Climate bill nears compromise in committee

Would ease some targets

Steve Hawley, May 14, 09.

UPDATE (6/29/09, 9:26 am): The American Climate and Energy Security Act (ACES) passed the House 219-212 on Friday.

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The US House Energy and Commerce Committee is nearing a compromise on the Waxman-Markey bill and may approve a version by the end of the week, according to the New York Times.

The bill has been weakened in some areas to gain support from more committee members. The current version would call for a 17 percent reduction of greenhouse gas emissions from 2005 levels by 2020, down from 20 percent in the original draft. The long-range goal of reducing emissions by 83 percent by 2050 is unchanged.

In addition, the bill would provide a number of free allowances under a cap-and-trade system. The article states:

Among the most difficult discussions were those that concerned the granting of free emissions permits under the bill’s cap-and-trade provisions. In the current compromise, 35 percent of all permits will be granted to local utility companies to cushion the higher costs of producing electricity in a way that emits less carbon dioxide.

An additional 15 percent of permits will be given to reduce costs in energy-intensive industries like steel, cement and aluminum, which face stiff international competition.

Three percent of permit value will go to the auto industry for work on electric and advanced-technology vehicles, although the subsidy falls to 1 percent after five years. Committee members are still negotiating the level of free allowances for petroleum refiners.

The free allowances would be phased out over 10 to 15 years.

The original bill called for 20 percent of all US electricity to be renewable by 2020, but the current version lowered the target to 15 percent, with exemptions for certain regions and energy sources.