Senators Unveil Bill to Reduce Greenhouse Gas Emissions

Senators John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.) released their long awaited energy bill, the American Power Act, on May 12.  The release of the bill was originally planned for Earth Day, but Senator Lindsey Graham (R-S.C.) withdrew his support for the bill and the Senators delayed its unveiling until now.

The American Power Act calls for reducing greenhouse gas emissions to 17% below 2005 levels by 2020, 42% by 2030, and 83% by 2050.  To accomplish this goal, the bill establishes a greenhouse gas permit price in the range of $12 to $25 per ton of emissions.  Only sources that emit more than 25,000 tons of greenhouse gases annually would be required to buy these permits.  Emissions restrictions would take effect in 2013 for power plants and transportation fuels and in 2016 for manufacturers.

Two-thirds of the revenue generated from the sale of greenhouse gas permits that are not allocated to reducing the nation’s deficit would be sent back to the consumers through energy bill discounts and direct rebates.  By 2035, after deficit reduction, 100% of the revenue will be directed back to consumers.

Other provisions in the bill include prohibiting states from operating their own cap and trade programs for greenhouse gas emissions; allowing states to proceed with offshore drilling but giving veto power to states that would have their shorelines fouled in the event of a spill; and a domestic offset program to provide incentives for farmers to reduce emissions on their land.

More information on the proposed bill can be found here.