Comparison of Kerry-Lieberman Bill to House Greenhouse Gas Bill
By Svend Brandt-Erichsen and Dustin TillKey Provisions | Kerry-Lieberman | H.R. 2454 |
|---|---|---|
Cap-and-Trade Program Overview | ||
GHG Reduction Targets | 4.75% by 2013 | 3% by 2012 |
Phase in of Cap-and-Trade Program | 2013 – Electric Power 2016 – Industrial Sources | 2012 – Electric Power 2014 – Industrial Sources 2016 – Natural Gas |
Transportation Fuels & Refined Products | Purchase allowances directly from EPA equal to carbon content of products sold during prior quarter Price set quarterly, equal to clearing price at most recent federal allowance auction – same price for all covered sources | Participate in allowance and offset market like other covered sources |
Banking allowances to meet future compliance obligations | Unlimited | Same |
Borrowing allowances with future effective dates to meet current compliance obligations | No limit on borrowing from the next year | Same |
Distribution of Emission Allowances (% of total annual allowances) | ||
Federal auction with proceeds distributed through | 2026 – 8.1% | No similar provision |
Electricity Consumers | 2013-2015 – transition | 2012-2015 – transition |
Natural Gas Consumers | 2016-2025 – 9% | Same |
Home Heating Oil Consumers | 2012-2015 – 1.9% | 2012-2015 – transition |
Low Income Consumers | 2013-2019 – 12.3% | 15% (auctioned to support assistance programs) |
Trade-Vulnerable Industries | 2013-2014 – 2% | 2014 – 15% |
Domestic Refineries | 2013-2014 – 4.3% | 2% for all refineries, with additional 0.25% to small refineries |
Carbon Capture & Sequestration | 2017-2018 – 0.8% | 2014-2017 – 1.75% |
Energy Efficiency & Renewable Energy | Varying between 2.5% and 0.5% through 2021 | Varying between 6.5% and 1% annually |
Clean Vehicles | 2013-2020 – 1% | No similar provision |
Clean Energy Research | 2.5% to 3% through 2021 | No similar provision |
Transportation Infrastructure & Efficiency | 12% in 2013, declining to 6.7% in 2034 | No similar provision |
Worker Adjustment Assistance | No similar provision | 2012-2021 – 0.5% |
Domestic, Wildlife & Natural Resource Adaptation | 2019 – 2034 – increasing from 0.75% to 3% | 2012-2021 – 1.9% |
International Adaptation | 2019 – 2034 – increasing from 0.75% to 3% | 2012-2021 – 1% |
International Clean Technology Deployment | No similar provision | 2012-2021 – 1% |
Deficit Reduction | All allowances not otherwise allocated | All allowances not otherwise allocated |
Emission Offset Credits | ||
Volume of Offsets Allowed | Up to 2 billion tons annually; pro rated among covered sources | Same |
International Offsets | Discounted: 1.25 International = 1 Domestic | Same discount rate |
Term Offset Credits | No similar provision | Agriculture and Forestry may generate offset credits that expire after 10 year term |
Administration | EPA and USDA set administrative rules, criteria for offsets | EPA sets administrative rules, criteria for offsets Same approach, different provisions |
Outside Involvement | Offsets Advisory Committee | Offset Integrity Advisory Board |
Types of Offsets | Initial List in Legislation | Same |
Reserve against Intentional & Unintentional Offset Reversals | Required | Required |
Criteria | Additionality, Leakage, Verification and Environmental Criteria | Same |
International Deforestation | Assistance to developing nations to reduce deforestation | Same |
Emissions Market | ||
Allowance Market Regulation | CFTC oversight of market | CFTC oversight of market |
Limits on Allowance Trading | Market participants limited to those with compliance obligations and registered participants Regulation of clearing organizations, GHG instrument trading organizations | Limits on use of derivatives, credit default swaps, require clearing through registered clearing organizations |
Cost Containment | Price floor - $12 in 2013, escalating thereafter at 3% + CPI Reserve allowances sold to maintain price ceiling - $25 in 2013, escalating thereafter at 5% + CPI | No price floor Reserve allowances sold to maintain price ceiling – $28 in 2012; after 2014 priced at 60% of 3 yr avg market price |
Oversight of federal auction process | Comptroller General to review federal allowance distribution & auction process every 2 years | No similar provision |
Tracking Allowance and Offset Ownership | EPA clearing house to track issuance and ownership of allowances and offsets | Same |
Effect on Clean Air Act Programs | ||
State Program | State limits on stationary sources of GHGs (including cap-and-trade programs) preempted; states allowed to limit mobile source GHG emissions consistent with CAA | State cap-and-trade programs preempted until 2017 |
PSD Construction Permits | GHG emissions do not trigger PSD permitting | Same |
Title V Operating Permits | Sources not subject to Title V due solely to GHG emissions If subject to Title V due to other emissions, GHG Allowance Obligations are Title V permit conditions | Same |
Ambient Air Quality Standards (CAA §110) | No NAAQS for GHGs | Same |
New Source Performance Standards (CAA §111) | Not allowed for GHG emissions from sources subject to cap; allowed for non-capped sources | Same |
Hazardous Air Pollutants (CAA § 112) | Does not apply to GHGs due to effects on climate chance or ocean acidification | Does not apply to GHGs due to effects on climate chance |
International Air Pollution (CAA §115) | Does not apply to GHGs due to effects on climate chance or ocean acidification | Does not apply to GHGs due to effects on climate chance |
Offshore Oil & Gas | ||
Revenue Sharing | 37.5% to coastal states with no current OCS production, with 20% of state share allocated to local communities 33% of State of Alaska’s OCS revenue share allocated to Alaska Native Corporations | No similar provision |
Conservation Funding | 12.5% of federal revenue directed to Land & Water Conservation Fund | No similar provision |
Spill Risk | As part of lease sale planning, Interior must assess probability of spill, potential spill impact on coastal environment, and potential spill impact on coastal economy of adjacent State and any other States likely to be directly impacted by a spill | No similar provision |
State Control | States may prohibit OCS leasing within 75 miles, or petition for specific areas to be closed to leasing If Interior assessment shows spill in area proposed for leasing would have direct impact on State’s coastal economy, U.S. will not lease if State passes law prohibiting leasing in that area | No similar provision |
Electricity Provisions | ||
National Renewable Energy Standard | No similar provisions | By 2020, utilities must meet 20% of demand from renewable sources and increased efficiency |
Nuclear Power | Federal loan guarantees – increasing the number of funded plants from 6 to 12 Increase number of projects able to obtain federal insurance against regulatory delays Accelerated depreciation for new nuclear plants 10% Investment Tax Credit Expedited NRC procedure for construction and operating permits | No similar provisions |
Coal Plants | Emission Performance Standard for new coal plants: Commercial deployment of CCS supported by assessment on fossil fuel-based electricity totaling $2 billion annually Distribution of emission allowances to commercial power and industrial projects deploying CCS Emission allowances granted for shutting down or repowering merchant coal plants | Same performance standard Same, but assessment totaling $1 billion annually Same method for distributing allowances to projects with CCS No similar provision |
Rural energy savings | Low interest loans through rural electric coops for consumer investments in energy efficiency | No similar provision |
Electric Transmission Siting | No similar provision | Expanded FERC jurisdiction within the Western Interconnection |
Smart Grid | No similar provision | Goals for large utilities to reduce peak demand using “smart grid” technology |
Transportation Provisions | ||
Low-Emission Vehicles | Requires Electric Vehicle Infrastructure Plan; Funds Electric Vehicle Pilot Projects | Same provisions, plus: Electric vehicle deployment program Distribution of allowances to support electric drive vehicle development |
Vehicle Emission Standards | No similar provision | Sets standards for heavy-duty and off road vehicles |
Transportation Efficiency | Requires transportation emission reduction goals for metropolitan areas, and planning process Distribute emission allowances to fund transportation efficiency efforts | Same provisions No similar provision |
Built Environment Provisions | ||
State Energy Efficiency & Renewables Programs | Distribute emission allowances to States and Indian Tribes to fund energy efficiency and renewable energy programs | Same approach – creates State Energy and Environment Development Accounts |
Residential Energy Efficiency | No similar provision No similar provision Subsidized loans to consumers for energy efficiency upgrades, repaid through charges on power bills | Requires greater energy efficiency in building codes Lighting and appliance energy efficiency standards No similar provision |
General Provisions | ||
Identification of Greenhouse Gases | Designates six greenhouse gases: carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons, and perfluorocarbons; authorizes EPA to identify additional GHGs Specifies carbon dioxide equivalence for designated GHGs | Same
Same |
GHG Registry | Annual Reporting of GHG emissions from covered sources (some changes from EPA-issued reporting rules – 40 CFR Part 98) | Same |
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