Washington (Platts)--20Jun2008

A senior member of the US House of Representatives committee on taxation
on Thursday introduced a carbon cap-and-trade bill with the help of 70
cosponsors. The legislation will be the first to go before that panel, the
House Ways and Means Committee, in July.

Texas Democrat Lloyd Doggett said his bill calls for US industry to slash
its emissions of carbon by 80% compared with 1990 levels by 2050. It sets up
an emissions allowance market where 15% of these credits initially would be
given away, but by 2020, all emission allowances will have to be bought.

The bill focuses on the big industry emitters, such as the electric power
sector, petroleum refiners, large industrials and transportation, and excludes
agriculture, forestry and small businesses from the emissions cap.

To spur developing countries to pursue their own carbon caps, the bill
would require goods imported into the US to be covered by emission allowances.
Similar language found in Senate carbon bills was backed by coal-fired
electric utilities.

The bill would also contain "carrots and sticks" to encourage China and
India to participate in a carbon reduction program, Doggett said. It includes
incentives for early implementation of carbon cap-and-trade agreements.

Other key provisions include substantial benefits for reducing tropical
deforestation and funding to operators of emitting facilities who take early
action to cut emissions.

Doggett's bill is slated to come before the Ways and Means Committee by
late July. The bill was originally cosponsored by 15 Democratic members of
that committee.

Earlier Thursday, a House Energy and Commerce subcommittee held a hearing
seeking industry and environmentalists' input on five existing climate change
bills. Subcommittee Chairman Rick Boucher, a Virginia Democrat, said he did
not know yet if he would hold a future hearing on Doggett's bill.

Doggett said the witnesses appearing before Boucher included a "who's who
of climate protection naysayers. We cannot wait until everyone sees the light
before we act to lower the heat."
--Cathy Cash, cathy_cash@platts.com