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May 12, 2010

Kerry and Lieberman unveil climate and energy bill

Around 7,500 companies are expected to be required to cut emissions through the American Power Act, if it passes

Senators John Kerry and Joe Lieberman unveiled their “comprehensive” climate and energy bill today, but without a show of bipartisan support.

The American Power Act centers around a target to cut US carbon emissions by 17% before 2020, and over 80% by 2050.

But the measure could struggle without the backing of Republicans in the Senate.

The third member of the energy bill’s original triumvirate, South Carolina’s Republican Senator Lindsey Graham, was markedly absent form the bill’s unveiling today. He had withdrawn because of a row over immigration policy (see this BrighterEnergy.org story).

Announcing the bill in Washington, Massachusetts Senator Kerry said: “This is a bill for energy independence after a devastating oil spill, a bill to hold polluters accountable, a bill for billions of dollars to create the next generation of jobs, and a bill to end America’s addiction to foreign oil and protect the air our children breathe and the water they drink.”

Joe Lieberman, the Independent Senator from Connecticut, said: “Our bill will create jobs and transform the American economy; make our country more energy independent, which in turn will strengthen our national security; and improve the quality of the air we breathe.

“We are proud to have support from a growing and unprecedented coalition of business, national security, faith, and environmental communities, who are energized to work hard to pass this bill this year.  America has a lot to gain from getting started now,” added Sen Lieberman.

Cap and Trade

Although more details on the climate and energy bill are expected later today, the central thrust of the proposals is a cap-and-trade scheme to limit carbon emissions from certain key industry sectors.

Heavy industry, power plants and transportation infrastructure will be expected to cut carbon emissions inline with the bill’s targets, with their allowances for carbon emissions reducing each year.

Firms emitting 25,000 tons or more a year in carbon emissions will be caught by the restrictions, which is expected to affect around 7,500 companies.

Polluters will be able to buy allowances to emit carbon dioxide for an initial rate of $12 a ton, rising by 3% above inflation each year with a ceiling set at $25 a ton.

Those that cut their emissions faster than their targets require will be able to sell off surplus carbon credits.

The scheme would start with power plants, with industry’s entry delayed until 2016 to give it some time to beat the recession. Even then, manufacturers in certain sectors like paper, steel and chemicals, will be given a number of free allowances to help with compliance costs.

Tax credits

Meanwhile, the bill would also offer support in the form of $6 billion in tax credits for energy efficiency projects and green transport developments, along with $5 billion in extended tax credits for clean energy manufacturers.

In a nod to the Gulf of Mexico disaster, the Bill will also allow America’s coastal states to opt out of oil exploration activities off their shores.

Support

Senator Kerry said he believed there could be enough support in the Senate to pass the American Power Act bill.

He said the progress from the 38 votes secured two seasons ago to the 54 votes secured in the last session of Congress could be carried through to achieve the 60 votes needed for the new bill to pass through the Senate.

The Democrat Senator said: “This is the time. We have a House bill already passed.  We have a never-before-seen coalition from across America, including key stakeholders embracing energy and climate legislation for the first time ever.  They aren’t giving up, they’re doubling down. They understand this isn’t a choice, it’s a necessity, and we’re going to get it done this year.”

Obama

Now is the time for America to take control of our energy future” - President Obama

President Barack Obama applauded the two senators for their “tireless” work drafting the bill, and stressed his hopes to sign the bill this year.

In a statement made this afternoon, the President said: “This legislation will put America on the path to a clean energy economy that will create American jobs building the solar panels, wind blades and the car batteries of the future. It will strengthen our national security by beginning to break our dependence on foreign oil. And it will protect our environment for our children and grandchildren.”

The President said the “immense tragedy” in the Gulf of Mexico underscored the need to “redouble our efforts” in reforming the nation’s energy policies.

He said: “For too long, Washington has kicked this challenge to the next generation. This time, the status quo is no longer acceptable to Americans. Now is the time for America to take control of our energy future and jumpstart American innovation in clean energy technology that will allow us to create jobs, compete, and win in the global economy.”