The American Materials Manufacturing Alliance (AMMA), a group of energy-intensive, trade-exposed industries (EITEs), issued a letter to Senators Bayh (D-IN), Specter (D-PA), Brown (D-OH), McCaskill (D-MO) and Stabenow (D-MI) regarding the U.S. Environmental Protection Agency’s (EPA) analysis of the impact that H.R. 2454 will have on EITEs. (The Effects of H.R. 2454 on International Competitiveness and Emissions Leakage in Energy-Intensive, Trade-Exposed Industries, also known as the “Interagency Analysis”).
AMMA recognizes that the EPA’s analysis of H.R. 2454 “is considered a first step in the Administration’s engagement with stakeholders…” and hopefully is “the beginning of a process leading to getting climate policy right for EITE industries.” However, AMMA questions the plausibility of the assumptions used in the study. Unfortunately, flawed assumptions could likely lead the Administration to the flawed conclusion that any EITE cost impacts resulting from climate policy are nearly or entirely eliminated by H.R. 2454’s emission allocation provisions. The report’s faulty suggestion that U.S. competitiveness issues are solved by measures in H.R. 2454 will only have negative consequences for climate policy and for America’s EITE industries.
-more-
PAGE TWO / AMMA CONCERN OVER EPA ANALYSIS
The AMMA letter points out the heavy reliance the Interagency Analsysis places on “all variables and moving parts built into the design of the (H.R.
2454) program work(ing) exactly right. Design mistakes can have enormous consequences for manufacturers and the millions of Americans whose jobs depend on a competitive and healthy domestic manufacturing sector.”
AMMA also states: “The idea that…EITE allowances are sufficient is the foundation of the conclusion of the Interagency Analysis,” yet “the Waxman-Markey measures for EITEs are inadquate. The absence of consideration of all of the costs that EITEs will confront in a carbon capped economy and the absence of a fair allowance distribution system call into question the ability to properly design an economy-wide cap and trade mechanism.”
AMMA observes that “The Interagency Analsysis recognizes the challenges of implementing such a complex emissions trading program have not yet been ‘fully considered’…enormous work is still needed to devise an allocation distribution system that does not unfairly penalize competivie manufacturers and result in production migration within and outside of the U.S. The potential for a system to unfairly create ‘winners and losers’ in the marketplace must be avoided at all costs.”
The Interagency Analysis says that more work will need to be done to improve assessments of competitiveness impacts and to address various implementation challenges presented by output-based allocations. AMMA agrees. An analysis of cost and job impacts on EITEs using proper and practical assumptions regarding allowances, EITE efficiency and other parameters will tell the true story. At this point, there are too many
-more-
PAGE THREE / AMMA CONCERN OVER EPA ANALYSIS
“unknowns” to confidently predict the outcomes of this climate policy.
AMMA looks forward to working with the Administration and Congress to make sure climate policy does not negatively impact the competitiveness of domestic manufacturers. To read the full letter, click here.
AMMA is a group of energy-intensive, trade-exposed industries that includes The Aluminum Association, the American Chemistry Council (ACC), the American Forest & Paper Association (AF&PA), the American Iron and Steel Institute (AISI) and The Fertilizer Institute (TFI).
Source: AISI
