A business contact group has been meeting with Senators Kerry, Graham and Lieberman (KGL) and staff to discuss the developing climate change legislation. At the meeting, staff distributed an 8-page narrative of the KGL proposal but collected the document back at the end of the meeting. The document shows a cap beginning in 2012 for utilities only and would mandate reductions of 17% by 2020, and then 80% by 2050. Industrial sectors would be folded into the cap over time with energy intensive and trade exposed industries under the cap by 2016.There was discussion of a "hard" price with a floor price at $10/ton and a ceiling price at $30/ton. The Center's Carbon Mercantile Exchange (CMX) has a current price of $20 per ton. The KGL price would increase at a fixed rate, indexed for inflation and there would be four billion credits in a reserve. It looks as though preemption will likely be an issue of contention as there seems to be support for significant state preemption and broad preemption of EPA authority.
On transportation, the early discussion on a linked fee seems to have given way to a fee imposed at the pump and the airline gate. Manufacturing provisions include phase-in, consideration of indirect emissions, and a leakage program centering on a border adjustment of some sort that ensures that imports from non-controlling countries must pay to eliminate the competitive advantage.
The proposal also has one-half of revenues from credits refunded back to consumers. The Center does not like this recommendation. Just too much unnecessary bureaucracy. There is some transition assistance for merchant coal developers and a significant CCS component. Finally, pieces of the narrative covered agriculture, clean energy investment, coal-related issues, natural gas, nuclear, energy independence (meaning oil and gas production issues) and "safe markets" (meaning appropriate regulation of any resulting market for trading). (Frank Maisano)
No comments:
Post a Comment