The cap-and-trade bill creates a market for trading pollution permits as a way of curbing emissions and calls on the United States to cut its 2005 greenhouse gas emissions by 17% by 2020 and by over 80% by 2050. Complementary measures in the legislation, such as investments in preventing tropical deforestation, are also outlined to achieve significant additional reductions in carbon emissions.
The bill also mandates that 15% of the nation’s electricity come from renewable sources such as wind and solar power by 2020.
According to the Committee on Energy and Commerce, the bill also contains the following key provisions:
- The requirement that electric utilities meet 20% of their electricity demand through renewable energy sources and energy efficiency by 2020.
- Investments of $190 billion in new clean energy technologies and energy efficiency, including energy efficiency and renewable energy ($90 billion in new investments by 2025), carbon capture and sequestration ($60 billion), electric and other advanced technology vehicles ($20 billion), and basic scientific research and development ($20 billion).
- Mandates new energy-saving standards for buildings, appliances, and industry.
The American Wind Energy Association (AWEA) said that it supports the bill, although they would like to see a stronger RPS. "We look forward to continuing to work with Chairmen Waxman and Markey and other supporters on Capitol Hill to strengthen the RES and take advantage of the historic opportunity to create new American manufacturing jobs that is presented by the rapid expansion of the global wind energy industry. We urgently need a strong RES to remain competitive with Europe and China, both of which have strong and binding renewable energy commitments, in the race to secure those jobs," said Denise Bode, CEO of the American Wind Energy Association.
The draft also contains provisions to facilitate the deployment of a smart grid, including measures to reduce utility peak loads through smart grid and demand response applications and to help promote smart grid capabilities in new home appliances.
It also directs the Federal Energy Regulatory Commission (FERC) to reform the regional planning process to modernise the electric grid and provide for new transmission lines to carry electricity generated from renewable sources. According to the Congressional Budget Office (CBO), the US cap-and-trade program will cost $22 billion annually, or about $175 per household, by 2020.
Reuters reports that the US Environmental Protection Agency estimates the bill would cost American households between $80 and $111 per year, which equals 22 cents to 30 cents per day, and the American Council for an Energy-Efficient Economy projected the bill’s energy provisions would save US households up to $1,050 cumulatively and produce more than 300,000 jobs by 2020.
Republicans and some business groups that oppose the 1,200-page legislation label it a “national energy tax” and believe the bill will cost much more, while several Democrats from coal producing or major manufacturing states voted against the bill, afraid of what higher energy prices may mean for their constituents.
Greenpeace also expressed concerns about the bill, stating that it sets emission reduction targets which are far lower than science demands, due to industry lobbyists that have weakened the bill. “This bill is not everything we need, but it is a critical starting point, at a crucial time,” said WWF-US President and CEO Carter Roberts.
John J. Castellani, President of Business Roundtable, is also concerned about the form of the bill: “We commend the House of Representatives for taking action in this critical area. However, H.R. 2454 falls short of providing a roadmap to an environmentally and economically sustainable future,” he said. “The bill ignores the role that oil and natural gas must play in the transition to a low-carbon future, as well as nuclear energy’s central role in reducing America’s carbon footprint. To achieve the GHG reductions called for in the bill, we not only need to use energy more efficiently, but also must deploy a balanced, comprehensive portfolio of new low-energy technologies.”
Opinions about the bill are divided among businesses and industry groups. Opponents include agricultural and manufacturing associations, several airlines, oil producers and mining companies, which believe putting caps on carbon dioxide will raise energy prices and force more manufacturing to China and other nations that do not limit greenhouse gases while doing little to limit global warming. The US Chamber of Commerce, the National Association of Manufacturers and the National Mining Association are also all opposed to the bill.
Meanwhile, key backers include The Edison Electric Institute, which represents investor-owned utilities and the AFL-CIO, along with several environmental groups and companies investing in clean energy.
The California-based non-profit making organisation Green For All, for example, which contributed to securing green job training funds in the American Recovery and Reinvestment Act, told Reuters that the bill is a significant step forward in creating a more equitable and secure country. While, Phil Angelides, chairman of the Apollo Alliance, also told Reuters: “The American Clean Energy And Security Act is a giant leap forward to establish energy security, reduce harmful carbon emissions, and create millions of green jobs that will put our citizens back to work and get our economy back on track.”
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