John Kerry, Lindsey Graham and Joe Lieberman, who have taken the lead on climate and energy legislation that can pass the US Senate, unveiled some of their plans in a press conference yesterday. The framework for the bill is not in legislative language and reflects principles more than policies, but the outline is taking shape.
Using broad headlines like “Better jobs, cleaner air,” “Securing energy independence,” and “Creating regulatory predictability,” the framework explains what should be in a climate bill that could get the required votes to pass Congress. They highlight the EPA’s endangerment finding as crucial to getting a legislative solution “before the EPA moves unilaterally.” The EPA continues to be the greatest hammer forcing Congress to act.
The framers support a cap and trade system that would set a carbon reduction of 17% below 2005 levels by 2020, and 80% below 2005 levels by 2050, consistent with what the US will be offering at Copenhagen. They want to “provide significant transition assistance to companies and consumers” in the bill, meaning that auctioning off carbon credits is probably out, at least at 100%. Setting a price on carbon would allow businesses the predictability to innovate and act with a realistic understanding of how much they can budget for carbon allowances.
To secure bipartisan support, the bill includes incentives for domestic oil and gas drilling (that’s the “Securing energy independence” part) as well as clean energy technologies. The bill would have some incentives for nuclear power as well, as well as so-called “clean coal”. In addition, emissions from agriculture would not be regulated under the plan, but farmers would get incentives to reduce their carbon emissions.
Obviously, this is a compromise document, and the price of capping carbon and ratcheting that cap down is seen in these industry-friendly giveaways, particularly to the coal industry. Needless to say, the White House supports the consensus approach which could lead to them signing something called a “climate and energy bill.”
Today, Senators Kerry, Lieberman and Graham took another significant step in the effort to pass comprehensive energy reform with the release of their legislative framework. The President believes this is a positive development towards reaching a strong, unified and bipartisan agreement in the U.S. Senate.
Over the last 11 months, the Obama Administration has made historic strides in building a clean energy economy, creating new American jobs and reducing US dependence on foreign oil. From robust domestic actions including historic investments in clean energy to sustained international engagement to encourage countries around the world to reduce their carbon emissions, the President has established a new energy foundation. The passage of comprehensive energy legislation is essential to that effort.
With global average temperature expected to be the highest on record next year, there is a severe opportunity cost in waiting for better legislation. That must be weighed against the places where this framework falls short and needs improvement.