House Passes American Clean Energy and Security Act

07/08/2009

On June 26th, the House of Representatives narrowly passed the American Clean Energy and Security Act (“ACES”), H.R. 2454. The bill will next be considered by the Senate, with some predicting a full Senate vote held in October. Because of the significance of this bill and the material effect it will have on many sectors of the economy, we thought it would be useful to summarize the House-passed version. As discussed below, views of the bill vary widely, but there appears to be little disagreement that the passage of a climate change bill will have a significant impact on our economy and on how we live our lives.

Representative Ed Markey (D-MA), one of the bill’s sponsors, stated: “…the House has passed the most important energy and environment bill in our nation’s history…This legislation will create jobs by the millions, save money by the billions and unleash investment in clean energy by the trillions.” House Minority Leader John Boehner (R-OH) had a different view, stating: “[the bill] will be a bureaucratic nightmare overseen by a confusing web of government agencies that will take and redistribute trillions of dollars from family budgets and workers’ payrolls." Not surprisingly, environmental groups and business groups also hold differing views.1

The Natural Resources Defense Council stated: "The passage of this legislation...will help set our country in a new direction…While passing the bill through the House took hard work and compromises on many sides, this is strong and vital legislation that Congress needs to deliver to the President's desk this year. This bill will help create new jobs in manufacturing and clean technology. It will increase energy efficiency, help consumers save on energy bills, and protect lower-income families. And it will finally put our country on a course to limit the carbon pollution that causes global warming."2

The U.S. Chamber of Commerce, on the other hand, believes “[the bill] is a 1,200-page behemoth consisting of a cap-and-trade program for greenhouse gas emissions, a federal renewable electricity mandate, and a suite of new mandatory energy efficiency standards [and] will impose 397 new federal regulations (which require traditional federal agency rulemakings) and 1,060 new mandates on an American public already overwhelmed by extensive federal regulation."3

On the bill’s passage, President Obama commented: "Today, the House of Representatives took historic action with the passage of the American Clean Energy and Security Act. It's a bold and necessary step that holds the promise of creating new industries and millions of new jobs; decreasing our dangerous dependence on foreign oil; and strictly limiting the release of pollutants that threaten the health of families and communities and the planet itself. Now it's up to the Senate to take the next step. And I'm confident that in the coming weeks and months the Senate will demonstrate the same commitment to addressing what is a tremendous challenge and an extraordinary opportunity.”4

With all the controversy surrounding ACES, it is by no means certain that Congress ultimately will pass climate change legislation. However, there are at least two cogent reasons why comprehensive federal legislation is in the interests of corporate America: to establish rules of the game that will allow companies to make better decisions regarding greenhouse gas management; and to preclude the Environmental Protection Agency (“EPA”) from developing and implementing climate change rules under the current version of the Clean Air Act, which most believe is an ill-suited vehicle for regulating greenhouse gases. We will continue to track ACES as well as related legislative, regulatory, and market-driven developments that are resulting in so-called carbon constraints—practical restrictions on activities that, directly or indirectly, result in emissions of greenhouse gases. Further information on carbon constraints can be found in the environmental publications section of our web site.

Most generally agree that significant changes are likely to be made by the Senate when it takes up ACES, but it appears that the provisions of ACES will form the starting point for the Senate’s activities. Below we summarize the key provisions of ACES. Our summary is organized according to the titles of ACES: Title I—Clean Energy; Title II—Energy Efficiency; Title III—Reducing Global Warming Pollution; Title IV—Transitioning to a Clean Energy Economy; and Title V (added by amendment)—Agricultural and Forestry Related Offsets.

Read the full text of the alert, including summaries of the ACES Titles.

Further information on carbon constraints can be found in the Environmental Practice Group. For more information, please contact:

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Press Release, Rep. Ed Markey, House Passes Historic Waxman-Markey Clean Energy Bill (June 26, 2009) (http://markey.house.gov). 
2 Press Release, Natural Resources Defense Council, House Passes ACES: A Dramatic Breakthrough for Clean Energy and Climate Protection (June 26, 2009) (www.nrdc.org). 
3 Press Release, U.S. Chamber of Commerce, U.S. Chamber Calls House Climate Change Bill Wrong Approach to Slowing Emissions (June 26, 2009) (www.uschamber.com). 
4 Press Release, The White House, Statement By The President on House Passage of The American Clean Energy And Security Act (June 26, 2009) (www.whitehouse.gov).

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