U.S. Representatives Tom Udall, D-N.M., and Tom Petri, R-WI have introduced the “Keep America Competitive Global Warming Policy Act of 2006,” in an effort to put the United States on the road toward curbing global warming.
Udall and Petri say that it is time for America to take steps to address global warming. “Our bill is modest, certain and efficient,” the Representatives said. “It begins to slow the growth of greenhouse gases, but minimizes the negative impacts to the U.S. economy.” In fact, they say, the legislation will spur innovation and keep America as a leader in global technology. “Having a policy to slow the growth of greenhouse gas emissions with the goal of first stabilizing and then ultimately reducing emissions would be a major and positive step forward.”
The bill sets a prospective baseline for greenhouse gas allowances. This would base the number of allowances at the outset of the program on the level of emissions three years following the enactment of the legislation. By being prospective, it gives the regulated industries the ability to plan ahead and not prematurely retire capital stock.
The Udall-Petri legislation includes a policy device known as a safety valve. The safety valve, initially set at $25 per ton of carbon, puts a ceiling on the price of an allowance in order to prevent an economically devastating price run-up. The legislation also allocates allowances to help make whole any industries and individuals who are adversely impacted by the legislation.
Udall and Petri say their bill protects U.S. competitiveness by tying future increases in the price of the safety valve allowances to the emissions-reducing actions of developing countries. Under the bill, only after the President and Secretary of State certify that developing countries are making comparative greenhouse gas reductions does the safety valve price increase beyond inflation.
The bill also allocates allowances to promote an advanced research and development program for technologies that will help curb greenhouse gas emissions.
“The solution to global warming rests on the development and implementation of low and no-carbon technologies. This legislation promotes the development of these technologies,” the Representatives said. Finally, the bill would be revenue neutral to the Treasury.
This legislation is the first comprehensive economy-wide, cap-and-trade global warming bill to include a prospective baseline, a safety valve, and to protect U.S. competitiveness in case developing countries do not take comparable actions to curb global warming emissions.
“The continuing absence of a meaningful, mandatory policy in the United States is a significant impediment to a global consensus to slow the growth of greenhouse gas emissions. By introducing this bill, we are working to fill that void and encourage lawmakers to take the first step toward responding to the increasingly urgent signs of global warming,” Udall and Petri concluded.
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