I was invited to testify yesterday in front of the House Energy and Commerce Committee on how allowances are allocated under HR2454, the American Energy and Security Act of 2009 (ACES). You can see my full testimony here.

I started with the broad economic arguments for passing climate legislation now: by doing so, we can harness American innovation, ensure leadership in making the next generation of clean-energy technologies, and unleash investment that will help pull our economy out of the recession.

Then I turned to the allocation provisions of the bill.  The allocation plan will preserve the environmental and economic effectiveness of the legislation, helping move us forward in solving the climate crisis in a way that is affordable, equitable and efficient.

Specifically, I outlined five major principles that any set of allocations should reflect, and illustrated how HR2454 fulfills each.

• First, the bill protects consumers, particularly low-income consumers.  It does this through three channels: allowance value allocated to local distribution companies, who are required to pass that value on to customers in the form of lower utility bill; direct funding for rebates and energy credits directed specifically at low- and moderate-income households; and broader tax refunds, especially in the later years of the program. In total, nearly half (44 percent) of the total allowance value goes directly to households – amounting to an estimated $700 billion in present value.
• Second, HR2454 includes provisions that preserve and strengthen the international competitiveness of U.S. businesses and workers during the transition to a clean energy economy, by directing about 12 percent of total allowance value (over the life of the bill) to energy-intensive and trade-exposed industries.
• Third, the allocation plan respects differences across states and regions by allocating half of the allowances for electricity consumers on the basis of CO2 emissions and half on the basis of electricity generation.
• Fourth, the integrity and credibility of the program is preserved since the bill ensures that consumers receive the allowance value intended for their benefit due to provisions specifically requiring utility companies to pass on the allowance value they receive.
• Finally, HR2454 directs some value (26 percent over the life of the bill) to public purposes that are the objectives of the legislation, including clean energy innovation, carbon capture and storage, investments in renewables and energy efficiency, and climate change adaptation.

Overall, HR2454 passes these tests with flying colors.

The House Energy and Commerce Committee just approved landmark climate change legislation, the American Clean Energy and Security Act.

EDF president Fred Krupp said it this way: "The committee today put climate legislation on the path to the President's desk."

This vote is much more than a procedural milestone. To pass this bill, the committee had to bridge regional differences among its diverse membership. It succeeded in producing a strong bill that can win broad support in the House and serve as a template for quick Senate action.

The bill, also known as the Waxman-Markey bill, draws on key provisions of a legislative blueprint negotiated by the 25 leading companies from every sector of the U.S. economy and the five non-profit groups in the U.S. Climate Action Partnership. Committee action on the bill also drew support from labor unions like the United Auto Workers and the Steelworkers, faith groups, and state and local officials.

The timing couldn't be better.  Fred Krupp says, "As the President's economic advisors said this week, a cap on global warming pollution is essential to our economic recovery and our long-term financial health."

We look forward to action by the full House this summer.

Today, in an ad running in four Capitol Hill publications, the United States Climate Action Partnership (USCAP) is calling on Energy and Commerce committee members to advance the American Clean Energy and Security Act.

USCAP is a coalition of businesses and environmental organizations that have come together to call on Congress to cap carbon emissions. With the introduction of the American Clean Energy and Security Act, USCAP released a statement [PDF] on the legislation, and followed with this landmark coalition ad.

The ad references USCAP's Blueprint for Legislative Action, which spells out how a cap on carbon emissions will protect the U.S. economy and our environment.

The Energy and Commerce committee is expected to vote the American Clean Energy and Security Act today.  We have been following the mark-up of the bill, and debunking the nay-sayers latest myths. Stay tuned for more updates.

The House Energy and Commerce Committee continues to slog through debate on the American Clean Energy and Security Act. Debate has been slow because opponents of the bill plan to introduce a whopping 450 amendments. You might think the unusually high number of amendments shows genuine concern about the issue, but some of the proposed measures are truly bizarre.

Among the amendments that opponents say they'll introduce are provisions to eliminate all the tax benefits for any business in USCAP — a group of major corporations that support a carbon cap. USCAP includes companies like PepsiCo, Shell Oil, Duke Energy, PG & E and Johnson & Johnson.

Another proposed provision specifically targets a much smaller, non-profit group — us. That amendment would call specifically for reviewing the tax status of Environmental Defense Fund.

Those amendments haven't been introduced yet, but they're still on the list of 450 so that could materialize at any time. It's hard to imagine how these actions would benefit the debate over climate change.

Perhaps opponents have no substantial ammunition with which to attack this bill?

With climate legislation moving to a vote this week in Chairman Henry Waxman's Energy and Commerce Committee, it's encouraging to see thoughtful and honest arguments and posts covering the various angles of this historic step forward. 

Paul Krugman's The Perfect, the Good, the Planet posits that while imperfect, Waxman-Markey is our best chance at addressing climate change.  Joe Romm sets the record straight on Europe's carbon trading efforts in his recent post, and Daniel Weiss provides a succinct update on where the legislation currently stands.

Did we leave anything out?  If so, post your links in the comments!

Follow us on Twitter to hear our play-by-play of the mark-up of the American Clean Energy and Security Act!  You can find Environmental Defense Fund on Twitter at www.twitter.com/EnvDefenseFund.  

As Tony wrote earlier, the House subcommittee working on climate legislation celebrated Earth Week with a packed schedule of testimony.

One of the more interesting participants was Mayor John Fetterman, from tiny Braddock, Pa., who has become a national champion in the fight to cap carbon pollution. He did a great job explaining that for communities like his, a cap on carbon will be an economic lifeline (see the video). He was joined on the panel by Nat Keohane, EDF's chief economist.

Here are some wrap-ups:

• Over at PowerShift, Danny Marx live-blogged the day of testimony.
• The hearings were noticed back in Pennsylvania, too. Read what the Pittsburgh Post-Gazette wrote about the ads Mayor Fetterman did with EDF and his trip to Washington.
• And taking the broad view, Jimmy Seidita posted on Huffington Post that there's only one must-do to save the planet: support the Obama administration's efforts to limit carbon emissions.

We'll hear more testimony today, including appearances by former GOP Senator John Warner and Al Gore, and next week the subcommittee starts the tough work of marking up the bill.

We have some folks from EDF down at the carbon cap bill hearing today.  Follow us on Twitter at www.twitter.com/EnvDefenseFund to keep up with the good, the bad, and the ugly!

This morning, Congressmen Henry Waxman (D-Ca.) and Ed Markey (D-Ma.) released a 600-page draft and put their committee on the path to passing climate legislation this year.  The details will be worked out in the legislative process, but this is great progress.

If Congress succeeds in passing a cap on carbon emissions, we will address global warming and pump billions of dollars into clean energy and new jobs. If we fail — well, let's not fail.

Here's the response from EDF's president, Fred Krupp:

Chairmen Waxman and Markey are experienced legislators who have focused on exactly the right issues to quickly build consensus and allow Congress to pass a strong bill this year.

We applaud the Chairmen for moving forward boldly and deliberately with their proposal for comprehensive legislation, and we look forward to working with them, the congressional leadership, and the Obama administration to help refine and pass a bill this year.

Key players are getting right to work to move strong global warming legislation through Congress. This morning, an impressive lineup of CEOs and environmental leaders announced a consensus blueprint for U.S. climate policy. It's built around a cap on the pollution that causes global warming. See details on the USCAP site.

And right afterward, Congressman Henry Waxman, the new chair of the House Energy and Commerce Committee, is convening the first major climate hearing of the year. You can follow the hearing on the committee's site.

The Washington Post describes the announcement in a detailed story. We'll add links to other noteworthy stories as they come in.

Update – More news stories:

From The Hill: "Waxman to push global warming bill"
From the AP: "Waxman promises quick action on climate"