New climate bill set in US Senate, draws fire and support

12 May 2010 21:50  [Source: ICIS news]

US Senate begins debate on new climate billWASHINGTON (ICIS news)--A new climate bill was introduced on Wednesday in the US Senate, with its sponsors saying it will create jobs and help reduce US dependence on foreign oil, but opponents quickly charged that the measure will undermine US industry and ship jobs overseas.

Senators John Kerry (Democrat-Massachusetts) and Joe Lieberman (Independent-Connecticut) introduced their long-expected “American Power Act”, a 1,000-page bill that would cap US greenhouse gases and mandate a staged-but-sharp cutback in those emissions on a schedule to 2050.

“The American Power Act will finally change our nation’s energy policy from a national weakness into a national strength,” Kerry said in announcing the bill.

“This is a bill for energy independence ... a bill to hold polluters accountable, a bill for billions of dollars to create the next generation of jobs, and a bill to end America’s addiction to foreign oil,” he said.

Kerry said that despite already widespread opposition to cap-and-trade climate legislation, he believed it was possible to get the 60 Senate votes needed to pass his bill.

“This isn’t a choice,” he said of the climate legislation, “it’s a necessity, and we’re going to get it done this year.”

However, Senator Lindsey Graham of South Carolina, the only Republican senator involved in the months-long drafting of what was to have been a bipartisan climate bill, said he did not think there is sufficient Republican or Democrat support for the measure to pass this year.

Graham noted that some Democrat senators who previously might have supported expanded offshore energy production - a key Republican-favoured element in the Kerry-Lieberman climate bill - were now opposed to any offshore development in the wake of the Gulf oil spill.

“The problems created by the historic oil spill in the Gulf ... have made it extremely difficult for transformational legislation in the area of energy and climate to garner bipartisan support at this time,” Graham said.

The Kerry-Lieberman bill would impose a cap on US emissions of carbon dioxide and six other greenhouse gases beginning next year and would require a reduction in emissions to a level nearly 5% below the nation’s 2005 pollution volume by 2013.

The emissions reductions would accelerate in following years to reach a level 17% below 2005 by 2020, 42% by 2030 and 83% below the 2005 level by 2050.

The federal government would auction off emissions permits to electric utilities and industries. The permits would be reduced in volume year by year and could be traded among individual facilities that have varying levels of emissions compliance.

The bill provided tax incentives and funding for renewed US nuclear power production and encouraged offshore oil and gas exploration and development, giving coastal states up to 37.5% of revenues generated by production off their shores.

However, in light of the still developing Gulf spill, the legislation would allow states worried about the threat of oil spill damage to their fisheries and resort coasts to unilaterally block offshore drilling.

The bill would bar individual states and the Environmental Protection Agency (EPA) from regulating greenhouse gases, and it would provide emissions allowances to carbon-intense industries that face competition from foreign producers.

It would impose a border tax on imports of goods from foreign countries that lacked climate controls and emissions restrictions, a feature that many observers think would be in conflict with US obligations under World Trade Organization rules. 

The measure also would provide rebates and financial support to low-income families that would be facing higher utility costs flowing from the cap-and-trade climate mandate.

The National Petrochemical & Refiners Association (NPRA) was quick to issue criticism of the Kerry-Lieberman bill, saying that it should be rejected outright.

“The draconian carbon reduction targets and timetables in this bill would trigger destructive change in America’s economic climate,” said NPRA vice president and general counsel Gregory Scott.

“This would add billions of dollars in energy costs for American families and businesses, destroy the jobs of millions of American workers, and make our nation more dependent on foreign energy sources,” he said.

He argued that the “severe and rapid reductions” in carbon dioxide emissions mandated by the bill “won’t have any impact on climate change because they only apply to vehicles, power plants, refineries and other manufacturing facilities in the US”.

“It is a fantasy to pretend that restricting our carbon dioxide emissions will improve the environment if China, India and other large and rapidly industrializing nations don’t adopt the same restrictions,” Scott said.  China and India have refused to impose emissions cuts.

But Dow Chemical, the leading US chemicals manufacturer, commended Kerry, Lieberman and Graham for working toward "a comprehensive energy and climate change plan".

Dow, a member of the US Climate Action Partnership (US-CAP), an industry and environmental group advocating for climate change legislation, said the American Power Act "recognises the need to maintain and enhance the competitiveness of American manufacturers".

The company said it looked forward to working with the bill's sponsors "to ensure that provisions in the bill are workable and effective in preventing the shifting of carbon emissions to other parts of the world".

A major environmental group, Friends of the Earth, was sharply critical of the new climate measure, charging that the Kerry-Lieberman bill "hands out billions in giveaways to some of the worst industrial polluters in the country" and would expand offshore drilling in the face of the current Gulf oil spill.  "Unfortunately, this bill is as bad as we feared," the group said.

The Kerry-Lieberman bill was similar in many respects to a climate bill approved by the House last year, but it also contains significant differences.  If the Senate were to approve the Kerry-Lieberman measure - widely thought to be unlikely this year - Congress would still have an arduous and time-consuming task in reconciling the Senate and House bills.

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