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First Look at the Kerry Lieberman Energy Bill: Pros and Cons

The long awaited Kerry-Lieberman climate and energy bill was finally unveiled today without a Republican co-sponsor after Lindsey Graham withdrew his support. Still, the American Power Act reflects most of the promises that had been made by the trio over the past months; both good and bad.

A strong push by electric, coal, and gas lobbies to protect their industries is heavily reflected in the bill which promotes nuclear power, “clean” coal, and offshore drilling. Also, carbon caps will be established on a rolling sector-by-sector basis which will not affect certain industries for (like manufacturing) for over 5 years, while others (like agriculture) are completely exempt. This leaves open the possibility for these sectors to produce “offsets” – or free carbon credits – which can be sold to regulated sectors in lieu of making real emissions cuts.

Here is a general overview of the high and low points contained in a draft text released by Kerry’s office today:

Pros

Cons

Carbon Cap:

The bill calls for an economy-wide emissions reduction to 95.25 percent of 2005 levels by 2013, 83 percent by 2020, 58 percent by 2030, and 17 percent by 2050.

Domestic Offsets:

Establishes a nationwide system under which sources not subject to the greenhouse gas emission reduction program may receive credits for making reductions in emissions that can be sold to and used by those subject to reduction requirements.

Coastal Drilling Opt-out:

States have the right to opt-out of drilling up to 75 miles from their shores, and veto projects of nearby states.

Offshore Drilling:

Despite a smattering of new regulations, offshore drilling stays in the nation’s long-term energy plan.

Clean Energy Funding:

Establishes a Clean Energy Technology Fund, though source for funding is not explicitly outlined.

Nuclear Power:

Incentives include a new investment tax credit to promote the construction of new generating facilities, $54 billion in loan guarantees and a manufacturing tax credit to spur the domestic production of nuclear parts.

Clean Transportation:

Supports electric vehicle infrastructure; provides funding to municipal transportation emissions reduction programs.

“Clean” Coal:

Annual $2 billion for research and development of carbon capture and sequestration methods and devices.

Clean Energy Career Development:

Grants and career training in the fields of clean energy, renewable energy, energy efficiency, climate change mitigation, and climate change adaptation.

International Offsets:

Establishes an independent advisory committee to monitor and approve international offset projects which allow US industries to continue polluting.

Customer Refund:

Two thirds of revenues from carbon trading will rebated to consumers, though not directly.

State Pre-emption:

States will not be permitted to operate their own cap-and-trade programs.

The next few weeks will undoubtedly see push-back from both the right and the left on a number of the bill’s more controversial elements. The chance of any legislation passing the Senate before the summer campaign season begins remains murky, but a strong push by the administration and civil society could mean a victory for the comprehensive, albeit less than perfect, bill.

View the full bill text here.

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