What’s Different? Waxman-Markey Vs. Kerry-Boxer Climate Bills
This post has been updated.
How does the newly unveiled Senate climate bill draft compare to the Waxman-Markey American Clean Energy and Security Act passed by the House in June?
As many have pointed out, the Kerry-Boxer bill has stuck pretty close to the Waxman-Markey template, but there are some differences. Here’s a quick run-through of some key distinctions, but keep in mind that some elements of the new bill (like the permit allocation distribution) have yet to be specified and others will be added as it wends its way through the various committees.
At a Glance: Waxman-Markey and Kerry-Boxer
| House Bill (Waxman-Markey) American Clean Energy and Security Act |
Proposed Senate Bill (Kerry-Boxer) Clean Energy Jobs and American Power Act |
|
|---|---|---|
| 2020 Emissions Target | Cuts emissions by 17% (using a 2005 baseline) | Cuts emissions by 20% (using a 2005 baseline) |
| 2030 Emissions Target | 42% | 42% |
| 2050 Emissions Target | 83% | 83% |
| EPA’s authority to regulate greenhouse gas emissions |
EPA authority superceded |
EPA retained |
| Carbon offsets | Capped at 2 billion tons per year |
Capped at 2 billion tons per year |
| International carbon offsets |
Capped at 50% of total offsets allowed (except when there are insufficient domestic offsets in which case cap rises to 75% of total) | Capped at 25% of total offsets, with increased international oversight. |
| Carbon market: Oversight | Carbon markets overseen by the Federal Energy Regulatory Commission and the Commodity Futures Trading Commission (CFTC) | Carbon markets overseen by CFTC only; regulators have more oversight |
| Carbon market: Cost stabilization | Sets a $10/ton carbon permit price floor |
Sets a $11/ton carbon permit price floor |
| Carbon market: Cost containment | Uses a “strategic reserve pool” to stabilize prices when they exceed 60% of the historical price. |
Uses a “strategic reserve pool” to stabilize prices when they reach a threshold price set at $28/ton in 2012 and increasing each year thereafter. |
| Trade protection | Employs border tariffs to compensate for international carbon inequities |
No mechanism yet to deal with non-carbon constrained economies |
| Treatment of indirect land use emissions in assessing carbon content of biofuels | Indirect land use emissions excluded from analysis (see my post on this) |
No language yet |
| Natural gas and nuclear energy |
Gives nuclear access to loan guarantees and clean energy investment funds as a clean energy technology |
Includes provisions to promote nuclear energy and natural gas |
| Transportation | Allows states to use carbon funds to support green transportation |
Requires states to use carbon funds to support green transportation |
| Methane emissions |
Regulates methane emissions from certain sources |
Methane reductions voluntary and can be used as offsets until 2020 when regulations kick in |
The Hot-Button Issue? Nukes
While much will probably be made in the press of the tighter 2020 emissions target in the Kerry-Boxer bill, I think the nuclear provision will be the one that catches a lot of fire during the backroom negotiations.
The provision for nuclear energy in the Senate draft bill goes farther than Waxman-Markey in that it devotes an entire section to removing barriers and promoting the deployment of new nuclear plants. (Nuclear is included in Waxman-Markey as one clean-energy option, but isn’t front and center.)
Nevertheless, nuclear energy is one of those hot-button issues. For some Senate fence-sitters support for nuclear energy is critical (see my posts on Sens. Graham and McCain) and thus fleshing out these provisions may help to bring such folks into the fold. But for many environmentalists, support of nuclear power is a deal-killer. At least that was the case in 2005 when subsidies for nuclear were added to the McCain-Lieberman climate bill. The addition brought minimal support from the right, while losing the support of key Democratic senators (including Barbara Boxer). In the end the bill went down to a resounding defeat.
We’ll have to wait and see what happens this time. I predict one difference between this go-round and the last Senate effort on a climate bill: nuclear provision or not, a positive vote from the junior U.S. senator from California is in the bag. What do you think?
Correction - 10/14/2009: Water efficiency provisions dropped from table
water efficiency in Waxman-Markey