Senate Gets Rolling with American Clean Energy Jobs and American Power Act

Senators John Kerry and Barbara Boxer kicked off the Senate's effort to pass comprehensive climate and energy legislation today by introducing the Clean Energy Jobs and American Power Act.  The Environment and Public Works Committee, which Sen. Boxer chairs, is expected to hold hearings and vote on the bill in October.

Following are several key features of this legislation, including some of the ways it improves on the ACES bill which passed in the House in June:

1. Targets: The centerpiece of the Kerry-Boxer bill is a steadily declining cap on carbon pollution, reaching an 83 percent reduction below 2005 levels by 2050.  In an important change from House bill, Kerry-Boxer calls for achieving a 20 percent reduction by 2020.  This is eminently doable.  The Energy Information Administration, for example, has repeatedly lowered its forecast of future U.S. emissions to account for climate and energy policies that are already in place and market trends in coal and gas use.  A recent analysis by NRDC shows that strengthening the 2020 target to achieve a 20% reduction would only increase allowance prices by 6 percent over the very modest prices estimated for the House bill. 

2. Clean Air Act: The Kerry-Boxer bill retains performance standards and certain other tools in the existing Clean Air Act.  While some tailoring of these existing Clean Air Act provisions may be needed, Kerry-Boxer avoids the overbroad Clean Air Act changes of the House bill. 

Update Oct. 1:  The bill makes one change discussed by my colleague Dan Lashof here, and I quote from him:  "[T]he Senate bill delays implementation of New Source Performance Standards for sources not covered by the cap until no sooner than January 1, 2020 (Sec. 811). This provision is designed to allow earlier reductions in emissions from these sources to qualify as emission offsets. Such offsets reduce the cost of compliance with the bill, but do not result in net emission reductions beyond those achieved by the cap itself. It will take some effort to make a sold estimate of the extra emissions permitted due to this provision, but it is almost certainly less than 100 million tons, which was the WRI's estimate of the benefits of the New Source Performance Standards provision of the House bill."

3. Market Stability: Kerry-Boxer includes changes to providing more certainty and predictability to protect consumers and businesses through price stabilization measures, while maintaining the integrity of the pollution cap over the long run.  Strong market safeguards are also called for, although the specifics will come later because they fall outside the jurisdiction of the Environment Committee.  By building on the House's provisions, these provisions should offer greater protection against the possibility of market volatility and price spikes.

4. Allowances: Kerry-Boxer includes the structure of the allowance distribution, mirroring the House proposal in dedicating most allowance value to various "baskets" of consumer protection, clean technology and so forth.  But just like the first version of the House bill, this initial offering does not fill in the percentages that will be allocated or auctioned to those baskets.  As in the House, those important blanks will be filled in later as the Environment Committee marks up the bill, and they probably will be further adjusted as the bill makes its way to the floor.

5. Energy Efficiency: Like the House-passed bill, Kerry-Boxer includes other provisions to enhance energy efficiency in buildings, factories, and transportation, promote clean technology deployment, maintain the competitiveness of energy intensive industries, and protect public health and natural resources from unavoidable climate change impacts.  It also includes critical provisions to protect remaining tropical forests, to support clean technology exports, and to help the poorest and most vulnerable nations cope with climate impacts.

6. Transportation: The legislation would also cut emissions from one of the major U.S. sources of carbon pollution-transportation-while cutting oil dependence and helping consumers reduce transportation costs. In addition to investing in clean, American-made automobiles, the bill would give states and cities new tools and funding to reduce energy use when planning long-range transportation investments.

7. Adaptation: The bill recognizes the importance of taking action now to address the damage to water, oceans, and other natural resources that is already starting to be felt as a result of climate change.  It requires federal and state adaptation planning for impacts to public health, natural resources, and water resource management and provides funding to support that planning, research, and implementation. Impacts to water resources are profound and include sea level rise, more frequent droughts, increased water demand, and more frequent extreme storm events, leading to flooding, beach closures, and sewer overflows.

That said, the Kerry-Boxer bill covers less ground than the House bill, with important parts on energy, trade, and other matters to be added or refined by other Senate committees and on the floor.  

The Kerry-Boxer bill is a strong start for the Senate's formal consideration of energy and climate legislation.  There is still time for the Senate to pass this legislation this year.  The Senate is capable of working on two important things at once.  Even though health care currently occupies the center ring, members and staff on and off the environment committee have been quietly at work narrowing differences and building consensus on climate and energy legislation.  Now's the time to get it done.