US House passes landmark climate change bill

By Edward Luce in Washington
Published: June 27 2009 00:51

The United States took its first step towards reducing carbon emissions on Friday night when the House of Representatives narrowly passed a bill that would set the country’s first ever limits on its greenhouse gas production.
President Barack Obama hailed the vote, which scraped through by a 219-212 tally, as a “bold and necessary step” that marked a “spirit of change” towards climate change in the US – echoing the words of Angela Merkel, Germany’s chancellor, who had described a “sea change” when she met the US president earlier in the day.

However Mr Obama reminded those celebrating the “historic” vote that the bill’s passage was still far from assured. “Now it is up to the Senate to take the next step,” he said.
In a statement, Harry Reid, the Senate majority leader, said the upper chamber, which is considered a tougher hurdle for cap-and-trade than the House, would start work on the bill in September.
The House version would reduce US carbon emissions to 17 per cent below 2005 levels by 2020 and 83 per cent below 2005 levels by 2050 by establishing a system for trading carbon permits within an ever-tighter ceiling. It would also mandate electricity producers to source a fifth of all production from renewable sources, such as wind, solar and wave, by 2020.
Many environmental groups hailed the bill’s passage as a big step forward in advance of the Copenhagen summit on climate change in December. “[It] will finally allow the United States to help lead the efforts toward a global agreement in which the major economies of the world, both developed and developing, play their part to address the climate challenge,” said Eileen Claussen, president of the Pew Centre on Global Climate Change.
But some green groups, including Friends of the Earth and Greenpeace, said the 1,300 page bill was hedged around with too many compromises and let-out clauses to have the desired effect. The legislation led by Henry Waxman and Edward Markey, the Democratic lawmakers who spearheaded the effort, was the product of several months worth of backroom deals with centrist Democrats from rural and manufacturing states.
In spite of the many compromises, which included giving away 85 per cent of carbon permits to various industry groups, against the 100 per cent auction that Mr Obama wanted, 44 Democrats still voted against the bill. Only eight Republicans, out of a caucus of 183, voted in favour.
The Republican leadership, which spent much of Friday in a last-ditch effort to derail the bill, says it will introduce a “national energy tax” that will cost millions of jobs. Independent estimates of the bill’s effects say it will impose a small cost of between 22 cents and 48 cents a day on the average American – less than the cost of a first class postage stamp.
Copyright The Financial Times Limited 2009