Cap and Trade Rules
Without Delay: Congress to Fast-Track Climate Legislation

January 15, 2009

The heads of some of America's largest corporations together with the leaders of five of the country's
largest environmental groups today presented a joint plan to Congress for
climate protection legislation. Congressional Democrats met their call for
immediate action with assurances that they agree - there is no time for delay.

Testifying before the House Committee on Energy and Commerce in the first
congressional hearing of 2009 on climate change, members of the U.S.
Climate Action Partnership called for a reduction in U.S. greenhouse gas
emissions by 80 percent of 2005 levels by 2050 through an economy-wide
cap-and-trade program.

"In the past, the U.S. has proven that we have the will, the capabilities
and the courage to invest in innovation - even in difficult times," said
Jeff Immelt, chairman and chief executive of General Electric, one of the
USCAP partners.

"Today, cap-and-trade legislation is a crucial component in fueling the
bold clean energy investments necessary to catapult the U.S. again to
preeminence in global energy and environmental policy, strengthen the
country's international competitiveness, and create millions of rewarding
new American jobs," Immelt said.

"The health of our economy and the safety of our climate are inextricably
linked, except nature doesn’t do bail-outs," said Jonathan Lash, president
of the World Resources Institute.

"USCAP has redefined what is possible," said Lash. "If the diverse
membership of USCAP can find common ground, Congress can agree on
effective legislation."

Committee chair Congressman Henry Waxman of California said his goal is to
pass comprehensive climate and energy legislation in the committee before
the Memorial Day recess.

"That is an ambitious schedule, but it is an achievable one," said Waxman
who is new to the committee chairmanship. "We cannot afford another year
of delay. As today's hearing will show, a consensus is developing that our
nation needs climate legislation. Our job is to transform this consensus
into effective legislation. The legislation must be based on the science
and meet the very serious threats we face."

House Speaker Nancy Pelosi said, "Chairman Waxman has set an aggressive
timetable for action to reduce global warming and our dependence on
foreign oil. I share his sense of urgency and his belief that we cannot
afford another year of delay."

The Houston Ship Channel hosts 25 percent of the United States' oil
refining capacity. Refineries would have to control their greenhouse
gas emissions under a national carbon cap-and-trade program. (Photo
by Roy Luck)

Developed through two years of intensive analysis and consensus-building
among USCAP's 26 corporations and five environmental groups, the
"Blueprint for Legislative Action" aired before the committee today sets
forth steps for creating a mandatory, economy-wide cap-and-trade program
for the main greenhouse gas carbon dioxide.

Under a cap-and-trade system, a government authority first sets a cap,
deciding how much pollution in total will be allowed. Next, companies are
issued credits, essentially licenses to pollute. If a company comes in
below its cap, it has extra credits which it can trade with other companies.

USCAP's plan couples the cap-and-trade program with cost containment
measures and complementary policies addressing a federal technology
research development and deployment program, coal technology, and
transportation, as well as building and energy efficiency.

Jim Mulva, chairman and chief executive of the oil company ConocoPhillips,
the nation's second largest refiner, told the committee, "We believe we
must act now in a united effort to slow, stop and reverse the growth of
greenhouse gas emissions."

Mulva agreed that quick action is imperative to curb climate change. "Each
year the United States delays enacting a federal framework to control its
emissions, the greater the future risk."

"From an oil and gas perspective," he said, "we understand that this means
fundamental changes in the way we operate and in the fuels we produce."
"ConocoPhilips is ready to meet the challenge," Mulva said, "but we and
others need an effective, efficient and equitable federal program in place
to establish the rules and to encourage the technology development and
investments necessary for change."

Frances Beinecke, president of the Natural Resources Defense Council, told
the committee, "The time for action on global warming has already been
delayed too long. Every day we learn more about the ways in which global
warming is already affecting our planet."

"A growing body of scientific opinion has formed that we face extreme
dangers if global average temperatures are allowed to increase by more
than 2 degrees Fahrenheit from today’s levels," Beinecke said.
She said that the NRDC believes we may be able to stay below this
temperature increase if atmospheric concentrations of carbon dioxide and
other global warming gases are kept from exceeding 450 parts per million
of CO2-equivalent and then rapidly reduced.

"This will require us to halt U.S. emissions growth within the next few
years and then achieve significant cuts in emissions in the next decade,"
she said, "progressing to an approximately 80 percent cut by 2050."

The targets and timetables in the USCAP legislative proposal are
consistent with the schedule proposed by President-elect Barack Obama.
In his November 18 address to a bipartisan conference of governors, Obama
said, "Now is the time to confront this challenge once and for all. Delay
is no longer an option."

In December, in a video address to the United Nations climate conference
in Poland, Obama said he would open a "new chapter" on climate change,
starting with a national cap-and-trade system.


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