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?
Sanders-Lautenberg
- 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.
Cap
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).
Coverage
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.
Allowances
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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.
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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.
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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.
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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.
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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)
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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
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Each year 7.5% 5% will be allocated to farmers, foresters, and other landowners to store carbon in soils, crops, and forests.
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Each year 2.5% will be allocated to the transportation sector.
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Each year 3% will be allocated for reducing the rate of tropical deforestation in other nations
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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
new
- 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
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.
Offsets
“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:
- 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
- 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.