An aggressive climate-change bill, which aims to reduce U.S. greenhouse gas emissions by 80% below 1990 levels by 2050, was introduced in the U.S. House of Representatives last week.
U.S. Representatives Lloyd Doggett (D-Texas), Chris Van Hollen (D-MD) and Earl Blumenauer (D-OR) introduced the Climate MATTERS Act (Climate Market Auction Trust and Trade Emissions Reduction System), centered around a strong cap-and-trade system. It is the first such bill to receive primary referral to the Ways and Means Committee, which is scheduling a hearing on it within a month.
Under the bill, 85% of emissions allowances would be auctioned off in the first year of implementation, with the rest being given away to industries. The bill calls for a quick move to 100% auction by 2020. This could help avoid some of the difficulties encountered by the European Emissions Trading Scheme which gave away the majority of emissions allowances for the first few years, undermining the effectiveness of carbon pricing.
The bill excludes agriculture, forestry and small businesses from emissions caps, but provides incentives for these sectors to reduce their emissions.
Funds raised by the cap-and-trade system would be used to provide consumer and worker assistance, as well as green job training, to address the social, economic and environmental aspects of adapting to a clean energy economy and offsetting the inevitable impacts of climate change, according to the bill’s sponsors.
Part of the revenue would create a "Healthy Families Fund" tp assist households with the costs of obtaining and maintaining healthcare coverage.
Funding would also be used to advance renewable energy technologies, increase energy efficiency and help developing nations adopt clean technologies.
The Climate MATTERS Act also provides strong encouragement to other countries such as China and India to participate through a combination of carrots and sticks in a manner designed to be WTO compliant.
The bill provides incentives to encourage early implementation of cap and trade agreements by allowing flexibility in setting emissions levels in a limited number of initial agreements.
Carbon-intensive goods from countries lacking such emissions caps could not enter the U.S. market without allowances purchased to cover their carbon footprint.
In addition, the Climate MATTERS Act acknowledges the substantial benefits of tropical deforestation reductions by providing negotiators the ability to reward countries that significantly reduce deforestation, even if they are unable to implement a comprehensive emissions cap.
Finally, the Climate MATTERS Act devotes a portion of the cap-and-trade auction proceeds to ensure the bill does not add to our national debt.
"Global warming is this generation’s greatest challenge, and we need everyone at the table now to develop a comprehensive solution," said Congressman Blumenauer. "We face a carbon constrained economy, and ignoring this will cost consumers and the environment dearly. A cap and trade system will allow us to create and transfer value. This means that by cutting emissions, we can generate revenue to invest in renewable energy sources, create jobs and reduce our dependence on foreign oil. I can think of no better opportunity and no better time to start."
The bill received support from representatives of the Environmental Defense Fund, Sierra Club, Friends of the Earth, the National Venture Capital Association, the Union of Concerned Scientists, Physicians for Social Responsibility, and the Center on Budget and Policy Priorities.
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