Monday, April 28, 2008

Lieberman-Warner America's Climate Security Act of 2007

America's Climate Security Act (S. 2191), cosponsored by Senators Joe Lieberberman and John Warner, calls for a cap on greenhouse gas (GHG) emissions from most of the U.S. economy beginning in 2012, with a reduction of approximately 63 percent by 2050. Lieberman-Warner establishes a cap-and-trade system and proposes an initial auction of 26 percent of allowances in 2012, moving to an auction of almost 70 percent of the allowances by 2031. An offset provision in Lieberman-Warner allows an entity to meet up to 15 percent of its compliance obligations with specified domestic offsets.

Highlights of the Lieberman-Warner Bill:

[1] Emission allowances will begin in 2012 with a declining cap on GHGs to 2030. A GHG registry and a GHG emission allowance transfer system will be established for "covered facilities." Facilities in the electric power and industrial sectors are "covered" as are facilities that produce or import petroleum or coal-based transportation fuel or chemicals.

[2] Emission allowances will initially be given to load-serving entities that deliver electricity to retail consumers. An "Emission Allowance Account" will also be provided for covered facilities in the electric power and industrial sectors.

[3] A "Climate Change Credit Corporation" will auction emission allowances. Auction proceeds will be used for several programs including one for zero- or low-carbon energy technologies and one for advanced coal and sequestration technologies.

[4] Allowances can be traded. A board will oversee the national GHG emission market and can provide cost relief measures if it determines that "the market poses significant harm to the U.S. economy." A domestic offset program will be set up to sequester GHGs in agriculture and forests.

[5] The act also supports carbon capture and sequestration by amending the Safe Drinking Water Act to permit commercial-scale underground injection of CO2 and establishing a task force to study the cost implications of potential federal assumption of liability for closed geological storage sites. The Secretary of Energy will be required to study the feasibility of constructing geological CO2 sequestration facilities and pipelines for the transportation of CO2 for sequestration or enhanced oil recovery.

[6] The SEC will be required to direct securities issuers to inform investors of material risks related to climate change. An interagency group will be set up to determine whether foreign countries have addressed GHGs.

State Regional Greenhouse Gas Initiatives

(Electric Light & Power, Mar, Apr, 2008)

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