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April 6, 2009

Carbon Cap Bill Introduced in US House

Washington, D.C. [RenewableEnergyWorld.com]

As national political leaders in the U.S. position themselves in the debate over carbon reduction policies, new pieces of legislation are being introduced into the legislature. Last week, Congressman Chris Van Hollen (D-MD) introduced the Cap and Dividend Act of 2009, which sets targets for emissions reductions, auctions 100 percent of carbon permits, and returns all auction proceeds to consumers in the form of a monthly dividend.

"The science of climate change can be complicated, but the legislative solution doesn't have to be."

-- Chris Van Hollen, Democratic Congressman from Maryland

If passed, the Cap and Dividend Act would:   

  • Set robust, scientifically driven emissions reductions targets at 25 percent below 2005 levels by 2020 and 85 percent below 2005 levels by 2050 for covered emissions.
  • Place an upstream compliance obligation on the first seller of fossil fuels into the U.S. market.
  • Auction 100 percent of carbon permits.
  • Include Border Adjustment provisions to protect U.S. manufacturers of carbon-intensive goods from imports of carbon-intensive goods originating in countries without comparable climate legislation and assistance for U.S. exporters of carbon-intensive goods to compete effectively in the international marketplace with carbon-intensive goods originating in countries without comparable climate legislation.
  • Return 100% of auction proceeds in the form of a monthly Consumer Dividend to every lawful resident of the United States with a valid Social Security number.

“The science of climate change can be complicated, but the legislative solution doesn’t have to be,” said Van Hollen. “The strength of cap and dividend lies in its simplicity and durability. All permits are sold at auction, and all proceeds are given back to the American people. As the price of energy rises, the monthly dividends will keep American consumers whole.”

This is just one idea of many that is being tossed around the halls of Washington and It is still unclear when this piece of legislation may actually be realistically considered.

Congressmen Waxman and Markey recently introduced more inclusive climate legislation that includes a renewable portfolio standard and other emissions related measures. That bill has a set hearing schedulein committee and is expected to be voted on by the summer. Click here to read more about that bill.

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Reader Comments (3)
 
April 8, 2009
Interesting, but doesn't address the problem of incentivizing a transition to zero-carbon fuels. A few bucks flowing to consumers will simply go back into the consumer economy, providing a weak stimulus to the dead end of (mostly) frivolous goods production. Proceeds from carbon auctions should go toward carbon reductions across all sectors of the energy economy.

Whether that money is best spent subsidizing home-scale distributed energy production (e.g., grid-tied home PV systems or thermal systems) or IGCC and carbon sequestration for utility-scale electricity production, I can't say. All fronts must be encouraged as it will take pan-spectrum efforts to mitigate carbon pollution. But the incentive system should be "closed" at first, to induce and accelerate a move away from carbon fuels.
Comment 1 of 3
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April 9, 2009
Proceeds should be used to solve the problems created by fossil fuels; expanding Renewable energy production, infrastructure, and pay for Health and Environmental costs related to coal and fossil fuel pollution. Van Hollen's heart seems to be in the right place except for this one major point. Nothing's more important than investing in develping our own resources instead of general consumer goods. We have to wean ourselves from fossil fuels but still feed and power ourselves, as well as use many times less water than we currently do in power production.
Comment 2 of 3
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April 12, 2009
The incentives to switch to renewables are 1) no fossil fuels will come into the economy except by auctioned permits, making fossil fuels less and less competitive, and 2) the supply available (through permitting) will decrease every year.
Comment 3 of 3
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