Senate Climate Bill Revealed: A Quick Guide

The Senate climate bill, called the Clean Energy Jobs and American Power Act, just made its debut today. There are still pieces deliberately left out of the bill that will be subject to Senate debate, and of course, time will need to be taken to properly analyze the 800-page bill (hey, at least it's shorter than Waxman-Markey's 1300-pager). But here's a first look--a rundown of its pros and cons, how it's different from the climate bill that passed the House, and what to expect next.

Obama has already lauded Senators Boxer and Kerry, the bill's authors, saying it will spur innovation in the energy sector and lead to greater energy independence.

Deeper Emissions Cuts

Matt noted that the emissions reduction target were a little steeper (20% by 2020 instead of 17%, and 83% by 2050 instead of 80%). According to Kerry himself, these cuts will come from heavy industry, and leave agriculture untouched, at least for now. He writes in a piece for Politico today:

7,500 facilities covered in 2012 -- mostly power plants, industrial facilities and petroleum and petrochemical operations -- account for nearly three-quarters of America's carbon emissions. Farmers and nearly all small business are exempt. More than 98 percent of all American businesses fall below the threshold.

The scheme to reduce emissions is still based on a system that's been termed cap and trade--though those words never appear in the bill itself--and just like in Waxman-Markey, many of the 'pollution permit' allocations will be given out for free at first.

Some Key Climate Bill Changes--More Nuclear?

One major difference in the Senate bill is it includes incentives for more nuclear power--a measure included perhaps to draw more Republicans, who've long said they want to see more nuclear power included, to the bargaining table.

Carbon offsets, one of the more dubious components of the climate bill, are now more affordable and easier to purchase, in what appears to be a concession to conservatives and heavy industry groups. There's also more faith and funding put into carbon sequestration, a technology that's still years away, but acts as a sign of good faith to the powerful coal industry.

But all the differences aren't negative--in fact, many seem to be drastic improvements:

The Senate bill leaves the EPA in the game--where the Waxman-Markey bill would remove the EPA's ability to regulate greenhouse gases as a harmful pollutant, it's intact in Kerry-Boxer.

It also introduces a price collar on carbon, which has some climate policy experts thrilled. That basically means there's a limit to how cheap or how expensive carbon permits can be priced, which stabilizes costs and is good for industry. It also prevents the price from falling too low.

Senate Climate Bill's Unfinished Business

There's still much left to be decided, but this seems like an intentional move--Kerry and Boxer's way of suggesting that the bill is open for debate. According to the LA Times:

The Senate proposal puts off several key decisions, such as how to allocate emissions permits under the cap-and-trade system, for future discussion. In doing so, Boxer and Kerry -- and indirectly the Obama administration -- were signaling their willingness to cut deals in order to pass a climate bill.

There's obviously plenty more to say about the bill, and we'll post more as we take a closer look. But there's enough from the first glimpse to get the discussion going. Despite its concessions, the bill seems well-designed to entice moderate Democrats and Republicans, and it calms the agriculture lobby, which is powerful in the Senate (could be a good move by Kerry in keeping the farmers out of the carbon equation for now for that reason).

So while the bill appears far from ideal, I'm actually encouraged--this looks like a bill that has a real shot at passing, and it would at least set us solidly on the long-overdue course to start seriously reducing emissions.