Congressman Ed Markey (D-Mass.), a key sponsor of the historic climate/energy bill being debated this week, said today during the show that some companies would receive free carbon permits in the early years of a proposed cap-and-trade scheme. The legislation would require utilities and companies to have permits for each ton of carbon pollution, but there is fierce debate over whether they should be forced to buy them at the outset.

“What we are going to do is to insure that in the early years…we are going to not auction off 100 percent of the carbon credits, but rather to insure that the trade-exposed energy-intensive industries will in fact receive some free allocations,” he said today.

The industries he mentioned included those involved in commodities such as steel, glass, and paper. He said that would insure that foreign competitors like China don’t “exploit” the new prices imposed on industry.

A central issue in the debate is the speed at which the costs should be imposed. President Obama’s campaign position favored auctioning off all the permits. Yet officials in his administration have also been signalled a softening of that position.

Markey’s draft of the bill, co-authored with Rep. Henry Waxman (D-CA), sidestepped the issue and did not initially contain details on the issue of auctioning vs. giveaways to industry.

To persuade “Blue Dog” conservative Democrats from manufacturing states to support the bill, Markey said he would emphasize that new clean technologies such as wind turnbines and smart energy grids will require a great deal more steel, iron, and other resources important to industry. It’s also expected to create millions of “green jobs,” he said.

Listen to Rep. Markey’s interview with On Point (mp3 download)

Tags: Economy, environment