Waxman Markey Bill Brings Us Halfway There

While the passage of the Waxman/Markey bill last Friday is a great step forward in the development of US carbon markets, it should not be forgotten that we are only halfway to the finish line. The US Senate needs to develop either companion legislation or approve its own version of climate change and energy package. I am very hopeful that this will occur in the next 6 months so that President Obama can go to the global climate meetings in Copenhagen with a firm platform for the US. But the heavy lifting in the Senate will revolve around getting the 60 votes necessary for passage of cap and trade legislation. It should also be remembered that even when that passes, the bill will go to the House/Senate conference committee for negotiations and harmonization.

Today, it is still way too early to predict what the final law will look like. The 1201 page Waxman Markey bill has involved compromise to get this far and passage of a Senate bill will also involve those kind of compromises. For example, no one expected the need for USDA approval for carbon offsets from forestry and agriculture, and that will now be the case.

The good news is that Waxman Markey is the first piece of significant federal energy legislation in 31 years since the Energy Policy Act of 1978 and the first piece of federal environmental legislation since the the Clean Air Act Amendments of 1990. The bill is all encompassing including initiatives for the smart grid, carbon capture and storage, national renewable portfolio standards, and carbon reductions. There is much more in the big that needs to be vetted, but it is a substantial piece of legislation that will decarbonize the US economy and point us on a greener path for the future.

The next six months will be arduous and contentious but if the Obama Administration expects an uplift it needs approval of this legislation to create the Green Economy this year. Don't forget next year is a Congressional election bye year and will more partisan (if that is possible). We expect passage and the dawn of the Green Economy!