good morning this past december the new direction congress passed the energy independence and security act a momentous first step towards combating global warming pollution and securing our energy independence with that downpayment in place congress now must turn to the next great challenge and acting in economy wide cap and trade program that will reduce heat trapping pollution eighty percent by twenty fifty a cap and trade system harnesses the power of the market to ensure that pollution will be cut by a defined amount at the lowest possible cost cap and trade is an idea that is made in the usa it vantages have been demonstrated under the clean air act highly successful acid rain program the europeans have adopted this idea for their emissions trading system for carbon dioxide and fortunately we are now in a position to benefit from the lessons we have learned in implementing that system one of the most important questions that any cap and trade system must answer is how tradeable pollution allowances should be distributed should they be given away for free to polluters or should they be auctioned off the acid rain program and the early phases of the e u admissions trading system rely primarily on free allocation but both economic theory and the e u s recent experience have taught us that giving allowances away may result in massive windfall profits for polluters and surprisingly does not lower cost to consumers in most cases polluters will charge consumers for the value of the allowances even if they receive those allowances for free auctioning avoids this problem and ensures that allowances this year view ssion is transparent and fair based on the free market rather than political deals auctioning also has the advantage of sending a carbon price signal that is loud and clear not muffled by special interest giveaways and finally auctioning can provide tens of billions of dollars of revenue which can be used to greatly reduce the overall cost of the program and speed the transition to a low carbon economy by investing auction revenues in technology research and development fish n c renewable energy and rebates and tax cuts for low and middle income households we can provide a much needed stimulus to the economy one that will get us out of the doldrums and unleash a clean green revolution of innovation and prosperity for all these reasons economists have long been nearly unanimous in advocating optioning over free allocation now policymakers around the world are moving decisively towards robust action as mr zappa witness from the e u will explain the european commission just this morning announced its proposal to move to one hundred percent auctioning of allowances for electric utilities by twenty thirteen and to increasing reliance on options for industrial sources at least six of the northeastern states including my home state of massachusetts representing represented the smalling by secretary of energy and environmental affairs ian bowles are planning to use nearly one hundred percent auctions to distribute allowances under the reggie cap and trade program as congress begins debate on cap and trade legislation it is imperative that we learn from these experiences the health of our planet's atmosphere is a sacred public trust that belongs to all of us and the right to pollute it should not be given away for free not should we adopt a program that will enrich corporate polluters at consumers expense i believe that with a well designed cap and trade program based on robust options and revenue recycling we can do our part to save the planet from global warming in a way that grows our economy creates jobs is efficient transparent and socially equitable our distinguished panel of witnesses today is well qualified to help us to to move forward on this endeavor i would also at this time like to inform the members that david moulton  serves as the select committee staff director and chief counsel will be leaving that position on february seventh david is one of capitol hill's most experienced veterans and much to my regret he has decided to retire from the hill after more than twenty five years of serving in the house and the senate david has been at my side on every major issue i worked on since one thousand nine hundred eighty five from energy to the environment to telecommunications to consumer protection over the last twenty three years he has worked with me on a series of in a series of capacities booting legislative director chief of staff in my personal office and a staff director of the subcommittee on telecommunications and finance before assuming the role of staff director for this committee whether it's energy efficiency the v chip children's educational television rollercoaster safety arctic refuge of fighting global warming david has been my closest adviser he has combined a deep commitment to the public interest with a mastery of the legislative process over the last year david played a pivotal role in setting up the select committee and he has helped to grow it into a force for change in this congress and in the world david exemplifies all of the best qualities of the staff whose hard work and professionalism make it possible for this institution to serve the public he combines the soul of john audubon with the writing talents of mark twain his skills council and creativity will be greatly missed by me and by all of my staff david i want to thank you for all that you have done for me over the years not only one of the top advisors that anyone in congress has ever had but you also my very dear friend and i wish the very best you your wife francey two daughters and all of you in all of your endeavors in the years ahead and i know for myself and all of the staff of the select committee in the members of the select committee we offer you our thanks for your public service