Guide to the Democrats' Energy and Climate Bill: the Greenest in US History?

Photo via the NY Times

What could be the greenest, most important climate and energy bill ever to hit Congress (sorry Lieberman-Warner) was unveiled yesterday—it's the Clean Energy and Security Act. The ambitious bill seeks to shape a new energy policy for the US, and it proposes a number of revolutionary green advances: a surprisingly aggressive plan to reduce national carbon emissions and a strong US renewable energy standard are both in the mix. The downside is, the thing is 600 pages long. Not to worry, I've sifted through it for the good stuff—here's everything you need to know about the Democrats' massive climate and energy plan.
This much anticipated bill, authored by Henry Waxman and Ed Markey, has the full support of Speaker Nancy Pelosi. It was introduced to the House of Representatives as a discussion draft, with many gaping holes intentionally left in to be filled over the course of debate. But here's what it's already got:

A Renewable Energy Standard:

All electricity suppliers would have to use some renewable energy. From the bill's summary (PDFs):
The draft promotes renewable energy by requiring retail electricity suppliers to meet a certain percentage of their load with electricity generated from renewable resources, like wind, biomass, solar, and geothermal . . . [They] begin at 6% in 2012 and gradually rises to 25% in 2025. The governor of any state may choose to meet one fifth of this requirement with energy efficiency measures.
Solid, reachable goals—a decent renewable energy integration timeline.

Aggressive Carbon Emission Restrictions

After Obama's cap and trade was criticized, debated, and protested, the Waxman-Markey bill emerges with a version of one that's . . . even tougher. Good for them. The targets for reducing carbon with a market based system are even more aggressive than Obama's. The proposed system forces companies that emit more than 25,000 tons of carbon a year (those that emit less aren't covered) to purchase tradable permits, or allowances, for every ton of carbon they emit. Then,
The program reduces the number of available allowances issued each year to ensure that aggregate emissions from the covered entities are reduced by 3% below 2005 levels in 2012, 20% below 2005 levels in 2020, 42% below 2005 levels in 2030, and 83% below 2005 levels in 2050.
That's right, 20% less emissions by 2020. Again, they're good, bold, and very obtainable goals. However, one of those glaring holes I mentioned earlier is exactly how this carbon cap system would function—how many of the permits would be given to polluters free (Obama wants none given away in his plan) or where the revenues from permit sales would go remain unclear, and open to debate.

Green Jobs Promotion

How about some incentives to green the workforce here?
One section authorizes the Secretary of Education to award grants to universities and colleges to develop curriculum and training programs that prepare students for careers in renewable energy, energy efficiency, and other forms of climate change mitigation.
Ah, that helps.

Keeping Competition Domestic and Green

One of the most common fears people have is that restricting carbon emissions of US industry is that companies would then turn to foreign (carbon tax-free) companies for cheaper goods and commodities. The bill answers this concern with "rebates." It allows
certain industrial sectors to receive "rebates" to compensate for additional costs incurred under the program. Sectors that use large amounts of energy, and produce commodities that are traded globally, would be eligible for the rebates.
If that's not sufficient, the president can then implement a
"border adjustment" program. Under that program, foreign manufacturers and importers would be required to pay for and hold special allowances to "cover" the carbon contained in U.S.-bound products.
Which would be very similar to the carbon tariff that Energy Secretary Stephen Chu already suggested.

Other Highlights

Low Carbon Fuel Standard: "The draft establishes a new low-carbon transportation fuel standard to promote advanced biofuels and other clean transportation fuels." This is left vague, as a standard would be determined over the next three years, and would be put into effect by 2014. The standard would be enforced until 2023, when it would be lowered every year afterwards.

Smart Grid Deployment: You didn't think they'd leave out the Smart Grid, did you? The bill includes plans to facilitate the deployment of the smart grid, as well as "measures to reduce utility peak loads through smart grid and demand response applications and to help promote smart grid capabilities in new home appliances."

Energy Bill Lowlights

Carbon Sequestration Funding: I realize that carbon sequestration may be a valuable political tool: it allows democratic coal workers and union leaders to believe that there's a future for their industry when the carbon regulations get tightened. But in reality, funding carbon sequestration is a huge waste of time and money that could be spent towards far more practical, feasible matters.

Boxes Out the EPA: To perhaps sweeten the deal for the opposition, the bill promises the EPA will not regulate CO2 as a pollutant, as the agency has announced it was planning to do. The bill's summary states "The draft provides that CO2 and other greenhouse gases may not be regulated as criteria pollutants or hazardous air pollutants on the basis of their effect on global warming." Many balked at the EPA regulating such a pervasive gas, but if the legislation proves unsuccessful for whatever reason, it's dangerous to have the law prohibit the EPA from doing so.

Those concerns aside, this is a truly important bill--the Democrats have really delivered on this one . . . so far. As noted by the New York Times, introducing the bill is just the beginning, as it has no Republican support yet (it did, amusingly, prompt John Boehner regurgitate his line about how carbon restrictions will be like taxing every American who "flips a light switch," drives a car, or does whatever else John Boehner thinks Americans do. Think it's time for a new line, J-Bo). It's far from perfect, but it's the closest we've gotten yet. And it's still going to be a long, long road ahead.

More on Climate Energy Bill:
Obama on Climate Bill : "We Will Get It Done. And I Will Sign It
Flawed U.S. Senate Climate Bill Making the Rounds

Tags: Carbon Emissions | Congress | Economics | Global Warming Solutions

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