US Senate addresses concerns of cap and trade system implementation

The impact on consumers of higher home energy prices from the creation of a cap and trade system would have to be offset by the federal government, according to an amendment to the Senate budget framework agreed to by lawmakers.
The amendment, sponsored by Sen. Barbara Boxer, D-Calif., would seek to address widespread concerns that the implementation of a cap and trade system could lead to a spike in electricity and gas prices.

It was approved by lawmakers by a margin of 54-43, as the Senate continues debating its outline of a $ 3.5 tn budget for the federal government in fiscal year 2010. Lawmakers also approved a separate measure that would have prevented any higher electricity or gas price increases due to cap and trade, backed by Sen. John Thune, R-S.D. But it would appear that the Boxer amendment would take priority over the Thune measure, which would have in effect made it difficult for the government to implement a cap and trade system.
"We believe that revenues from a climate bill should we pass one -- and I certainly hope we will -- would be used to offset any kind of increase in electricity and gas prices," Boxer said on the floor of the Senate.

The idea of forcing companies to buy and sell credits allowing them to emit pollutants into the atmosphere as a means to tackle climate change was one of the central planks of President Barack Obama's election campaign. He proposed paying for any increase in costs that consumers would face in home energy prices through a tax credit of $ 400 for most working Americans.
Republicans have argued that the increase in energy costs would be much higher than $ 400 a year, and that consumers would inevitably suffer as a result. Further muddying the waters, neither the House nor Senate included in their budgets funding for the tax credit, known as Making Work Pay, after an initial two year period.

An aide to Boxer said the senator's position is that all the various elements of the sweeping energy legislation that Democrats are expected to pursue this year would leave the consumer in a net positive position. These include not only the cap and trade concept, but also weatherizing of homes, promoting more fuel efficient vehicles and enhancing development of alternative sources of energy.
Earlier, House Energy & Commerce Chairman Henry Waxman, D-Calif., introduced legislation which proposed widespread reform of US energy policy.