The House Energy and Commerce Committee passed its version of a comprehensive energy and climate change bill on May 21, by a vote of 33-25, largely along party lines. The American Clean Energy and Security Act (H.R. 2454) is intended to move the country towards a clean energy economy through a comprehensive approach to energy policy built largely around an emissions "cap and trade" program. Components of the bill include a 20-percent national renewable energy and efficiency standard by 2020 along with numerous programs to encourage energy efficiency and conservation. Another component of special interest to the conservation community is a reliable funding source for natural resource adaptation, which could top $4 billion by 2030, reports the Wildlife Management Institute.

"[Our] Committee took decisive and historic action to promote America's energy security and to create millions of clean energy jobs that will drive our economic recovery and long-term growth," said Committee Chairman Henry Waxman. ?"This bill, when enacted into law this year, will break our dependence on foreign oil, make our nation the world leader in clean energy jobs and technology, and cut global warming pollution."?

The cornerstone of the massive bill is a greenhouse gas emissions cap-and-trade program. Under the bill, the Environmental Protection Agency (EPA) would distribute a declining number of permits (called "allowances" in the bill) to industry and governments for releasing greenhouse gas pollutants. The reduction in allowances, the "cap" in the program, calls for a 17-percent reduction in emissions by 2020 and an 83-percent reduction by 2050. Excess allowances could then be given away by the permit holders or the allowances could be sold, i.e., "traded," on a secondary market allowing entities that need more allowances for their carbon emissions to purchase them. An analysis released by the Congressional Budget Office in early June indicated that the legislation would increase federal revenues by about $846 billion during 2010-2019 while increasing direct spending by about $821 billion?a net gain of about $24 billion for the federal treasury.

"Creating this price on carbon emissions is the key to the entire bill's architecture," noted John Kostyack, Executive Director of Wildlife Conservation and Global Warming for the National Wildlife Federation. "By setting declining caps on emissions each year, the bill gradually drives up the cost of emission allowances and thereby creates incentives for private companies and public agencies to meet their economic objectives with lower emissions. Those who can accomplish economic objectives by polluting less than allowable levels can benefit financially by selling unused allowances."

Of particular importance to the conservation community is that H.R. 2454 would allocate a small percentage of total allowance value toward natural resource adaptation?1 percent from 2012 through 2021, 2 percent from 2022 through 2026, and 4 percent from 2027 through 2050. At this level and using EPA estimates, allocations would start at approximately $550 million in 2012 and increase to more than $4 billion by 2030, if the program would continue as currently proposed. Bill advocates worked to ensure that all funding for adaptation programs would be dedicated without further appropriation and were successful with state funding provisions. However, the federal share would be held in a new Natural Resources Climate Change Adaptation Fund that would require annual appropriation by Congress.

Under the bill, 38.5 percent of the natural resource-adaptation allowances would be distributed directly to state agencies. Of that, the vast majority (32.5 percent) would go to state fish and wildlife agencies using the Pittman-Robertson funding mechanism; the remainder would target coastal-management programs. The federal share of adaptation funding would be distributed among departments involved in land, wildlife, aquatic and coastal conservation. Habitat acquisition and protection are key components of the bill and 12 percent of the funding is targeted towards the Land and Water Conservation Fund. In addition, tribal entities will receive 3 percent of allowances for habitat efforts by federally recognized sovereign tribes.

The legislation calls for the creation of a National Climate Change Adaptation Program within the U.S. Global Change Research Program (GCRP), to increase the effectiveness of adaptation efforts at the federal level. Although housed within the EPA, the GCRP will be dispersed broadly across federal agencies. The planning and implementation of activities would be enhanced through the strategic development of Federal and State Natural Resource Adaptation Plans. Funding from the bill would be provided only to activities outlined within the federal and state plans. The bill outlines a detailed process and substantive requirements for the strategies to prioritize goals and establish a schedule for identifying, monitoring and conserving natural resources impacted by climate change.

Beyond the natural resource-adaptation provisions, the bill addresses a broad spectrum of energy and climate-change policy revisions. It would create a market for offset credits that could spur conservation efforts for forests, grasslands and soils that help to sequester carbon. In addition, it would require a new EPA strategy to address barriers to carbon sequestration while developing a coordinated approach to permitting and certifying sequestration sites. The bill would promote energy conservation through development of qualified renewable energy sources, such as wind, solar, geothermal, biomass, biofuels and more. In addition, there are provisions that would address vehicle, building and appliance efficiency, authorize a "cash for clunkers" program and take steps towards "smart grid" and transmission planning.

The size and scope of the bill have made it a lightning rod on Capitol Hill, with long-term prospects of the legislation unclear. The bill was referred to eight other House committees for consideration and, while some will simply rubber stamp it, both the Agriculture Committee and Ways and Means Committee have stated they will do substantive work on the bill. Speaker of the House Nancy Pelosi has given a June 19 deadline to complete committee work on the bill, potentially paving the way for a full House vote by the August recess. (jas)