Details of New Kerry-Graham-Lieberman Energy Reform Bill Leaked
Photo via Senatus
Ever since clean energy reform legislation faded far, far into the background during the last months' health care reform brouhaha, all we've had to go on have been the occasional reminder that Senators Kerry (D-MA), Graham (R-SC) and Lieberman (I-CT) were still indeed working on crafting a bipartisan effort to spur clean energy growth and create green jobs. Now, at long last, some concrete details of their bill has leaked. Here's what bipartisan clean energy reform would look like:The details of K-G-L, or Keggles, as I think I'll be calling it, leaked out when the senators had a closed door meeting with industry leaders to discuss the reform. Here's the (tentative) lowdown on what the bill will include, via Climate Progress and CQ:
- As expected, the measure would set a mandatory cap on carbon emissions across the economy but apply different sets of regulations to different polluting sectors....
- An economy-wide cap on carbon emissions that would begin in 2012, with a target of reducing carbon pollution 17 percent by 2020 and 80 percent by 2050.
- Separate caps on carbon emissions by the electric utilities and manufacturing sectors, which would have to buy permits to pollute from the federal government.
- A straight fee or tax, paid by consumers at the pump, on transportation fuels. The levy would be linked to the carbon content of the fuel and the price of carbon in the other markets.
- A combination for the regulated sectors of a "cap and trade" model, under which polluters could trade pollution permits on an open market, and a "cap and dividend" model, which would return revenue from the sale of permits directly to consumers.
- Direct rebates to consumers of half the revenue from the sale of pollution permits.
- Delay until 2016 in starting the phase-in of carbon caps on manufacturers.
- Application of a "carbon tariff" to imports of goods from countries that do not regulate their carbon emissions.
- A "hard collar" on the price of emission permits of no less than $10 per ton of carbon emitted and no more than $30 per ton. The government would keep a strategic reserve of 4 billion credits, and would flood the market if the carbon price exceeded $30 per ton. The price would be indexed to inflation rates and rise over time.
- A threshold of 25,000 tons of carbon per year before a polluter would be subject to regulation.
- A single federal system to cap emissions, pre-empting separate state limits.
- Sections or titles devoted to oil refining, farming, coal, clean energy innovation, and increasing production of nuclear energy and oil and natural gas drilling.
Some first reactions: Maybe ol' Graham was just attempting a bit of re-branding back there--recall him making noise about cap and trade being 'dead' not so long ago--but the primary mechanism in this bill is indeed mighty close to being the cap and trade we've all come to know and tolerate.
The 25,000 ton CO2 threshold, as with the rebates to energy consumers, are still good (and necessary) ideas that were also included in the Waxman-Markley bill (but were under publicized) and should work to shake the notion that the bill will come down on everyday Americans and small business owners. This charge will be brandished anyways, of course. The tariff on foreign countries that don't curb carbon is a stupid idea, IMHO, would be disastrous in international climate negotiations, and wouldn't really do all that much in the way of protecting US manufacturing. The 'price collar' on carbon--keeping the price on pollution permits between $10-30, is too weak to motivate meaningful reductions, especially the $10 floor.
Finally, breaking down the caps and controls so they apply differently to different industries may seem to be a good idea in attempting to satisfy the demands of each, but it could also be seen as trying to pass three different 'taxes'. One of which actually would be a tax, for a change--the GOP doesn't even have to trot out the 'let's call it what it is' line in that case, as the bill includes raising the gas tax. Which, for the record, I think is a great idea--but it'll be a political minefield to be sure.
So can this thing pass? It'll be a slog, to be sure. But if even a few more Republicans sign on (Collins?) it certainly has a shot.