Brief Summary of Kerry-Boxer Climate Tax Bill

The Senate cap and trade bill introduced by Sen. Kerry (D-Mass.) and Sen. Boxer (D-Calif.) is long. Not over 1900 pages like the healthcare bill (which ATR breaks down for you here), but still long - over 700 pages.

In an effort to make it more, comprehendable let's say, we have broken down some of the key emissions goals and tried to simplify the allowance division.

On the emissions side, below are their "goals" for the U.S. in terms of our emission of Carbon Dioxide. You know, silly things we do like drive and make things in factories.

o    2012- 3% below 2005 emissions
o    2020- 20% below 2005 emissions (tighter than the 17% in HR 2454)
o    2030- 42% below 2005 emissions
o    2050- 83% below 2005 emissions

To simplify things even more, this Administration, in only 41 years, wants us, as a collective nation, to emit 85% less carbon than we do now (the amount could be much higher as this is based on 2005 levels).

Hhhmmm...that should be easy. Let's only drive cars that run on unicorn tears and rainbows (because that's about as realistic as saying let's only drive cars that use straight electricity, all solar, or efficient ethanol). Oh, and let's kill all the animals on the planet, all of them. Because they emit carbon too. And let's stop producing things in the U.S., I mean hey, if cap and trade will cost us at least 2.5 million jobs by 2050 anyway, we might as well kill off the rest of the manufacturing sector as well.

Sounds like a pretty stupid idea huh? Well, so does cap and trade!

See below for ATR's full emissions and allowance breakdown or click here for the PDF version.

Summary of S. 1733, the Clean Energy Jobs and American Power Act
aka Kerry-Boxer Cap and Trade Bill

The Sept. 30th draft of the Kerry-Boxer bill is based on the Waxman-Markey House passed version, however it has major differences that make it more stringent and costlier. It would establish a cap and trade program to limit CO2 emissions from the combustion of fossil fuels and contains elements that single-out oil and gas production. Contact Brian Johnson at 202-785-0266 or bjohnson@atr.org for more information.

Emissions Goals:

o    2012- 3% below 2005 emissions
o    2020- 20% below 2005 emissions (tighter than the 17% in HR 2454)
o    2030- 42% below 2005 emissions
o    2050- 83% below 2005 emissions

Free Allowances:

Fuel Producers and importers

o    An allowance allocation program is established for “domestic fuel production”
o    The quantity of free allowances is not specified and there is no reference to a separate allocation for small refiners
o    The Small Business Refiner Reserve is retained but the quantity of allowances is not established. Allowances would be available at the average auction price

Any electricity source

o    Free allowances are not specified
o    Allowances for cogeneration entities limited to those powered 80% by coal and petroleum coal

Industrial Stationary Sources and Industrial Fossil Fuel-Fired Combustion Devices

o    Petroleum refining is not an “eligible industrial sector” for free allowances
o    Free allowances also not specified for Natural Gas Local Distribution Companies

International Competitiveness:

o    Rebates available for domestic eligible industrial sectors for costs incurred. Amount of allowances or rebates are not specified
o    Petroleum refining sector is specifically excluded from being an eligible sector

Cost Containment:

o    Limits are placed on availability of allowances
o    Minimum Stability Reserve Auction price is set at:
o    $28 in constant 2005 dollars for auctions in 2012
o    From 2013-2017 it would be the previous year’s price plus inflation plus 5%
o    In years thereafter it would be the previous year’s price plus inflation plus 7%
o    Minimum allowance price for auctioned allowances of $10

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