American Clean Energy and Security Act of 2009

Aston D'souza, 50086073

The American Clean Energy and Security Act of 2009 (ACES) was an energy bill in the 111th United States
Congress which was to establish an energy trading plan like the European Union Emission Trading
Scheme. On June 26, 2009, the American Clean Energy and Security Act (ACES) was passed by the US
House of Representatives by a vote of 219 to 212. The bill proposed a cap and trade framework, under
which the government sets a cap limit on the total CO2 gasses a company can primarily emit. Companies
are then asked to buy or sell permits to emit certain quantities of CO2. Over the course of time, these
emission allowances would keep decreasing, encouraging the companies to pursue cleaner means of
producing power. After the initial distribution of allowances, the companies were free to buy or sell
their share of allowances to other companies. A higher penalty was imposed on the companies that
emitted more CO2.
A study done by The Heritage Foundation's Center for Data Analysis (CDA) concludes that this bill can
cause serious problems with the American Economy over time. The ACES put severe restriction on the
current infrastructure. 85% of the energy in the US comes from CO2 emitting coal and the restrictions
put forward by the ACES can only be fulfilled by utilizing largely undeveloped and untested new
renewable technologies. In addition to the costs that would burden the public, the tax-energy cost
increase will also hurt the economy in every stage of its production. This would also reduce employment
and in the end, all the ill effects of this bill would filter down to the American people.
Implementing ACES would extract billions of dollars from the tax paying public and distribute this wealth
among various groups, some more deserving than others. This increase in tax would be the largest tax
increase in the recent history of America. ACES imposed strict limits on six Green House Gasses, CO2,
methane (CH4), nitrous oxide (N2O), hydro fluorocarbons (HFCs), per fluorocarbons (PFCs), sulfur
hexafluoride (SF6), and nitrogen trifluoride (NF3) with main emphasis on CO2. The allowances given will
require companies to pay for the energy and pay for the rights to use the energy if its a greenhouse
regulated gas. This directly impacts the general public as increased cost of electricity.
As an estimation (2009 dollar adjusted), the cumulative Gross Domestic Product (GPD) losses are
estimated to be around $9.4 trillion between 2012 and 2035. Single year GDP losses are estimated to
reach $400 billion by 2025 and net job losses are predicted to extend from 1.9 million in 2009 to 2.5
million by 2035 with the manufacturing segment unemployment reaching 1.4 million jobs by 2035. The
annual cost of emissions, which was predicted to reach $100 billion by 2012, would exceed $300 billion
by 2035. A family of four would end up paying an additional $829 per year due to these estimated
increases and also the petrol cost rising was estimated to be over 58%.
The failure of the bill in the senate largely attributes to the Great Recession. The senate argues that
during the recent recession and the global financial crisis, US GDP was at a fall of 6% annually and the
unemployment was steadily declining and was at 6 percent at the time. This peaked in October 2009 at
10.1%. Currently the economic state is improving with the GDP at a smooth rise of 3%. More over the
energy acts introduced always caused an increased unemployment. The first Clean Air Act, Clean Water
Act, Endangered Species Act, and Resource Conservation and Recovery Act (hazardous waste disposal)
were all done when unemployment was under 6%. Unemployment is now 50% higher. This along with
the increased cost of using energy got the ACES rejected by the senate.

References:
[1] http://www.americanprogress.org/issues/green/news/2010/10/12/8569/anatomy-of-a-senateclimate-bill-death/
[2] http://www.c2es.org/federal/congress/111/acesa-short-summary
[3] http://www.c2es.org/docUploads/Waxman-Markey%20summary_FINAL_7.31.pdf
[4] http://thinkprogress.org/climate/2009/06/22/204267/cbo-stunner-waxman-markey-postage-stampa-day-low-income-families-efficiency-savings/#
[5] https://www.govtrack.us/congress/bills/111/hr2454/text