Sen. Max Baucus, who has worried fellow Democrats with his concerns about the costs and depth of emissions cuts in the Senate climate bill, said today that he is committed to passing "meaningful, balanced climate change legislation."
Last week, the Montana senator was the only Democrat to vote against the climate bill in the Environment and Public Works Committee.
Today, Baucus opened a hearing of the Senate Finance Committee, which he chairs, by saying:
"I want our children and grandchildren to be able to enjoy the outdoors the way that we can today. So I’m going to work to pass climate‐change legislation that is both meaningful and that can muster enough votes to become law.
"Today we’ll hear predictions — some optimistic, some otherwise — about the effects that climate legislation will have on American jobs and the American economy. We need to consider these predictions. But we also need to consider the consequences of failing to act."
What Baucus’s comments will mean for the climate bill remains to be seen.
He stressed that he wants legislation that will "protect our land and those whose livelihood depends on it." He also said that, considering the state of the economy, Congress must be mindful of the cost of legislation and diligent about creating jobs, including in the energy sector.
The Finance Committee hearing was on the impact of climate change legislation on U.S. jobs. It started out with calls for comprehensive greenhouse gas legislation from a labor union official and a utility representative. Then representatives from the American Enterprise Institute and the American Council for Capital Formation took the floor and threw cold water on hopes that increases in green jobs would offset potential losses in traditional industrial sectors, justifying their claims with their own studies.
Once opening statements were over, the hearing quickly morphed into a debate between Sen. John Kerry (D-Mass.) and two witnesses over the accuracy of conservative think tanks’ studies on the bills’ economic effects.
Margo Thorning, chief economist with ACCF, a think tank that has received more than $1.6 million in funding from ExxonMobil since 1998, pointed to a survey her organization produced with the National Association of Manufacturers that says the U.S. would lose up to 2.4 million jobs by 2030 and that “household income would be about $1,200 less than it otherwise would be.”
She said the study relied on macroeconomic models, which “are able to capture the dynamic impact of changes in energy prices,” as opposed to input-output models, which “are not able to capture the impact of higher energy prices on the U.S. economy.”
Kerry jumped on the claim.
“The question of assumptions is really fundamental to this,” he said.
Numerous studies have been done by academic and progressive think tanks as well as environmental groups that have found a net reduction in household costs and growth in jobs, Kerry said.
A University of Massachusetts Amherst study, for example, concluded that the clean energy boost provide House-passed American Clean Energy and Security (ACES) bill, in conjunction with the stimulus package, would provide a net increase of about 1.7 million jobs. A cost analysis by the EPA projected an increase in annual costs of about $80 to $111 per household, but that didn’t factor in the economic benefits of reducing greenhouse gas emissions. A University of California, Berkeley assessment concluded that the number of jobs, GDP and household income would rise with the legislation because energy efficiency would reduce costs.
"You don’t take into account the cost of inaction," Kerry added.
As Thorning began to mention the unwillingness of India and China to take action on climate change, Kerry interrupted her, saying,
“That’s not accurate. That’s not accurate. You need to be accurate.”
“The changes that have been taking place are taking place in the rest of the world; not in the U.S.,” Kerry said. “China, India and others are going to clean our clock if we don’t act.”
AEI’s Kenneth Green drew Kerry’s ire when he contended that “economists, EarthFirst and people like me at AEI say cap-and-trade doesn’t work … cap and trade hasn’t worked in Europe and it will not work here.”
“Europe’s trading system didn’t fail; its working”
“They began a two year initial phase in which they acknowledge they made some mistakes,” Kerry said. “They’ve reduced emissions. They’re growing their economies. Germany today has created more jobs in the [renewable energy sector] than in their vaunted automobile industry.”
Green, however, sees structural problems with Europe’s cap-and-trade program. "We will see many of the same problems here" only on a much larger scale, he said.
Kerry, an author of the Senate’s Clean Energy Jobs and American Power Act, told Green he was “seeing something that thousands of others don’t.”
Those others, said Kerry, presumable referring to the Intergovernmental Panel on Climate Change, “won a Nobel Prize; we didn’t.”
“If all these people are over here and you’re over there, the [burden] is pretty heavy [on you] to tell me we need to exercise the precautionary principle,” said Kerry. After asking whether AEI’s studies have been peer-reviewed, Kerry added, “You realize there are two or three thousand peer-reviewed studies that contradict your findings.”
Abraham Breehey of the International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers got a warmer reception from Democrats on the committee. Labor unions that see renewable energy creating jobs that can’t be exported and legislation supporting more businesses have given the climate bill a boost with their support.
“The lack of a clear comprehensive policy and the uncertainty associated with the future regulation of greenhouse gases is delaying the creation of job opportunities our nation needs,” Breehey said.
Van Ton-Quinlivan, director of Workforce Development and Strategic Programs at Pacific Gas & Electric Co., also cited a need for national policy.
“Over the next five years, 30 to 40 percent of industry employees will be eligible to retire,” she told the committee. “We need a clear, long-term national policy direction … that will unlock more investment” in training and infrastructure. “This is an important opportunity for job creation and economic growth,” but we need trained skilled workers, she said.