We did a brief summary of our likes and dislikes of the original draft discussion bill.  That was a long time ago in legislative terms!  But today, no normative statements – just some highlights from the summary of the bill.

The American Clean Energy and Security Act:

• Requires retail electric companies to source a percentage of their load from renewable sources, beginning at 6% in 2012 and gradually rising to 20% in 2020.  A portion of this requirement may be met with efficiency savings.
• Provides incentive programs for smaller renewable projects, such as rooftop solar, which are built into the electricity credit system.
• Includes a bunch of stuff on carbon capture and sequestration – since there is currently not a deployable technology, most of this section is geared towards figuring out how to make CCS deployable.  Investigation of state geological protections, creation of an incentive program for commercially deployable CCS, etc.
• Establishes technology standards for coal power plants built after 2020.
• Provides incentives for large-scale electric transportation programs, development of electric vehicles, development of and integration with smart-grid infrastructure.
• Provides incentives for a variety of energy efficiency projects across various sectors.
• Addresses adaptation measures.
• Outlines tons of funding for research.

As far as the climate change/emissions section, we are looking at a cap and trade system that allows offsets.  Distribution will be by both allocation and auction, with a decreasing % of allowances allocated each year.  Reduction targets are from 2005 levels – 97% by 2012, 80% by 2020, 58% by 2030, and 17% by 2020.

The bill also includes an impressive worker adjustment assistance section, with substantial support for workers displaced as a result of the new energy policy and provisions protecting low-income families. 

All in all, not bad.  It’s long, it’s comprehensive, and I’m sure Congress will have lots to fight about.  But isn’t that what Congress does best?

I must disclaim by saying I did not (and probably will not) read the full text of the bill.  It is over 600 pages long, I am preparing for a cross-country move, and I have a day job.  It’s just not likely to happen.  That being said, here is a brief overview of my thoughts on the bill.

Things We Like:

• Aggressive emissions reductions targets – more aggressive, in fact, than President Obama’s.  20% from 2005 levels by 2020 and 83% by 2050
• Smart grid for electricity.  A smart grid would lay the groundwork for so many important developments, including electric cars and increased utility of residential renewable energy sources.
• Green jobs and worker
• It’s a draft bill!  It’s movement!  We’re thrilled!

Things We Don’t Like:

• This bill leaves many questions unanswered.  How will allowances be distributed?  How will revenue generated from the sale of carbon permits be used?
• Free permits to carbon-intensive industries.  While I understand that steps must be taken to cushion carbon-intensive industries from the cost impact of climate change, I don’t know that this is the way.  However, it will make the bill more politically salable, which is important.
• $10 billion for carbon capture and storage.  Wouldn’t it be better if we just produced renewable energy?  I worry that pouring money into CCS technology might encourage the construction of new coal power plants, especially in developing countries.  I think this is a step in the wrong direction.  Again, politics at work here.
• Performance standards for new coal fired power plants.  Can we please not build any more of these?

Things To Note:

• Offsets – this bill provides for them.  There are limits on how many companies may use as well as a scientific advisory board to monitor offset quality.
• Unlimited banking and limited borrowing allowed.
• All regions of the country would be required to source 25% of energy from renewable sources by 2025.
• The United States Climate Action Partnership (USCAP) has called the bill a “strong starting point” for dealing with emissions.

The Waxman-Markey bill is only a discussion draft, and clearly there is much to be done in the way of negotiating specific details, especially in the area of allowance distribution.  But it is a good start.  More to follow later on the individual sections of the bill.