Rabbit Valley Road

Henry Waxman’s ascent to chair the House Energy & Commerce Committee has environment and energy camps split down the middle. Environmentalists are ecstatic, but the energy business community is a little apprehensive. The split revolves around Cap & Trade legislation, and the degree of enforcement that will come out of committee:

Waxman’s decision to challenge Dingell for chairmanship of the powerful committee was largely motivated by fundamental differences between the two men on the design of a US cap-and-trade programme. Waxman, a long-time ally of the environmental community, favours stringent short-term emissions reduction targets, auctioning emissions allowances, and very limited cost-containment mechanisms, such as offsets. Dingell, a long-time ally of the automobile industry, favoured more lenient short-term targets and a certain amount of emissions allowances given for free to regulated companies to help them adjust to the increased cost of doing business that will result from climate policy in the near term.

Here, I tend to side with the environmentalists. Cap and trade will be difficult to enforce by nature of its design. The tougher the bill is straight out of committee, the less leeway opposition will have to water it down. I prefer a carbon tax BTW, but that’s neither here nor there. Also, I’m still trying to get my head around the smorgasbord of responsibilities within the House Energy & Commerce Committee.