Will Boxer, Pelosi, and Waxman Pre-empt Their Own State?

03/18/2010 05:12 am ET | Updated May 25, 2011

[This version edited 11-15-09]

The climate change bill currently being debated by California Senator Barbara Boxer's Environment and Public Works Committee partially pre-empts California's ability to set a tighter cap on greenhouse gas emissions. Considering the clout of the Golden State on climate in D.C., are Senator Boxer, Speaker Pelosi, and Rep. Waxman showing enough regard for their own state's special status that has been enshrined in the Clean Air Act for over 30 years?

For starters, even the name of the bill, the Clean Energy Jobs and American Power Act (CEJAPA), is confusing. It's a climate change bill, right? The cap and trade section is named the "Pollution Reduction and Investment Mechanism" (my guess is this wording came from co-author Sen. John Kerry). Hey guys, why not call it something that people can relate to? How about the consumer dividend, fairness, and stimulus mechanism? Maybe it's because the bill gives allowances to coal-burning utilities instead of to consumers.

It's possible that our lawmakers are giving away the store because they believe the details of the bill do not really matter. First, from an international perspective, if the U.S. passes a bill, even a bad one, it could be seen at December's international talks in Copenhagen as a turning point, and encourage action around the world. Tim Flannery, the Australian author, naturalist, and chair of the Copenhagen Climate Council, recently said that if the U.S. cannot pass domestic legislation, many countries, including China, would be tempted to forgo Kyoto-style targets and timetables, and adopt weaker "national schedules" instead. In this sense, anything is better than nothing.

Second, Boxer and Kerry's CEJAPA provides for two billion tons of domestic and international offset credits in lieu of allowances to demonstrate compliance for a portion of their emissions. I think almost everyone, except the offset traders themselves, understands that this will swamp any real reductions for decades.

If the main purpose of this bill is symbolic, sort of like the Nobel Peace Prize, and lawmakers are happy to water it down until there's nothing left, you can see why people like Grant Smith are so outraged. Smith, the executive director of the Citizen's Action Coalition of Indiana, called the Waxman-Markey and Boxer-Kerry bills, " a financial mechanism to sustain the coal industry," and "a massive infusion of dollars into the status quo...[that is ] not only ineffective, it's counterproductive and sets us back 20 years. The bills, on the House side it's a maintenance program for coal-fire power plants, and on the Senate side it's an expansion of nuclear energy." (Note: Instead of giving billions of dollars of allowances to coal companies, a better approach would give the majority of the permits as a "Carbon Share," directly to the American people.)

So maybe given the international importance, and the hijacking of the bill by coal and offset lobbyists, maybe we should just hold our noses, look away, hope for the best, and continue working at the state and local levels, as I have been in California.

Sorry, CEJAPA pre-empts states from running their own cap and trade systems ahead of Congress. You can trade in your California allowances for Federal ones, but the state systems would be suspended for up to five years. In ACES the pre-emption starts in 2012 and goes until 2017, and in CEJAPA it starts with the start of the federal system to 2017. Presumably, this pre-emption was a negotiated to woo reluctant Senators or lobbyists worried about a "patchwork" of conflicting regulations. But California's exceptional status has been integral in the history of the Clean Air Act, providing other states the option of adopting stricter rules, and saving thousands of lives.

California's AB32, the Global Warming Solutions Act of 2006, predates Congressional action by several years. California is currently in the midst of defining how to set up a cap and trade system. Governor Schwarzenegger has convened an Economic and Allocations Advisory Committee to consider "returning the value of allowances back to the people, including through an auction of allowances and distribution of auction proceeds in the form of a rebate or dividend, in order to minimize the cost to California consumers and maximize the benefits to the state's economy."

In her testimony to Boxer's Committee, CalEPA Secretary Linda Adams said, "State authority to implement clean energy and climate policy must not be abridged."

Notably (and I omitted this from my first version of this article), the Senate bill, the Boxer's Chairman's Mark, and ACES all contain an important provision that existing state authority to adopt or enforce air pollution standards shall include global warming. So if states set tighter caps than the federal cap, states could require the surrender of federal emission allowances or offset credits as a means of demonstrating compliance with state emission reductions requirements. But this will be reconsidered by the full Senate, so stay tuned.