The newest bill to reduce greenhouse gas emissions in the US would implement an economy-wide cap-and-trade program to reduce emissions to 1990 levels by 2030.
The measure, introduced on July 11 by senators Jeff Bingaman, Democrat-New Mexico, and Arlen Specter, Republican-Pennsylvania, is supported by the nation's largest coal-burning and nuclear electric utilities and by labor unions. But other bills to accomplish the same thing, including some bipartisan efforts, are also on the Senate's work list. They are all in the early stages of consideration.
The Low Carbon Economy Act of 2007 was hailed by utility leaders as a "balanced" and "sensible" approach to dealing with global warming. Utility CEOs supporting the bill included Mike Morris of American Electric Power, Jim Rogers of Duke Energy, Jeff Sterba of PNM Resources, John Rowe of Exelon, John Bryson of Edison International and James Miller of PPL. David Crane, CEO of merchant generator NRG Energy, also joined the group at a Washington news conference.
Bingaman said he recognizes getting climate-change legislation, even a bill this moderate, through Congress and to the president would be a "heavy lift," but he believes there is growing consensus in both parties to move legislation to address global warming soon.
The White House, which has opposed mandatory limits on GHG emissions, has not weighed in on the bill.
Rowe said the Bingaman-Specter bill has his "unequivocal support." Sterba said the measure gives the industry the certainty it needs to make long-term investments and Rogers praised its provisions for developing technologies to control carbon dioxide that would allow coal-fired utilities to operate "without extreme hardship."
"We'll work hard to see if this gets passed," said Morris, who leads the biggest coal-burning utility in the US.
Labor unions support bill
The AFL-CIO, United Auto Workers, United Mine Workers and the International Brotherhood of Electrical Workers also came out to support the bill. "Rather than ignoring our nation's energy security needs, which will require domestic coal to fuel our electrical grid for decades to come, this bill will spur development of carbon capture and sequestration technologies, thereby protecting the environment and the economy at the same time," UMWA President Cecil Roberts said in a statement.
The bill would establish an economy-wide cap on greenhouse gas emissions starting in 2012 and would call for emissions to be cut to 1990 levels by 2030. The bill also would create an emissions allowance trading program that would initially allocate 53% of the allowances to industry in 2012. The bill specifies that 24% of the allowances would be auctioned and 9% would be allocated to states.
Of the 53% of allowances allocated to industry, the bill would provide 54% to electric utilities, 12% to coal mines, 7% to oil refineries, 4% to natural gas processing plants and 19% to manufacturing industries.
The percentage of allowances auctioned would increase beginning in 2017 until it reached 53% in 2030. Revenue from these auctions by the federal government would go toward research and development of low-carbon technologies.
The bill also contains a "safety valve" that would allow emitting sources to pay $12/metric ton of GHG emissions to meet the cap. The cost of this so-called "technology accelerator payment" would rise steadily each year and serve as an option should technologies to control carbon dioxide not keep pace with the emissions cap.
To engage developing countries competing with US manufacturers, the bill would permit the president to recommend changes to the GHG program, and starting in 2020, it would authorize the president to require countries to purchase emission allowances to cover the amount of GHG emitted to make their goods exported to the US.
The bill heads to the Senate Environment and Public Works Committee, where another bipartisan effort led by Connecticut Independent Senator Joe Lieberman to draft a climate bill is under way. Already, about a half-dozen climate bills have been introduced with stricter limits on power plant emissions than Bingaman's.
Bingaman's bill "will receive serious consideration on the global warming subcommittee that I lead with Senator Warner," Lieberman said in a statement.
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