Rep. Edward Markey, D-Mass., chairman of the House Energy and Commerce Subcommittee on Energy and the Environment, explored the prospects for domestic and international action on climate change with Atlantic Media Political Director Ronald Brownstein at a June 23 "Face to Face With National Journal" breakfast. Markey, a principal architect of the climate-change legislation that the Energy and Commerce Committee cleared in May, spoke on the morning after House Speaker Nancy Pelosi, D-Calif., announced that she would attempt to bring that bill to the floor on June 26. Later on June 23, Energy and Commerce Committee Chairman Henry Waxman, D-Calif., and Agriculture Committee Chairman Collin Peterson, D-Minn., reached an agreement that sought to assuage rural Democrats' concerns about the legislation. An edited transcript of the session with Markey follows. Visit the archives page for more Insider Interviews.
NJ: The speaker last night indicated that the climate-change bill will come to the floor for a vote on June 26. Why the decision to schedule the vote now?
Markey: Well, a lot of times legislation is scheduled before all of the pieces are in place. It looks good, we are very optimistic, and we believe we have other members who are acting in good faith who will make it possible for us to complete it by Friday.
NJ: Some argue that imposing limits on carbon emissions in the United States will simply drive manufacturing jobs to other countries that have not mandated such limits. Is that a valid concern?
Markey: Right from the beginning, Henry Waxman and I were concerned that we not draft the legislation in a way that had an adverse effect on the trade-vulnerable, energy-intensive industries. So we created a formula, which will protect those industries for the first 10 or 12 years from adverse impacts from the legislation. And then a tariff that could also be imposed by the president in conjunction with Congress if it is determined that these industries are going to be vulnerable to trade effects because of the legislation.
NJ: What were the most difficult things for you to compromise on in this bill?
Markey: Honestly, I felt it was going to be necessary right from the beginning to have a partnership with industry, labor, and environmentalists, that we could not pass the legislation without all three feeling comfortable with the legislation. So I have not felt from the beginning uncomfortable about any of the decisions we have made that has ensured consumers are protected, that vulnerable industries are protected, because ultimately that's the fairest way in which to construct the legislation.
NJ: One area that the environmental community has criticized is how the legislation deals with renewable-energy standards for utilities. Do you feel that the bill's requirements will be sufficient to drive the development of an alternative-energy industry, particularly wind and solar power?
Markey: Environmentalists were thrilled two years ago when we passed legislation in the area of renewable-electricity production that had a standard of 11 percent by 2020 with 4 percent energy efficiency; a combined total of 15 percent by 2020. Now, in this legislation, without changing the goal of 2020, we've increased it to 15 percent by 2020 for renewable electricity, and 5 percent more through efficiency. Since only about 30 states now have renewable-electricity standards, [we have] expanded it to all 50 states. In my opinion [that] is going to create a revolution, which will surpass the goals we have in the legislation, because now a national marketplace will have opened and every utility will have had to meet that standard. I feel it's a little bit like the 1996 Telecommunications Act, that people are underestimating how great this revolution will be once the momentum is created.
NJ: Once that national marketplace is established, what do you expect to see happen?
Markey: We are in a race with China and Denmark and Germany, and other countries around the world, to create a renewable-electricity marketplace. The analogy is that not one home in the United States had broadband [Internet access] in 1996, when the Telecommunications Act was signed by President Clinton. Ten years later, there was a whole new vocabulary in the United States and in the whole world -- Google, eBay, YouTube, Amazon, Hulu -- thousands of companies, millions of jobs, none of which existed in February of 1996. I think the same thing is going to happen in this renewable sector.
NJ: The Congressional Budget Office estimated last week that the bill's cost would be about $175 per household by 2020. Will the cost be significantly higher in the states that are now heavily dependent on coal for their electricity?
Markey: The formula that has been created [in the bill] is one that the Edison Electric Institute recommended that deals with regional disparities. The formula is weighted toward those utilities that have higher emissions from fossil fuel generation of electricity. In other words, the Midwestern states that you refer to are actually given a higher allocation of the credits.
NJ: From the other side though, in the states that are heavily dependent on coal, like a West Virginia or a Kentucky, the per-kilowatt-hour price of electricity is about half of what it is in California, and about a third the level of your state of Massachusetts. Over time, is that equitable that the coal states in effect are paying much less for electricity than states that are burning less coal and thus contributing less carbon to the atmosphere?
Markey: The goal is to unleash a revolution which actually makes it possible for there to be a continued burning of coal in the United States. Rick Boucher of Virginia, who is my predecessor as the chairman of the subcommittee which I chair, worked with Henry and I to negotiate with the utilities to create the formula which is going to be included in the legislation. The only way in which coal, in the long run, can play a significant role generations from now in the electricity-generation mix is if we find a carbon capture and sequestration technology that makes coal compatible with the long-term environmental goals of our country.... We can then export to China and India and Russia, and other coal-burning countries, because nothing that we do in our country is in and of itself sufficient to deal with the problem of global warming.
We have to find a solution technologically in conjunction with these other countries and it is our responsibility to find the solution, because the United States and the Europeans are by far the principle contributors to the problem which we are now seeing unfold, because CO2 and greenhouse gases are cumulative up in the atmosphere, and the Chinese and the Indians are pointing to us, saying "Please do not preach temperance from a bar stool to us."
NJ: How optimistic are you that carbon capture and sequestration will become a viable technology on a large scale in any intermediate term?
Markey: I am optimistic. Duke Power, AEP, FutureGen are all part of a technological effort to find a solution: storing the gas underground. But there are other approaches; for example, a company called Calera, which is out in Silicon Valley... is employing a technology which uses a chemical to extract the CO2 and then repurpose it as an additive to the manufacturer of cement, and then cement in highways across the country would become the sequestration location.
I'm of the opinion that we do not know ultimately which of the many different avenues which are being pursued will be the final approach which is adopted. It might be a collection of them in tandem that work to solve the problem, but I am convinced that once we open up a multibillion-dollar marketplace to solve the problem, which this legislation does, then some of the smartest minds in the world will begin to make the investment knowing that the return will be so great.
NJ: There are negotiations going on internationally -- the Copenhagen meeting at the end of this year. What does the U.S. need to have accomplished by then in terms of our own domestic action, in order to give us the leverage to try to drive forward an international agreement? What do you think is the minimum we need to have done by December?
Markey: I think having a president that believes that global warming is a problem is a good first step -- we now have that. I think having a speaker of the House and a Senate majority leader that make it very clear that they are committed to passing legislation is also an important step. I visited China with Speaker Pelosi for a week in the end of May. We met with President Hu [Jintao], with Premier Wen [Jiabao] -- with every leader in that country who would be in a position to make a decision about energy and climate policy, and it was quite clear that they were beginning to make an adjustment to this new environment, politically speaking, that has now been created in the United States.
Coincidentally, the legislation which Henry Waxman and I had drafted, passed on the Thursday night before we got on the plane on Friday morning to fly to China. The speaker continued to reiterate to the leaders of China throughout that week that this was game-changing legislation -- that we were sending a signal that we were now serious, and that we hoped that it would elicit a serious response from China in their relation to this summit.
NJ: Do you believe that House action on the bill will influence other countries during the international negotiations on climate change in December?
Markey: I think passage would demonstrate a significant change of direction in our country. I think it makes it possible for President Obama to go to the [negotiations] in Copenhagen as a leader and not the laggard.
NJ: Conversely, if China and India are not persuaded to make substantial agreements, will that affect the Senate's willingness to act, assuming that the House passes the bill this summer?
Markey: I think it's important for the United States to act if we expect the Chinese and Indians to act. They have pointed to us for a generation as not taking the lead on this issue. I think once we do take the lead, it will be very hard for the Chinese and the Indians and others not to partner with us to find a global solution. But there will be no solution as long as the United States does not act.
NJ: You spent decades battling the auto companies over fuel-economy standards, but the president stood in the Rose Garden the other day with the heads of 10 auto companies who agreed to raise the standards. During the 1980s debate over strengthening the Clean Air Act, you and Waxman and your allies were pitted against the utility industry, which is now supporting what you've done on this bill. What is different today about the business community's attitude?
Markey: For many of them, they're already doing business in Europe. Europe has an emissions-control system. They have learned how to live within that environment. A lot of them have now realized that it is not necessarily inconsistent with their long-term profitability to reduce their energy intensity and to change their energy mix. So there's a confluence now of interests that did not exist a generation ago. That connection is something which we are now benefiting from politically.
NJ: Attention has focused on the level of carbon reductions that the bill would require by 2020, but that's really a foothill next to the mountain that is the 80 percent reduction mandated by 2050. What kinds of changes will be necessary to meet those larger goals?
Markey: Again, it's not unlike the 1996 Telecommunications Act. In 10 years, we've moved from a world of black rotary-dial phones to a world of BlackBerrys. We've moved from a dial-up world to a world in which people are walking around with devices in their pockets that not only allow them to phone home but also to keep a lot of data, watch cable and television channels. And if you take that and expand it out 10 years from now, people will be using that same device in their pocket to control their air conditioning and heating and appliances at home by remote. We will have by 2030 a generation of younger Americans that will never know what it was like to pump gasoline at a station.
NJ: Because we'll be using electric cars?
Markey: It will be all-electric cars. They'll be plugging their vehicles in at home. They won't ever have to stop at a gasoline station in order to pump.
NJ: You've long been a skeptic of nuclear power, but when you look at these long-term carbon reductions, can we meet our energy needs without expanding our use of nuclear power?
Markey: Nuclear power is a beneficiary of this legislation. In a carbon-constrained environment, nuclear power becomes a more attractive investment alternative. That said, by the time we reach 2020, there is likely to be 150,000 to 200,000 new megawatts of renewable electricity that is constructed in the United States. That's not to say that [the] nuclear [industry] won't at that point begin to have some new power plants come online, but I think it's important to keep that proportion in mind as you're looking at the long-term trends in electrical generation in our country.
NJ: Does this president and this White House say to you often, "We must have this, I must have this provision," or does he give you a lot of leeway?
Markey: The president has left it to Henry and I to create the formula that can work that would place a bill on his desk.
NJ: When the bill finally gets to the floor, whether it's this week or later, will you need Republican votes to pass it?
Markey: We will have Republican votes. We met with the moderate Republicans last week -- the speaker, Henry Waxman and I -- and we will have Republican support for the bill.
NJ: Will President Obama sign climate-change legislation before the 2010 election?
Markey: Yes.
NJ: Do you believe that the basic formula that you and Waxman have devised to deal with the allocation of credits and the general trajectory of carbon reduction will survive through the final legislation?
Markey: It is a formula that has the support of business leaders, of [environmentalists], and labor unions. I think it's a very solid formula. This might not be the identical bill that the president signs, but it will look very closely like the bill the president signs.
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