The 987-page Senate bill, unveiled in May 2010, tries to limit climate-altering emissions, reduce oil imports and create millions of new energy-related jobs.

In June 2009, Democrats in the House of Representatives passed a climate and energy bill that sought to reduce the growth of greenhouse gases through “cap and trade” — a market-based regulatory system that tries to reduce emissions by setting an overall limit (cap) and then lets companies buy and sell (trade) pollution permits, or allowances, among themselves.

Smoke-on-the-WaterEconomists consider cap and trade the equivalent of a tax, without the stigma attached to that word. The approach was endorsed by environmental groups, many of their foes in industry and by President Obama. But a cap and trade bill stalled in the Senate, and was in effect pronounced dead in March of 2010.

Three senators — John F. Kerry, a Massachusetts Democrat; Joseph I. Lieberman, an independent from Connecticut; and Lindsey Graham, a South Carolina Republican — came up with plan to introduce a less sweeping bill. But Mr. Graham withdrew his support over problems raised by a dispute with the Senate leadership over immigration and the oil spill in the Gulf of Mexico in April. No other Republicans have stepped forward to support the two senators’ efforts.

The 987-page Senate bill, unveiled in May 2010, tries to limit climate-altering emissions, reduce oil imports and create millions of new energy-related jobs. One of the central elements of the Senate bill — incentives to increase domestic offshore oil production — was changed in the aftermath of the explosion and fire on the Deepwater Horizon drilling rig in the Gulf of Mexico on April 20, 2010, which left an undersea well leaking oil. Instead of providing for a broad expansion of offshore drilling, the Senate measure would have the effect of sharply limiting oil operations off the Atlantic and Pacific coasts by giving states the right to veto any drilling plan that could cause environmental or economic harm.

The Kerry-Lieberman proposal would treat each major sector of the economy differently, while providing something for every major energy interest: loan guarantees for nuclear plant operators, incentives for use of natural gas in transportation, exemptions from emissions caps for heavy industry, generous pollution permits for utilities for years, modest carbon dioxide limits for oil refiners and substantial refunds for consumers.

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Source: The New York Times
Photo: Reuters