WASHINGTON, D.C. - Chairman Edward J. Markey (D-Mass.) convened a hearing today of the Energy and Commerce Subcommittee on Energy and Environment titled, “Competitiveness and Climate Policy: Avoiding Job Losses and Global Warming Progress in International Business Competition.” The hearing addressed potential domestic legislative provisions to prevent the loss of jobs and carbon emission reductions from the United States to countries that do not take similar action to curb heat-trapping carbon pollution.The Chairman'sopening statement follows below.
INVITED WITNESSES:
WHEN: 9:30 a.m. on Wednesday, March 18
WHERE: 2123 Rayburn House Office Building
** The hearing will be webcast at www.energycommerce.house.gov.
Opening Statement (As Prepared)
Chairman Ed Markey
Hearing On "Competitiveness and Climate Policy"
Before the Subcommittee on Energy and Environment
March 18, 2009
With March Madness about to begin, it is important that we keep in mind the need for a "level playing field." As we work to get more players in the clean energy game, including wind and solar and new clean tech companies, we cannot afford to simultaneously "tilt" the playing field against American businesses and manufacturers.
This hearing will explore ways to keep all countries economically "in bounds," in the global challenge to reduce global warming pollution.
Global warming does not recognize national borders. CO2 emitted in California has the same warming effect as CO2 emitted in China, Europe, or India. Rising sea levels threaten millions of people across the globe, in places as far apart as Bangladesh, Boston and Shanghai. Global warming highlights that we are, in fact, "one world."
And just as we are connected environmentally, so too are we connected economically. The actions we take in the United States to curb global warming pollution and create jobs cannot stand alone.
A cement factory that emits heat-trapping emissions in the U.S. and then decides to move to Mexico or China in response to our laws would have accomplished nothing to reduce global warming, except perhaps to export jobs and emissions overseas. Thus, in a global economy, we cannot ignore the reality of global emissions, nor the reality of global competition.
The Subcommittee will hear today about some innovative proposals to address this problem, which is important but manageable. Once you drill down on the facts it's clear that a relatively small number of industry sectors are highly energy-intensive and directly vulnerable to international competitive effects brought about by carbon limits.
Those industry sectors include iron and steel, aluminum, cement, glass, paper and pulp, and basic chemicals. These sectors face international competition and have energy or carbon intensive production processes. While it is true that these sectors together account for more than half of all CO2 emissions from the manufacturing sector, their overall percentage is modest: the big six energy intensive industries account for only about 6 percent of total U.S. emissions.
These important industrial sectors interestingly constituted a little more than 3 percent of America's gross domestic output in 2005 and accounted for less than 2 percent of our jobs.
To avoid shipping jobs or emissions overseas, some have suggested requiring that energy intensive products imported into the United States be accompanied by some kind of fee or surcharge, unless the product comes from a country with carbon pollution limits. This approach would put imported, carbon-intensive products on the same footing as American made goods and thus "level the playing field."
Mr. Marty McBroom of American Electric Power is here to discuss the tariff/allowance proposal his company co-authored with the International Brotherhood of Electrical Workers.
Another way of dealing with potential competitive effects would be to take some of the allowance values from the carbon market and give them to the "trade exposed" industry sectors to aid in their transition to a low-carbon economy. I commend the work of Mr. Doyle and Mr. Inslee, who have authored such an approach.
Mr. Jack McMackin, who represents a coalition of energy intensive manufacturers who favor such an approach, is here to provide his views regarding that strategy..
Finally, we should remember that in order to stop global warming, it will be necessary for virtually all countries, particularly industrialized countries, to limit their emissions of carbon pollution.
If we are ultimately successful in halting global warming, the playing field will not remain tilted forever, and the best approach for keeping all countries "in bounds" is to encourage them to permanently "match" the U.S. by limiting emissions immediately.
Only then will it truly be possible for teams and companies, from places like China, India or Australia, to compete without restrictions on the same court as teams from places like North Carolina, Massachusetts, Illinois or (dare I say it) Michigan.
I look forward to hearing the witnesses' testimony.
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