US Senate to consider climate-change amendment this week

Washington (Platts)--17Jun2005

The US Senate this week is expected to debate a climate-change amendment that
would establish an economy-wide cap-and-trade program to reduce greenhouse gas
emissions intensity beginning in 2010. The amendment will be offered by Sen
Jeff Bingaman (Democrat-New Mexico), but committee staff said Senate Energy
and Natural Resources Committee Chairman Pete Domenici (Republican-New Mexico)
may cosponsor the provision. 

Under the proposal, the Secretary of Energy would preside over an emissions
trading program to reduce greenhouse gas emissions intensity by 2.4% each year
from 2010 through 2019. Allowances would be granted according to the emissions
intensity target multiplied by the GDP for that year. About 90% will be
allocated the first five years of the program, 5% auctioned, 3% given to make
entities whole and 1% will be made available to those that make early emission
reductions.

The amendment also would direct the secretary to set up a procedure to
distribute allowances to electricity generators to offset any expected loss of
profits attributed to the program. In addition, the proposal contains a
"safety valve price" of $7 per metric ton of carbon dioxide that increases 5%
annually to provide industry certainty of how much the program would cost,
committee staff said. 

Up to $50-bil in proceeds from the auctions and "safety valve purchases" would
go to a fund of which 40% would be used to pay for the deployment of
low-carbon technologies, 20% would be directed toward advanced coal and
sequestration technologies and 25% would go to conserve coastal wetlands. The
remaining 15% would be earmarked for variety of biomass systems and advanced
technology for vehicle.

This story was originally published in Platts Electricity Alert
http://www.electricityalert.platts.com

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.