- 12 May 2010
Today, Senators John Kerry (D-MA) and Joe Lieberman (I-CT) unveiled their long-awaited climate and energy bill. The bill, negotiated over long months with Senator Lindsey Graham (R-SC) and a broad range of businesses, environmental organizations and civil society groups, marks a new chapter in the US debate over climate and energy policy.
The new bill is different from past climate and energy proposals in the US Congress. Most noticeably, it departs from a single, economy-wide cap and trade program to apply a more nuanced approach to each of the country’s three major emitting sectors: electric power, industry and transport.
Utilities would come under a cap and trade program beginning in 2013, while major industrial emitters would be phased-in to the program beginning in 2016. The transport sector, however, would not be included in the cap and trade program - instead being required to purchase and retire emission allowances at a fixed price.
Other details of the bill include:
- Targets of 17% below 2005 levels by 2020, 42% by 2030, 83% by 2050
- Price collar (ceiling and floor) on emission allowances starting at $12 and $25 per ton
- Border adjustment mechanism requiring imports from countries that have not taken action to limit emissions to pay a fee at the border – if an international agreement on climate change is not reached
- Nuclear provision including regulatory risk insurance for 12 new plants, $54 billion in loan guarantees and tax credits, and streamlined licensing procedures
- Carbon capture and storage (CCS) provision including incentives for the commercial deployment of 72 GW of CCS, including $2 billion per year for CCS R&D
- Advanced vehicle provision including incentives for the production of advanced vehicles and pilot projects for plug-in electric vehicles
- Pre-emption of state cap and trade programs and EPA authority to regulate GHGs under several sections of the Clean Air Act
The bill also includes a provision to expand offshore drilling for oil and natural gas, by providing states that allow drilling 37.5 percent of resulting revenues. But in light of the recent oil spill in the Gulf of Mexico, it also includes new protections for states opposed to drilling, including the ability to opt-out of drilling up to 75 miles from their shores and the power to veto drilling plans if they would “suffer significant adverse impacts in the event of an accident.”
While the new bill is designed to appeal to a much broader group of supporters than past proposals, its prospects for passage this year remain uncertain. With mid-term elections on the horizon in November, the window for legislative action this year is shortened - and debate over immigration reform has drawn some attention away from climate and energy. More importantly, despite the many provisions aimed at attracting support from conservatives, it has yet to secure the endorsement of a single Republican - including Senator Graham, who has withdrawn from the negotiations.
“Now that it is released, the bill needs to do what it was designed to do – secure broad support,” said Evan Juska, Senior Policy Manager at The Climate Group. “There is a lot in the new bill for moderate Republicans and Democrats to like. There’s a lot to expand domestic clean energy and create new industries and jobs. But if it’s to move forward this year, we need to see Senators get off the fence and start endorsing it.”
“Comprehensive climate and energy legislation will reduce our dependence on oil, increase our nation’s security and create jobs,” added Amy Davidsen, US Executive Director of The Climate Group. “What’s more, it will ensure that we remain competitive in the clean technology revolution taking place around the world. We must not miss this opportunity to help unlock a clean and prosperous future for America.”
Senator Lieberman has said that he expects the bill to be debated on the Senate floor in June or July, after EPA and the Energy Information Administration (EIA) finish their analysis. Senate Majority Leader Harry Reid (D-NV) has said that he is waiting to see the response to bill before making a decision on its time-line.