US House climate bill imposes $8,000bn in fees

28 May 2008 19:50  [Source: ICIS news]

WASHINGTON (ICIS news)--Congressman Edward Markey (Democrat-Massachusetts) said on Wednesday he will introduce a global warming remediation bill next week that will raise $8,000bn (€5,120bn) from industry to cut US emissions of greenhouse gases.


Markey, chairman of the House Select Committee on Energy Independence and Global Warming, said his plan would reduce US emissions of carbon dioxide (CO2) and other greenhouse gases (GHG) to 85% below 2005 levels by 2050.


That level of emissions reduction, Markey said, is “the necessary US contribution to stabilise atmospheric concentrations of heat-trapping gases and avoid dangerous global warming”.


He said his bill, called the Investing in Climate Action and Protection Act or iCAP Act, would impose emissions limits or caps on US power plants, chemical and other industrial production facilities and energy companies that produce or import oil or natural gas and their refined or other derivative products.


The measure would provide that emissions permits would be auctioned to covered industries beginning in 2012. As with similar cap-and-trade climate control bills already pending in Congress, Markey’s bill would allow covered industries to trade emission credits they do not need to other firms.


However, Markey calls his plan cap-and-invest because the bill “takes the $8,000bn in revenues expected from polluters and reinvests that money back to American families and workers and into promoting a clean energy economy”.


More than half of the $8,000bn in emission permit fees taken in over the life of the measure would be transferred to US households earning less than $70,000/year “to compensate them for all increased energy costs due to climate legislation”, Markey said.


The balance of the $8,000bn taken from industry would be invested in research and development (R&D) toward clean energy technology, energy efficiencies and training for US workers so they can “transition into the new jobs of a low-carbon economy”, according to a summary of the legislation.


Part of the permits revenue would go into an International Clean Technology Fund established by the bill, which would provide assistance to developing nations, such as China and India, if they take comparable emissions control measures. 


If developing nations fail to institute comparable greenhouse gases controls, US firms importing products from those countries would have to purchase allowances to account for pollution generated by production of the imported goods.


There was no immediate reaction to the Markey plan from US chemical industry officials. However, most chemical producers and a wide spectrum of other manufacturers have expressed opposition to similar cap-and-trade measures on grounds they would trigger massive increases in energy costs, sharply reduce US gross domestic production and yet fail to have any significant effect on global warming.


($1 = €0.64)


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