Senate Energy Bill Unveiled  

Technology Review has a look at the climate "cap and refund" bill being introduced by John Kerry and the unpleasant Joe Lieberman, which includes support from a grab bag of toxic (nuclear power), depleting (natural gas) and imaginary (clean coal) technologies as well as clean energy projects and an interesting strategy of only charging large scale polluters - Senate Energy Bill Unveiled.

A long-awaited energy bill was unveiled today by its Senate sponsors, John Kerry (D-MA) and Joseph Lieberman (I-CT). According to a summary (pdf) of the bill, it would reduce carbon emissions by 17 percent by 2020 and by over 80 percent by 2050 by putting limits on the amount of carbon dioxide emissions from power plants and heavy industry, and from producers and importers of refined fuels for transportation.

The limits will only apply to those who emit over 25,000 tons of carbon dioxide a year, which works out to about 7,500 factories and power plants, according to the summary. These emitters will have to purchase emissions allowances, cut emissions, or both to meet the targets. The proceeds will be divided up--some will go to pay down the deficit; some will fund research and development; some will go to businesses to help them meet the caps; and the rest will be mailed to taxpayers in the form of a refund check. As the years go by, more of the proceeds will go directly to taxpayers.

The plan is very similar to the cap and trade system in a bill the House passed last year, except that one didn't involve sending out refund checks (although there were provisions to help out poor people who are affected by higher energy bills). The new bill also only covers parts of the economy, rather than the whole thing.

Numerous provisions cater to different interests. It supports offshore drilling but lets states opt out. For those worried that a cap on carbon emissions will hurt the coal industry, the bill contains support for capturing and storing carbon from coal plants, which could help them meet the caps. Supporters of natural gas will find tax incentives for people to switch to natural gas powered vehicles, as well as other subtle changes that will make it more attractive to build natural gas power plants. Industries affected by the cap get a couple of boons. First, they don't get regulated until 2016, and the money from the purchases goes back to them to help them pay for switching to cleaner technology. They also are protected by trade provisions designed to keep business from moving to countries without caps on carbon. Farmers are exempt. And they'll make billions with carbon offsets--such as planting trees that absorb and store carbon dioxide. Nuclear gets $54 billion in loan guarantees, as well as "risk insurance" to help get new power plants financed. There will also be money to promote battery-powered cars.