Obama's green start

Hope of early action on climate change as US president-elect prepares two bills to cut pollution and kick-start a clean energy revolution

Barack Obama and congressional leaders are preparing rapid legislation to cut US emissions that cause global warming and to kick-start a clean energy revolution.

Two bills are to be introduced as soon as the President-elect takes office in January. One will provide $15bn (£10.1bn) a year to encourage innovation in renewable energies as part of a thorough overhaul of the highly polluting US energy system. The other will pave the way to setting up a system of tradable emissions permits to combat global warming. The moves, to be taken quicker than expected, will galvanise top-level international negotiations on a new climate treaty that reopens in Poznan, Poland, next week, and will greatly boost attempts to bring in a "green new deal" as the best way out of the financial crisis.

Yesterday – as exclusively predicted in The Independent on Sunday three weeks ago – Mr Obama took the first steps towards creating green jobs, a crucial element of the proposed deal, as a top priority for his forthcoming administration. In his weekly radio address, he announced that he has ordered his advisers to produce an economic recovery plan that will create 2.5 million new jobs in two years by building windfarms, making solar panels and fuel-efficient cars, as well as in modernising schools and re-building crumbling infrastructure.

Senior Democratic sources added that the President-elect had picked Timothy Geithner, head of the New york Federal Reserve Bank to be his Treasury Secretary. "We are facing a sea change," said Barbara Boxer, the Democratic head of the Senate Environment and Public Works Committee, of the two new bills. "Instead of denial we will have resolve; instead of procrastination we will have action. The time to start is now."

The energy bill is expected to pass rapidly through the houses of Congress – in both of which the Democrats will have increased majorities – with some experts expecting it to become law by the summer. Sources close to the rapidly forming Obama administration say that it will include tax breaks to encourage wind, solar and other renewable energies, and the creation of a grid to deliver their electricity effectively. There will also be incentives for consumers to buy fuel-efficient cars, and for householders and businesses to conserve energy.

There will be massive investment in developing carbon capture and storage, which removes carbon dioxide from power station emissions. And the bill may include a bid to set a nationwide target for the amount of energy to be obtained from renewable energy. Most controversially, there is likely to be an increase in drilling for oil more than 25 miles offshore, not least to provide revenues to finance the energy revolution.

The climate bill will instruct the US Environmental Protection Agency to introduce a national "cap and trade" system for regulating emissions of carbon dioxide. This gives the polluters limits on what they are allowed to emit, but leaves them able to trade them; so those that clean up fastest will be able to sell unwanted permits to pollute to laggards.

Mr Obama wants to return US emissions of carbon dioxide to 1990 levels by 2020, and cut them by a further 80 per cent by 2050. Last week in a video address to a global warming summit he promised to set "strong annual targets" to achieve this. He added: "My presidency will mark a new chapter in America's leadership on climate change that will strengthen our security and create millions of new jobs in the process."

Despite his commitment, some leading congressmen and even some environmentalists believe that a climate bill is unlikely to make it into law this year. Senator Jeff Bingaman, chairman of the upper house's Energy Committee, said last week that it might have to wait until 2010, adding: "The reality is that it may take more than the first year to get it all done." This would imperil the international effort to agree a new treaty to replace the Kyoto Protocol, which is scheduled to culminate in a massive conference in Copenhagen in a year's time.

But hopes of early action rose dramatically last week when Democratic congressmen overturned their hallowed seniority system and replaced John Dingell, the 82-year-old chairman of the House of Representatives' crucial Energy and Commerce Committee, with a so-called "young Turk" in the shape of 69-year-old Henry Waxman. Rep Dingell has long been an old-school supporter of car-makers and other big industries and has obstructed tough anti-pollution legislation. By contrast, Mr Waxman is an ardent environmentalist who represents Hollywood and Beverly Hills and promises to make passing climate change legislation a top priority.