What's At Stake?

Ask Your Senators to Strengthen Promising New Climate Bill

A recent UCS report confirmed that the United States must cut global warming pollution by at least 80 percent below 2000 levels by 2050 to avoid the most severe effects of climate change. According to the study, cutting emissions soon is essential. Across the nation, we have laid important groundwork and celebrated some concrete victories that will help us reach this goal:

• Congress is currently working to pass a comprehensive Energy Bill that could reduce global warming pollution from vehicles and electricity production.
  
  
• Twenty-five states and the District of Columbia have now enacted standards that require electric utilities to increase their use of wind, solar, and other renewable energy. Congress is now considering a national renewable electricity standard.
  
  
• Last year, California passed the most comprehensive global warming policy in the country, capping the state’s global warming emissions across industry sectors at 1990 levels by 2020. New Jersey and Florida have followed with similar policies.
  
  
• Twelve states have adopted clean car standards to reduce global warming pollution from autos by 30 percent over the next decade. Three additional states are in the adoption process.
  
  
• In the Northeast, ten states are working to implement the landmark Regional Greenhouse Gas Initiative—a plan to reduce global warming pollution from power plants.

Despite these important accomplishments, the United States still doesn’t have comprehensive climate legislation to reduce global warming pollution at the national level.

Soon, Congress will be consumed with 2008 presidential election activity. We need them to take action now on a strong policy that helps prevent dangerous warming. We have a small window of opportunity—and we must act now.

Two key members of the Senate Environment and Public Works Committee, Senators John Warner (R-VA) and Joseph Lieberman (I-CT), have taken a positive step to help fight global warming by introducing America’s Climate Security Act (S. 2191).

Although the bill includes a strong framework for reducing global warming pollution, the Senate will need to make some important improvements to ensure its effectiveness in preventing the worst effects of climate change. Below are summaries of the strong elements of the Warner-Lieberman bill and the areas of that need strengthening.

Strongest Elements of America’s Climate Security Act

Public Benefits: The bill creates a market for each allowable ton of global warming pollution, which is called an emission allowance. Some of these allowances are auctioned to polluters and the revenue generated will support important public programs: 55 percent for technology development (mostly climate-friendly technology, but some for advanced coal); 20 percent to support low-income U.S. energy consumers; 20 percent for wildlife and habitat adaptation; and 5 percent for worker-training programs.

Free Allowances for Important Programs. The bill provides benefits in the form of free emission allowances for:

• electricity providers that must use them to provide cost savings for low- to middle-income energy consumers;
• states that enact emission reduction requirements that are more stringent than the federal policy; and
• tropical countries that reduce emissions from deforestation, which account for about 20 percent of worldwide global warming emissions.

Clean Technology and Low Carbon Agriculture Provisions
The bill includes energy efficiency measures, including stricter standards for residential heating systems and incentives for states to enact building and other efficiency standards. It also includes incentives to encourage farmers to use farming practices that produce less global warming pollution.

Verifiable Offsets: The bill includes procedures and standards the Environmental Protection Agency (EPA) must use to ensure that pollution offsets-which let polluters avoid making emission cuts themselves by paying for pollution-reducing projects elsewhere-are real, permanent, verifiable, and additional (they would not have occurred under a business-as-usual scenario).

Areas for Improvement
Long-Term Pollution Reduction Target: The bill only covers large industrial facilities, electric utilities, and refineries, which make up 75 percent of the economy. It sets targets to reduce emissions from covered sectors to 15 percent below 2005 levels by 2020 and 70 percent below 2005 levels by 2050. While there are energy efficiency standards and incentives, as well as incentives for low-carbon agricultural practices, the impact of these provisions is not clear and could result in insufficient economy-wide reductions. To avoid dangerous warming, the bill should cover more of the economy and ensure economy-wide emission reductions of at least 15 percent by 2020 and 80 percent by 2050.

Scientific Review: The bill calls for the National Academies of Science (NAS) to periodically review the reduction requirements and the effectiveness of the program to ensure that reductions are sufficient to forestall catastrophic impacts of global warming. However, the bill must provide the authority for the EPA to adjust the emissions reduction targets as needed and create regulations to ensure they are met.

Limits on Offsets: Although the language regarding verification of emission offsets is positive, the bill allows polluters to offset up to 15 percent of their total emissions, which means they could achieve ALL their initial reduction requirements through offsets. This will delay much-needed technological changes and could make future reduction targets harder and more expensive to achieve. The bill should limit offsets to a very small portion of the actual pollution reductions required for each polluter.

Distribution of Allowances: Selling emission allowances at an auction is the best way to distribute them, because it allows the market to set the price and will generate revenue for public benefit programs. By contrast, giving away allowances can drive down their value and undermine the market-based incentives for reducing pollution and investing in clean technologies. The bill initially auctions only 24 percent and gives away 76 percent of emission allowances – 40 percent to polluters (industry and electric utilities), 9 percent to companies that took early action or store the pollution they produce, and 27 percent to other entities (agriculture interests, states, and low- to middle- income energy consumers). By 2036, the bill phases out the giveaways for industry and electric utilities, as well as those for companies that took early action or store their pollution, so that 73 percent of the allowances are auctioned in that year. States with similar climate legislation, including the majority of states within the Northeast Regional Greenhouse Gas Initiative, already require or announced their intention to require auctioning 100 percent of emission allowances. Ideally, the bill should eliminate free allowances to polluters, or at least should reduce and phase them out sooner.

Cost-Containment: The bill attempts to contain the cost of complying with emission reduction targets by creating a Carbon Market Efficiency Board, which has certain powers to influence the market. Among these are the ability to let polluters use more offsets and to temporarily increase the total number of available allowances, essentially raising the cap for a short period. Other proposals to contain costs could be far more damaging–including the idea of setting a ceiling on carbon prices, above which pollution reductions would stop. Nevertheless, the board’s powers should be more limited. It should be required to consult with scientific advisors before taking any action and its ability to increase overall emission allowances should be curtailed.

Adaptation Assistance: The United States is responsible for 25 percent of worldwide global warming emissions, but the world’s most vulnerable people will bear the brunt of the effects. The bill creates a commission that must consider spending money overseas to mitigate climate impacts that could affect U.S. national security. However, the bill should allocate some of the auction revenue directly to programs that will help the world’s poor adapt to climate change.

http://ucsaction.org/campaign/10_31_07_Americas_Climate_Security_Act/explanation