Controlling Costs of New Energy and Climate Legislation - Senate Testimony
Eileen Claussen testifies today before the Senate Energy and Natural Resources Committee about meaures to control costs and prices under climate and clean energy legislation.
“Climate legislation is critical to both our future economic prosperity and our environmental well-being,” Claussen said. “I am convinced that if we draw from experience to enact measures that reward innovation and limit costs, we will prove once again that no challenge is beyond our reach.”
In her testimony, Claussen details how to avoid excessively high costs of reducing GHG emissions by: 1) making available significant quantities of high-quality domestic and international offsets; and 2) accelerating the development and deployment of clean energy technologies, including CCS and nuclear power.
Lessons learned from the federal Acid Rain Program, from U.S. states, and from the European Union offer key insights to avoid price volatility under cap and trade. Specifically, Claussen recommends allowing banking of offsets and GHG allowances and multi-year compliance periods and multi-year allocations to avoid unnecessary price spikes.
Taken together, smart design of a cap-and-trade regime and incentives to spur technological change will greatly reduce the costs and deliver the benefits of climate protection.