In his February budget proposal, President Obama included a cap-and-trade system that requires corporations to purchase government permits if they want to continue to produce greenhouses gases.
This week, Congress has begun re-doing President Obama’s budget (they’ve cut as much as $15 billion in Obama recommendations, The Washington Post says) and now it looks like Rep. Jim McDermott (D-WA,7) has his own, not-quite-Obama-friendly ideas, about how to regulate greenhouse emitters.
In short, he wants the cap, but not the trade. In the Obama cap-and-trade system, emitters must purchase permits to pollute, but are free to trade them with each other, which causes the prices of the permits to rise—making lower emissions a profitable enterprise. Under McDermott’s proposal, companies aren’t allowed to trade or sell the permits.
Instead of allowing the competition over companies’ permits to determine their changing prices, McDermott’s plan gives the Treasury Secretary power to lay out permit prices and provides a table of specific emissions allotments for every year until 2050.
The idea, McDermott’s office says, is that the stringency and specificity of the McDermott plan will give the energy market some much-needed stability, more than a cap-and-trade program would. “My legislation would reduce greenhouse gas emissions and avoid creation of a carbon derivatives market that could turn a potential energy solution into energy market chaos,” McDermott wrote in a blog post for The Hill.
If emitters don’t buy a permit, the government can fine them 300 percent of the cost of a permit under McDermott’s proposal. Conversely, companies can sell the permits back to the government for the same amount they paid if they cut their greenhouse gas emissions entirely.
All the money made from the permits, according to the original bill text, goes toward supporting clean energy production and “to promote the economic security of vulnerable families and communities.”
McDermott’s office says its alternative to the Obama plan is a way of putting more diverse options on the table. “We need more ideas debated, and this idea is really a breakthrough in the way it approaches the issue,” McDermott spokesman Mike DeCesare told PubliCola.
The office is touting an endorsement of the bill from the EU-bashing Friends of the Earth, and has signed on six co-sponsors.
