05/01/2009 05:12 am ET | Updated May 25, 2011

Waxman And Markey To Unveil Climate Change Legislation

Two powerful House Democrats plan to unveil a draft of a climate change bill Tuesday, officially kicking off the legislative race to cap carbon emissions and create a regime of tradable credits that polluters can buy and sell.

[Update: Here's the draft.]

The draft is authored by Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) and Rep. Ed Markey (D-Mass.), chairman of the House Select Committee on Energy Independence and Global Warming. The select committee was created by House Speaker Nancy Pelosi (D-Calif.), who hand-picked Markey to lead it.

In general, the Ways and Means Committee has jurisdiction over legislation that raises revenue, but Waxman and Markey are charging ahead regardless. "We're going to work on a bill and where Ways and Means may have jurisdiction," Waxman told the Huffington Post, emphasizing "may" just as Markey walked by. "We'll work with them."

Some observers had expected Waxman to set a stake on the left with his opening bid, but the package he'll unveil is more generous to businesses as they are forced to transition to an economy where the cost of emitting carbon is borne by polluters and not merely by the sky. It broadly follows emissions reductions guidelines called for by the U.S. Climate Action Partnership, a coalition of business and environmental groups.

"That's right," Waxman said when asked if the bill would include transition assistance for business. "The transition allocations will be worked out on a member-to-member basis because there's a lot of intense interest from the members in that issue."

Divvying out such revenue is also a good way to secure the votes of fence-sitting members of Congress. The revenue raised from charging for carbon permits is expected to be hundreds of billions of dollars. The legislation would also raise the price of electricity, leading the GOP to dub it the "light-switch tax."

With those increased costs in mind, Waxman said, some of the revenue raised will go back to consumers. "Some ratepayers are going to face a big increase and we've got to try to minimize that increase so people can pay their bills," he said.

Green groups and the coal industry have been battling over whether to invest money in so-called "clean coal" technologies -- with environmentalists insisting that such technology is a fantasy and that coal needs to be phased out.

Waxman wouldn't use the phrase "clean coal" but made clear that funding for the technology is on the table. "In some areas, [the transition] will take time. We cannot, for example, have the utilities in this country run without coal. You have to develop the technology so that sulfur can be sequestered and coal can be used without causing the environmental harm that it does at the present time. So we have to be mindful that we need money to invest in new technologies."

So "clean coal" is in?

"We're being mindful of the fact that we've got to develop a transition using coal so that we can make it as part of the portfolio of our energy supplies," he replied adding, with a laugh, that those are "my words--I won't pick up yours."

Waxman pitched the climate change bill as not just an environmental remedy but the catalyst for an economic transformation. "The whole idea of the legislation is to move us to energy independence and to put us in the lead again in terms of new technology and new industrial jobs. I think it's going to transform the economy as we move to a low sulfur economy," he said. "We want to give incentives for the entrepreneurial spirit of the American people to kick in."