Senators Kerry and Lieberman unveiled their comprehensive energy and climate change legislation, the American Power Act, at a press conference today. Kerry claims the bill will set achievable reduction targets while creating huge benefits for American consumers. Though a more comprehensive analysis is certainly warranted, for now we’ll just stick to highlights of the 987-page bill.
The bill calls for greenhouse gas emissions reductions of 17% by 2020 and 80% by 2050. Restrictions would take effect in 2013 for power plants and transportation fuels, and in 2016 for manufacturers.
The bill sets a price on carbon, but also includes a “hard-price collar” that will keep carbon prices between $12 and $25 in the trading market. Large manufacturers would be exempt from the emissions reduction program until 2016.
Two-thirds of the revenues earned from the sale of carbon that are not dedicated to reducing the deficit would be rebated back to consumers; the rest would go to low-carbon energy development and deployment. In later years, 100 percent of revenue not spent to reduce the deficit will go directly back to consumers.
Notably, the bill sets aside allowances to improve energy efficiency and promote renewable energy. The section on clean energy emphasizes the development of nuclear power, increasing funding for nuclear loan guarantees to $54 billion.
Abandoning the goal of a single economy-wide mechanism for trading pollution credits, the bill includes separate regulations for utilities, transportation and manufacturing. Importantly, states would also be able to opt out of offshore drilling up to 75 miles from their coast, a nod to the current Gulf Coast oil spill.
But while some pundits have suggested the Gulf Coast disaster would energize Congress to seek clean energy solutions, others have posited that we might see the opposite effect. At present, the bill’s reception seems to be mixed at best.
The bill’s chances of success are also relatively remote, particularly without the backing of any Republicans. Republican Senator Lindsey Graham, who helped write the bill, has said that he does not think this is the time to press on a climate bill because of the oil spill and talk of moving ahead on immigrations reform.