Senators Release Draft Energy/Climate Change Bill (Includes Import Tax Provisions)
On May 12, 2010, Senators Kerry and Lieberman released their draft comprehensive energy and climate change bill, The American Power Act.
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According to a summary of the draft, the Senators’ measure would invest in technology to harness domestic power sources and innovation across all energy sources. It would also reduce emissions for the three major emitting sectors: power plants, heavy industry, and transportation. The draft would create a federal carbon market and a single set of rules for reducing greenhouse gas (GHG) emissions, giving energy-intensive and trade-exposed industries allowances to offset their compliance costs. The bill would only require the largest sources of pollution to comply with reduction targets, some 7500 factories and power plants.
(The next step for this draft Senate bill would be its introduction and numbering. Senate committee hearings could then be held on the measure.)
Senators’ Draft Has Import Tax Provisions
A section-by-section overview of the measure states the draft would require the President to establish an International Reserve Allowance Program if a multilateral climate change agreement had not entered into force by January 1, 2020, unless the President determined that such a program would not be in the interest of the U.S.
If such a program were established, a short summary of the draft states that a World Trade Organization (WTO) consistent border adjustment mechanism (import tax) would be phased-in, that would require imports from countries that have not taken action to limit emissions, to pay a comparable amount at the border to avoid carbon leakage (the shifting of GHG pollution from the U.S. to overseas countries).
House-Passed Energy/Climate Change Bill Also Has Import Tax Provisions
The House passed it own energy/climate change bill, the American Clean Energy and Security Act (H.R. 2454) on June 26, 2009. ACES also contains provisions for an international reserve allowance program, which would allow the President to determine whether such allowances (i.e., import tax, border adjustment) were needed for various industrial sectors.
(See ITT’s Online Archives or 07/01/09 news, (Ref: 09070110), for BP summary of House passed H.R. 2454. See ITT’s Online Archives or 10/05/09 news, (Ref: 09100520), for BP summary of prior Senate energy/climate change bill.)
Senator Kerry’s web page on bill available at http://kerry.senate.gov/americanpoweract/intro.cfm