Despite heavy criticism from House Republicans and generally tepid support from House Democrats, the latest bill on climate change initiatives, H.R. 2454: The American Clean Energy and Security Act (ACESA), garnered just enough votes to move forward in the legislative process, passing 219 to 212. Having passed the House, the next stop for ACESA is the U.S. Senate for consideration.

Introduced by U.S. House Energy and Commerce Committee Chairman Henry Waxman (D-CA) and House Energy and Environment Subcommittee Chairman Edward Markey (D-MA), H.R. 2454 calls for an economy-wide greenhouse gas (GHG) cap-and-trade system and various complementary GHG reduction measures, while also providing for federal investment in the areas of clean energy and energy efficiency programs, carbon capture and sequestration technologies, and the research and development of renewable technologies.  

Some of the most contentious provisions of the bill were those devoted to reducing global warming pollution, in particular the bill’s cap-and-trade program, which would establish an economy-wide cap on GHG emissions that is reduced over time, forcing GHG emitters to choose between reducing their emissions through technological improvements, purchasing emissions allowances, or paying substantial penalties. Using this cap-and-trade mechanism as the primary means to reduce GHG emissions, ACESA aims to reduce GHG emissions 17% from 2005 levels by the year 2020. The bill would also institute a national standard requiring utilities to generate at least 20% of their electricity from renewable energy sources by 2020, but would allow up to one-third of this requirement to be satisfied through efficiency improvement measures. Various members of the House have expressed concerns that such a stringent energy law would harm U.S. industry already weakened by a recession, eliminate jobs and increase energy costs for American households.

As a result, the latest iteration of ACESA contains numerous compromises, many inserted shortly before Friday’s vote. One such compromise requires the President, starting in 2020, to impose a “border adjustment” or tariff on certain goods from countries that do not act to limit their global warming emissions. This provision was purportedly added to secure the votes of those House members who were uncertain about the bill’s ultimate impact on jobs in heavy industry. Other compromises included reducing the bill’s emissions reduction targets, easing its renewable electricity mandate for utilities, and nearly eliminating the auction system for emissions allowances contained in earlier versions of the bill.

Despite its passage in the House, the future of ACESA remains uncertain, as it faces both opposition and competing bills intended to address climate change in the Senate. For example, the Senate Energy and Natural Resources Committee chaired by Sen. Jeff Bingaman (D-NM) recently passed the American Clean Energy Leadership Act. This bill addresses several of the same energy issues addressed by ACESA, but with a stronger emphasis on enhancing energy efficiency and increasing capitalization for clean energy projects, rather than mandatory emissions reduction. Additionally, the Senate Environment and Public Works Committee has preliminary plans to act on climate change initiatives expected from Sen. Barbara Boxer (D-CA) later this summer. These measures, as well as proposals from other Senate committees, will likely be combined to create the Senate version of ACESA. If the Senate passes its own version of ACESA, differences between the Senate and House bills would have to be reconciled and the final bill passed by both houses, before the bill could be sent to President Obama to be signed into law.