Senate Climate Change Legislation

July 8, 2010
Recently introduced Senate bill would enact cap-and-trade

In a related climate change matter, on May 10, 2010, U.S. Senators John Kerry (D. Mass.) and Joseph Lieberman (I. Conn.) released their version of a climate change/energy bill for Senate consideration. Their bill is similar in many respects to the American Clean Energy and Security Act (ACES), H.R. 2454, passed by the House in June 2009.

The Kerry-Lieberman bill would create a federal cap-and-trade program that would reduce U.S. GHG emissions 17% by 2020 and 80% by 2050.

Unlike ACES, it would create a federal Renewable Portfolio Standard (a requirement imposed on electric utilities to use electricity generated from renewable resources for a specified portion of the electricity supplied to their customers). It pre-empts state GHG cap-and-trade programs that have been developed to facilitate utility compliance with state GHG control programs (ACES would pre-empt such state programs from 2012 through 2016 only). It also stops EPA regulation of GHG emissions as pollutants causing climate change. Electric utilities would start compliance in 2013 (one year later than under ACES).

Large industrial source compliance would not start until 2016. In the early years, GHG allowances would be distributed free to utility emitters to reduce rate increases to customers. It is too early to predict whether ACES or the Kerry-Lieberman bill will become law or even be considered by the Senate before the November U.S. elections.

Kai Alderson of Fasken Martineau practices business law with an emphasis on Energy, Aboriginal, Environmental matters, including climate change and renewable energy law. Stephen Higgs with Perkins Coie, focuses his practice in the area of environmental and natural resource law.

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