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Senator Feinstein Joins Democratic Senators, Labor and Business Leaders to Discuss Efforts to Create Green Jobs and Protect Middle-Class from Rising Energy Costs

- Lieberman-Warner legislation on Senate Floor includes Feinstein provisions to establish oversight for new carbon markets and to fund water and green practices research -

Washington, DC –  U.S. Senator Dianne Feinstein (D-Calif.) today joined Democratic Senators Barbara Boxer (D-Calif.), Charles Schumer (D-N.Y.), and Bob Casey (D-Pa.) at a news conference with labor and business leaders to discuss the need for comprehensive climate change legislation. The Lieberman-Warner legislation now under consideration on the floor of the United States Senate, the “Climate Security Act of 2008,” will help create green jobs and protect Middle-class Americans from rising energy costs – while helping to prevent catastrophic climate change.

At the news conference, Senator Feinstein spoke about the growing support for the Lieberman-Warner legislation: “Now, why do so many people support this bill? I think it’s pretty simple. As people have watched weather patterns become more volatile, as they see Hurricane Katrina, as they see the Cyclone in Burma, as they watch their own weather, like the tornadoes in the Midwest of the United States, and as they notice the increased volatility of that weather, they begin to ask ‘what is going on?’ Well, what is going on is that the planet is growing warmer.”

“I hope this bill passes,” Senator Feinstein continued. “It’s a start, it’s a big start. It puts us on the road to really containing global warming and really moving away from fossil fuels. That has to be the result.”

(A full transcript of Senator Feinstein’s remarks at the news conference follows at the end of the release).

Feinstein Provisions in the Lieberman-Warner Legislation

Senator Feinstein announced today that the latest version of the Lieberman-Warner climate change legislation includes a Feinstein provision to establish federal oversight for the new carbon emissions trading markets. 
 
Senator Feinstein also authored two other provisions that will be debated on the Senate floor later this week, including:

  • Funding of $25 million over 10 years to study the potential impacts of climate change on drinking water supplies.
  • Funding for research into innovative and cost-effective methods for farmers to store carbon in soil.

Carbon Market Oversight

The Market Oversight and Enforcement provisions in the legislation would help prevent future Enron-like fraud and manipulation in greenhouse gas credit markets -- – markets that are expected to develop once Congress approves comprehensive legislation to establish a cap-and-trade system to reduce carbon emissions.

“A market for the trading of carbon emissions will spring up as a cap-and-trade system is established – and we need to be prepared,” Senator Feinstein said. “And unless we take preventive action, this new market could attract Enron-like manipulation, fraud or excessive speculation. 

Last month, Congress finally passed legislation to close the ‘Enron Loophole’ to protect electronic energy markets. But it took more than six years after the Western Energy Crisis to do so. It’s time to learn from our mistakes. We need to take steps now to ensure that this market functions with transparency, as well as anti-fraud and anti-manipulation provisions from the get-go.

I am grateful to Senator Boxer for her leadership on this issue and for including these items in the bill.”

Specifically, the legislation will require the President to establish an interagency task force – the Carbon Market Working Group – to oversee the carbon emissions trading market. Because the markets may include cash energy markets, futures markets, and securities markets, the Working Group would include the heads of the Environmental Protection Agency (EPA), the Federal Energy Regulatory Commission (FERC), the Commodity Futures Trading Commission (CFTC), the Securities Exchange Commission (SEC), and the Treasury Department.

The Carbon Market Working Group would be required to make recommendations on the structure and regulations required to oversee this new market, within 270 days of enactment and act in accordance with core market oversight principles. The principles would include:  

  • Ensuring market transparency: price, volume, and other trading data would be made available to the public; 
  • Requirements for recordkeeping and an audit trail; and
  • Preventing fraud, manipulation and excessive speculation.

Based on the Carbon Market Working Group’s recommendations, the President would then be required to delegate authority to the federal agencies to enforce the regulations and levy fines and penalties. This oversight structure must be in place before the cap-and-trade program can begin.

Senator Feinstein and Senator Olympia J. Snowe (R-Maine) introduced the Emission Allowance Market Transparency Act (S. 2423) in December to ensure market oversight in carbon markets. The Market Oversight and Enforcement provisions in the Climate Security Act are significantly modified from the Emission Allowance Market Transparency Act.

Water Research

Also included in the manager’s amendment is a provision authored by Senator Feinstein and Senator Harry Reid (D-Nev.) that would authorize $25 million to study the potential impacts of climate change on drinking water supplies.

“Global warming is expected to dramatically impact our supply of fresh water – and this could have dire consequences for the future of drinking water in the West,” Senator Feinstein said.

“In California, it is projected that global warming will melt approximately two-thirds of the Sierra Snowpack by 2050, imperiling the drinking water supply of 16 million people in Southern California.  And this is just one of many global warming side effects that we will see in the coming decades. So, it’s critical that we take steps now to understand and minimize the full impact of climate change. We cannot afford inaction when it comes to drinking water.”

Specifically, the legislation would authorize $25 million over 10 years to fund a research program on the full range of impacts that climate change will have on drinking water utilities, supplies, customers, and facilities. The legislation directs the research to be conducted through a nonprofit water research foundation and be supported by water utilities.

Green Practices

Another Feinstein measure included in the bill would fund research into innovative and cost-effective methods for farmers and foresters to store carbon in the soil – called carbon sequestration. The research would be funded through allowances for agriculture in the cap-and-trade system established by the Lieberman-Warner legislation. 
    
“Tackling the challenge of global warming will require innovation and investment,” Senator Feinstein said. “It is believed that farming and forestry practices to store carbon in the soil hold great potential in helping to reduce our carbon footprint.  But the fact is that we don’t yet know enough about the best ways to carry out carbon sequestration cost-effectively.”

“This legislation would help shed light on innovative steps farmers and foresters can take to store carbon in the soil, Once we understand which of these methods is most cost-effective, farmers could then sell low-cost offset credits to companies that need to reduce their emissions. So, it’s a win-win.”

Pilot programs that would qualify for the research funding would be required to research innovative practices that attempt to measure emission reduction, sequestration or other benefits and costs. Priority would be given to projects or other research with a substantial non-federal cost share.

          Research funded by this legislation could include several methods popular in California, including: 

  • Row crop practices, such as conservation tillage;
  • Permanent crop practices including planting cover crops during the winter season, and using prunings for bioenergy production, rather than chipping, mulching or burning the material; and
  • Practices to reduce the digestion-related emissions of methane gas from cattle and livestock.

News Conference Remarks

Following is the full text of Senator Feinstein’s remarks at the global warming news conference this morning:

“Let me thank my friend, Senator Barbara Boxer. She’s Chairman of the Environment and Public Works Committee.

This is a hard issue. She has been strong and solid in her leadership. She has been open. She has solicited every one of us. She would come and meet individually with us -- and ask us what are your suggestions? She has said that if you have a part of the bill you’d like to submit, go ahead and submit it. It’s been an open process.

So, Barbara, I’d like to congratulate your on your leadership - it’s really been very special.

We have with us this morning, PG&E, with whom I have worked on a bill that I submitted earlier on that just had to do with the electricity sector of the United States. PG&E was just great. They did some of the modeling for us. I know that Steve Kline is representing the company here today. They also represent the Clean Energy Group – and the Clean Energy Group of utilities is supporting the bill, which is just great.

Also, Barbara mentioned some of the unions in support, and today we have two of them with us today – the Boilermakers and the Painters. And I think that this indicates the strength of support behind the bill.

Now, why do so many people support this bill? I think it’s pretty simple.

As people have watched weather patterns become more volatile, as they see Hurricane Katrina, as they see the Cyclone in Burma, as they watch their own weather, like the tornadoes in the Midwest of the United States, and as they notice the increased volatility of that weather, they begin to ask ‘what is going on?’

Well, what is going on is that the planet is growing warmer.

What is going on is the discovery that global warming gases, in particular carbon dioxide, do not dissipate in the atmosphere – the atmosphere is a shell – and they remain in this shell 25, 50, 75 years.

Since the beginning of the Industrial Revolution, we have been building global warming gases within that shell.

Well, what does that do?  It warms the climate – and so our planet has been warming. We already know of 1 degree warmth. I speak at a Westerner – the West has warmed about 1.7 degrees. So, the West is very strongly impacted by global warming.

There is a 50 percent chance that Lake Mead could disappear by 2021. Lake Mead is a major source of drinking water for Southern California, Arizona and Nevada. 

We expect to lose part of the Sierra Nevada snowpack – a major source of drinking water for 16 million people in California as well.

So, we’re going to have a heavy impact. What can we do?

We can’t stop it, but we can contain it. And the key is that if we contain it to 1 to 2 degrees over the next Century, we can handle it.

But if it goes from 4 to 9 degrees, it is catastrophic on Planet Earth.

And we now know that it is moving faster than anyone had originally anticipated.

That’s why this first big debate on global warming on the floor of the United States Senate is so important.

I hope this bill passes. It’s a start, it’s a big start. It puts us on the road to really containing global warming and really moving away from fossil fuels. That has to be the result.

And as I tell people whenever I speak on this subject, if we don’t do this, we will condemn this earth for our grandchildren. There is no question about it. The earth will be a much less hospitable place.

So, my congratulations go to Senator Warner, Senator Lieberman, and my friend and leader on this, Senator Boxer.

The time, ladies and gentlemen, is now.”

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