Washington, 23 October 2009 

President Obama urged Congress to pass cap-and-trade legislation on Friday. 

Speaking at the Massachusetts Institute of Technology, Obama said passage of the Senate’s Kerry-Boxer bill would fight global warming, create jobs and reduce the price of renewable energy. Senators Barbara Boxer and John Kerry are expected to release an updated version of their bill, which seeks to cut US emissions 20 per cent below 2005 levels by 2020, on Monday.

Obama applauded Kerry for reaching across the aisle to enlist the help of Republicans in passing the bill. Since first introducing the bill, Kerry co-authored a newspaper editorial with Republican Senator Lindsey Graham that outlined what a compromise bill should include.

The bill would need to include incentives for the nuclear power industry as well as an expansion of offshore oil and natural gas drilling to get Graham, and potentially other moderate Republicans, to support it.

Still, Obama warned that the legislative fight to reach 60 votes in the Senate would be a tough one. "It's important to understand that the closer we get, the harder the opposition will fight," he said.

But he said a transformation in the way the US produces and uses energy is necessary. "There are those who will suggest that moving toward clean energy will destroy our economy – when it's the system we currently have that endangers our prosperity and prevents us from creating millions of new jobs," he said.

It is unclear if any of the compromises outlined by Kerry and Graham will be reflected in the updated bill, known as the “chairman’s mark”. The mark is expected to answer the critical question of how emission allowances should be distributed to covered sectors. It will also include how the government will address the threat that US manufacturers will move overseas to avoid carbon constraints. The Environmental Protection Agency ( EPA) completed an analysis of the chairman's mark today, and delivered it to Senators Boxer and Kerry. That report should provide an estimate of how much the bill will cost the average American family, how much revenue the bill will bring in, and give a forecast of allowances prices.

The Kerry-Boxer bill is similar to the House-passed Waxman-Markey bill, which seeks to reduce emissions 17% below 2005 levels by 2020. An EPA analysis of that bill said it would cost the average American family about $175 a year, a figure proponents said was a bargain given its environmental, fiscal and geopolitical benefits.

On Tuesday, Boxer’s environment committee will kick off three straight days of hearings with a panel of administration officials including EPA Administrator Lisa Jackson, energy Secretary Steven Chu, and transportation Secretary Ray LaHood.

In all, the committee will hear from 54 witnesses representing energy producers, state officials, national security experts and environmentalists.

Ends --

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