Cap-and-trade bill boosts jobs, helps environment

"Green technology is the way of the future, and America must get in on the ground level," says Jeff Manning, president of UAW Local 31.

After decades of neglect and even outright hostility toward the nation's manufacturing sector from policy makers in Washington, U.S. manufacturing workers have a rare chance to gain the kind of public support that other nations have always used to their advantage.

The UAW is fighting for green jobs as a way to rebuild manufacturing by backing legislation known as "cap and trade."

The bill, the American Clean Energy and Security Act, passed the House in June with support from the UAW and other labor unions and environmental groups. Similar bills are now under consideration in the Senate.

A cap-and-trade program would establish limits on climate-change pollution and commit the United States to invest billions to create and support green jobs.

And you'd be surprised how many jobs can be considered green. Several thousand Ford Motor Co. workers are about to find out, because Ford was just awarded a low-interest loan of $5.9 billion from the Department of Energy to convert U.S. factories to produce more fuel-efficient vehicles and their key components.

Ford got the loan through the existing Advanced Technology Vehicle Manufacturers Incentive Program, championed by the UAW for many years and enacted by Congress in 2007. The money must be used for new tooling at assembly and component plants or for certain engineering costs associated with that production.

This kind of investment is just a preview of what cap and trade could mean for the auto industry.

As passed by the House, the act contains provisions that would provide billions more to fund auto industry retooling through 2025.

"Providing incentives to retool factories to produce green products makes all the sense in the world," said Jeff Manning, president of UAW Local 31, whose members work at General Motors' Fairfax (Kan.) Vehicle Manufacturing facility. "Green technology is the way of the future, and America must get in on the ground level."

The bill provides incentives to fund the production and installation of a wide range of job-creating green products in addition to automobiles: windmills and their components, solar, clean coal, energy efficiency products and alternative fuels.

The cap-and-trade legislation would establish a national limit on the emission of pollutants that cause climate change. Emissions would decline gradually over many decades, reducing global warming and protecting our environment. That's the "cap" part.

The "trade" part introduces market competition by creating an allowance for the right to emit one ton of global warming pollution. The allowances can be sold and bought, traded, saved or loaned.

Since the number of allowances will be reduced as the cap steadily declines, the price of each allowance will rise over time, due to supply and demand.

This will create incentives for industry to implement new technology or become more efficient to reduce emissions, since these changes will be cheaper than the rising cost of paying for allowances to emit pollution.

Motor vehicles would not be directly covered as a source of emissions under cap and trade. Instead, the emissions from vehicles would be covered "upstream" because oil companies would be required to turn in allowances equal to the global warming emissions created when their products are used.

The cap-and-trade bill passed by the House would slowly lower the amount of emissions allowed over nearly four decades, beginning in 2012 and running until 2050. By that time, emissions would be 80 percent lower than the baseline year of 2005.

At the beginning of the program the vast majority of the allowances would be given away, enabling covered companies to either use them for the right to emit greenhouse gasses, or reduce emissions and sell the unneeded allowances on the open market.

Over time the number of free allowances will decline slowly, and they will have to be purchased from the government or others. The money generated from selling allowances can be used to promote the domestic production of solar panels, high-speed trains, advanced technology automobiles and other energy-saving products.

There is a specific amount set aside for the auto sector, and the use of these funds will be outlined in the bill.

Critics have called the bill "cap and tax," claiming increased costs for consumers. Even though addressing climate change will have costs, doing nothing will cost even more, because adapting to increased temperatures will cost more than acting to prevent those increases.

The UAW-backed bill passed by the House could be called "cap and invest" because of the billions

in investments in the domestic production of green technology the program will provide. This kind of investment policy to support domestic manufacturing is a huge victory for working people.

After decades of neglect and even outright hostility toward the nation's manufacturing sector from policy makers in Washington, U.S. manufacturing workers – including UAW members – have a rare chance to gain the kind of public support that other nations have always used to their advantage.

Investment in the technology needed to reduce greenhouse gas emissions will benefit the environment and create jobs.

Maybe we should call it "cap and win."

Brad Markell