The Senate has begun debate on S. 3036, the Climate Security Act (the Lieberman-Warner Bill in the vernacular). While there looks to be more than enough votes in the Senate to move to a debate, it is anyone’s guess whether there are the 60 votes needed to cut off debate and move to a final vote- that will largely be determined by the type and amount of amendments that are accepted, rejected, or permitted to be debated. Getting the 60 votes necessary to cut off debate became one vote harder this week with the absence of Sen. Ted Kennedy.

For further initial background on the debate, today’s Washington Post cites the call to action inherent in the recent federal Climate Change Science Program report as contributing to a “sturdy platform” for leadership from the next Administration; while the New York Times analyzes conflicting interests of various industry groups and the Wall Street Journal’s Environmental Capital predicts that “nothing much will happen.”

ClimateIntel will monitor the debate and update this blog as events warrant. C-SPAN2 is streaming the debate online (Windows Media Player or RealMedia).

For further information about this topic, please contact Akin Gump.

The Lieberman-Warner Climate Security Act has emerged as the leading legislative vehicle for the creation of a national cap-and-trade system for greenhouse gas (GHG) emissions. Recently described by the Wall Street Journal as “the most extensive government reorganization of the American economy since the 1930s,” the Climate Security Act would, among many other things, require U.S. importers of a wide range of manufactured goods to purchase and surrender emissions allowances representing the GHGs associated with manufacture of the imported goods.

This requirement, intended to ensure that U.S. emissions caps do not diminish the competitiveness of domestic manufacturing industries vis-à-vis their foreign rivals, would only be excused for goods produced in countries that have adopted GHG emissions requirements as stringent as those in effect in the United States. In this way, the Climate Security Act would use U.S. market access to compel foreign exporting nations to limit GHG emissions, and could significantly affect trade flows.

In anticipation of the floor debate scheduled to begin in the Senate next week, Senator Boxer issued a substitute bill (S. 3036) that significantly alters the regulation of imports. One of the principal trade-related changes in the substitute bill is that it would create an International Climate Change Commission (ICCC) that would determine which foreign countries have taken “comparable action” to the United States in curbing GHG emissions. A negative determination would trigger the requirement for importers to provide emissions allowances pursuant to an International Reserve Allowance Program. The ICCC’s duties would also extend to determining the scope of manufactured goods falling under the import provisions, as well as modifying the import emissions allowance requirements as warranted.

Read the rest of this entry »

For further information about this topic, please contact Akin Gump.

This afternoon, the House Energy and Commerce Committee released a white paper “Getting the Most Greenhouse Gas Reductions for our Money.” Premised on the Committee’s goal of achieving “the necessary greenhouse gas reductions (60 to 80 percent by 2050) for the least cost,” the paper discusses research on the future costs of inaction, summarizes the findings of the McKinsey Report on low cost measures to reduce emissions, and uses the U.S. sulfur dioxide trading program under the Clean Air Act to illustrate the efficiencies that could be realized through capping and trading emissions allowances.

The paper recognizes that the benefits of a cap-and-trade system are contingent on the success of the market at managing impacts to the economy and discusses six mechanisms that could be used to avoid unnecessarily high costs: (1) allowance banking; (2) offsets and international trading; (3) firm-level borrowing from the future; (4) multi-year compliance periods; (5) cost containment mechanisms that could release additional allowances into the market if needed (e.g., safety valve, circuit breaker, independent agency, and strategic reserve); and (6) a floor for allowance prices, to ensure a minimum price for technology developers. The paper concludes with brief descriptions of possible complementary measures (such as energy efficiency), the distribution of allowances among regulated entities, and the relative capacities of market players.

The white paper is one in a series of papers on Climate Change Legislation Design released by Rep. John D. Dingell (D-MI) and Rep. Rick Boucher (D-VA). Earlier papers include “Competitiveness Concerns/Engaging Developing Countries” and “Appropriate Roles for Different Levels of Government.”

For further information about this topic, please contact Akin Gump.

This afternoon, Senator Barbara Boxer released her long awaited, 157 page substitute amendment to the Lieberman‐Warner Climate Security Act of 2008.

For further information about this topic, please contact Akin Gump.

The Environmental Law Institute convened a panel discussion last week covering international competitiveness concerns raised by cap-and-trade programs for greenhouse gas (GHG) emissions. Much of the program focused on a proposal by the utility company American Electric Power and labor unions such as the IBEW and the AFL-CIO that addresses concerns over the potential loss of jobs in the United States due to higher energy costs.

The proposal adds provisions to the Lieberman-Warner bill that would authorize an independent commission to determine if other countries are adequately regulating carbon. If a country is not regulating GHG emissions, energy-intensive goods manufactured there would be significantly less expensive than similar goods made in countries with emissions limits. Once it is determined that a country is not taking “comparable action” it will be subject to certain requirements. In order to import specific goods, the foreign manufacturers will have to purchase a special type of international emissions allowance - which is separate from the allowances issued to domestic facilities - and surrender it at the border with the goods being imported. This ensures that imported energy-intensive goods will not be able to unfairly undercut the prices of domestic-produced goods that are required to incorporate a price for GHG emissions.

Read the rest of this entry »

For further information about this topic, please contact Akin Gump.

Turning his attention to the climate regulation debate, John McCain presented his strategy for confronting global climate change. McCain’s plan:

• Mandates gradual greenhouse gas emissions reductions under a cap-and-trade program to reach 60% below 1990 levels by 2050, with an “increasing fraction of permits for emissions could be supplied by auction.” By comparison, both Hillary Clinton’s proposal and Barack Obama’s proposal commit to reducing greenhouse gas emissions 80% from 1990 levels by 2050 and auctioning 100% of the permits provided under a cap and trade system. Read the rest of this entry »

  For further information about this topic, please contact Akin Gump.

Paul Gutermann and Kenneth Markowitz presented at Carbon Expo 2008 in Cologne, Germany. Mr. Gutermann discussed the ongoing battle in the United States between state and federal authorities over climate change initiatives. Mr. Markowitz presented on the challenges associated with ensuring compliance across market-based systems.

Mr. Gutermann’s presentation explored how states like California and the members of regional initiatives in New England, the West, and the Midwest run the risk of conflicting with federal programs or entering areas of exclusive federal power. Regional cap and trade programs are most susceptible to challenges under the Commerce, Compacts, and Supremacy Clauses of the U.S. Constitution.

Read the rest of this entry »

For further information about this topic, please contact Akin Gump.

In a recently released “Dear Colleague” letter, Senator Corker (R-TN) questioned the number of carbon credits that would be auctioned under the Lieberman-Warner climate bill (S. 2191), which is scheduled to be debated in the Senate in early June.

For further information about this topic, please contact Akin Gump.

Adding to the evolving debate on how and whether the US should regulate greenhouse gas (GHG) emissions from aircraft, the Environmental Protection Agency (EPA) announced plans to seek public comment on two petitions urging the Agency to curb aviation emissions, during recent testimony to the House Select Committee on Energy Independence and Global Warming.

The two petitions - one by a group of states including California and the other by a coalition of environmental groups - urge EPA to (1) determine that aircraft emissions cause or contribute to air pollution and endanger public health and (2) adopt regulations to control such emissions.

Read the rest of this entry »

For further information about this topic, please contact Akin Gump.

While Lieberman-Warner has garnered most of the headlines since late last year, other climate change bills continue to appear in Congress, illustrating the difficulties ahead for forging a consensus on carbon legislation.

Senator Voinovich (R-OH) recently drafted, but has not formally introduced, the “Incentives-Based Climate Policy Act” as an alternative way of reducing greenhouse gas (GHG) emissions. The Voinovich proposal calls for more modest reduction targets than Lieberman-Warner, with a goal of reducing emissions to - but not below - 2006 levels by 2020 and 1990 levels by 2030.

Read the rest of this entry »

For further information about this topic, please contact Akin Gump.