Bush Criticizes Lieberman-Warner Bill

Posted by Brad Johnson Mon, 02 Jun 2008 15:58:00 GMT

In an address calling on Congress to make all his tax cuts permanent, Bush made the following statement:
Today the Senate is debating a bill called the Warner-Lieberman bill, which would impose roughly $6 trillion of new costs on the America economy. There’s a much better way to address the environment than imposing these costs on the job creators, which will ultimately have to be borne by American consumers. And I urge the Congress to be very careful about running up enormous costs for future generations of Americans.

We’ll work with the Congress, but the idea of a huge spending bill fueled by taxes – increases – isn’t the right way to proceed. And the right way for Congress to proceed on taxes in general is to send a clear message that the tax relief we passed need to be made permanent.

Al Gore Praises Boxer, Lieberman-Warner Bill

Posted by Brad Johnson Mon, 02 Jun 2008 15:10:00 GMT

Former Vice President Al Gore’s statement on the Lieberman-Warner Climate Security Act (S. 3036):
I want to commend Senator Boxer for her leadership of the Environment and Public Works Committee. Thanks to her vision and dedication, we have the first global warming bill in history that is comprehensive, bipartisan and that enjoys support across the country – from labor and agriculture to the business and the environmental communities. Of course the bill needs to be stronger, but it’s vital that Congress begin to act. While it’s important that people change their light bulbs, it’s even more important that we change the laws.

Boxer Delivers Democratic Radio Address On Global Warming

Posted by Brad Johnson Mon, 02 Jun 2008 14:47:00 GMT

On Saturday, May 31st, Senator Boxer gave the Democratic Radio Address on this week’s upcoming debate on the Lieberman-Warner Climate Security Act (S. 3036).

Right now, many of our states, including my home state, are leading. They have the will. Our mayors are leading. They have the will. Religious leaders have urged us to act now as well. They reminded me of a wonderful quote that motivates me to work as hard as I can for as long as it takes to responsibly address global warming. These words stay with me: “When God created the first man, he took him around to all the trees in the Garden of Eden and said to him ‘see my handiwork, how beautiful and choice they are. Be careful not to ruin and destroy my world, for if you do ruin it, there is no one to repair it after you.’”

The full text of the address is below.

The text of the radio address, as delivered, is below:

Good morning. I’m Senator Barbara Boxer from California and Chairman of the Environment and Public Works Committee. Next week, the Senate will begin debate on one of the most important issues of our time – global warming.

Senators have come together across party lines to write a law that will not only enable us to avoid the ravages of unchecked global warming, but will create millions of new jobs and put us on the path to energy independence. Other benefits of our legislation will be cleaner air, energy efficiency, relief for consumers and the alternative energy choices that American families deserve. And, by acting wisely, America will regain the leadership we have lost these past seven years.

There are some in the Senate who insist that global warming is nothing more than science fiction. These are the same kind of voices who said that the world was flat, cigarettes were safe and cars didn’t need airbags – long after the rest of us knew the truth.

The fact is that the overwhelming majority of scientists say that the earth is in peril if we don’t act now. They’ve told us clearly that more than 40 percent of God’s creatures could face extinction if we don’t act now. They’ve told us of more intense weather events if we don’t act now. Health experts have told us that infectious diseases will increase due to warmer waters. And military leaders have told us that unchecked global warming will lead to severe conflict and war as droughts, floods and rising sea levels create huge numbers of desperate refugees.

I hope you will help us convince the negative voices that we must act now to avert these dangers. Tell the Bush administration to help us, not fight us. Tell your Senators that action now will have positive results for our families and our nation. Tell those skeptics who say “wait for China and India to act” that the America we know and love doesn’t hide from a challenge and wait for others to lead.

Right now, many of our states, including my home state, are leading. They have the will. Our mayors are leading. They have the will. Religious leaders have urged us to act now as well. They reminded me of a wonderful quote that motivates me to work as hard as I can for as long as it takes to responsibly address global warming. These words stay with me: “When God created the first man, he took him around to all the trees in the Garden of Eden and said to him ‘see my handiwork, how beautiful and choice they are. Be careful not to ruin and destroy my world, for if you do ruin it, there is no one to repair it after you.’”

I truly hope that you will support our efforts on the Senate floor. Please join our fight, and thanks for listening.

Club for Growth, Environmental Defense Action Fund, Launch Dueling Lieberman-Warner Campaigns

Posted by Brad Johnson Thu, 29 May 2008 13:40:00 GMT

The conservative Club for Growth has launched a $250,000 radio and television campaign targeting several coal-state senators in opposition to the Lieberman-Warner Climate Security Act (S. 2191/3036). The Environmental Defense Action Fund, the C(4) side of the Environmental Defense Fund, has also begun a much larger $4 million campaign that comes on top of the estimated $8.5 million already spent this year in support of the cap-and-trade legislation.

The text of the Club for Growth ad running in Tennessee:
Congress is at it again. This time they’re pushing massive new taxes and regulation in the name of global warming. But let’s ask ourselves, are the unproven benefits of legislation worth the major job losses, new taxes and increased energy costs that could result?

Call Senator Lamar Alexander and tell him to vote “no” on the Lieberman-Warner climate bill. Tennesseans just can’t afford another huge, costly government program.

Club for GrowthEnvironmental Defense
Club for Growth:
  • Tennessee (Republican Bob Corker)
  • North Carolina (Republican Elizabeth Dole)
  • West Virginia (Democrats Robert Byrd and Jay Rockefeller)
  • Montana (Democrats Max Baucus and John Tester)
  • Arkansas (Democrats Blanche Lincoln and Mark Pryor)
  • Colorado (Republican Wayne Allard and Democrat Ken Salazar)
  • Florida (Republican Mel Martinez)
  • Indiana (Republican Richard Lugar and Democrat Evan Bayh)
  • Missouri (Republican Kit Bond and Democrat Claire McCaskill
  • Nebraska (Republican Chuck Hagel and Democrat Ben Nelson)
  • New Hampshire (Republicans Judd Gregg and John Sununu)
  • New Mexico (Republican Pete Domenici and Democrat Jeff Bingaman)
  • North Carolina (Republican Richard Burr)
  • North Dakota (Democrats Kent Conrad and Byron Dorgan)
  • Ohio (Republican George Voinovich and Democrat Sherrod Brown)
  • Pennsylvania (Republican Arlen Specter and Democrat Robert Casey)
  • Tennessee (Republicans Lamar Alexander and Bob Corker)
  • Virginia (Democrat Jim Webb)

E&E News:

The Environmental Defense Fund ads also are running in the districts of several influential House members, including Speaker Nancy Pelosi (D-Calif.), Majority Leader Steny Hoyer (D-Md.), Energy and Commerce Chairman John Dingell (D-Mich.), Minority Leader John Boehner (R-Ohio) and Minority Whip Roy Blunt (R-Mo.).

Markey Introduces "Investing in Climate Action and Protection Act," Calling it "Revolutionary"

Posted by Brad Johnson Wed, 28 May 2008 11:54:00 GMT

From the press release:
Rep. Edward J. Markey (D-Mass.) introduced a revolutionary new global warming bill today that would reduce global warming pollution according to scientific targets, reinvest any revenue back to American workers and technology, and would re-establish America as a leader in solving the globe’s greatest challenge, climate change.

At a speech at the Center for American Progress this morning, Rep. Markey, who is Chairman of the House Select Committee on Energy Independence and Global Warming, and a senior member of the Energy and Commerce and Natural Resources Committees, laid out his science- and consumer-based vision for climate legislation.

“I am here today because the chorus for change is deafening. The time for action is now,” said Rep. Markey in his prepared remarks. “We must cap pollution, we must invest in consumers, jobs and the technology of tomorrow, and America must lead the world in solving our greatest challenges, and we must start now.”

The bill is called the Investing in Climate Action and Protection Act, or iCAP for short, the small “i” a tip of the cap to the technological potential of clean energy. The bill also proffers a new paradigm in global warming legislation: the Cap-and-Invest system. The bill caps pollution at 85 percent below 2005 levels by 2050. It then uses an auction system that sets a price on carbon, and allows companies to compete for reductions, or buy or trade credits within the system.

The “Investing in Climate Action and Protection Act” (iCAP Act) amends the Clean Air Act to establish an economy-wide cap-auction-and-trade system that adheres to five core principles:

1. Reduce U.S. global warming pollution by 85 percent by 2050, the necessary U.S. contribution to stabilize atmospheric concentrations of heat-trapping gases and avoid dangerous global warming.

The iCAP Act’s cap-auction-and-trade program will cover 87 percent of U.S. greenhouse gas emissions and will reduce covered emissions to 2005 levels by 2012, to 20 percent below 2005 levels by 2020, and to 85 percent below 2005 levels by 2050.

The following “covered entities” will be regulated under the cap: (1) power plants and large industrial facilities; (2) entities that produce or import petroleum- or coal-based liquid or gaseous fuels; (3) entities that produce or import hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, or nitrogen trifluoride; (4) natural gas local distribution companies; and (5) geological carbon sequestration sites.

The iCAP Act will achieve 7 percent additional coverage (a total of 94 percent coverage) through (1) mandatory performance standards for coal mines, landfills, wastewater treatment operations, and large animal feeding operations; and (2) voluntary financial incentives to farmers and forest managers to reduce greenhouse gas emissions and increase carbon storage. The iCAP Act also sets mandatory performance standards for new coal-fired power plants, requiring them to capture and sequester 85 percent of their CO2 emissions within a set timeframe.

2. Auction pollution allowances, instead of giving them free-of-charge to polluters, to avoid windfall profits for polluters, ensure fairness and effectiveness, and reduce social costs.

The iCAP Act begins by auctioning 94 percent of allowances in 2012 and transitions to a 100 percent auction in 2020. The 6 percent of allowances not initially auctioned are distributed as transitional assistance to U.S. industries that are energy-intensive and exposed to international trade competition (e.g., iron and steel, aluminum, cement, glass, and paper). The iCAP Act permits any person to buy, sell, or transfer allowances or to “bank” them for future use. Covered entities also may borrow allowances from the allowance budget for future years, but these “loans” must be repaid within five years with interest. Covered entities can meet up to 15 percent of their annual obligations with EPA-approved domestic offset credits and up to an additional 15 percent with EPA-approved international emission allowances or offset credits. Domestic and international offset credits are subject to rigorous standards to ensure reductions in emissions or increases in sequestration are real, verifiable, additional, permanent, and enforceable. The Federal Energy Regulatory Commission will oversee the carbon market to prevent fraud and market manipulation.

3. Return over half of auction proceeds to low- and middle-income households to help compensate for any increase in energy costs as a result of climate legislation.

The iCAP Act returns over half of auction proceeds to low- and middle-income households through rebates and tax credits. This will compensate all increased energy costs due to climate legislation for all households earning under $70,000 (66 percent of U.S. households), and will provide benefits to all households earning up to $110,000 (over 80 percent of U.S. households).

4. Invest the remaining auction proceeds in programs that will further reduce the costs of climate policy, spur the development of advanced low-carbon technologies, grow the U.S. economy, and address unavoidable impacts of climate change.

The iCAP Act uses the remaining auction proceeds to fund:
  • clean energy technology research, development, demonstration and deployment;
  • efficiency policies to reduce the costs and consumer impacts of climate policy;
  • incentives to U.S. farmers and foresters to reduce greenhouse gas emissions and increase carbon storage in agricultural soils and forests;
  • green jobs training and assistance for workers to transition into the new jobs of a low-carbon economy;
  • reduction of deforestation and deployment of clean technologies in developing countries;
  • programs to increase resilience to climate change impacts in the United States and in developing countries; and
  • climate change education.

5. Include policies that will encourage major-emitting developing countries, like China and India, to take comparable action to reduce global warming pollution to protect the competitiveness of U.S. industry.

Under the iCAP Act, developing countries that take comparable action to reduce global warming pollution will have access to funding from the International Clean Technology Fund and will be allowed to sell “offset credits” into the U.S. market. Developing countries that carry out programs to reduce emissions from deforestation will be eligible for assistance from an International Forest Protection Fund. If a country fails to take comparable action by 2020, importers of energy-intensive primary goods (e.g., iron and steel, aluminum, cement, glass, and paper) from that country will have to purchase special reserve allowances to account for pollution generated in the production of such goods. Until 2020, U.S. manufacturers of competing primary goods will be given free allowances to prevent loss of jobs or “leakage” of emissions due to international competition.




Section 101 of the bill adds a new Title VII to the Clean Air Act, the subtitles of which are summarized below.

Subtitle A: Tracking Emissions

Subtitle A establishes a process through which EPA may designate substances as greenhouse gases for the purposes of this Act. It also directs EPA to determine (and periodically review) the quantity of each greenhouse gas that makes the same contribution to global warming as one metric ton of CO2. Subtitle A directs EPA to establish a national greenhouse gas registry to collect information on greenhouse gas emissions, on a regular basis, and make that information publicly available.

Subtitle B: Reducing Emissions

Subtitle B directs EPA to establish a National Emission Allowance Account, composed of a separate quantity of emission allowances for each calendar year from 2012 through 2050. In a table, the subtitle identifies the number of emission allowances that will be issued for each year. EPA will create, at the inception of the program, all of the emission allowances that will exist over the life of the program. Each emission allowance will have a unique serial number that will include the calendar year for which it was created. The bill covers emissions of seven greenhouse gases – carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3) – plus any other anthropogenic gas that EPA designates as a greenhouse gas, based on a determination that such gas has a global warming potential equal to or greater than that of CO2. Each emission allowance is equal to one metric ton CO2-equivalent – the quantity of a greenhouse gas that makes the same contribution to global warming as one metric ton of CO2. The emissions “cap” will cover 87 percent of total U.S. greenhouse gas emissions. The size of the 2012 Emission Allowance Account is 6,098 allowances, which is equivalent to greenhouse gas emissions from sources covered by the “cap” in 2005. The size of the cap will decline each year, resulting in a reduction of U.S. emissions to 20 percent below 2005 levels in 2020 and 85 percent below 2005 levels in 2050. The bill requires the owner or operator of each “covered entity,” at the end of each calendar year beginning in 2012 and ending in 2050, to submit to EPA one emission allowance for each metric ton CO2-equivalent of greenhouse gases that they emitted or that was contained in the fuels or chemicals they put into commerce that year. Covered entities include:
  • Electric power and industrial facilities;
  • Entities that produce or import petroleum- or coal-based liquid or gaseous fuels – including most fossil-based transportation fuels;
  • Entities that produce or import HFCs, PFCs, SF6, or NF3;
  • Natural gas local distribution companies – to cover emissions from natural gas combustion by residential and commercial facilities; and
  • Geological carbon sequestration sites – to cover any leakage.

Entities that do not meet a 10,000 CO2-equivalent threshold will not be required to submit allowances. To avoid double-counting of emissions, (1) electric power and industrial facilities will not be required to submit allowances for any emissions resulting from the use of petroleumor coal-based liquid or gaseous fuels; (2) natural gas local distribution companies will not be required to submit allowances for emissions resulting from combustion of any natural gas delivered to an electric power or industrial facility that meets the 10,000 metric ton CO2- equivalent threshold; and (3) electric power and industrial facilities will not be required to submit allowances for emissions of HFCs, PFCs, SF6, or NF3. HFC producers will not be required to submit allowances between 2012 and 2019 in order to ensure U.S. success in meeting Montreal Protocol targets for stratospheric ozone-depleting substances and to allow adequate time for environmentally preferable substitutes for HFCs to come to market. A covered entity may submit domestic offset credits approved by EPA under subtitle E in lieu of emission allowances to satisfy up to 15 percent of its compliance requirement. A covered entity may also submit international emission allowances or offset credits approved by EPA under subtitle F to satisfy up to 15 percent of its compliance requirement. EPA will issue destruction credits to entities that convert a greenhouse gas (other than methane) to another gas with a lower global warming potential. The number of credits issued will be equal to the number of metric tons of CO2-equivalent of reduction in global warming potential achieved through such conversion. A covered entity may use these credits to satisfy up to 100 percent of its annual compliance requirements.

Subtitle C: Distribution of Allowances

Subtitle C directs EPA to auction virtually all of the emission allowances each year, beginning with 94 percent auction from 2012-2019 and transitioning to 100 percent auction in 2020. The remaining allowances will be provided to U.S. manufacturers of trade-exposed primary goods (such as iron and steel, cement, aluminum, bulk glass, and paper) as a transitional measure to avoid production shifting abroad and thus undermining the environmental objectives of this bill. Six percent of total allowances in 2012 through 2020 (with a cumulative value of $96 billion) will be allocated to manufacturers based upon the predicted adverse impact of direct and indirect costs of this Act.

To optimize market liquidity and stability, auctions will be held on a quarterly basis. Allowances for the current compliance year and for future compliance years (up to four years in the future) will be available at each auction. Auction proceeds will be used for a variety of public benefit purposes. Up to 0.5 percent of auction proceeds will be deposited in to the Climate Protection Management Fund to cover the costs associated with EPA and FERC administration of the Act. Fifty million dollars per year will be dedicated to climate change education programs and centers for excellence established under Subtitle H of Title III. All remaining proceeds will be divided among 10 separate funds which will fund the programs described in Title III and Title IV of this Act.

Subtitle D: Trading, Banking, and Borrowing

Subtitle D establishes rules for the trading, banking, and borrowing of emission allowances. Anyone may buy, sell, or transfer emission allowances, or submit them to EPA for retirement. Unlimited “banking” of allowances for future use is permitted. A covered entity may also borrow allowances from EPA (to be drawn from the emissions budget for future years) to meet up to 15 percent of its annual compliance obligation, but an allowance “loan” must be repaid within 5 years with 10 percent annual interest.

Subtitle E: Offsets

Subtitle E establishes a program to issue offset credits to entities that carry out projects in the United States that achieve real, verifiable, additional, permanent, and enforceable reductions in emissions or increases in storage of carbon in plants and soils. Four types of projects will be eligible to receive offset credits:
  • Reductions in (outside-the-cap) greenhouse gas emissions from oil and gas systems;
  • Reductions in greenhouse gas emissions from livestock operations that are not covered by performance standards under subtitle H;
  • Reductions in greenhouse gas emissions from abandoned coal mines; and
  • Increases in biological carbon sequestration through afforestation and reforestation.

Activities covered by compliance obligations in subtitle B or performance standards in subtitle H, or receiving support under subtitle D of Title III are not eligible to earn offset credits. Subtitle E directs EPA to establish standardized monitoring, quantification, and accounting protocols and standards for approval of offset credits. Offset credits may be claimed for eligible projects annually by submitting verification reports certified by an accredited third party to EPA.

Subtitle F: International Emission Allowances and Offset Credits

Subtitle F directs EPA to establish regulations providing for approval of emission allowances from foreign greenhouse markets that impose mandatory absolute limits on emissions that are of comparable stringency to the program established by this bill, including comparable monitoring, compliance, and enforcement practices.

Subtitle F also directs EPA to establish regulations providing for approval of categories and subcategories of international offset credits that meet certain criteria. Only credits generated from projects in countries that have taken action on climate change comparable to that of the United States, or in countries that have very low emissions or are among the least developed of developing countries, are eligible for use under this title.

Subtitle G: Global Effort to Reduce Greenhouse Gas Emissions

Subtitle G encourages the President to work proactively under the United Nations Framework Convention on Climate Change and in other appropriate forums, to establish binding agreements committing all major greenhouse gas-emitting nations to contribute equitably to the reduction of global greenhouse gas emissions. Subtitle G also directs the President to determine whether each foreign country has taken action to reduce greenhouse gas emissions that is “comparable” to that of the United States, taking into account the level of economic development of each country. If, by 2020, any of our trading partners have not taken “comparable” action, the President is authorized to require importers of trade-exposed primary goods (e.g., iron and steel, cement, aluminum, bulk glass, and paper) from those countries to purchase special “international reserve allowances” to account for the greenhouse gas emissions from the production of the goods. Least-developed countries and countries with very low greenhouse gas emissions will be exempt from this requirement. The pool of international reserve allowances will be separate from the domestic emission allowance pool, so that the program will not affect domestic emission levels or the price of domestic emission allowances. Proceeds from the sale of international reserve allowances will provide supplemental funding for the International Clean Technology Fund described in subtitle B of Title IV.

Subtitle H: Standards for Coal-Fired Power Plants and Non-Covered Facilities

Subtitle H directs EPA to promulgate performance standards for certain sources not included under the cap – such as coal mines, landfills, wastewater treatment operations, and large animal feeding operations – that emit at least 10,000 metric tons CO2-equivalent per year. These standards will require such sources to apply best available control technologies or practices. Subtitle H also establishes mandatory performance standards for any new coal-fired power plant, requiring all plants on which construction begins after January 1, 2009, to achieve capture and geological sequestration of 85 percent of their CO2 emissions within a defined time frame.


Section 102 of the Act amends sections 113, 114, and 307 of the Clean Air Act to make the Act’s existing mechanisms for enforcement, inspections, administrative process, and judicial review applicable to the new Title VII of the Act.


To ensure proper use and disposal of HFCs and other fluorinated gases used as substitutes for ozone-depleting substances, this section amends sections 608 and 609 of the Clean Air Act to extend to these substances the requirements of the Clean Air Act that already apply to the sale, use, and disposal of chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs).


This section overrides EPA’s unfounded denial, in December 2007, of California’s petition for a waiver of preemption under the Clean Air Act of its greenhouse gas emissions standards for vehicles. This will permit California and the other States that have adopted the California standards to proceed with implementation of these standards.


This section amends section 211 of the Clean Air Act to establish a Low-Carbon Fuel Standard (LCFS). The LCFS establishes a market-based system to incentivize reductions in the lifecycle greenhouse gas emissions associated with the production and use of transportation fuels, through deployment of advanced biofuels, plug-in hybrid vehicles, and hydrogen. The LCFS is integrated with the current Renewable Fuel Standard, promoting a long-term market for substitutes to petroleum.


Title II creates a new Office of Carbon Market Oversight (“OCMO”) within FERC, which is charged with ensuring transparency, fairness, and stability in the market for emission allowances, offset credits, and derivatives thereof (referred to as “regulated instruments”). The OCMO will establish rules requiring registration of (1) self-regulated “registered carbon trading facilities” on which regulated instruments are traded, (2) “carbon clearing organizations” that provide clearing services to trading facilities, and (3) brokers and dealers trading in regulated instruments. Registered carbon trading facilities will publicize price and other trading data and enforce rules against fraud and market manipulation. Trading of regulated instruments generally will be limited to registered exchanges, except that, in order to provide greater flexibility and efficiency in hedging carbon risks, large institutions and high net-worth individuals are permitted to trade regulated derivatives off-exchange (in the over-the-counter market). To ensure market transparency, the OCMO will establish regulations providing for reporting of trading activity by large traders in regulated instruments. To prevent market participants from seeking to “corner” or otherwise manipulate the market, the OCMO may adopt position limits or position accountability requirements for regulated instruments.

Title II establishes rules against fraud and market manipulation, which OCMO is authorized to enforce through administrative procedures and penalties, civil enforcement actions in federal district court, or (in the case of knowing or willful violations) criminal prosecution. Finally, the OCMO will monitor the functioning of the carbon market and its effects on the U.S. economy and will provide quarterly reports to Congress.


Title III establishes a series of domestic programs funded by auction proceeds. A description of each program, along with an estimate of cumulative funding for the program over the life of the bill, is provided below.

Subtitle A: Climate Trust Tax Credits and Rebates

Under Subtitle A, $4.3 trillion (55 to 58.5 percent of auction proceeds) will be used for refundable tax credits and rebates for middle- and low-income households, to compensate for any increase in energy costs resulting from the bill. Tax credits will be used to reach middleincome wage earners and senior citizens, and cash rebates – distributed through the Electronic Benefits Transfer systems used for food stamps – will be used to reach low-income households. All households earning under $110,000 will be eligible. Virtually all costs from climate regulation will be covered for households earning under $70,000, with benefit levels phasing out gradually for households earning $70,000 to $110,000.

Subtitle B: Low-Carbon Technology Fund

Under Subtitle B, $963 billion (12.5 percent of auction proceeds) will be used to fund lowcarbon energy technology research, development, demonstration, and deployment programs administered by the Department of Energy (DOE). These include RD&D programs authorized under existing law in the areas of renewable electricity generation, carbon capture and sequestration, electric transmission and distribution efficiency (including smart grid technologies), low-carbon renewable fuels, low-emission vehicles, building efficiency, industrial efficiency, energy storage technologies, and the Advanced Research Projects Agency-Energy (“ARPA-E”). In addition, Subtitle B establishes two new programs to promote the deployment of renewable electricity generation – the first awards production payments through a reverse auction and the second provides rebates for the purchase and installation of distributed generation technologies such as solar panels. From 2010-2020, cost-sharing grants are authorized to cover the incremental costs of implementing carbon capture and sequestration technology at coal-fired power plants.

Subtitle C: National Energy Efficiency Fund

Under Subtitle C, $963 billion (12.5 percent of auction proceeds) will be used to fund a broad array of efficiency programs. These include: (1) a program to award incentive payments to States based on the magnitude of energy savings each State achieves each year through consumer efficiency programs; (2) programs to award grants to states that adopt and implement building efficiency and recycling policies; (3) funding for the Weatherization Assistance Program for low-income persons and the Low Income Home Energy Assistance Program; and (4) grants to support state and local mass transit and “smart growth” projects that will reduce vehicle miles traveled.

Subtitle D: Agriculture and Forestry Carbon Fund

Under Subtitle D, $378 billion (4.5 to 5 percent of auction proceeds) will be used to fund a program, administered by the Department of Agriculture, to support projects by U.S. farmers and foresters that increase biological sequestration of carbon and reduce greenhouse gas emissions through improved agricultural soil management and forest management practices (not including afforestation and reforestation). USDA is also directed to undertake a complementary program of research, education, and outreach on agriculture and forestry greenhouse gas management.

Subtitle E: Worker Transition Assistance and Green Jobs Training

Under Subtitle E, $147 billion (1.5 to 2 percent of auction proceeds) will be used to fund the green jobs training programs established under the Energy Independence and Security Act of 2007, and a program, administered by the Department of Labor, which will provide training, income support, and tax credits for health care insurance for up to two years to any workers affected by the transition to a new low-carbon economy.

Subtitle F: National Climate Change Adaptation Program

Under Subtitle F, $185 billion (2 to 2.5 percent of auction proceeds) will be used to support a comprehensive program to increase America’s resilience to the impacts of climate change. Under this program, the National Oceanic and Atmospheric Administration will (1) develop periodic regional and national assessments of America’s vulnerability to climate change impacts; and (2) establish a National Climate Service to provide research products and decision tools, based upon robust monitoring and observational capabilities, to federal, state, local, and tribal decision makers to assist with developing adaptation strategies. Subtitle F also requires federal agencies to develop and implement plans to address climate change impacts within their respective jurisdictions and directs the President, pursuant to a detailed plan submitted for congressional review, to fund state, local, and tribal government programs and projects to reduce vulnerability to climate change impacts.

Subtitle G: Natural Resource Conservation Fund

Under Subtitle G, $147 billion (1.5 to 2 percent of auction proceeds) will be used to support measures, implemented by federal land and natural resource management agencies and the States, to protect U.S. natural resources, wildlife, and fisheries against adverse impacts from climate change. Federally administered funds must be used in accord with a national strategy developed by the President, with advice from a science advisory committee, and state-administered funds must be used in accord with federally approved state strategies.

Subtitle H: Climate Change Education and Centers for Excellence

Under Subtitle H, $2 billion (up to $50 million per year) will be used to provide support, through the National Science Foundation and EPA, for the development and implementation of climate change education programs and to provide cost-sharing grants supporting the establishment, at colleges, universities, and non-profit organizations, of national centers for excellence on climate change science, technology, and policy.


Title IV establishes three international programs, funded by auction proceeds, to encourage global action to combat climate change.

Subtitle A: International Forest Protection Fund

Under Subtitle A, $147 billion (1.5 to 2 percent of auction proceeds) will be used to support policies in qualifying developing countries that reduce emissions from deforestation and forest degradation or increase biological carbon sequestration through restoration of forests and degraded lands, afforestation, and improved forest management. Countries that do not initially qualify for inclusion in the incentive program are eligible for grants to build their capacity to reduce emissions from deforestation and degradation and increase carbon storage in forests.

Subtitle B: International Clean Technology Fund

Under Subtitle B, $301 billion (3.5 to 4 percent of auction proceeds) will be used to support an international clean technology fund. This fund will provide support for the adoption of clean energy and efficiency technologies by major-emitting developing countries that the President certifies, under Title I, as having taken “comparable action” to combat climate change, taking into account the country’s level of economic development.

Subtitle C: International Climate Change Adaptation Fund

Under Subtitle C, $185 billion (2 to 2.5 percent of auction proceeds) will be used to support an international adaptation program, to be administered by the U.S. Agency for International Development, which will fund projects to assist the most vulnerable developing countries in adapting to the impacts of climate change.


Title V amends the Safe Drinking Water Act to require EPA to develop comprehensive regulatory standards for underground injection of carbon dioxide. Representative Edward J. Markey Investing in Climate Action 9 and Protection Act Title V also directs EPA to establish a task force charged with providing Congress with recommendations regarding the legal framework to govern liability with respect to closed geological storage sites. Finally, the Secretary of Energy is directed to undertake a feasibility study regarding construction of carbon dioxide pipelines and geological sequestration facilities.


Title VI incorporates provisions from the House-passed version of the energy bill from 2007, requiring the Department of Energy to develop model building efficiency codes that States are required to adopt and enforce. States that do so become eligible for funding from the National Energy Efficiency Fund (described in subtitle C of Title III).


Title VII establishes a comprehensive framework for periodic review and reports to Congress, by the National Academy of Sciences (NAS), the Government Accountability Office (GAO), and relevant federal agencies, of all major aspects of the bill. The NAS is directed to report every five years on the latest scientific information relevant to greenhouse gas emissions and climate change impacts and the bill’s performance in reducing emissions. The GAO is directed to report every three years on Federal agencies’ administration of, and performance of, the programs established under titles III and IV of the bill. Every five years, an interagency body will make recommendations to the President, and the President will in turn make recommendations to Congress, on changes to the framework established by the bill based on the NAS’s and GAO’s most recent findings and recommendations. Title VI also provides for expedited Congressional consideration of a presidential recommendation to tighten the bill’s emissions cap if the NAS’s scientific findings indicate such action is necessary.

Snowe Announces Support for Lieberman-Warner

Posted by Brad Johnson Fri, 23 May 2008 13:09:00 GMT

On Wednesday, Sen. Olympia Snowe (R-Maine) announced her support for S. 3036, saying it “mirrors closely” the Kerry-Snowe Global Reduction Act (S. 485), which calls for a 65 percent reduction from 2000 levels of greenhouse gases by 2050. Snowe also noted that language from the Feinstein-Snowe Emission Allowance Market Transparency Act (S. 2423) was included in the manager’s mark.

Unlike Lieberman-Warner, Kerry-Snowe also sets a goal of achieving a greenhouse gas stabilization target of 450 ppm, and calls for the establishment of vehicle emissions standards. In Snowe’s press release, she states that Lieberman-Warner “would reduce greenhouse gas emissions by at least 66 percent by 2050,” although NRDC analysis of the bill finds that Lieberman-Warner would only achieve reductions between 60 to 65 percent from 2000 levels.

Reid Takes Steps To Begin Floor Debate On Lieberman-Warner 1

Posted by Brad Johnson Fri, 23 May 2008 12:07:00 GMT

On Wednesday, Senate Majority Leader Harry Reid (D-Nev.) introduced Sen. Barbara Boxer’s (D-Calif.) manager’s mark of the Lieberman-Warner Climate Security Act (S. 2191) as a new bill, numbered S. 3036. S. 3036 will be the vehicle for the floor debate of the cap-and-trade legislation. On Thursday, Reid filed for cloture on a motion to proceed onto the bill, setting the stage for a 5:30 p.m. vote on June 2, one week from Monday. According to E&E News, “Few expect the vote to be contentious.”

“It may even end up being 99-0,” said Andrew Wheeler, staff director for Senate Environment and Public Works Committee ranking member James Inhofe (R-Okla.). Inhofe plans to back this procedural step as a gateway to a bigger debate over the merits of the legislation, Wheeler said.

Reid, Boxer, and the bill’s co-sponsors, Joe Lieberman (I-Conn.) and John Warner (R-Va.), have not determined what terms they will seek for the debate and amendment process. Reid has the option of exerting privilege to block unwanted amendments by “filling the tree” with his own.

Text of Boxer's Manager Amendment to Lieberman-Warner Climate Security Act

Posted by Brad Johnson Wed, 21 May 2008 20:27:00 GMT

Download the Full document. Titles are after the break.

Title I Immediate Action

  • Subtitle A Tracking Greenhouse‐Gas Emissions
  • Subtitle B Early Clean Technology Deployment
  • Subtitle C Research

Title II Capping Greenhouse‐Gas Emissions

Title III Reducing Emissions Through Offsets and International Allowances

  • Subtitle A Offsets in the United States
  • Subtitle B Offsets and Emission Allowances From Other Nations
  • Subtitle C Agriculture and Forestry Program in the United States

Title IV Establishing a Greenhouse‐Gas Emissions Trading Market

  • Subtitle A Trading
  • Subtitle B Market Oversight and Enforcement
  • Subtitle C Carbon Market Efficiency Board
  • Subtitle D Climate Change Technology Board
  • Subtitle E Auction on Consignment

Title V Federal Program to Prevent Economic Hardship

  • Subtitle A Banking
  • Subtitle H Transition Assistance for Natural‐Gas Processors
  • Subtitle I Federal Program for Consumers

Title VI Partnerships with States, Localities and Indian Tribes

  • Subtitle A Partnerships with State Governments to Prevent Economic Hardship While Promoting Efficiency
  • Subtitle B Partnerships with States, Localities, and Indian Tribes to Reduce Emissions
  • Subtitle C Partnerships with States and Indian Tribes to Adapt to Climate Change
  • Subtitle D Partnerships with States, Localities, and Indian Tribes to Protect Natural Resources

Title VII Recognizing Early Action

Title VIII Efficiency and Renewable Energy

  • Subtitle A Efficient Buildings
  • Subtitle B Efficient Equipment and Appliances
  • Subtitle C Efficient Manufacturing
  • Subtitle D Renewable Energy

Title IX Low‐Carbon Electricity and Advanced Research

  • Subtitle A Low‐ and Zero‐Carbon Electricity Technology
  • Subtitle B Advanced Research

Title X Future of Coal

  • Subtitle A Kick‐Start for Carbon Capture and Sequestration
  • Subtitle B Long‐Term Carbon Capture and Sequestration Incentives
  • Subtitle C Legal Framework

Title XI Future of Transportation

  • Subtitle A Kick‐Start for Clean Commercial Fleets 3
  • Subtitle B Advanced Vehicle Manufacturers
  • Subtitle C Cellulosic Biofuel
  • Subtitle D Low‐Carbon Fuel Standard

Title XII Federal Program to Protect Natural Resources

  • Subtitle A Funds
  • Subtitle B Bureau of Land Management Emergency Firefighting Program
  • Subtitle C Forest Service Emergency Firefighting Program
  • Subtitle D National Wildlife Adaptation Strategy
  • Subtitle E National Wildlife Adaptation Program

Title XIII International Partnerships to Reduce Emissions and Adapt

  • Subtitle A Promoting Fairness While Reducing Emissions
  • Subtitle B International Partnerships to Reduce Deforestation and Forest Degradation
  • Subtitle C International Partnerships to Deploy Clean Technology
  • Subtitle D International Partnerships to Adapt to Climate Change and Protect National Security

Title XIV Reducing the Deficit

Title XV Capping Hydrofluorocarbon Emissions

Title XVI Periodic Reviews and Recommendations

Title XVII Miscellaneous

  • Subtitle A Climate Security Act Administrative Fund
  • Subtitle B Paramount Interest Waiver
  • Subtitle C Administrative Procedure and Judicial Review
  • Subtitle D State Authority
  • Subtitle E Tribal Authority
  • Subtitle F Retail Carbon Offsets
  • Subtitle G Clean Air Act
  • Subtitle H Study on State‐Federal Program Interaction

Energy and Related Economic Effects of Global Climate Change Legislation

Posted by Wonk Room Tue, 20 May 2008 14:00:00 GMT

Representatives from CRS, EIA, EPA, and CBO discuss their economic analyses of Lieberman-Warner (S. 2191) and other emissions-controlling climate legislative proposals.

  • Brent Yacobucci, Congressional Research Service
  • Dr. Larry Parker, Congressional Research Service
  • Dr. Howard Gruenspecht, Deputy Administrator, Energy Information Administration
  • Dr. Brian McLean, U.S. Environmental Protection Agency
  • Dr. Peter Orszag, Congressional Budget Office

10:03 Domenici: The more of these hearings we can do the better off this country will be. We have five cap-and-trade bills in the Senate. Every single day, 11 out of 11 studies have concluded that these bills will result in higher energy costs, lower economic growth. The analyses of L-W don’t agree on much. Addressing global climate change is one of the greatest challenges of our time. I remain concerned about the dire consequences L-W could have for our nation. The best estimates of our capable minds often prove inaccurate. The EIA projection for oil prices in 2010 was $25. Even the projected environmental impacts of climate change have varied. IPCC’s assessment of sea level rise was reduced from three feet to 27 inches. Very few will have been able to provide input on the manager’s amendment. We’re all working on a bill that will be irrelevant. It is critical to look at what other countries have tried to do.

Assume the president signs L-W. What will we have achieved for the environment? Close to nothing. Without international participation, L-W will have reduced greenhouse gases by 1% by 2050.

China has surpassed us in global warming emissions. Addressing climate change is a great challenge, but not the only challenge we face.

Rather than choosing among cap-and-trade programs, we could look at promoting nuclear power and other tax incentives.

10:16 Bingaman Orzag recently testified before the Finance Committee.

10:17 Yacobucci explains a cap-and-trade system.

10:22 Parker CRS has conducted a review and synthesis of models projecting costs of S. 2191. Long-term cost projections are at best speculative.

10:30 Gruenspecht The projected impacts of L-W are highly sensitive to assumptions about availability of low and no-carbon energy sources and access to international offsets. Costs are roughly three times larger under least favorable assumptions than under most favorable assumptions. 80-90% of emissions reductions are in the electricity production sector. Over 90% of coal, the main emissions source impacted by a cap, goes into electricity production.

10:37 McLean discusses EPA report.

10:43 Orzag Addressing climate change will involve short-term economic costs. Timing is important. An inflexible cap is bad. Giving the permits away is equivalent to auctioning the permits and giving the money to the polluters. Two key factors of a cap-and-trade system include timing flexibility and auction revenue.

10:49 Bingaman A NAM/ACCF study envisions 75% higher allowance costs than the EIA study but economic impact three times higher. Can you explain why?

Gruenspecht The allowance price difference reflect some of the assumptions, like the absence of banking. We were surprised by the size of macroeconomic losses done for NAM. We asked to look at some of their modeling results and met with their contractor. They used EIA’s high-priced oil policy scenario but compared it to the low-price scenario. We think there are some abnormal results in their report.

Bingaman Basically there’s double-counting?

Gruenspecht They’re mixing the impact of two different things.

Bingaman A price ceiling and floor is the best mechanism?

Orzag I don’t want to say best, but yes.

10:55 Barrasso Effect on gas prices?

Gruenspecht If electricity sector can’t reduce emissions, gas price effect can range from $0.40 to $1.00.

Barrasso I want Americans to be aware of the effects on their pocketbook. You talk about uncertainties. The uncertainties are one of magnitude, not direction: how many jobs will be lost. Will a safety valve help?

Parker A safety valve – putting an upper limit on price – is a very effective of limiting economic impact.

Barrasso There’s going to be lower wages and lower returns for retirement plans no matter what you do.

Parker Prices will go up but whether or not bills will go up depends on individual action. We found bills may go down.

Barrasso Nuclear energy.

Gruenspecht Public acceptance is important.

11:07 Sanders What happens if you don’t act?

Orzag I think climate change is among the nation’s and world’s highest long-term risk. There is some danger of catastrophic change. The question is one of timing. It’s like paying an insurance premium.

Sanders We’re paying $10 billion more for Katrina. What will flooding, drought, war cost? That’s really what we’re debating. It’s disaster if we don’t go forward. I believe you’re underestimating efficiency and renewable energy. Of course there going to be economic dislocation.

McLean On the impacts. I think this is an area that concerns us greatly. It’s a very hard area to quantify and monetize. We’re working on that. On energy efficiency and renewables, there’s a lot we can say about that. We show a huge increase in renewable energy.

Corker The bill that came out is not just a cap-and-trade bill. It’s a huge spending bill. It spends every penny in a non-discretionary way. I think the whole issue of allowances because we’re passing out what is like public shares in a public company. I know the romance of this is interesting. There’s a lot underneath this that is going to affect us. Transfering trillions of dollars of wealth. $7.2 trillion, maybe $23 trillion. I think that’s important. I don’t understand why we would be allocating credits out to middlemen.

In essence this bill transfers out hundreds of billions of dollars to states for no reason.

Orzag It is a key insight that much of this money represents a windfall.

Corker It makes absolutely no sense to give allowances to people not involved in emissions. This bill provides for us to provide international credits. What it does do is transfer out, when we have a trade deficit, hundreds of billions of dollars to projects that are often wracked with fraud.

McLean What would states do with money? I’m not defending the amount of money or the policy decision. A lot of efficiency programs are run at the state level.

Corker I hope this is a dry run.

11:24 Salazar What we’re doing is defining a new energy future for America. There’s a lot of learning yet to be had. On the allocation of the auction revenues. Is this the right allocation?

Orzag It depends what your objective is. Low-income households, minimize macroeconomic costs, spur innovation. A more effective approach to cushion macroeconomic costs would be to auction the permits and use that to reduce payroll taxes.

Salazar A lot of people have talked about a Manhattan-style project. Would it be better to put the money into that pot than to lower costs on low-income consumers?

Orzag It’s big, but there is a given size. You can’t do all things for all people at all times. The price signal will do some things. You can auction revenue and explicitly fund R&D. Or allocate permits to entities that do the work, but that would be more opaque.

Gruenspecht There are issues of economic efficiency and fairness.

Salazar We have these great thoughts and great programs. We talk about hybrids and clean-coal technology. This is an opportunity to marry our work to deal with climate change to make our vision a reality.

11:32 Domenici You’re talking about this as if it is another huge Federal Reserve System. You have made it eminently clear. I think people are going to be very quizzical about what we’re doing. I believe is what we really need to do is develop new technology as rapidly as possible to clean up what we need to clean up, and then clean things up.

Murkowski Is it fair?

Parker None of the models will give you the answer reliably what the cost will be. What the models can do is whether we’ve designed the bill to hold the price down. How can they be modified to bring these reductions at the most economic level.

Murkowski Most useful, but for whose end? If I’m opposed to cap-and-trade, I’ll look at NAM’s model. We can use these models as we use statistics to support our particular situation.

Gruenspecht The different studies start from different baselines. They analyze different provisions. CRA gets a large impact from the low-carbon fuel standard. I already had a long discussion with NAM may have wrapped up two different scenarios. It’s technology and technology acceptance.

12:00 Craig I don’t know if I’m willing to risk Idahoans on the environmental or economic models of climate change. We spent years shaping energy legislation. You’re all over the field, as is the country. I’m not quite sure I can remember, have we as a Congress ever tried to micromanage the market. And I think the answer is no, never before. We’re averaging about 1.9 hurricanes in the United States. An average of $5 billion. The impact of this bill is between three to nine hundred hurricanes. We’ve spread the hurricane hit nationwide. It isn’t just Florida and the Gulf Coast and the East Coast. Now the whole country gets hit, from an economic point of view. Old speak, new speak or green speak, I don’t know where we are. But I suspect no speak is the best way for us to go.

12:08 Bingaman Second-order impacts like employment?

Parker Once you move from first-order to second-order impacts you lose even more certainty. You’re making a whole host of assumptions about a quality of life of a generation that doesn’t even now work. My concerns would be increased when talking about employment numbers.

Orzag The main effect will be on the type of jobs, not the number of jobs.

Bingaman There’s no effort to adjust for dynamic effects.

Orzag I tend not to focus on the job numbers that come out of these assessments.

Gruenspecht I too tend to be very skeptical of job numbers.

Corker Right now 52% of auction proceeds go into technology development. A five-person board, not the Congress, decides how this money is spent. Would this distinguished, mind-numbing panel agree that upstream is a direct tax, pretty much?

Orzag In economics, direct and indirect taxes have a specific meaning. But consumers will bear pretty much all of the cost no matter what.

Corker Upstream is easier to monitor. This is in essence a tax. It is in fact a carbon tax. What’s happened is interest groups have gathered around the table and have made what could have been very simple with a carbon tax very complicated. I’d like you to address the efficacy of a carbon tax that increased over time.

Orzag Economic analysis generally suggest that a carbon tax is more efficient. You can make the cap-and-trade similarly efficient by auctioning all the permits and offering significant flexibility in timing.

Corker And we’re allocating about 70% up front.

Orzag At the very start it’s even greater.

Yacobucci You’d still have to decide where that money goes if it’s a tax.

Corker We’re going to be offering an amendment to return all the revenues to consumers. We’re going to be debating on the floor a tax. Two candidates for president advocated a gas-tax holiday. I think we need to be very transparent about this. Citizens need to know we’re driving up the price of petroleum.

Murkowski Is there something we can do to get the technology in place first?

Orzag Pricing carbon will create a strong incentive for technologies to be developed and diffused throughout the economy.

Murkowski And the impact might be higher in certain areas.

McLean A price signal and investment in R&D both have impact. I think we need to do both.

Boxer Releases Preview of Lieberman-Warner Manager's Amendment

Posted by Brad Johnson Mon, 19 May 2008 18:02:00 GMT

Sen. Barbara Boxer (D-Calif.) has released an overview of the “global warming substitute amendment” to the Lieberman-Warner Climate Security Act (S. 2191) that will be the subject of debate during the first week of June.

Changes from the version of Lieberman-Warner that was passed out of the Committee on Environment and Public Works last year include:
  • Title V, Subtitle C: Emergency Off-Ramps. “If the price of carbon allowances reaches a certain price range, there is a mechanism that will automatically release additional emission allowances onto the market to lower the price. The additional allowances are borrowed so that the environmental integrity of the caps over the long term is protected.”
  • Title V, Subtitle I: Financial Relief for Consumers. “The bill sets aside a nearly $800 billion tax relief fund through 2050, which will help consumers in need of assistance related to energy costs. The precise details of the relief will be developed by the Finance committee.”
  • Title XIV: Deficit Neutrality. “This section auctions allowances and transfers the proceeds to the Treasury to ensure that the bill is deficit-neutral.”

Full document.

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