AMMA Notes Concerns on Analysis of HR 2454

The American Materials Manufacturing Alliance (AMMA), a group of energy-intensive, trade-exposed industries, issued a letter recently to Sens. Bayh (D-Ind.), Specter (D-Pa.,), Brown (D-Ohio), McCaskill (D-Mo.) and Stabenow (D-Mich) regarding the U.S. Environmental Protection Agency's analysis of the impact that H.R. 2454 will have on its members.

EPA's analysis is called "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 analysis "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 [these] industries." However, AMMA questions the plausibility of the assumptions used in the study, according to the Alliance press release. "Unfortunately, flawed assumptions could likely lead the administration to the flawed conclusion that any energy-intensive, trade-exposed (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."

The AMMA letter points out the heavy reliance the analysis 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 EITE industries are inadequate. 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 includes The Aluminum Association, the American Chemistry Council, the American Forest & Paper Association, the American Iron and Steel Institute and The Fertilizer Institute.

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