House lawmakers weighed how much businesses should pay under a major new climate bill, while trying to shield consumers and workers from sharply higher utility bills.
The so-called “cap and trade” plan at the center of the climate bill would set a cap on carbon emissions and require companies to hold a permit for each ton of carbon dioxide emitted. The bill does not say whether all the carbon permits would be sold or a portion would be given away - a key sticking point which has stalled previous efforts to regulate greenhouse gasses.
The two Democrats who co-authored the draft bill, House Energy and Commerce Committee Chairman Henry A. Waxman of California and Energy and Environment Subcommittee Chairman Edward J. Markey of Massachusetts, have set a breakneck schedule for passing the climate bill to the full House by Memorial Day.
Utility executives said Thursday that the more permits are given away for free, the fewer costs would be passed along to consumers.
“It shouldn’t be a revenue-enhancing endeavor, it should be something that is trying to reduce carbon emissions,” said Glenn English, CEO of the National Rural Electric Cooperative Association.
Mr. Obama and some Democratic lawmakers, including Mr. Markey, have said they would like to sell all of the permits - to avoid the problems the European Union faced after it gave away its allowances for free - but have softened in that stance in recent months.
Democratic leaders have said they would like to see any money collected returned to consumers - but have been wary of claims that giving the allowances to utilities for free would translate into lower energy bills for consumers.
“What would prevent them from pocketing that windfall?” Mr. Markey asked Jeff Sterba, a spokesman for Edison Electric Institute, an industry trade group.
Mr. Sterba said he would like to see 40 percent of the carbon permits given away, and then have that amount reduced gradually as companies adopt cleaner technologies.
Tom Conway, international vice president for the United Steelworkers union, said one option for protecting American jobs would be to tax imports from countries which do not impose the same carbon caps.
“Failure to address these issues will likely make the issues of climate change worse, not better,” Mr. Conway said.
At one point in the hearing Rep. Jay Inslee, Washington Democrat, asked the members of a panel whether they believed carbon dioxide was contributing to global warming. All but one of the panelists said they did.
When Rep. Mike Doyle, Pennsylvania Democrat, asked the same panel how many believed all of the carbon permits should be sold, only one panelist raised his hand.