Tuesday, 25 May 2010

US climate change bill emerges in the Senate

Whilst in the UK we’ve been waiting to see how a new (coalition) government will impact policy on climate change and the environment, in the US the draft of the long-awaited climate bill made it’s first appearance in the Senate.  It’s officially known as the American Power Act and was introduced by Senators John Kerry (D-Mass.) and Joe Lieberman (I-Conn.)

The emissions reduction targets included in the bill are along similar lines to those in the Waxman-Markey bill that was narrowly passed (219-212) in the House in June 2009. The bottom line is:

• a 17% reduction (from 2005 levels) in greenhouse gas emissions by 2020, 42% reduction by 2030 and 83% reduction by 2050.

• The principal mechanism will be a cap-and-trade system with prices starting at $12 per ton and effectively capped by a $25 per ton reserve price, escalating at 5 percent per year over the inflation rate. The bill would stop individual states from implementing their own a cap-and-trade programmes, which would end initiatives such as the Regional Greenhouse Gas Initiative, started back in 2008. 

Heavy power users will be the main target for the legislation, although the introduction will be a year or two behind the timescale originally proposed by Waxman-Markey.

• There is a provision for up to two billion tons of offsets a year through a programme managed by the EPA (Environmental Protection Agency) and USDA (US Department of Agriculture). The Futures Trading Commission will manage carbon markets. 

• The legislation would also include protection for US industry from unregulated foreign competitors, with the EPA distributing rebates to eligible industrial sectors.  In fact the EPA will be responsible for working out the detail of how the policy will work in practice, but will lose its own right to regulate emissions under the Clean Air Act.

• Other aspects include encouraging nuclear power, a national strategy for carbon capture and sequestration and a national low carbon transportation plan addressing the infrastructure needs of electric cars.  Offshore oil drilling is promoted (primarily aimed at appeasing Republican opposition, but it may have backfired in the light of the Deepwater Horizon oil spill) although coastal states will be able to opt out.  There are also grants to support the development of green jobs.


The proposal has general support from environmentalists and some industry sectors.  (Included in that are are companies that provide carbon emissions management solutions, since the legislation would require extensive reporting of emissions and energy use).  But opposition is strong, with almost no Republican support, so the chances of getting the 60 required votes in the Senate are questionable.  Added to the woes are the fact that the EPA is already under fire for its climate change actions, the Republicans are defensive because of splits within its own ranks (the Tea Party) and their are mid-term elections in November. 

Much will depend on the support that the proposals get from the business community, so it’s a time for ICT companies to stand up and be counted.  But it still might not be enough for a bill to be passed this year.

© The Green IT Review

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