Details on Kerry-Graham-Lieberman climate bill leaking out

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p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:6.0pt">Details on Kerry-Graham-Lieberman climate bill leaking out

By Agri-Pulse Staff

© Copyright Agri-Pulse Communications, Inc.

Washington, March 18 - A handful of trade associations representing industries that would be most impacted by proposed cap-and-trade climate legislation got a first peek Wednesday at details of the new climate bill being hammered out behind closed doors by Sens. John Kerry (D-MA), Lindsey Graham (R-SC) and Joe Lieberman (I-CT). Today, the same eight-page draft outline of the bill is being shared with environmental groups but, as with yesterday's briefing, not being made public.

According to the organizations which met with the senators Wednesday, including the U.S. Chamber of Commerce, the Edison Electric Institute, the American Petroleum Institute and the Portland Cement Association, the Kerry-Graham-Lieberman bill proposes a phased-in approach to achieve a 17% reduction from 2005 levels of U.S. greenhouse gas emissions by 2020, increasing to 80% by 2050. Emissions reduction regulations would be imposed first on electricity power plants, starting in 2012, with phased in curbs on other major emissions sources like petroleum refineries, cement plants, and major manufacturing plants starting in 2016.

As part of the proposed approach, the EPA would be blocked from regulating GHG emissions under the Clean Air Act. The plan would also block states from taking action on their own. Another key part of the proposal is that the new federal controls would only apply to emissions sources releasing 25,000 tons or more per year.

A centerpiece of the proposal is the inclusion of a “hard price collar” to maintain the price of carbon allowances between $10 and $30 per ton, to be inflation adjusted in the future. To support this collar, the government would hold a reserve of four billion tons of allowances which could be used to limit price volatility and assure the relatively stable price outlook needed by industry to invest in emissions control measures.

More specific provisions in the proposed legislation are still being drafted and may not be finalized until mid April. But the current draft includes eight titles: Refining, America's Farmers, Consumer Refunds, Clean Energy Innovation, Coal, Natural Gas, Nuclear Power, and Energy Independence. It also includes a mixture of both cap-and-trade and cap-and-dividend provisions.

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