Bingaman on Containing Costs in a Cap-and-Trade Bill
September 15, 2009
03:38 PM
“Global climate change is one of the most consequential and difficult problems we face here in Congress. It is a problem of vast scale and it requires a solution of vast scale – namely, that we reinvent our entire energy infrastructure. Many members are currently absorbed by the health care debate right now, but it is important for us to continue to make progress on this issue.
“This week the Energy Committee will hold two hearings on the issue of energy and climate change legislation. Today, we will receive testimony on the topic of containing costs in a greenhouse gas emissions market. Thursday, we will learn about economic analyses and what models can tell us about the expected impacts of energy and climate legislation.
“Many members of this Committee have expressed an interest in climate legislation and its impacts on the energy sector. It is important that this Committee do its part to help the full Senate understand this connection. Having available the most current and credible information on key issues in the energy-climate connection is a constructive step this Committee can make towards crafting and enacting effective legislation.
“The discussion this week will revolve around the implementation of a cap-and-trade program for greenhouse gases. The primary goal of any such program must be to achieve our environmental goals with the least possible disruption to our economy. As we contemplate cap-and-trade, we need to ensure that the costs of carbon permits do not become excessively high, or excessively volatile. In today’s hearing we will receive testimony on policy options to avoid these types of unexpected and potentially dangerous costs.
“I am pleased with the bipartisan approach and hard work that this Committee put into crafting energy legislation earlier this year. We reported a bill that contained important incentives and programs for clean and efficient energy. I am very interested in seeing those provisions enacted into law.
“At the same time, I am also dedicated to doing what I can to enact effective greenhouse gas legislation. I have worked for several years now on the task of developing legislation to mitigate the emission of greenhouse gases in a comprehensive way. The Ranking Member, Sen. Murkowski, was a co-sponsor on a bill along those lines that Sen. Specter and I introduced in the last Congress. Failure to act on this issue carries real costs for the global environment and economy, as well as for arid places like the State of New Mexico.
“The search for effective legislative proposals for avoiding climate change, then, involves avoiding the costs of global warming without imposing other unintended costs that would have few benefits and could even have negative impacts on society. We need to provide assurances that the costs of a cap-and-trade system will not go out of control, either through excessive prices or excessive volatility. The purpose of today’s hearing is to explore some of the mechanisms that can be used to address those concerns. We will start with a short presentation by the Congressional Research Service to lay out some of the different mechanisms and then hear from our panel of witnesses what they think about these policy tools.”
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