Safe Markets Development Act

Floor Speech

SAFE MARKETS DEVELOPMENT ACT -- (House of Representatives - March 23, 2009)

The SPEAKER pro tempore. The Chair recognizes the gentleman from Texas (Mr. Doggett) for 5 minutes.

Mr. DOGGETT. Madam Speaker, with all of the recent talk about unearned bonuses, I want to talk about a bonus that we Americans can give to ourselves and the world. We can do that by approving President Obama's plan to ``make clean, renewable energy the profitable kind of energy.'' Because we can build a clean energy economy by reducing greenhouse gas emissions--carbon pollution--through a market-based system, as the President has proposed, I am today, together with a number of my colleagues, introducing the Safe Markets Development Act.

This legislation will help to ensure that any future market for carbon allowances is not abused by price speculators or undermined by excessive price volatility. This is the first cap-and-trade measure to be filed in this Congress, and it is unique both in responding to concerns about market manipulation, and in its broad support bringing new members and a broader array of interests behind this new idea about how to resolve one aspect of our transition to a cleaner world.

The Safe Markets bill offers an approach that will provide a narrow auction and trading environment for the start-up phase for a cap-and-trade or cap-and-invest system. Experts on commodities markets tell us that price volatility is not unusual with new markets. And certainly legitimate concern recently over speculation in fossil fuel and financial markets must not stand in our way of new clean energy policy.

How does this bill achieve science-based emission reductions? It creates an independent board with strict conflict-of-interest provisions and post-employment restrictions to determine the annual prices per ton of carbon necessary to meet science-based annual emission targets from 2012 to 2020. The Treasury Department would conduct quarterly allowance auctions designed to maintain this price. Under the legislation, the board would conduct an annual review of its success in meeting emission goals in order to adjust for gas prices to ensure compliance with the next year's targets.

Just as a child removes training wheels after becoming comfortable cycling, or tries the shallow end of the pool before moving into the deep end, so too we can gain experience over these first eight years to move eventually to a more traditional cap-and-trade system.

Like President Obama, I believe that the best approach is one that relies
upon a 100 percent auction--that does not give away to polluters ``pollute free'' cards. Budget Director Dr. Peter Orszag has correctly noted that giving away allowances would represent the largest corporate welfare program that has ever been enacted in the history of the United States. As noted in another recent statement by over 600 economists calling for auctioning all allowances, free allocations do little or nothing to protect families and businesses from higher energy costs. The significant shortcomings of the European cap-and-trade system are largely linked to the pursuit of this politically easy but very ineffective course. An abundance of free allocations just leads to more price speculation and would hinder the ability of the system to properly reduce emissions.

The bill that I am introducing today represents the type of legislation that I will continue offering, building block by building block, to help us achieve a comprehensive solution. Next will be a plan that I will advance to ensure the competitiveness of American importers and exporters in the new energy economy. I am pleased this legislation enjoys support from a number of members of the Blue Dog coalition, such as Representative Jim Cooper and Representative Heath Shuler, as well as members of other caucuses here in Congress and a broader array of business interests such as the National Venture Capital Association.

Last week, Speaker Pelosi brought together key House committee chairs to sign a statement that they are uniting behind one bill to achieve our shared goal with President Obama of a more accessible, affordable health care system for every American. I believe we need to do the same thing to resolve global warming. Today's bill represents one new element of that broader legislation that must be developed through cooperation and collaboration of the House Energy and Commerce and Ways and Means Committees as well as many other Members.

I believe that a role exists for every Member of this Congress who is willing to work in good faith based on good science to end obstruction and reduce the real threat of global warming. The more Members we bring together, the more successful we will be in enacting the solution that President Obama has offered and move us to a clean energy economy.

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