Late this afternoon Senators Barbara Boxer and John Kerry were busy putting the final touches on the latest version of Senate climate legislation before the planned formal release tomorrow. The current 801-page draft goes beyond the House Waxman-Markey bill for short-term emissions reductions, calling for a 20% reduction in greenhouse gas emissions over 2005 levels by 2020. The House bill calls for a 17% reduction over 2005 levels. Both bills mandate a 42% reduction from 2005 levels by 2030 and 83% by 2050.
In large measure the Senate bill otherwise mirrors much of the House bill, with some significant differences:
The Boxer-Kerry bill would place carbon markets under one regulator - the Commodities Futures Trading Commission (CFTC), whereas the House version places regulation under the CFTC as well as the Federal Energy Regulatory Commission (FERC)
The Boxer-Kerry bill also includes language empowering the CFTC to prevent manipulation and "excessive speculation" in carbon market that can lead to unwarranted price volatility.
EPA - Biofuels mandate
The Boxer-Kerry bill does not bar the Environmental Protection Agency from considering, for six years, greenhouse gas emissions produced by indirect land-use changes in the implementation of the national biofuels mandate.
The senate version of the bill currently has "modest" provisions that would direct money to the Energy Department to implement programs to broaden expertise in nuclear technology. Pro-nuclear advocates say any expansion of nuclear energy infrastructure will require more nuclear engineers and other experts in the field.
There is also a section in the bill titled "Nuclear Waste Research and Development" with no accompanying details, the section only stating provisions "to be supplied."
The Boxer-Kerry bill draft provides greater incentives than the House bill for deploying natural gas-fired power plants by means of an "incentive fund" similar to other "bridge fuel" tax credits for natural gas. Other projects covered in the provision include energy storage, some carbon capture and storage projects (CCS) not included in other parts of the bill, and "projects that achieve the greatest reduction in greenhouse gas emissions per dollar of incentive."
A bipartisan group of Senators have urged Boxer to consider natural gas as an important bridge fuel as the nation transitions to a new energy economy.
The latest draft also includes support for research and development of advanced biofuels, particularly second-generation cellulosic biofuel, as well as funding to support construction of commercial-scale biofuel facilities.
Carbon credit allocation:
The Senate draft calls for auctioning off 25% of the emissions credits allocated every year from 2012 to 2050, worth potentially hundreds of billions of dollars, with the proceeds dedicated to lowering the federal deficit. President Obama initially called for 100% of the allocations be auctioned in, but relented as the House debated Waxman-Markey, compromising that down to 15% starting in 2011. Proceeds would go to low and moderate-income households.
The details on how the allocation will be distributed between industries is yet to be determined. As one staffer is quoted as saying, "There's a lot still to be worked out."
Boxer and Kerry say they realize the draft version they intend on releasing tomorrow is not the version that will be passed in the full Senate, but is the starting point where negotiations can begin.
Clean Air Watch's Frank O'Donnell said of draft, "All in all, it looks like a solid start."