Senators Boxer and Kerry Introduce Climate Bill

On September 30, Senator Barbara Boxer (D-CA), Environment and Public Works Committee Chair, and Senator John Kerry (D-MA), Foreign Relations Committee Chair, introduced legislation entitled The Clean Energy Jobs and American Power Act . “We know clean energy is the ticket to strong, stable economic growth -- it's right here in front of us, in the ingenuity of our workers and the vision of our entrepreneurs. We must seize this opportunity, or others will move ahead,” Boxer said at a press conference for the bill’s introduction. “This is a security bill that puts Americans back in charge of our energy future and makes it clear that we will combat global climate change with American ingenuity. It is our country's defense against the harms of pollution and the security risks of global climate change,” Kerry added. President Obama responded to the introduction of the bill in a statement: “I applaud Chairmen Kerry and Boxer for their leadership on comprehensive energy reform. With the draft legislation they are announcing today, we are one step closer to putting America in control of our energy future and making America more energy independent.”

Much of the Senate climate bill is modeled after the American Clean Energy and Security Act (ACES, H.R. 2454), passed by the House in June, though differences exist in key areas. Like ACES, a centerpiece of the legislation is a national cap and trade program for greenhouse gas emissions (GHGs), though the Senate bill calls for a 20 percent reduction in GHG emissions below the 2005 baseline by 2020, compared to a 17 percent reduction in ACES. Senators Boxer and Kerry also included a collar on the price of emission allowances, stipulating that if the price of an emission allowance rises above $28 in 2012, the Commodity Futures Trading Commission (CFTC) may issue additional emission allowances from a market stability fund to drive the price down. The bill also preserves the right of the Environment Protection Agency (EPA) to regulate GHG emissions which was significantly limited in ACES. In addition, the Senate bill empowers the CFTC to wholly regulate the carbon market created by the cap and trade program, rather than sharing jurisdiction with the Federal Energy Regulatory Commission, as stipulated by the House bill.

Similar to when ACES was introduced in the House, Senators Boxer and Kerry will initially leave out details on how emission allowances will be distributed, choosing to add those details at a time closer to when the bill is considered by the full Senate Environment and Public Works Committee.