Part Two: Waxman-Markey Climate Change Legislation
Welcome to part two of GBET’s discussion of the proposed Climate Change legislation. Below titles III and IV of the proposed act will be discussed.
Title III: Reducing Global Warming Pollution
· Global Warming Pollution Reduction Program
o Establishes a market-based program for reducing global warming pollution from electric utilities, oil companies, large industrial sources, and other entities who are responsible for 85% of U.S. global warming emissions. Covered entities must have tradable federal permits (allowances such as under the Clean Air Act) for each ton of pollution to be emitted. Entities which release less than 25,000 tons of CO2 per year are not covered. Allowances are to be reduced each year so that there is a 3% reduction below 2005 levels by year 2012, 20% reduction by 2020, 42% reduction by 2030 and an 83% reduction by 2050.
· Supplemental Pollution Reductions
o Directs EPA to enter into agreements to prevent international deforestation. By 2020 supplemental reductions are to account for a 10% reduction from the 2005 base level.
· Offsets
o Offsets can be obtained to allow for increases above allowances if the total pollution in any year does not exceed 2 Billion tons split evenly between domestic and international offsets. 5 tons of offset credits must be submitted for every 4 tons of emissions being offset.
· Banking and Borrowing
o Unlimited banking of allowances may be used for future years. There is a 2 year rolling compliance period allowing entities to borrow from 1 year ahead without penalty.
· Strategic Reserve
o EPA is to create a strategic reserve of 2.5 billion allowances. These allowances may be auctioned when prices rise to unexpectedly high levels.
· Carbon Market Assurance and Oversight
o The Federal Energy Regulatory Commission is charged with regulating the market, and the President is directed to delegate regulatory authority for the derivatives market to the appropriate agency.
· Additional Greenhouse Gas Standards
o EPA is to set emission standards on sources that are not covered by the allowance program. Special programs would be created to regulate HFCs and black carbon.
· Clean Air Act Exemptions
o CO2 may not be regulated as a criteria air pollutant on the basis of their effect on global warming. The new source review component of the clean air act will not be applicable to CO2.
Title IV: Transitioning to A Clean Energy Economy
· Ensuring Domestic Competitiveness
o To avoid putting U.S. manufacturers at a disadvantage the draft authorizes companies in certain industrial sectors to receive rebates to compensate for additional costs incurred under the program. If these rebates are insufficient the President is directed to establish a border adjustment program under which foreign manufacturers would need to hold special allowances for the carbon contained in products entering the U.S.
· Green Jobs and Worker Transition
o The Secretary of Education may award grants to colleges and universities to develop curriculum and training programs that prepare students for careers in renewable energy, energy efficiency, and other forms of climate change mitigation. The Secretary of Labor is authorized to carry out such training programs.
· Exporting Clean Technology
o U.S. assistance may be encouraged to deploy clean technologies to developing countries. To be eligible a country must have ratified international treaties and undertaken national mitigation activities to achieve greenhouse gas reductions.
· Adapting to Global Warming
o Established an interagency council to ensure an integrated federal response to global warming.
