Senate Unveils Cap-And-Trade Emissions Bill

By James Armstrong

Law360, New York (October 26, 2009) -- Sen. Barbara Boxer, D-Calif., on Monday released the text of the chairman's mark of cap-and-trade carbon emissions legislation now being considered in the Senate.

Boxer, who chairs the Senate Committee on Environment and Public Works, praised the S. 1733, proposed by herself and Sen. John Kerry, D-Mass., and officially known as the Clean Energy Jobs and American Power Act.

“We've reached another milestone as we move to a clean energy future, creating millions of jobs and protecting our children from dangerous pollution,” Boxer said in a statement.

Revised language in the chairman's mark of the bill includes new provisions to address “clean” coal technology, increase investments in energy efficiency and renewable energy, enhance agricultural and forestry provisions, and increase the size of the government's market stability reserve under the cap-and-trade program, according to Boxer.

An economic analysis by the U.S. Environmental Protection Agency found the Senate bill would result in no significant change in the estimated cost to American families when compared to corresponding legislation passed by the U.S. House of Representatives this summer.

The House bill, which was championed by Rep. Henry Waxman, D-Calif., and Rep. Edward Markey, D-Mass., would cost the average American household about 22 cents to 30 cents per day, according to the EPA.

In June, the House bill passed by a 219-212 vote. Experts are predicting an uphill battle for the corresponding cap-and-trade bill in the Senate.

Boxer's committee is scheduled to begin hearings on the Senate bill on Tuesday. A total of 54 witnesses are slated to testify, including the secretaries of energy, transportation and the interior.

Also scheduled to testify in coming days are executives from prominent energy companies such as Infinia Corp., Valero Energy Corp., NRG Energy Inc. and Exelon Corp., as well as scholars from such groups as the Union of Concerned Scientists and the American Enterprise Institute.

Coming in at 925 pages, the Senate bill would grant a certain number of emission allowances and then allow the lawful holders of those allowances to sell, exchange or transfer them, or to retire them completely.

In distributing the emission allowances, the chairman's mark of the bill places an emphasis on investments in energy-intensive and trade-exposed industries, small local power distribution companies, transportation grants, agriculture and forestry, advanced energy research and training for workers in the energy efficiency, renewable energy, and nuclear energy fields.

The chairman's mark also includes a new program that authorizes the EPA to provide assistance to owners and operators of buildings in the U.S. that implement energy-efficient measures that meet Energy Star or other relevant standards, according to information provided by the committee.

According to the committee, the chairman's mark clarifies the definition of biofuels to include algae-based fuels, enhances the role of American Indian tribes, and gives priority to low- and moderate-income households for energy efficiency grants.

Conservatives like Sen. Lisa Murkowski, R-Alaska, have criticized the bill as picking winners and losers in the energy sector, advantaging some resources while disadvantaging others.

--Additional reporting by Elaine Meyer