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Suagee: Tribal sovereignty and the green energy revolution: The Waxman-Markey Bill

Is this the year the United States will finally enact a law to start dealing with the climate crisis? The House of Representatives passed its version of such a bill June 26, the American Clean Energy and Security Act. The Senate is expected to take up the bill in September.

The Obama administration will push to have the legislation enacted into law before December, when the countries of the world will meet in Copenhagen to finalize the next phase of an international treaty to deal with the climate crisis. How does all this matter for Indian tribes?

Many tribal communities are already suffering from the impacts of global warming, particularly those in Alaska, and we know that what has happened to date is only the beginning. If present trends in the emissions of carbon dioxide and other greenhouse gases continue for another decade or so, climate scientist James Hansen says we are likely to pass a “tipping point” – the Earth we leave to our grandchildren will be very different from the one we have lived in, very different from the Earth in which tribal cultures were developed by our ancestors.

It would be better for EPA to auction these allowances and distribute the proceeds among tribal governments on a formula basis.

The bill, commonly known as Waxman-Markey after its primary sponsors, Henry Waxman, D-Calif., chair of the Energy and Commerce Committee, and Edward Markey, D-Mass., chair of the Energy and Environment Subcommittee, is massive and complex. One key feature is the creation of a “cap-and-trade” system, which is a way of putting a price on the right to emit greenhouse gases into the atmosphere.

In theory, “cap-and-trade” is a way of using market forces to reduce greenhouse gas emissions by establishing an overall limit and handing out a fixed number of “allowances” to emit one ton of carbon dioxide (or an equivalent amount of another greenhouse gas). The cap will be lowered each year so that by 2050 total greenhouse gas emissions will be reduced by about 80 percent from 2005 levels. A market will develop in which allowances will be bought and sold. Sources that can reduce their emissions by investments in energy efficiency or renewable energy can sell their excess allowances. Sources that choose to put off investments in efficiency or conversion to renewable could buy allowances.

At the outset, as passed by the House, most of the allowances would be given away, with the largest share going to the electric power industry. A small portion would be auctioned by the Environmental Protection Agency to provide funding for various programs created by the bill, including an energy refund program for low-income households and a range of programs to support adaptation to climate change.

Some of the allowances would be given to states for their use in funding energy efficiency and renewable energy programs – in the first four years of the program, the Congressional Budget Office estimates that these allowances would mean about $50 billion in funding for state programs. That’s through 2015 – this source of funding would continue through 2050. States would be able to sell these allowances and bank the proceeds in State Energy and Environment Development accounts, which they could use to fund programs to ratchet up the efficiency standards in building codes, retrofit assistance for existing buildings, and replace older mobile homes.

This point illustrates one of the most important concepts about the cap-and-trade system under Waxman-Markey – it will create, in effect, sources of funding for investments in energy efficiency, renewable energy, carbon sequestration, and adaptation to climate change that are outside the federal appropriations process. This helps to explain why the bill has been the focus of such intense lobbying by a range of interests including fossil fuels industries, renewable energy industries, environmental groups, and states. The interests of tribal governments have been advocated by a small group of people who work for a few national organizations, including the National Congress of American Indians and the National Tribal Environmental Council. Their efforts have met with some success, but there is still room for improvement.

Recently, I had the opportunity to provide an overview of the bill for a continuing legal education program, in which I noted many of the points at which tribal governments are included, as well as some of the points at which tribes should be included but are not. I will discuss some of the details in future columns.

In this column I want to point out the way the bill includes tribal governments in something of a counterpart to the SEED account for the states. As provided in Section 132, allowances allocated for SEED accounts would be distributed among the states in accordance with a formula that would take into account population and energy consumption. States would not have to compete for the allowances, but would be able to incorporate them into long-term budget projections.

A few days before the House passed Waxman-Markey, Section 133 was added, “Support for Indian Renewable Energy and Energy Efficiency Programs.” This tribal program would be funded by half of one percent of the allowances allocated for the state SEED accounts. This would be a step in the right direction, no doubt. Under Section 133, the Secretary of Energy would create a competitive program to distribute these allowances among the tribes.

In my view, it would be better for EPA to auction these allowances and distribute the proceeds among tribal governments on a formula basis, so tribes could count on long-term funding for energy efficiency and renewable energy programs. One idea is to distribute the funds through the Energy Efficiency and Conservation Block Grant program administered by the Department of Energy.

Will tribal governments assume leading roles in cutting emissions of greenhouse gasses so that our grandchildren have a prayer of avoiding the looming catastrophe? I think this is starting to happen. The extent to which tribes have the resources to perform leading roles, however, will turn, in large part, on the climate and energy legislation Congress passes.

Dean Suagee is an attorney of counsel to Hobbs, Straus, Dean & Walker, LLP, Washington, D.C., and is a citizen of the Cherokee Nation. E-mail him at dsuagee@hsdwdc.com.