Yesterday, the House of Representatives Energy and Commerce Committee favorably reported H.R. 2454, the American Clean Energy and Security Act of 2009 by a vote of 33-25, largely along party lines. H.R. 2454 is comprehensive legislation intended to address climate change and clean energy generation. The bill, as reported, contains several measures aimed at transitioning the domestic auto industry to the next generation of fuel efficient, low-carbon vehicles.
Greenhouse Gas Emissions Allowances: H.R. 2454 would cap the emissions of greenhouse gases in the United States. To help emitters achieve the emissions limit of 17 percent below 2005 levels by 2020 and 83 percent below 2005 levels by 2050, H.R. 2454 creates an emissions allowance trading program. At the outset of the program, companies producing electric and advanced technology vehicles would get three percent of the allowances through 2017 and one percent through 2025.
Advanced Technology Vehicle Loan Program: H.R. 2454 would double the $25 billion Advanced Technology Vehicle Loan Program originally created by the Energy Independence and Security Act of 2007. This program will help auto companies and auto parts manufacturers retool their facilities to produce advanced technology vehicles or qualified components. Program funds can also be used to finance associated engineering integration costs.
"Cash for Clunkers" Program: H.R. 2454 would provide vouchers ranging from $3,500 to $4,500 to consumers that trade in older cars for newer, more fuel-efficient models. New cars purchased through the program must get at least 22 miler per gallon and the value of the voucher would be dependent upon the increase in fuel economy from the old car to the new car.
New Heavy-Duty and Non-Road Vehicle and Engine Emissions Standards: H.R. 2454 would require that by December 31, 2010, the Environmental Protection Agency (EPA) issue standards regulating greenhouse gas emissions from new heavy-duty motor vehicles or engines. EPA would also be required by the end of 2012 to issue emissions standards for new non-road vehicles or engines that are determined by EPA to be the largest emitters and whose emissions can be reduced most cost-effectively. These standards would not apply to vehicles already regulated under EPA's Tier II emissions program and are intended to clarify the standards for construction and farm equipment, locomotives and airplanes.
As a result of President Obama's announcement this week that the administration will enforce more stringent national vehicle fuel economy standards than were newly implemented in 2007, the House Energy and Commerce Committee dropped from H.R. 2454 a provision enabling states, such as California, to enforce their own fuel economy standards. President Obama's proposed national standard would mandate a fleetwide average of 35.5 miles per gallon by 2016 through a five percent annual increase beginning in 2012. This is four years in advance of the standards established in 2007.
While reported by the Energy and Commerce Committee, H.R. 2454 has been assigned to eight other House Committees with jurisdiction of the bill and that must address portions of it before being considered by the full House. Majority Leader Reid has indicated that the Senate will wait to receive the bill from the House before full debate will occur by that chamber.