Proposal to Revise Waxman, Markey Climate Change Bill

Date: April 28, 2009

Source: News Room

Proposed revisions to the draft climate and energy bill pose a challenge to Energy & Commerce Committee leaders as they attempt to gain support from swing-vote lawmakers without eroding backing from environmentalists on key issues of emission targets, renewable electricity standards, the award of free allowances and rules for emission offset projects. A group of moderate democrats are now suggesting changes to the climate and energy discussion draft authored by committee Chairman Henry Waxman (D-CA) and energy subcommittee Chairman Edward Markey (D-MA) to make it more palatable to industry and sensitive to Midwestern coal states and prevailing economic conditions.

For example, the new proposal urges a 2020 emissions target of 6 percent below 1990 levels, rather than the 20 percent outlined in the discussion draft. It also calls for "free allocation to the utility sector of 40 percent, consistent with the sector's share of CO2 emissions," as well as an allocation of a "small percentage" of allowances to unregulated merchant coal generators. And, it calls for easing the legislation's renewable electricity standard from 25 percent to 15 percent by 2025, and expanding the list of eligible fuels by roughly a dozen categories, beginning with waste-to-energy plants and including such categories as municipal solid waste, mine methane and combined heat-and-power facilities.

On emissions offsets, the proposal calls for liberalizing the rules in the discussion draft. Recommendations include increasing the number of allowed offsets from 2 billion to 3 billion annually; making offsets traded on the Chicago Climate Exchange eligible for crediting as emissions cuts. It would including unspecified language that would allow coal plant projects currently "underway" to continue, and language that would make imposition of the bill's 2015 and 2020 standards for the plants contingent on technology availability.

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