Kerry and Lieberman Introduce Much-Anticipated Climate Change Bill

Author:Mr Jonathan Flynn, Gregory K. Lawrence and Christopher J. Polito
Profession:McDermott Will & Emery

With no Republican sponsors and a full Senate calendar, the climate change bill faces an uphill battle despite significant industry support.

On May 12, 2010, Senators John Kerry (D-MA) and Joseph Lieberman (I-CT) introduced the American Power Act, a comprehensive energy and climate change bill that would establish a federal cap-and-trade program for carbon dioxide and other greenhouse gases (GHGs) and provide numerous incentives for new energy development in the United States. The bill was introduced after months of delay and without any explicit bipartisan support. Senator Lindsey Graham (R-SC) participated extensively in the negotiations and drafting of the proposal, but stepped away from the proposal in April following the Gulf of Mexico oil spill and a dispute with U.S. Senate leadership regarding immigration reform.

Although the Kerry-Lieberman bill follows the same general format as other climate change proposals debated in the Senate, it differs in a number of important respects from the American Clean Energy and Security Act of 2009, sponsored by Representatives Henry Waxman (D-CA) and Edward Markey (D-MA), that narrowly passed the U.S. House of Representatives in June 2009. Further complicating the bill's prospects, any differences between the Senate and House proposals would need to be reconciled before the climate change bill could become law.

For more information on the Waxman-Markey bill, see " Waxman-Markey American Clean Energy and Security Act Passes House ."

For more information on the Kerry-Boxer bill, see " Senators Kerry and Boxer Unveil Climate Bill ."

Emissions Targets

The bill seeks to reduce GHG emissions by 17 percent below 2005 levels by 2020, 58 percent below 2005 levels by 2030 and 83 percent below 2005 levels by 2050. These reduction levels match the short- and long-term reductions called for in the Waxman-Markey bill (17 percent below 2005 levels by 2020, and 83 percent below 2005 levels by 2050), and closely track previous commitments and targets discussed by the administration in connection with the Copenhagen convention. Sources of electricity, refineries, large industrial facilities that emit 25,000 tons or more of carbon dioxide equivalent GHGs per year, natural gas local distribution companies, geologic sequestration sites, and various enumerated categories of chemical and industrial facilities will be "covered entities" under the program. The cap initially applies primarily to electric generators. Large industrial facilities...

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