Statement of Energy and Air Quality Subcommittee Chairman Boucher

"Climate Change and Energy Security: Perspectives from the Automobile Industry."

March 14, 2007

           This afternoon we continue our focus on the proper United States response to the challenge of climate change by examining the views of leaders in the automobile industry. 

            Our goal is to produce this year legislation that has economy -wide application.  Each sector of the economy will make a greenhouse gas control contribution.

            Applying this broad measure to the transportation sector poses special challenges.

            Unlike some other industries, auto manufacturers are subject to a pre-existing regulatory program, CAFÉ, which is designed to promote fuel economy, but which also has a limiting effect on greenhouse gas emissions, notably the emission of carbon dioxide.

            Much thought must be devoted to an effective means of integrating the existing CAFÉ regulatory program into the new regulatory structure which will specifically target greenhouse gases.

            While we have not made decisions at this point about the shape of the greenhouse gas regulatory program, some form of cap and trade system is obviously a major candidate for consideration when we adopt an approach.

            Therefore, in order to gain maximum benefit from today's discussion, I would welcome views from our witnesses on how cap and trade might apply to the auto sector, and how do we effectively integrate it with CAFÉ.

            Some have suggested that because transport emissions sources are individually small, highly dispensed, and mobile, direct CO2 emissions monitoring pre-vehicle would be too costly to administer and that it is better to use proxies for each vehicle, such as the fuel that contains the carbon, or in the alternative, the fuel economy of the vehicle.

            Comment from our witnesses on these possible alternative approaches would be helpful.

            If transportation fuel is chosen as the best foundation for a transportation sector cap and trade program, where in the fuel distribution system should the accounting take place and tradable credits be generated, upstream at the refinery gate and port of entry, or further downstream at the point of final sale of the fuel? Do alternative transportation fuels pose special challenges for emission trading system design?

            As these questions suggest, designing a greenhouse gas regulatory program for the transportation sector is a formidable task.

            While I don't expect our witnesses this afternoon to have complete and detailed answers to all of these questions, in posing them, I want to direct your thinking to obtaining the answers and sharing them with us as we consider policy alternatives.

            We are pleased to have each of our witnesses here today, and we look forward to your testimony.

            I also want to say a word this afternoon about our schedule for drafting a greenhouse gas control program.  Earlier this year, the Speaker assured me that we would have the time the committee needs to produce a carefully constructed bill.

            That early assurance was reconfirmed this week by the Speaker's office's statement that climate change legislation will not be part of the July floor agenda.

            It is my intention to continue our hearing process through the early spring and then begin the bill drafting process with the goal of having the comprehensive climate change bill on the House floor late this year.  House passage this year would provide ample time for a conference.

-###-