Energy and Climate Bill Introduced in the U.S. Senate

June 15th, 2010 - Posted by RESNET under Climate, Energy Efficiency, RESNET News, RESNET Notes, RESNET Notes - May 2010

After nearly eight months of negotiations with Senators and industry and environmental groups, Senator John Kelly (D-MA) and Joseph Lieberman (I-CT) introduced legislation to address climate change, reduce oil imports, and create clean energy jobs. The bill’s overall goal is to reduce the nation’s greenhouse gas emissions by 17 percent by 2020 and by 83 percent by 2050. The proposed targets in the bill matches those in the legislation passed by the House and the goals adopted by the Obama Administration.

Unlike the House legislation, however, the Senate bill would not create an economy wide cap-and-trade system but instead set limits on electric utilities and establish a market that would allow the utilities to trade emissions. The oil industry would also have to buy emission permits based on the prices set in the utility trading market.

The carbon allowances granted to states can be used for energy efficiency purposes (e.g. building codes, building labeling, low-income efficiency, etc) and cost-effective energy efficiency programs for consumers, as well as renewables, smart grid, and transportation efficiency. Also, 20% of the value of natural gas allowances and 50% of the value of heating oil allowances must be spent on energy efficiency for consumers.

The New York Times reported that Senator Kerry commented that the “United States was crippled by a broken energy policy and falling behind in the global race for leadership in clean energy technology. We’re threatened by the impacts of a changing climate and right now, as one of the worst oil spills in our nation’s history washes on our shores, no one can doubt how urgently we need a new energy policy in this country. Now is the time to take action.”

President Obama endorsed the legislation stating, “Americans know what’s at stake by continuing our dependence on fossil fuels. But the challenges we face – underscored by the immense tragedy in the Gulf of Mexico – are reason to redouble our efforts to reform our nation’s energy policies. For too long, Washington has kicked this challenge to the next generation. This time, the status quo is no longer acceptable to Americans.” The president called on the Senate to move ahead so that a final bill could be enacted this year.

A number of businesses in the industry endorsed the Kerry-Lieberman bill including Edison Electric Institute, General Electric, Duke Energy, Exelon, and PG&E. Despite this , the legislation has uncertain prospects. For months, Senator Lindsey Graham (R-SC) worked with the two sponsors to craft a bill that some Republicans could support. Graham, however dropped out of the effort because of problems over the Gulf oil spill and an unrelated dispute with Senate leadership over immigration. Senator Graham was quoted in the New York Times as saying, “The problems caused by the historic oil spill in the gulf, along with the uncertainty of immigration politics, have made it extremely difficult for transformational legislation in the area of energy and climate to garner bi-partisan support at this time.”

The legislation can be downloaded by clicking on http://kerry.senate.gov/americanpoweract/pdf/APAbill.pdf

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