Senate moves toward climate change legislation

Senate moves toward climate change legislation

Washington (Platts)--20Jun2005


The much talked about climate change amendment from Sen. Jeff Bingaman,
D-N.M., would reduce greenhouse gas emissions by 2.4% annually, starting in
2010 in an emissions trading program overseen by the Dept. of Energy. 

Senate aides released a 78-page discussion draft of the Climate and Economy
Insurance Act of 2005 at a press briefing late Friday afternoon. Republican
Staff Director Alex Flint said that Sen. Pete Domenici, R-N.M., was now
willing to support some sort of climate change legislation.

"Domenici is convinced that the science now indicated that [climate] change is
occurring and we need to do something about it," Flint said. He went on to say
that the amendment was not completely to Domenici's liking and that there is
no final agreement on the amendment. Flint also said that is was possible
Domenici would support the bill but not co-sponsor it.

Under the proposal, beginning Jan. 1, 2010, and ending Dec. 31, 2019,
greenhouse gas emission intensity would be reduced by 2.4% through an
emissions trading program presided over by the Secretary of Energy.

GHG allowances would be granted according to the emission intensity target
multiplied by gross domestic product for that year. The allowances will be
sold at auction much like the Environmental Protection Agency's emission
allowance program. The money from the sale will be put into a Climate Change
Trust Fund until the fund reaches $50-bil. At that point, a percentage of the
money would then be used to pay for programs such as advanced coal
sequestration and biomass facilities.

Aides say they are confident that if the climate change legislation is passed,
it would generate enough activity to reach $50-bil.

According to Democratic Staff Director Bob Simon, the amendment has an
economic safety valve that a competing McCain/Lieberman bill does not. It is
in place to give companies certainty on the price of allowances. If a company
can't afford to purchase them in the market, they will pay no more than
$7/metric ton for allowances they get from the secretary of Energy. 

This story was originally published in Platts Coal Trader
http://www.coaltrader.platts.com

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