Bingaman to Environment Committee on Global Warming

January 30, 2007
02:00 PM
Jeff Bingaman
Prepared Testimony before Senate Committee on Environment and Public Works
Jan. 30, 2007
            “Thank you Senator Boxer and Members of the Committee.
            “The 2005 Sense of the Senate resolution on climate change emphasized that the risks associated with a changing climate justify the adoption of mandatory limits on greenhouse gas emissions and that an important first step towards addressing climate change can be taken at an acceptable cost.  In that spirit, Senator Specter and I circulated a discussion draft on global warming legislation last week that begins with a modest emissions-reduction target that strengthens gradually over time.
            “The approach is consistent with that of the successful Acid Rain Program in that it sets a “forward price” on emissions to provide both the flexibility and incentive needed to accelerate technology development and deployment.  The long-term price signal that a forward price creates is critical for giving industry certainty and for focusing its decision-making on lower carbon options.  In order to complement that price signal, the discussion draft also includes provisions to create incentives for new technology and provides significant new R&D funding for low- and no-carbon technologies. 
            “The decision to circulate a discussion draft, rather than introduce legislation, reflects our desire to modify and improve the legislation in the coming months.  This draft is already the product of over two years of work, but there are still many unresolved issues that must be addressed and challenges that deserve attention.
            “As I see it, there are three main challenges.  First we must convince our colleagues that the model we have chosen, a cap and trade program, is the right model.  Second, we must figure out how to structure that cap and trade program – there are many different design features that must be discussed and analyzed.  Finally, we need to see what kind of political consensus we can get over the targets to reduce greenhouse gas emissions without harming the economy.
            “As I mentioned, this process began over two years ago.  It started with the recommendations of the bipartisan National Commission on Energy Policy, or NCEP.  This group of business leaders, former government officials, environmentalists and NGO leaders published a report to influence the upcoming debate on energy policy.  Within that report was a recommendation to implement a cap and trade program to slow the growth of greenhouse gases by mandating targets and allowing companies to use tradable credits in a market to meet those limits.
            “I supported this type of proposal when Senators Lieberman and McCain introduced their Climate Stewardship Act and I still believe that this is the most appropriate way to reduce emissions.  In order to address some of the concerns with a cap and trade proposal and its impacts on the economy, the NCEP recommended that growth targets be implemented to slow the growth of greenhouse gas emissions before stopping that growth and reducing emissions.  They also recommended a safety valve feature, which would allow the government to sell extra permits at a set price.  That price would escalate over time, but would provide certainty to business and would prevent difficult shocks to the economy as we move into a lower-carbon economy.
            “After submitting this proposal to the Energy Information Administration – the nonpartisan analytical arm of the Department of Energy – I drafted an amendment to the Energy Policy Act of 2005 and considered amending the Energy Bill with it.  Because of the limited amount of time available, we decided instead to circulate a Sense of the Senate Resolution and added that to the Energy Bill.
            “That Resolution gave us the grounds to continue exploring this issue over the remainder of last Congress.  I worked very closely with Senator Domenici to have hearings in the Energy Committee and participate in a series of workshops with the NCEP.  The purpose of this was to examine the structure of a cap and trade proposal.
            “In February of 2006, Senator Domenici and I authored a White Paper on Design Features of a Mandatory Market-Based Greenhouse Gas Regulatory Program.  We asked four basic questions: 1) Who should be regulated?  2)  How do we allocate permits throughout the economy?  3) Should a domestic program be able to link with other countries? And 4) How do we engage developing country participation?
            “We received over 150 submissions from major companies, individuals and NGO’s responding to these questions and Sen. Domenici and I invited 29 of those respondents to an all-day conference to discuss them here on Capitol Hill.
            “After incorporating many of the things we heard at this Conference into a new draft, I was joined by five of my colleagues in resubmitting the legislation to the EIA for further analysis.  The results of that analysis have shown that it is possible to begin reducing our emissions here in the United States without negatively harming the economy.
            “It is my plan now to take the next two months to use this discussion draft and bring stakeholders and interested parties to the table to see if we can get some kind of bipartisan consensus on legislation that we can enact this year.
            “A first step toward that goal is to host a series of bipartisan staff workshops.  This Friday at 2pm in the Energy Committee Hearing Room, we are hosting the first staff workshop to look at the issues within the discussion draft.  I encourage anyone who is interested in attending to contact my Committee Office.  We are also extending the invitation to the Administration and House staff.
            “Thank you for the opportunity to express my views before your Committee.  Global warming is an extremely important and difficult issue to resolve, but I know that we can work together in a manner that expedites action rather than delay it any longer.”