Markup of S.2191, to direct the Administrator of the Environmental Protection Agency to establish a program to decrease emissions of greenhouse gases

Posted by Brad Johnson Thu, 01 Nov 2007 13:00:00 GMT

Markup of America’s Climate Security Act, S. 2191.

Prior to hearing changes were made to secure the support of Sen. Lautenberg, ensuring passage with the votes of Lieberman, Baucus, Lautenberg, and Warner. The changes made in the form of a substitute amendment, according to CQ:
  • Extending the scope of the bill to cover all emissions from the use of natural gas. The introduced bill covers natural gas burned in power plants and industrial processes but not in commercial and residential buildings.
  • Requiring the EPA to make recommendations to Congress based on periodic reports from the National Academy of Sciences. The bill already would direct the academy to evaluate whether changes in the law are necessary, based on the state of the environment and available technology.
Amendments were introduced by Sen. Sanders (I-Vt.) and Sen. Barrasso (R-Wyo.). Changes made by amendments adopted at the markup:
  • Advanced tech auto funding limited to vehicles with minimum of 35 mpg (Sanders 3)
  • More allocations given to states (Barrasso 4)
  • Low-rank coal definition changed from coal below 9000 BTU to 10000 BTU (Barrasso 2)

Live-blog informal transcript of the hearing is below.

9:24 Baucus I look forward as all of us do to make this a better bill. Specifically, spurring our international partners to take greater action. Global problems require global solutions. This bill puts the US back on track to be the global leader on renewable energy and clean coal solutions.

9:26 Lautenberg You have produced a bill we can be proud of. The obstacles to moving on this are obvious. We are living in the most densely populated state in the country, New Jersey. We love the outdoors, we rush to the outdoors. The question that I think arises is not whether or not it’s going to cost more. But what’s the cost in life? We’re talking about everybody’s grandchildren in this country. What’s the cost of a decaying infrastructure because we’re beset by pollution? We will never achieve perfection. We permit states to set higher target reductions. I’ll try to keep within the time. The chairman gave us fifty percent more speaking time.

Lieberman I’ll be holding an auction.

Baucus It’ll be held to an emissions cap.

9:30 Sanders I want to thank all who have put together what is in fact a strong bill. It may well be that this issue of trying to reverse global warming is the most important for the world. I want to thank Barbara Boxer who has reversed what we were doing. What is the scientific community saying we have to do? I’m a big fan of bipartisanship, loving each other. But we have to go to the scientists. What they are telling us is the projections they have made were wrong. They underestimated the problem. If anything, the Sanders-Boxer legislation may be too conservative. The problem I have to start with this legislation is it calls for a 63% reduction by 2050. It simply does not go far enough. That’s the bad news.

The good news is that if Congress gets its act together, and gets aggressive about moving to all the new technologies we can solve this problem. We can create millions of well-paying jobs. I will be offering a number of amendments this morning. These amendments come from the scientific community.

9:34 Lieberman I will offer a substitute amendment on behalf of Warner, Lautenberg, Baucus, and myself. The substitute amendment, substantial, will be pending under consideration of other amendments. The pending amendment is amendable. Sen. Sanders and Barrasso each have several they have filed.

9:35 Sanders Amendment 1: There is such huge potential in renewable resources. If you look at where the money goes – we will be playing with more than three trillion dollars and it is important for the American people to know where the money is going. The bill didn’t have one word for solar or wind energy. This amendment carves out from the zero- and low-emissions technologies fund an equal amount for solar, wind, and geothermal as it does for carbon sequestration. It doesn’t add any more money.

Lieberman I’m going to respectfully oppose this amendment. We estimate that the auctioning of these credits will raise a very substantial amount of money which will be reinvested to help the sources of greenhouse gases meet their declining cap and will constitute the most significant national investment our country has made in alternative, clean, renewable technologies. People have said we need a Manhattan Project to make us energy independent. This is it! 45% of the 50% of the auction proceeds goes to zero or low-carbon technologies. It includes solar, wind, it might include nuclear, it includes high-efficiency consumer products. So in the case of this amendment which would say that 28% would only go to renewable energy sources. I’m very sympathetic to renewable energy sources. I think to mandate that significant portion to those sources would be a mistake. As we worked to fashion a compromise there are very different opinions. Some members don’t want us to mention nuclear. One member on the committee is opposed to putting money into wind. It was our judgment not to define which technologies get the money.

Lautenberg I support the Senator’s amendment. I think focusing on those sources that can produce energy without those carbon emissions we worry about. New Jersey is the second largest installer of solar panels due to a state requirement. We have a tariff of over 50 cents of gallon on imported ethanol. We shoot ourselves in our foot. Sen. Sanders is on the right track.

Barrasso I have reservations about this amendment. It diverts money into renewables. I want to direct investment into coal.

Sanders If we put all the money into zero and low-carbon technologies, that would be okay. But we’re putting $324 billion into clean coal. Billions into cellulosic ethanol. Billions to the automakers. It says we’ll put zero to solar. We have more unlimited supplies of solar, wind. It is a disgrace that the large solar plant being built in California is an Israeli company. Where are the American companies? We have not supported that industry.

Lieberman Those numbers are not committee numbers, they’re estimates. If you take that sheet of paper who tried to put a dollar number on the percentages, $522 billion in the zero and low-carbon fund. It can be world-changing. Because of the balance we’ve worked out at this point I think it would be a mistake to carve out for one technology as opposed to the others.

Baucus I think it’s a wiser choice not to adopt this amendment. There are a lot of incentives in other legislation, like the RPS in the energy bill. Second, in the tax portion, a tax credit for renewables. I have to say this Congress is doing enough for renewables. I think it’s better not to pass this amendment.

9:52: Rollcall Failed.

9:53: Barrasso Amendment 2: Support for high-altitude Western state coal gasification demonstration projects.

Lieberman I don’t understand this well enough.

Baucus We have coal in Montana, and we’re a high-altitude state. Maybe we can work something along those lines. We have to make some changes to the language.

Amendment tabled.

9:56 Sanders Amendment 3. I’d like to talk about the carve-outs in this bill. This bill proposes that $232 billion goes to advanced technology vehicles, the automobile industry. The auto industry has led the effort against higher CAFE standards. They produce cars in Europe and Asia that are of far higher efficiency than in the US. The language in the bill is very weak. What are we getting in return for our money? Cars that get 20 MPG. We should be getting 50, 70 MPG. This amendment gives cities and towns money for increasing energy efficiency. I have a 100% lifetime voting record for the AFL-CIO. If we do not act aggressively Detroit will be shutting down and moving to China. What is very clear is that the auto industry is moving to China. GM is opening another research center in China. We need to deal with that in another bill.

Lieberman In my opinion the advanced technology vehicles investment is what we’ve been calling for for a long time. A serious national investment. What’s intended by this very significant amount of money is to create that kind of revolution equal in some ways to the combustion engine so that we can be energy independent. Almost 2/3 of the oil we use in this country is in the transportation sector. Sanders fears this is just a giveaway. It is the goal of the sponsors that the Climate Change Credit Corporation will demand very high standards. It may be that we may want to add express legislative standards on how that money will be spent. I intend to support one of Sanders’ future amendments to that end. This amendment will remove all vehicular funding.

Sanders You talk about the need for revolutionary change in the auto industry. Unfortunately the language in the bill does not do that. It allows the auto industry to produce cars that get 20 MPG.

10:05: Rollcall. Amendment fails.


10:36 Lautenberg This is not unlike a patient with a sickness, for our world. Do we take our medicine earlier than we’d like, or do we just let it hang out there as far as we can. I salute Sen. Sanders’ work here and I’m going to support it. UCS and NRDC are in favor of moving this date up. I think it’s a good idea to have an earlier target.

10:39 Rollcall: The amendment is adopted. Excuse me, the amendment is not adopted.

10:39 Barrasso Amendment #5. Amendment would push back sequestration targets. Technologies do not exist to reach 85% reductions.

Lieberman This amendment has merit but I’m not prepared to support it now. I request you withdraw it and we can work on it.

Barrasso I withdraw my amendment.

10:41 Sanders His amendment, with all due respect, would be a disaster. To accelerate that makes no sense from a global warming perspective or a health perspective. Amendment #6 says that no new coal-fired plant can move forward unless 85% of its emissions are captured and sequestered. Just two weeks ago Kansas rejected a coal plant permit. On October 15 the Congreso adopted a call for a moratorium on new coal-fired plants. This amendment would respond to that concern to guide the future production and operation of coal-fired power plants. On one hand we’re putting hundreds of billions of dollars into coal sequestration, but on the other hand we’re allowing dirty coal plants to go forward.

Lieberman I certainly understand your concerns. I’m going to oppose your amendment and let me say why. About half of our electricity is produced by coal. Coal is also the most abundant natural energy resource we have today. By some estimates we have some two centuries worth of coal reserves. As we make this transition we have to figure out how to burn coal in a way that is cleaner, that is clean. This bill will take a lot of the money coming to the corporation to give to the coal industry. Practically speaking wanting to move this bill along this amendment would jeopardize the chances of the bill going forward in the Senate.

10:46 Voice vote: the amendment is defeated.

10:46 Barrasso This amendment would extend covered facilities that limits it to petroleum and natural gas fuels, to extend to biodiesel.

Lieberman I’m going to oppose this because it appears to strike a blow to biodiesel, whose lifecycle carbon emissions are much lower.

10:47 Voice vote: the amendment is defeated.

10:48 Sanders I withdraw amendment #7, and go on to amendment 8, supported by UCS, NRDC, PSR, etc. This limits total offsets. The amendment limits the yearly offset to 420 million metric tons of allowances, a number which comes from USPIRG, UCS, and NRDC. Why am I seeking to change the offset provision? An old, coal-fired plant could buy offsets rather than clean up or shut down. The bill allows companies to achieve 15% of its reductions by offsets. If a company emits 100 units now and has 15% tighter in 2020, the 15% offset means the company could emit 97.5 units in 2020 by using offsets. I understand the bill uses guidelines for offsets. I would prefer to limit the total amount of offsets. Many experts have tried to design good offset programs but without satisfactory results.

Lieberman I respectfully oppose the amendment. Offsets are a way to use the power of the market to drive an overall reduction in greenhouse gases. Maybe an emitter decides it would rather retire an old facility or support a farmer to reduce methane emissions. It’s a different way to achieve the same goal. We’ve had real concern about achieving this with integrity. As to whether it should be 15% or the lowered number is a judgment call, a subjective call. The 2020 cap, the 2050 cap, and this will be under debate. This is a reasonable balance, subject to negotiations. As chairman we need to keep it at 15% to keep this bill moving.

10:54 Voice vote: Amendment is defeated.

10:54 Barrasso Amendment 7 creates Congressional panel that assesses impact to federal and state budgets of the bill if economic impact is greater than 2% before the bill is implemented.

Lieberman I’m going to oppose this because it would delay implementation. The Carbon Market Efficiency Board would have continuing monitoring and surveillance abilities.

10:56 Amendment is defeated by voice vote.

10:56 Sanders Amendment #9 is one of the most important amendments I have offered because it is about the bottom line. I understand what we do is about compromise. This is not what I want, Sen. Isakson, Sen. Lautenberg. What we’re dealing with is the future of the planet, not what I want. If people here think they know more than the scientists, that’s fine. We’ve got to act boldly. It would require cuts by 15% by 2020 and 80% by 2050. I should repeat here and that even these goals according to the IPCC are conservative. These are not some radical wild-eyed ideas. Let me contrast these targets with what is in the bill. I understand that one of the changes in the manager’s amendment includes residential natural gas in the coverage of the bill. This bill would get us reductions 13% by 2020 and 63% by 2050. If we don’t get this act right the results could be cataclysmic.

Lieberman Your presence has made substantial contributions to this bill. We’re trying to do something real here. This is one of those numbers which we will debate. We would take in the substitute to 63% by 2050, you to 80% by 2050. To hold a majority and ultimately 60 votes on the Senate floor. The number one goal with environmental groups was to make the initial goal real, which I think we have done with the 15% goal. I will say also that the USCAP set a goal between 60-80% by 2050, we’re confident we’re in that. The IPCC says we have to keep the level below 500 PPM as we head to the end of this century. Outside scientists say we would do that. Your amendment would break the coalition and have possible other negative impacts.

Isakson I respect Sanders’ passion. I don’t discount science. I do think we have to empower the private sector and all the alternatives that are there, which leads me back to the nuclear power issue. If we go through this bill and have not empowered one of the best resources to achieve our goal, then we’ve done a disservice. I want to compliment you for recognizing that the solution lies in private business innovation, which is why I continue have a passion for nuclear energy.

Lieberman I appreciate your words and agree with them.

Lautenberg We’ve repeatedly heard we have to reduce our emissions by 80% by 2050 to avoid the worst effects of global warming. I think the Sanders amendment is in line with the science. I think the analogy of us as doctors is appropriate. We know what kind of medicine is needed. Why would you hold back to administer that medicine? I salute the well-meaning bill, it’s a good bill, but when I see an amendment like Sanders I support it. If it’s too stringent we can change it.

Sanders This isn’t about passion. Nobody wants to see us enter an era of drought, floods. This isn’t about passion. This is about science. What the scientists are telling us is that we have to get to 80% by 2050 to have a 50-50 chance to avert catastrophe. We are beyond old-fashioned politics. This is chemistry, this is physics, this is science.

Lieberman Sen. Lautenberg made some significant contributions. One of which is to include natural gas within the cap. Doing so may well put us in the position of reducing our emissions by 19% by 2020.

11:10 Roll call: Amendment fails.

Barrasso Amendment 8 sunsets the bill in five years. So much rides on China and India following in a cap-and-trade approach.

Lieberman I’m going to oppose the amendment for two or three reasons. We need to create a sense of certainty.

11:13 Amendment is defeated by voice vote.

Barrasso Amendment #1 creates the Rocky Mountain Center of Coal Studies at the University of Wyoming.

Baucus We in Montana have more coal than anywhere else on Earth. More than China. The governor of Montana is interested in developing coal. We’re looking at clean coal technologies. I frankly believe that because we have more coal than anywhere else in the world, that the University of Montana would be a good place for this too. I ask that the amendment be withdrawn and talk with Barrasso about the language.

Barrasso I will withdraw the amendment and work with Sen. Baucus on our commitment to coal.

11:18 Lieberman We’ve done very well, though there’s lots of disagreement, we’ve worked together in an excellent manner. The journey to climate change legislation in the United States will just begin with this step. I rule that the amendments agreed to today are appropriately drafted to the substitute. I move to adopt the substitute by voice vote. I move to report the bill to the full committee.

Barrasso Mr. Chairman I would like specifics to where these ten changes are in the pages.

Sanders I thought this was a constructive markup and want to thank you, Sen. Warner, and especially Sen. Boxer for changing the direction of the Congress. I do think that Congress is way behind the American people. This is a step forward but I regretfully am not prepared to support this bill.

Lieberman It’s really unfortunate Sen. Warner could not be here today.

Baucus Sen. Warner is a good man, and if there were more senators like him, the world would be a better place.

Rollcall: Aye: Lieberman, Warner (proxy), Baucus, Lautenberg No: Sanders, Isakson, Barrasso.

11:23 Lieberman With that the bill as amended is reported favorably to the full committee and the meeting is adjourned.

Republican Senators on Lieberman-Warner

Posted by Brad Johnson Wed, 31 Oct 2007 18:09:00 GMT

VOINOVICH Speaking at the National Press Club on Friday, Sen. George V. Voinovich (R-Ohio), a member of the Committee on Envrionment and Public Works, criticized the “overly aggressive first phase of emission reductions” in the draft Lieberman-Warner legislation, which calls for the Sanders-Boxer target of reduction to 1990 levels of emissions (15% reduction from 2005 levels) by 2015.

According to CQ (subscriber only):
Voinovich said that legislation should include financial incentives for technological development and deployment, such as loan guarantees, government procurement programs and international technology transfer promotion.

“Let’s do a Manhattan project,” Voinovich said. “Let’s do an Apollo project.”

Without new technologies, he warned, coal-fired power plants would simply switch over to using natural gas

ISAKSON Johnny Isakson (R-Ga.) will introduce a “nuclear title” amendment at the subcommittee markup tomorrow for more nuclear power plant incentives. At last week’s hearing, Isakson said it was “just crazy” to not support nuclear power. Update: Isakson may miss the markup to attend a White House meeting on the Georgia drought. David Roberts notes the irony that means Isakson won’t be able to support subsidies for the most water-intensive source of electricity.

ALEXANDER Lamar Alexander (R-Tenn.) sits on the EPW committee. He believes the cap-and-trade system should not apply to the transportation sector through the “upstream” cap on refiners and fuel importers, instead only applying a Low Carbon Fuel Standard (LCFS) such as that in S. 1324 and HR 2215.

According to CQ, Alexander will amend Alexander-Lieberman (S 1168), a power-sector cap-and-trade bill, to include transportation and building efficiency standards.

INHOFE Inhofe, EPW’s ranking member, continues to challenge the science of climate change.

Friends of the Earth Excoriates Lieberman-Warner Polluter Giveaways

Posted by Brad Johnson Tue, 30 Oct 2007 19:52:00 GMT

Erich Pica, Friends of the Earth:
The Lieberman-Warner bill will reward corporate polluters by handing them pollution permits worth almost half a trillion dollars. And that’s just one part of this bill. The bill also includes hundreds of billions of dollars of other mind-boggling giveaways. The levels of pollution-rewarding giveaways in this bill are truly obscene.

In calculating the value of emissions allowances, FoE follows the estimates of EPA’s analysis of McCain-Lieberman (Climate Stewardship and Innovation Act of 2007, S. 280) which estimated that between 2015 and 2050, the price of emissions permits would increase from an average of $14 to $78 per ton of carbon dioxide equivalent greenhouse gas emissions.

Friends of the Earth’s analysis found that the bill:
  • Provides the coal industry and other fossil fuel industries pollution permits worth $436 billion over the life of the legislation; 58 percent of this amount goes to coal (sec. 3901)
  • Returns revenue raised through auctions directly to polluters—for example, an additional $324 billion would subsidize the coal industry’s efforts to develop carbon capture and storage mechanisms (sec. 3601)
  • Directs another $522 billion of auction revenue to low or zero-emissions technologies, which could result in handouts to the nuclear power, big hydro and coal industries, which are not clean (these funds could also be directed toward important clean technologies, such as wind and solar—the legislation is not specific) (sec. 4401)

Lieberman-Warner Subcommittee Markup on Thursday

Posted by Brad Johnson Tue, 30 Oct 2007 13:26:00 GMT

On Thursday, the Private Sector and Consumer Solutions to Global Warming and Wildlife Protection Subcommittee of the Senate Committee on Environment and Public Works, chaired by Joe Lieberman (I-Conn.), will markup S. 2191, the Lieberman-Warner cap-and-trade climate legislation.

The LA Times calls for Congress to implement “simple carbon taxes that would assess polluters for the cost of their environmental damage and offset the resulting economic pain by lowering other taxes”, and failing that, 100% auction. The Roanoke Times supports L-W but calls for a tighter cap, citing UCS. The Center for American Progress, in an article primarily about the California wildfires, calls for these changes to L-W:
  • Mandating that new coal fired power plants reduce their pollution by 85 percent using carbon and capture storage technology.
  • Providing significantly more resources to protect people in Africa and Asia at risk from global warming impacts.
  • Requiring all emitters to purchase allowances that allow them to emit greenhouse gases.

The Great Falls Tribune takes a look at the Montanan perspective, noting Baucus’s scripturally based support for the bill, the no-till agricultural offsets, allowances for rural electric cooperatives, CCS incentives, and the weak cap targets. The Helena Independent Record has more of Baucus’s perspective.

MarketWatch notes that hundreds of billions of dollars are at stake, noting that environmentalists are calling for 100% auction and that US-CAP has avoided a stance, and links to the CBO report from this spring, Trade-Offs in Allocating Allowances for CO2 Emissions.

The Politico takes a look at the lobbying on L-W. Note to the Politico: “allocate” is not “legislative slang for ‘give away’”—auctions and free distribution are the alternative methods of allocation.

America’s Climate Security Act of 2007

Posted by Brad Johnson Wed, 24 Oct 2007 18:30:00 GMT

Visit Hill Heat’s continuing coverage of. S 2191.

The initial draft.

  • Kevin Anton – president, Alcoa Materials Management
  • Frances Beinecke – president, Natural Resources Defense Council
  • William R. Moomaw – director, Institute for the Environment, Tufts University
  • Will Roehm – vice president, Montana Grain Growers Association
  • Paul Cicio – executive director, Industrial Energy Consumers of America
Excerpts from Beinecke’s testimony:
In order to assure that we get on, and stay on, the necessary emission reduction pathway, NRDC believes the coverage of the bill and the total amount of emissions reductions should be increased. . . . Scientists are telling us that we will need reductions in total U.S emissions on the order of 80% by 2050 in order to do our proportional part in a global program of preventing catastrophic impacts. Our calculations indicate that the bill will result in reducing total U.S. emissions by approximately 51-63 percent by 2050. In order to ensure that overall reductions keep pace with the science, NRDC believes that the bill’s coverage should be increased. The most important source of emissions that is not covered is the commercial and residential use of natural gas.

It is important to distinguish between the abatement cost of a cap and trade system and its distributional implications. The abatement cost will be significant, but far less than the cost of inaction. At the same time, the value of the pollution allowances created by the law will be much higher: some estimates place their value between $30 and $100 billion per year.

The bill should be revised to allow EPA to take all necessary actions to avoid dangerous global warming by requiring additional reductions, including by changing applicable targets or through increasing the coverage of the bill.

The Sanders-Boxer bill contains two complementary performance standards for coal plants and we recommend the Subcommittee and Committee incorporate these concepts into S. 2191.

NRDC believes these pollution allowances are a public trust. They represent permission to use the atmosphere, which belongs to all of us, to dispose of global warming pollution. As such, they are not a private resource owned by historical emitters and such emitters do not have a permanent right to free allowances. The value of the allowances should be used for public purposes including promoting clean energy solutions, protecting the poor and other consumers, ensuring a just transition for workers in affected industries, and preventing human and ecosystem impacts both here and abroad, especially where they can lead to conflicts and threats to security.

The current bill’s allocation to electric power and industrial emitters, however, is still much higher than justified under “hold-harmless” principles and will result in windfall profits to the shareholders of emitters. For example, an economic analysis by Larry Goulder of Stanford University suggests that in an economy-wide upstream cap and trade program, only 13% of the allowances will be needed to cover the costs that fossil-fuel providers would not be able to pass on to their customers. Similar analyses, with similar results, have been conducted by Resources for The Future and the Congressional Budget Office.

As a result, NRDC believes that the bill should be improved substantially by reducing the starting percentage of free allowances to emitters and phasing them out faster – within 10-15 years of enactment.

Enviro Group Climate Legislation Principles

Posted by Brad Johnson Wed, 24 Oct 2007 12:09:00 GMT

As Lieberman-Warner has its first hearing, Sierra Club, Audobon, Physicians for Social Responsibility, U.S. PIRG released these seven principles for climate change legislation:
  • Reform energy policy: New national energy policies should encourage efficiency, innovation, competition, and fairness. We need more aggressive energy efficiency policies for electricity and buildings, increased CAFE standards like those passed by the Senate, and the renewable electricity standard included in the House energy bill.
  • Promote a clean energy future: Invest in energy efficiency and renewable energy to create new industries and good jobs here at home.
  • Cap and cut carbon emissions to science-based levels: Science tells us in order to prevent the worst impacts of global warming we must start cutting global warming pollution by 2012, with reductions in total U.S. greenhouse gas emissions of at least 15 to 20 percent below current levels by 2020 and 80 percent by mid-century.
  • Use all public assets for public benefit: The value of carbon permits should benefit the public – through auctions or other mechanisms – not generate windfalls for polluting industries. Free allocations, if any, must be limited to a short transition period.
  • Ensure a just transition: Allowances should be used to help finance a just transition that keeps and creates jobs, reduces impacts on low-and moderate-income citizens, and mitigates harm to affected workers and communities.
  • Provide aid to adapt to an altered climate: Allowances should be used to help distressed and impoverished people around the world, as well as wildlife and ecosystems in the face of global warming’s varied threats.
  • Manage costs without breaking the cap. “Safety valves” and other devices that break the cap on emissions must not be allowed. Any offsets must be real, surplus, verifiable, permanent, and enforceable.

Lieberman-Warner Co-Sponsors

Posted by Brad Johnson Sat, 20 Oct 2007 01:42:00 GMT

The intial co-sponsors of Lieberman and Warner’s America’s Climate Security Act (S. 2191) are:

Cardin, Casey, and Klobuchar are also co-sponsors of Sanders-Boxer (S. 309). Casey and Harkin are co-sponsors of Binagaman-Specter (S. 1766). Coleman, Collins, and Klobuchar are co-sponsors of McCain-Lieberman (S. 280).

Casey is the author of the Climate Change Worker Assistance Program provision in S 2191.

Coleman is the chair of the Senate biofuels caucus.

Harkin is the chair of the Senate Agriculture Committee.

Klobuchar is the author of the Greenhouse Gas Registry provision in S 2191 (introduced as S 1387).

Lieberman-Warner Releasing Draft Legislation: America's Climate Security Act 1

Posted by Brad Johnson Thu, 18 Oct 2007 11:37:00 GMT

As reported at Gristmill, Sens. Lieberman and Warner intend to submit the draft of their cap-and-trade legislation, America’s Climate Security Act (S. 2191), today. The legislation incorporated suggestions from stakeholders to adjust some figures from the draft outline released at the beginning of August. Notably, the 2020 reduction from 2005 emissions levels is increased from 10% to 15% (the Sanders-Boxer target), and the peak auction percentage (reached in 2036) is increased from 52% to 73%. There are numerous other components, adjustments, and details.

How does Lieberman-Warner stack up to the Sanders-Lautenberg principles or the Step It Up 2 provisions?

  • CAP: The 2020 target is as strong as Sanders-Boxer, but the 2050 target is much weaker (67% by 2050 instead of 80%) and only 75% of emissions are regulated; there are numerous explicit provisions to loosen controls to protect the economy but none to change them to stabilize atmospheric concentrations of GHG; however, it calls for a report every three years looks at both economic and environmental impacts
  • POLLUTER PAYS: The bill does not transition quickly to a full auction. Spending of auction revenues is generally in line with Sanders-Lautenberg, though large amounts go to CCS development
  • ENCOURAGE STATE LEADERSHIP: The bill explicitly rewards states with stricter standards than the federal cap
  • ADDITIONAL PROVISIONS: The bill includes green building standards and low-carbon fuel provisions, among others, but does not require new coal plants to have CCS
  • NO LOOPHOLES AND LIMITED OFFSETS: The annual caps may be temporarily increased by as much as 20% if later caps are tightened and companies pay interest on “borrowed” allowances; offsets are limited to 15% of allowances and are held to the Sanders-Lautenberg standard
Step It Up 2
  • GREEN JOBS: There is some funding for green jobs, but not 5 million by 2015
  • EFFICIENCY: There is not a federal efficiency standard of 20% greater efficiency by 2015
  • CAP: As decribed above, the cap is not economy-wide, and is 15% by 2020 and 67% by 2050, not 30% by 2020 and 80% by 2050
  • NO NEW COAL: There is not a moratorium on new coal plants without CCS

Full comparison of October release with the original August draft below the jump.


The bill specifies an annual aggregate tonnage cap, expressed in terms of Co2 equivalence, for each year from 2012 through 2050. The cap that the bill will specify for 2012 will be the 2005 emissions level. And: 10% 15% below 2005 by 2020, 30% by 2030, 50% by 2030, 70% by 2050. With respect to 1990 levels: 19% above 1990 levels by 2012, at 1990 levels by 2020, 17% below by 2030, 40% by 2030, 67% by 2050.

The emissions monitoring and reporting system is modeled on Klobuchar-Snowe (S 1387).


Covered sectors represent about 80% 75% of total US emissions. The agricultural sector is not covered. Residential appliances are not covered by the cap, but efficiency standards in the bill apply to them.


  • Each year from 2012 to 2016 20% of that year’s National Emission Allowance Account for free to covered entities within the industry sector, transitioning to zero by 2036.
  • In 2012 20% of the NEAA will be allocated to the electric power sector. A portion of that 20% will be free to new entrants to the electric power sector. The allocation will be at 20% from 2012 – 2016, then transition to 0% by 2036.
  • 10% will be allocated to load-serving entities to defray energy-cost impacts on low- and middle-income consumers and to promote demand-side energy efficency, some of it for free to rural electric cooperative facilities.
  • 8%5% will be allocated to covered entities who have taken pre-enactment action since the 1994 Rio Treaty to reduce greenhouse gas emissions. That 8%5% will transition to 0% by 2020 2017.
  • Each year 4% will be allocated to state governments, half based on population, half on historical state emissions. Each year 9% will be allocated to state governments as such:
    • 5% split 1/3 based on LIHEAP expenditures; 1/3 based on population; 1/3 based on amount of coal mining, natural gas processing, and petroleum refining
    • 1% to states that have at least 90% of new buildings complying with the efficiency codes in the HR 3221
    • 1% to states that have adopted decoupling regulations for any electric and natural gas utilities in the state
    • 2% to states with a stricter cap than the federal cap
    States must use at least 90% of allowances on climate change mitigation and adaptation (e.g. wildfire suppression, technology R&D, subsidies for low-income consumers and energy-intensive industries)
  • Each year until 2035 4% will be placed into a reserve “Bonus Account”, to be allocated to US coal mines firms who successfully perform geologic sequestration of CO2 from electricity generation, with a multiplier of 4.5 per unit of CO2 sequestered in 2012 that decreases to zero in 2040
  • Each year 7.5% 5% will be allocated to farmers, foresters, and other landowners to store carbon in soils, crops, and forests.
  • Each year 2.5% will be allocated to the transportation sector.
  • Each year 3% will be allocated for reducing the rate of tropical deforestation in other nations
  • 6% of the 2012 allowances, 4% of 2013, and 2% of 2012 are to be disbursed in early auctions starting within one year of enactment and ending in 2011

Allowances for Auction

  • 24% in 2012 will go to auction under the aegis of the Climate Change Credit Corporation; rising to 52% by 2035 73% by 2036.

Auction Proceeds

  • 20% for a public-private partnership for power-sector technologies including CCS
  • 20% for public-private partnership for CCS
  • 20% for transportation sector technologies and reducing miles traveled
  • 10% for environmental mitigation
  • 10% for SO2, NOx, mercury emission reduction from coal plants
  • 10% to state and local for low-income community mitigation
  • 10% for international mitigation
  • 55% to Energy Technology Deployment Program
  • 20% to Energy Assistance Fund
  • 20% to Adaptation Fund
  • 5% to Climate Change Worker Training Fund

new Energy Technology Deployment Program

A series of financial incentive programs designed to accelerate the development and deployment of renewable electricity technologies, low-carbon electricity technologies, advanced bio-fuels such as cellulosic ethanol, CO2 capture and storage systems, electric and plug-in hybrid electric vehicles, and high-efficiency consumer products.

new Energy Assistance Fund

  • 50% to LIHEAP
  • 25% to the Weatherization Assistance Program for Low-Income Persons
  • 25% to a new Rural Energy Assistance Program

new Climate Change Worker Training Fund

Funding for a new Department of Labor workforce education, training, and placement program.

new Adaptation Fund
  • 40% to the Wildlife Conservation and Restoration Account established under the Pittman-Robertson Wildlife Restoration Act.
  • 20% to the Interior Department for funding endangered species, migratory bird, and other fish and wildlife programs.
  • 5% to the Interior Department for cooperative grant programs that benefit wildlife.
  • 5% to US Forest Service for adaptation activities carried out on National Forests and National Grasslands
  • 25% split evenly between EPA and Army Corps for restoring large-scale freshwater and estuarine ecosystems
  • 5% to Commerce Department for cooperative grant programs such as the Coastal and Estuarine Land Conservation Program, the Community-Based Restoration Program, and programs established under the Coastal Zone Management Act.


CCS regulations and a legal framework for the Federal assumption of liability for geological storage will be proposed by a study group within two years of enactment.

Carbon Market Efficiency Board, Banking

  • Up to 15% of the allowances a covered entity must submit may be comprised of borrowed allowances, with an interest rate set by the Board of 10%, adjustable by the Board.
  • Up to 15% of the allowances that a covered entity must submit may be comprised of offset credits.
  • Up to 15% of the allowances that a covered entity must submit may be comprised of allowances purchased on a certified foreign greenhouse gas emissions trading market.
  • the Board may increase the number of emissions credits if the average daily closing price of an emissions credit exceeds the upper end of the range predicted by the CBO prior to the start of the program.
  • The Board may adjust the terms and interest rates of the emissions loans “as needed to avoid significant harm to the economy” and “in the event of more extreme economic circumstances” to raise the cap temporarily by as much as 5% provided that subsequent year’s caps are tightened so that cumulative reductions are unchanged.


“The bill will set forth detailed, rigorous requirements for offsets, with the purpose of ensuring that they will represent real, additional, verifiable, and permanent emissions reductions.”

Foreign Tariffs

[Modeled on Bingaman-Specter (S 1766)] The President will be authorized eight years after enactment to require that importers of GHG-intensive products submit emissions allowances of a value equivalent to that of the allowances that the US system effectively requires of domestic manufacturers, if it is determined that nation has not taken commensurate action to reduce GHG emissions.

new Climate Change and National Security Council

The Secretary of State is the Council’s chair, and the EPA Administrator, the Secretary of Defense, and the Director of National Intelligence are the Council’s other members.

The Council makes an annual report to the President and the Congress on how global climate change affects instability and conflict, and recommends spending to mitigate global warming impacts and conflict.

Up to five percent of auction proceeds, at the President’s discretion, may be used to carry out the report recommendations.

new Energy Efficiency

ACSA includes the appliance and building efficiency provisions of HR 3221.

new Reviews

Two National Academy of Sciences reports every three years:
  1. a broad review to determine:
    • whether the cap-and-trade system is functioning properly
    • whether the emissions trading market is liquid, transparent, and relatively free of dangerous volatility
    • whether US emissions are coming down as projected
    • whether atmospheric greenhouse gas emissions are stabilizing, on account of US and overseas emissions trends
    • whether any of the allocations or uses of auction proceeds should be changed
    • whether additional measures are required to protect low- and moderate- income Americans to cope with cost changes
  2. whether technology deployment is enabling the US economy to comply with ACSA’s emissions caps without suffering hardship, and recommendations for a tightening or a loosening of the emissions caps

A one-time EPA report recommending policies to reduce emissions from the transportation sector.

Regionally-specific analyses by the EPA of the new infrastructure, safety, health, land-use planning policies necessary for adaptation.

new Miscellaneous

The President is authorized to suspend the provisions of the bill in the event of a national emergency.

The Securities and Exchange Commission is required to require publicly traded companies to disclose global warming related financial risks.

Actions that EPA takes pursuant to ACSA are subject to the Administrative Procedures Act and the Clean Air Act.

States are not preempted from enacting and enforcing greenhouse gas emission reduction requirements that are at least as stringent as the federal ones.

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