Waxman Said to Offer Free Pollution Credits In Climate Talks
Waxman, the Democratic chairman of the House Energy and Commerce Committee, made the proposal in an effort to win approval in his panel for legislation to establish a carbon- trading system, said the people, who declined to be identified discussing the private talks. The free permits may be worth as much as $40 billion a year according to Mike McKenna, president of MWR Strategies, a policy consulting firm based in Washington.
Waxmans offer marks a break from President Barack Obamas original proposal to auction off all permits to pay for a middle-class tax cut. Businesses and some lawmakers of both parties opposed the presidents approach.
“Polluters should have to pay for the privilege of dumping their stuff into the atmosphere,” Frank ODonnell, president of Clean Air Watch, a Washington environmental group, said in an interview. “The problem is purely a political one as they try to round up votes in the House Energy and Commerce Committee.”
The cap-and-trade legislation proposed by Waxman would require companies to obtain a permit for every ton of carbon dioxide they pump into the atmosphere. In 2012 when the program begins, 4.7 billion permits would be issued, after which they could be traded on a market.
Karen Lightfoot, Waxmans spokeswoman, declined to discuss the talks. Waxman of California, who has pledged to act before Memorial Day on May 25, delayed action on the climate-change measure in a subcommittee this week as negotiations continued.
“The president would still like to see a bill by Memorial Day,” Representative Bart Stupak, a Michigan Democrat, said in an interview this week. “Thats going to be difficult to do.”
55% of Permits
Under the proposed compromise, about 55 percent of the pollution permits could be given to utilities, refiners and manufacturers, according to McKenna, who added that the specifics may change as the talks continue.
A target for emissions reductions would drop to 17 percent by 2020 from Waxmans original proposal of a 20 percent decline, according to a Democrat on his committee who sought changes in the draft bill and declined to be identified. Sponsors of projects to capture and bury carbon emissions from coal plants would get $10 billion, the lawmaker said.