‘Cap and trade’ costs not detailed in House climate bill

The Obama administration opened Earth Day lobbying for an expansive climate change bill with the question still looming of just how much businesses will be forced to pay to curb greenhouse gas emissions.

Energy Secretary Steven Chu, Environmental Protection Agency Administrator Lisa P. Jackson and Transportation Secretary Ray LaHood lauded the climate bill being debated by House lawmakers this week, saying it achieves President Obama’s goals of spurring renewable energy projects and blunting climate change.

“We must state in no uncertain terms we have a responsibility to our children to curb emissions from fossil fuels which have begun to change our climate,” Mr. Chu told members of the House subcommittee on energy and the environment Wednesday.

Although Democratic leaders have moved quickly to hold hearings on the climate plan, one of the most important details - how businesses would buy carbon permits under a “cap and trade” plan - has yet to be detailed.

“The elephant in the room is the missing piece on how the allowances will be allocated,” said Jim Rogers, president of Duke Energy Corp. and a founding member of the U.S. Climate Action Partnership, whose climate plan was used as a blueprint for the House bill.

Democratic lawmakers have touted an EPA analysis released Tuesday that expects carbon permits to be sold for between $13 and $17 per ton of carbon dioxide emitted. It does not, however, detail whether business would have to buy all or some of the allowances.

“How were you able to do that analysis while the bill has no allocation-cost scheme in it?” Texas Rep. Joe L. Barton, ranking Republican of the House Energy and Commerce Committee, asked Mrs. Jackson.

“We had to make assumptions,” Mrs. Jackson said.

Mrs. Jackson did not say whether the analysis included a determination of how many allowances would be sold, only saying that analysts assumed 40 percent of auction proceeds would be returned to consumers.

When she was pressed later by Rep. Steve Scalise, Louisiana Republican, she repeated the president’s preference for selling all of the carbon permits.

Mr. Obama spent Earth Day in Iowa touting a wind turbine manufacturing plant and the green jobs he hopes to create through investments in renewable energy projects, but said that a cap on carbon emissions is necessary to push the nation away from fossil fuels.

Republican leaders set up a round-the-clock press operation this week to fight against the so-called cap and trade plan, which would place a cap on greenhouse gases and require that companies buy permits for each ton of carbon dioxide they emit.

“Republicans and Democrats both support the efforts of employers and employees devoted to new, cleaner sources of energy, but cap and trade is not the answer,” House Minority Leader John A. Boehner said.