Wednesday, February 20, 2013

Comprehensive Climate Legislation in the US this Spring?

Buoyed by President Obama's commitment to address climate change in his second term, leading Democrats are pushing for comprehensive climate legislation. In his State of the Union address President Obama called on Congress to pass a "market-based" climate measure and then promised to exercise his executive authority if lawmakers fail to act. On Valentines Day, Senator Barbara Boxer (D-Calif.) indicated that she hopes to bring climate legislation to floor by the summer of 2013. “We’re going to go in earnest to this topic and this bill," she said. As the Senate Environment and Public Works Chairwoman Boxer stated her intent to bring a comprehensive climate bill to a vote within the next few months.

The bill was sponsored by Sen. Bernie Sanders (I-Vt.) and would put a price on carbon emissions. Boxer called the bill “the gold standard” for climate legislation.

Although the President has vowed to act on climate change, as Sanders noted, “We will never fully deal with this crisis until Congress passes strong legislation.”

The bill would slash greenhouse gas emissions 20 percent below 2005 levels by 2025. A carbon fee contained in the bill would generate $1.2 trillion in the next decade, according to the Congressional Budget Office.

The bill, known as the Climate Protection Act, would impose a fee of $20 per ton of carbon in the first calendar year after the bill is signed into law. The fee would rise 5.6 percent per year over the next decade.

These fees would offset increased costs by returning 60 percent of the revenues generated by the largest fossil fuel companies to citizens under what is being called the Family Clean Energy Rebate Program. The remainder of the revenus generated would grow renewable energy, energy efficiency, job training programs and R&D.

A companion bill from Sanders would eliminate tax breaks for fossil fuel companies.

The bill also has important implications for fracking as it would require the gas drilling industry to disclose the chemicals they use. The bill would allow the Environmental Protection Agency to regulate fracking under the Safe Drinking Water Act.

If the bill proves unsuccessful, more stringent regulations are sure to follow. While some business leaders can be expected to vociferously resist the bill, others may embrace the predictability it will provide.

Even though the bill contains provisions to minimize the effects of energy cost increases on consumers, it is very doubtful that the bill will be able to secure any support from the GOP. Republicans and some centrist Democrats have thwarted climate change legislation during the President's first term and can be expected to do so again.

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