Draft of Cap-and-Trade Bill To Be Released by Key U.S. Senators

Two U.S. senators will release on Wednesday a draft climate bill that calls for slightly higher greenhouse gas cuts by 2020 than an earlier version approved by the House of Representatives, but that also includes provisions designed to ease the financial burden of cap-and-trade legislation on business and industry. The bill unveiled by Senators Barbara Boxer (D-Calif.) and John Kerry (D-Mass.) calls for a 20 percent cut in greenhouse gas emissions below 2005 levels by 2020, as opposed to a 17 percent cut in the House version. Both versions set a target of reducing emissions by 83 percent below 2005 levels by 2050, a goal they plan to achieve by placing a price and a steadily decreasing cap on carbon emissions. The Boxer-Kerry bill reinstates a provision — eliminated in the House version — that gives the U.S. Environmental Protection Agency the right to regulate greenhouse gas emissions under the Clean Air Act. But the Senate bill contains elements that will soften the financial impact of cap-and-trade legislation, including provisions that would initially limit the price of carbon emissions permits and would enable industry to avoid some emissions cuts by purchasing offsets in projects — such as forest preservation — that lower overall CO2 emissions.