House panel advances global warming bill

updated 9:12 p.m. ET May 21, 2009

WASHINGTON - A far-reaching bill that would impose the first nationwide limits on greenhouse gases has been approved by a House committee despite strong Republican opposition.

Democrats on a 33-25 vote Thursday pushed the legislation through the Energy and Commerce Committee. The bill calls for cutting gases linked to global warming by 80 percent over the next 40 years. The emissions limits target power plants, factories, refineries and other industrial plants.

Republicans failed repeatedly in their attempts to kill or weaken the measure. They argued that the emissions cuts would cause higher energy prices and job losses. The bill's supporters said costs to consumers could be contained and that new clean-energy jobs would be created.

The legislation would require factories, refineries and power plants to reduce emissions of carbon dioxide and other greenhouse gases by roughly 80 percent by mid-century and would help wean the country off fossil fuels by forcing energy conservation and increased use of renewable energy.

"The American people are overwhelmingly calling for a new direction," said Rep. Ed Markey, a Democrat who along with committee chairman Henry Waxman, a Democrat, sponsored the measure. "They are calling for this Congress to take action in a way that changes forever our relationship with imported oil, with the loss of jobs overseas, with the pollution that is causing greenhouse gas warming on our planet."

Republicans argued that the pollution cuts would lead to soaring energy prices and threaten economic growth by imposing new costs on energy intensive industries already facing economic hardships.

But the bill's supporters said provisions in the bill were designed to help contain costs and protect electricity users. To ease the economic impact, the government would issue pollution allowances, or permits, to businesses that could be traded on the open market. The bill calls for giving away 35 percent of the pollution permits to electric utilities and keep them from passing higher costs on to consumers.

The government also would sell 15 percent of the allowances and use the money to provide direct relief to consumers.

"It is very clear that ratepayers are going to be protected," Waxman insisted.

Republicans, nevertheless, have characterized this "cap-and-trade" approach as tantamount to a massive energy tax because it would make energy from fossil fuels — especially electricity produced from burning coal — more expensive.

To get the support of Democrats from coal and industrial states, Waxman agreed to give away significant emissions allowances to industries in their states, including the electric utilities, steel manufactures, automakers and refineries. Waxman also scaled back the required greenhouse gas reductions between now and 2020 from 20 percent to 17 percent. And he eased the requirement for utilities to use renewable energy such as wind and solar for electricity production.

Democrats on Thursday added language to create a clean energy bank to disperse grants for new forms of energy and inserted a "cash for clunkers" program that would provide rebates to consumers who turn in gas guzzling vehicles for more fuel-efficient cars.

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