Efficiency First

Legislating America’s Energy Future

An Overview of the Waxman-Markey Climate Bill

June 9, 2009 – If you haven’t already heard of the American Clean Energy & Security Act (commonly known as the Waxman-Markey Climate Bill), now is the time to start paying attention. This ambitious legislative package, which is currently winding its way through Congress, contains provisions that would profoundly alter the business landscape for everyone in our industry.

In writing the bill, California Representative Henry A. Waxman and Massachusetts Representative Edward J. Markey set out to tackle a wide range of issues related to climate change, dependence on foreign oil, and economic stimulus through the creation of green-collar jobs. As with any controversial piece of legislation, the climate bill is sure to go through some major revisions on Capitol Hill before it is sent to the White House for President Obama’s signature, but here are some of Waxman-Markey’s key features as it was originally written:

· Caps greenhouse gas emissions at 17 percent below 2005 levels by 2020, and 83 percent below 2005 levels by 2060.

· Establishes a cap-and-trade program that will allow companies to buy or sell emission allowance credits.

· Revenue raised from the initial sale of emission allowances in the cap-and-trade program will be invested in clean energy technologies.

· Requires energy companies to produce 6 percent of electricity from renewable sources by 2012, increasing to 20 percent by 2020. Renewable sources are defined as solar, biofuels, wind, wave currents, geothermal, landfill gas, etc.

· Funding through state energy programs to improve building codes.

· Funding for universities to conduct energy research and development.

· Financial incentives for the auto industry to development of advanced technology vehicles.

In future posts we’ll monitor the progress of the climate bill and discuss its likely impact on the emerging Home Performance industry.

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