by Nathan Empsall, Wed May 12, 2010 at 04:32:52 PM EDT
After weeks of teasing and rampant speculation about the bill’s actual contents, Senators John Kerry and Joe Lieberman finally released the draft of their long awaited energy bill today, known as the “American Power Act.” The two have lost their Republican counterpart, Lindsay Graham of South Carolina, though according to The Hill, “Graham praised the package, although he cautioned that he didn’t know all the details.”
Until earlier this month, I was paid by an Episcopal Service Corps program to work with Repower America, Al Gore’s clean energy campaign. (Disclaimer: That program is done, and Repower has nothing to do with this post - they probably disagree with it.) I like to think that my environmental credentials are pretty strong – but I oppose this bill as currently written. Fortunately, it wouldn’t take much to get me to support it. This post will contain both a summary of the bill from Senator Kerry's office and my own reaction.
According to Kerry’s office’s (emphasis added), “Rather than allowing a patchwork of conflicting state and federal regulations, it lays out one clear set of rules for reducing greenhouse gas emissions. States will not be permitted to operate cap-and-trade programs for greenhouse gases. Those states that have already taken a leadership role in implementing emission reduction policies will receive compensation for the revenues lost as a result of the termination of their cap-and-trade programs. “
This anti-federalist ban on state action may or may not be unconstitutional, but it certainly turns this bill into a last step rather than a first step. It’s the states, not the Congress, the Department of Energy, or even the EPA that have taken the lead in the combating climate change and our addiction to oil. Without California’s aggressive actions on energy or the northeast’s Regional Greenhouse Gas Initiative, we’d be nowhere. The Kerry-Lieberman bill gets the ball rolling on national climate action, but by banning future state regulation, it also stops the ball as soon as it starts. I can support the bill’s oil and coal giveaways if it’s just a first step, but not if it’s a last step.
As for the rest of the bill, Senator Kerry’s office has made executive summaries and section-by-section summaries available. Select bullet points in the short summary include (emphasis added):
- We include a hard price collar which binds carbon prices and creates a predictable system for carbon prices to rise at a fixed rate over inflation. Introductory floor and ceiling prices are set at $12 (increasing at 3 percent over inflation annually) and $25 (increasing at 5 percent over inflation annually), respectively.
- To provide environmental integrity and ensure meaningful emissions reductions, we include a strategic reserve to complement the hard price collar and ensure the availability of price-certain allowances in the event of unusually high carbon prices.
- We provide over $7 billion annually to improve our transportation infrastructure and efficiency, including our highways and mass transit systems.
- We also address our use of foreign oil in our trucks and heavy-duty fleet by providing significant tax incentives for conversion to clean natural gas vehicles.
- Mindful of the accident in the Gulf, we institute important new protections for coastal states by allowing them to opt-out of drilling up to 75 miles from their shores. In addition, directly impacted states can veto drilling plans if they stand to suffer significant adverse impacts in the event of an accident. States that do pursue drilling will receive 37.5 percent of revenues to help protect their coastlines and coastal ecosystems.
- Industrial sources will not enter the program until 2016. Prior to 2016, allowance value is dedicated to offset electricity and natural gas rate increases for industrial rate-payers and to improve energy efficiency in manufacturing – to keep power bills down in the future.
More summary and analysis below the jump.