November 7, 2007

To: Members of the Committee on Environment and Public Works and Subcommittee on Private Sector and Consumer Solutions to Global Warming and Wildlife Protection

We are writing you to express our concerns about Senate Bill 2191, "America's Climate Security Act of 2007," introduced by Senators Joe Lieberman (I-Conn.) and John Warner (R-Va.). The legislation falls short of reducing greenhouse gas emissions by the amount current science says is needed to avoid dangerous global warming. In addition, the bill as it is currently written is likely to give away hundreds of billions of hard-earned taxpayer dollars in windfall profits to polluters, undermining the emissions reduction system it seeks to construct. Finally, the trading allowed in the bill could force poor communities, communities of color and indigenous peoples to absorb the direct costs of emissions reductions while seeing none of the benefits nor a swift change to a renewable, carbon-free energy mix.

EMISSIONS CUTS NOT AMBITIOUS ENOUGH

Leading scientists indicate that to avoid some of the most catastrophic effects of global warming, we must begin dramatically reducing emissions now, with cuts of at least 30 percent below 1990 levels by 2020 and at least 80 percent below 1990 levels by 2050. But America’s Climate Security Act as it is currently written would achieve 15 percent cuts below current levels by 2020, and 51-63 percent cut below 2005 levels by 2050--if all goes well. While this bill is presented as a start to reduce emissions, it amounts to nothing less than a false start because of its unbridled corporate giveaways, and its costs to the poor.

The U.S. can achieve zero CO2 emissions by 2050-without relying on nuclear power --thereby leading the way in emissions reductions and helping lead China, India and other future big emitters to the table to develop a global solution without promoting dangerous and expensive technologies. But to achieve these justifiably ambitious goals, the manner in which the revenue is allocated from any cap and trade program is key.

UNPRECEDENTED CORPORATE GIVEAWAYS

Analysis conducted by Friends of the Earth reveals that the Lieberman-Warner Bill would give away $1.5 trillion worth of pollution permits - or roughly fifty percent of the permits - and auction the remaining 50 percent of the permits over the lifetime of the bill.

Of the Lieberman-Warner allocation giveaway, 38 percent--or $436 billion-- is earmarked for the fossil fuel industry over the lifetime of the program; $268 billion will go to the coal industry alone. Even of the allowances that would be auctioned for sale, the bill allows 15 percent of the revenue from auctions to go the fossil fuel industry over the lifespan of the bill in order to subsidize "advanced sequestration of carbon." This subsidy for carbon sequestration amounts to an additional $325 billion in giveaways over the lifetime of the program to the most carbon-intensive of fossil fuels, coal.
Carbon sequestration is currently an expensive technology, and unproven at the scale needed. Let's work out these problems before we make decisions to subsidize sequestration activities by the fossil fuel industry.

The Lieberman-Warner bill also permits an additional $522 billion to the energy sector through the "zero and low carbon energy technologies" section of the bill. Though the section creates a reverse auction that may ultimately benefit energy efficiency and renewables, the legislation is vague. Given the set-up of the reverse auction, proceeds could be given away to the fossil fuel industry--or, in the future, to the nuclear industry. As with carbon sequestration, a full public debate on the costs, security concerns, and waste disposal problems associated with nuclear power must be debated before any such subsidies are allocated in the name of climate stability. The giveaway of free allocations could also saddle communities with the environmental and public health costs associated with toxic "hot spots" as greenhouse gases and other toxic emissions rise in their communities in addition to the financial costs of higher utility bills. The corporate giveaways also could result in fewer resources to be allocated to the poorest globally; an earlier provision in the bill to provide 10 percent of auction proceeds for global relief for the world’s poorest populations hit hardest by climate change impacts should be restored.

A TAX ON WORKING FAMILIES

We are not alone in urging that you rethink these giveaways. Analysis from the Center on Budget and Policy Priorities urges that a well-designed cap-and-trade system treat the emissions allowances as a resource to be auctioned off for public purposes rather than as windfall profits for energy companies. They have also warned that giving away these allowances could significantly increase poverty, increase the national deficit or both. The Center on Budget and Public Policy Priorities notes: "A "cap-and-trade" system, the emissions-control approach that currently seems to have the most support in Congress, can provide ample resources to shield vulnerable Americans from the effects of higher energy prices, but only if a significant share of the emissions allowances are auctioned off to energy companies rather than given away. If the allowances are largely provided to energy companies free of charge, cap-and-trade legislation will effectively impose heavy burdens on low-income households while conferring windfall gains on companies and their shareholders. This latter course would risk large increases in deficits and debt (already on course to reach unsustainable levels in future decades), increases in poverty, and a further widening of the gap between rich and poor." While the bill attempts to set aside some funds to protect low-income families, the amount of funds directed to this purpose are woefully inadequate, falling well below what would be needed. Further, the mechanisms for putting these funds to use are poorly matched for the task at hand, are likely to be diverted to other purposes, and would require a massive and rapid expansion of existing programs without the capacity to meet the task. The fact that the bill guarantees the same small amount of funds for wildlife adaptation as it does for low income adaptation is both economically irresponsible and ethically questionable.

In sum, the goals to be achieved in a responsible climate change bill are ambitious and necessary. However, the Lieberman-Warner bill falls woefully short of meeting the scientific threshold to avoid dangerous climate change while subsidizing polluters, and creating economic burdens for the working poor. Moreover, it won't establish the necessary US leadership that will allow the US to speak credibly with India, China and other big emitters. We believe the US can achieve zero carbon emissions by 2050 without resorting to nuclear power and that Congress should support policies that achieve this.

To have the strongest bill possible and to achieve the ambitious emissions reductions necessary to avoid the most catastrophic effects of global warming, we strongly urge you to:

1) Ensure that 100 percent of emissions allocations are auctioned, not given away free to polluters;
2) Set goals that would achieve at least 30 percent reductions below 1990 levels by 2020 and at least 80 percent reductions below 1990 levels by 2050;
3) Ensure that environmental justice, public health and economic justice concerns are adequately addressed in the trading measures that are allowed;
4) Hold hearings on how the U.S. could achieve zero CO2 by 2050 without resorting to nuclear power.

Signed,

Brent Blackwelder, President
Friends of the Earth
Washington, DC

John Passacantando, Executive Director
Greenpeace USA
Washington, DC

Michael Brune
Rainforest Action Network
San Francisco, CA

Patrick McCully, Executive Director
International Rivers Network
Berkeley, CA

Tom Goldtooth, Director
Indigenous Environmental Network
Bemidji, MN

Rabbi Arthur Waskow, director
The Shalom Center
Rabbi Jeff Sultar, director
Green Menorah Covenant campaign of The Shalom Center
Philadelphia, PA

Atossa Soltani, Executive Director
Amazon Watch
Malibu, CA

Kathleen Rogers, President
Earthday Network
Washington, DC

Mike Tidwell, Executive Director
Chesapeake Climate Action Network
Takoma Park, MD

James P. Barrett, Ph.D., Executive Director
Redefining Progress
Washington, DC

Felicia Davis
Georgia Kids Against Pollution
Atlanta, GA

Mary Anne Hitt, Executive Director
Appalachian Voices
Boone, NC

Rev. Lennox Yearwood, President
Hip-Hop Caucus
Washington, DC

Ken Bossong, Executive Director
SUN DAY Campaign
Takoma Park, MD

Ansje Miller, Policy Director
Center for Environmental Health
Oakland, CA

Ann Hancock
Climate Protection Campaign
Sonoma County, CA

Jill Johnston
Southwest Workers Union
San Antonio, TX

Michael Marriott, Executive Director
Nuclear Information and Resource Service
Takoma Park, MD

Jenice View, Education Director
Just Transition Alliance
Washington, DC

Tam Hunt, Energy Program Director / Attorney
Community Environmental Council
Santa Barbara, CA

Ted Glick, Coordinator
U.S. Climate Emergency Council
Takoma Park, MD

Tom Stokes
Climate Crisis Coalition
South Lee, MA

Anne Petermann, Co-Director
Global Justice Ecology Project
Hinesburg, VT

Tom Kelly
Kyoto USA
Berkeley, CA

Jerry Mander, Co-Director
International Forum on Globalization
San Francisco, CA

Claire Greensfelder, Co-Director
Plutonium Free Future
Berkeley, CA

Rev. Osagyefo Uhuru Sekou, Senior Community Minister
Judson Memorial Church
New York, NY

Tom Athanasiou, Executive Director
EcoEquity
Berkeley, CA

Jane Williams, Executive Director
California Communities Against Toxics
Rosamond, CA

Ross Gelbspan, author,
Theheatisonline.org
Boston, MA

Steve Kretzmann, Executive Director
Oil Change International
Washington, DC

Brian Tokar
Institute for Social Ecology
Plainfield, VT

Dr. Stephen Smith, Executive Director
Southern Alliance for Clean Energy
Knoxville, TN

Eban Goodstein, Director
Green House Network
Portland, Oregon

Phil Mitchell, Founder
2People.org Citizen's Network for Climate Action
Portland, OR

CC: Senate Majority Committee Members
Barbara Boxer (Chairman), Max Baucus, Joseph I. Lieberman, Thomas R. Carper,
Hillary Rodham Clinton, Frank R. Lautenberg, Benjamin L. Cardin, Bernard Sanders
Amy Klobuchar, Sheldon Whitehouse

Senate Minority Committee Members
James M. Inhofe, John Warner, George V. Voinovich, Johnny Isakson, David Vitter
John Barrasso, Larry E. Craig, Lamar Alexander, Christopher S. Bond

Bill Section Percent of Permits Number of Permits Dollar Value Percent Value
Auction Beneficiaries
Energy Technology Deployment Program
Zero and Low Carbon Energy Technologies 12.44% 16,376,382,450 $522,086,916,150 14.50%
Advanced Coal and Sequestration 7.74% 10,189,749,080 $324,854,081,160 9.02%
Cellulosic Biomass Ethanol and Solid Waste Technology 1.93% 2,547,437,270 $81,213,520,290 2.26%
Advanced Technology Vehicles 5.53% 7,278,392,200 $232,038,629,400 6.44%
Energy Assistance Fund
Low Income Home Energy Assistance Program 4.94% 6,504,662,000 $209,375,394,000 5.82%
Weatherization Assistance Program for Low Income Persons 2.47% 3,252,331,000 $104,687,697,000 2.91%
Rural Energy Assistance Program 2.47% 3,252,331,000 $104,687,697,000 2.91%
Adaptation Fund
Interior Department - Pittman Robertson Wildlife Restoration Act 3.95% 5,203,729,600 $167,500,315,200 4.65%
Interior Department - Endangered Species, Migratory Bird 1.98% 2,601,864,800 $83,750,157,600 2.33%
Interior Department - Grant Programs for Wildlife 0.49% 650,466,200 $20,937,539,400 0.58%
Agricultural Secretary - National Forest and National Grasslands (USFS) 0.49% 650,466,200 $20,937,539,400 0.58%
EPA Agency - Freshwater and Estuarine Ecosystems 1.24% 1,626,165,500 $52,343,848,500 1.45%
Army Corps - Freshwater and Estuarine Ecosystems 1.24% 1,626,165,500 $52,343,848,500 1.45%
Commerce Department - Community and Costal Lands 0.49% 650,466,200 $20,937,539,400 0.58%
Climate Change Worker Training Fund 2.47% 3,252,331,000 $104,687,697,000 2.91%
TOTAL TO FOSSIL FUEL INDUSTRY IN AUCTION 15.52% 10,189,749,080 $324,854,081,160 15.45%
TOTAL TO COAL INDUSTRY IN AUCTION 15.52% 10,189,749,080 $324,854,081,160 15.45%
TOTAL TO AUCTION 49.87% 65,662,940,000 $2,102,382,420,000 58.39%
Allocations
Early Action 0.58% 760,800,000 $10,651,200,000 0.30%
States
Energy Savings 1.00% 1,316,700,000 $36,005,460,000 1.00%
Energy Efficient Buildings 1.00% 1,316,700,000 $36,005,460,000 1.00%
Programs that Exceed Emission Reduction Targets 2.00% 2,633,400,000 $72,010,920,000 2.00%
General Allocation
LIHEA 1.67% 2,194,500,000 $60,009,100,000 1.67%
Population 1.67% 2,194,500,000 $60,009,100,000 1.67%
Coal/ Natural Gas/ Petroleum 1.67% 2,194,500,000 $60,009,100,000 1.67%
Electricity Consumers 10.00% 13,167,000,000 $360,054,600,000 10.00%
Bonus Allowance for Carbon Capture and Sequestration 2.99% 3,932,160,000 $78,190,720,000 2.17%
Domestic Agriculture and Forestry 5.00% 6,583,500,000 $180,027,300,000 5.00%
International Forest Protection 3.00% 3,950,100,000 $108,016,380,000 3.00%
Electric Power Sector
Not to Fossil Fuels 0.20% 257,632,000 $4,371,742,400 0.12%
To Fossil Fuels 9.59% 12,623,968,000 $214,215,377,600 5.95%
Industrial Sector - Not to Fossil Fuels
Not to Fossil Fuels 3.82% 5,023,824,000 $85,248,976,800 2.37%
To Fossil Fuels 5.97% 7,857,776,000 $133,338,143,200 3.70%
TOTAL TO FOSSIL FUEL IN ALLOCATION 41.46% 27,369,204,000 $496,404,540,800 33.13%
TOTAL TO COAL IN ALLOCATION 24.06% 15,879,669,120 $288,517,558,717 19.26%
TOTAL TO ALLOCATION 50.13% 66,007,060,000 $1,498,163,580,000 41.61%
TOTAL TO FOSSIL FUEL INDUSTRY IN BILL 28.53% 37,558,953,080 $821,258,621,960 22.81%
TOTAL TO COAL IN BILL 19.80% 26,069,418,200 $613,371,639,877 17.05%
TOTAL IN BILL 100.00% 131,670,000,000 $3,600,546,000,000 100.00%