With the health care debate kicked forward, various post mortems are speculating whether the bill passing makes a cap-and-trade legislation more or less likely.
On the one hand, Obama’s win on contentious health reforms may have boosted the momentum to now pass what is comparatively easy. From the gang at Climate Progress:
“If progressives can pass a mono-partisan health security bill that isn’t popular with the public, passing a bipartisan job-creating climate and energy security bill that is quite popular with the public should be a no-brainer.”
Perhaps a no-brainer, until last week. On Sunday, the House approved the health care bill without a single Republican vote, a move that Senator Lindsey Graham warned would “poison the well for anything else they would like to achieve this year or thereafter.” While it’s true that the proposed climate bills contain provisions that appeal to both parties as well as to environmental and business groups, many wonder whether the Senate is simply too fractured and exhausted to duke out another controversial bill. Increasingly, getting the required 60 votes looks daunting.
There are alternatives. Already, Democrats are talking of a smaller “energy-only” bill, that would omit greenhouse gas limits. Though many thought the day would never come, real consideration is being given to whether the EPA can step in to handle the job.
Whatever the direction, this is a good time to review what exactly each proposal offers, including recently leaked rumors on the Kerry-Graham-Lieberman bill.
Below, a dizzying summary, from Brad Johnson at the Wonk Room:
| Provision | Obama Proposal | Waxman-Markey | Kerry-Graham-Lieberman Rumor |
|---|---|---|---|
| Overall Structure | Economy-wide cap and trade, plus renewable electricity and energy efficiency standards and clean energy investment | Utility, industry, and petroleum sector cap and trade starting in 2012, plus renewable electricity and energy efficiency standards and clean energy investment | Utility (2012) and industry (2016) cap and trade with linked fuel carbon fee, plus renewable electricity and energy efficiency standards and consumer rebates |
| Emissions Targets | 15% below 2005 (at 1990 levels) by 2020, 80% below 2005 (77% below 1990) by 2050 | Capped Sectors: 17% below 2005 (3% below 1990) by 2020, 80% below 2005 by 2050 Overall economy goal: 20% below 2005 (7% below 1990) by 2020, 80% below 2005 by 2050 |
Capped Sectors: 17% below 2005 by 2020, 80% below 2005 by 2050 |
| Scientific Review | Not discussed | Presidential plan in 2015 and every four years thereafter | TBA |
| Traditional Coal Plants | “Standards that ban new traditional coal facilities” if necessary, and “cap on carbon will make it uneconomic to site traditional coal facilities and discourage the use of existing inefficient coal facilities” | Price on carbon mitigated by free allocations based 50% on historical emissions; Clean Air Act performance standards in 2016 | TBA |
| Green Economy Investment | $150 billion over ten years, including workforce training, plug-in hybrids, renewable electricity, advanced biofuels, advanced coal technology, nuclear power, and smart grid | Approximately $100 billion over ten years, including workforce training, plug-in hybrids, renewable electricity, advanced biofuels, advanced coal technology, nuclear power, and smart grid | Support for nuclear, advanced coal, and renewables TBA |
| Permit Allocation | Full auction | Allocations based on historical emissions and energy production with 20% auction at start, phasing to 70% auction by 2030 | Allocations TBA |
| Renewable & Efficiency Standards | 25% renewable electricity by 2025, 100% new building efficiency by 2030, phase out traditional incandescents by 2014 | 15% renewable electricity + 5% efficiency by 2020, 75% new building efficiency by 2030, appliance and lighting efficiency standards | Standards TBA; if based on Bingaman energy bill, weaker than projected business-as-usual |
| Consumer Protection | LIHEAP, low-income weatherization grants, a “dedicated fund to assist low-income Americans,” plus Making Work Pay tax cut | Over first ten years, 45% (approx. $30 billion) of allocated permits and auction revenues dedicated to consumer protection through rebates and efficiency measures, emphasizing low-income consumers | Universal rebate checks from 50% of auction revenues |
| Market Regulation | Increased regulation of energy markets | FERC and CFTC regulation, no over-the-counter derivatives trading, increased regulation of energy markets | Cantwell-Collins language prohibits derivatives, limits permit auction to covered emitters |
| Agriculture and Deforestation | Domestic and international incentives to sequester carbon and reduce deforestation, support for biofuels | Pool of offsets plus supplemental fund of 5% of permits for domestic and international incentives to sequester carbon and reduce deforestation, support for biofuels | Agriculture title TBA; Sen. Kerry supports $3 billion annually in international climate aid |
| Deficit Reduction | Not discussed | 10% of permits auctioned (approx. $8 billion) over first ten years for deficit reduction | TBA |
| Fuels and Transportation | Increase biofuels to 60 million gallons by 2030, low-carbon fuel standard of 10% by 2010, 1 million plug‐in hybrid cars by 2025, raise fuel economy standards, smart growth funding, end oil subsidies, promote natural gas drilling, enhanced oil recovery | Smart growth funding, plug-in hybrids, raise fuel economy standards | Promote offshore and natural gas drilling, enhanced oil recovery, fuel fee for transportation funding |
| Cost Containment | International offsets | Offset pool, banking and borrowing flexibility, soft price collar using permit reserve auction at $28 per ton going to 60% above three-year-average market price | “Hard” price collar between $10 and $30 per ton, with an increase at “fixed rate” TBA, plus permit reserve auction, offsets TBA |
| Clean Air Act And States | Not discussed | Only polluters above 25,000 tons of carbon dioxide equivalent a year, regional cap and trade suspended until 2017, EPA to set stationary source performance standards in 2016, some Clean Air Act provisions excluded | Only polluters above 25,000 tons of carbon dioxide equivalent a year, regional cap and trade pre-empted, some Clean Air Act provisions excluded |
| International Competitiveness | Tax incentives for domestic auto industry | Free allowances for trade-exposed industries, 2020 carbon tariff on imports | Carbon tariff on imports |
| Via Brad Johnson, Wonk Room. From: Barack Obama, 2007; Barack Obama, 8/3/08; Pew Center, 6/26/09; CQ, 3/18/10; E&E News, 3/17/10. | |||