STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - July 11, 2007)
BREAK IN TRANSCRIPT
Mr. SPECTER. Mr. President, I have sought recognition to join Senator BINGAMAN, chairman of the Senate Committee on Energy and Natural Resources, in introducing the Low Carbon Economy Act of 2007. This legislation represents the most comprehensive and responsible approach to date in reducing our Nation's greenhouse gas emissions, which contribute to the growing threat of global climate change.
The amount and quality of scientific data continue to improve our understanding of global climate change. This information points toward potentially severe ramifications for Earth's climate, ecosystems, and life as we know it. The most recent assessment in February 2007 by the Intergovernmental Panel on Climate Change, IPCC, concluded that ``most of the observed increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations.'' This 90 percent likelihood of human impact on the global climate adds to the compelling case that action to fight climate change is warranted.
Some skeptics of the human contribution to this global problem remain, however their voices grow more distant as more information comes to light. Given past uncertainties, I have previously been unable to support legislative proposals which have threatened U.S. economic interests without meaningful environmental benefit. The Senate voted 95-0 in 1997 to overwhelmingly support the Byrd-Hagel resolution, S. Res. 98, rejecting the Kyoto protocol for its unequal treatment of developed and developing nations, as well as the potential serious harm to the U.S. economy. Subsequently, the Senate has twice voted on climate change legislation offered by Senators McCain and Lieberman--failing by votes of 43-55 in 2003 and 38-60 in 2005. As I stated on the Senate floor at the time, the McCain-Lieberman bill did not contain adequate consideration of the U.S. economy, nor did it adequately address the global nature of the problem.
However, due to my increasing concerns about the threats of climate change, in 2005, I joined Senator BINGAMAN in offering an amendment to the Energy Policy Act, amendment No. 866, which was passed by voice vote after an unsuccessful attempt--43-54 vote to table'' or set it aside. The amendment called on the U.S. Congress to ``enact a comprehensive and effective national program of mandatory, market-based limits and incentives on emissions of greenhouse gases that slow, stop, and reverse the growth of such emissions at a rate and in a manner that: (1) will not significantly harm the United States economy; and (2) will encourage comparable action by other nations that are major trading partners and key contributors to global emissions.''
In January of this year, Senator Bingaman and I announced a ``discussion draft'' of legislation to achieve these goals. Today, we are introducing a revised bill which has been shaped by a comprehensive and inclusive stakeholder process which brought together over 300 representatives of consumers, energy producers, manufacturers, workers, and environmental advocacy organizations, as well as numerous Senate offices.
The ``Low Carbon Economy Act'' creates a strong and credible approach to reduce U.S. greenhouse gas, GHG, emissions while protecting the U.S. economy and engaging developing countries. The act creates a cap-and-trade program for U.S. GHG emissions that is modeled on the successful Acid Rain Program. By setting an annual target and allowing firms to buy, sell, and trade credits to achieve the target, the program is designed to elicit the most cost-effective reductions across the economy. The target is set to avoid harm to the economy and promote a gradual but decisive transition to new, low-carbon technologies.
The strategic targets of the act are: reducing U.S. GHG emissions to 2006 levels by 2020 and 1990 levels by 2030. To limit economic uncertainty and price volatility, the government would allow firms to make a payment at a fixed price in lieu of submitting allowances. This fee, referred to in the bill as the ``Technology Accelerator Payment''--TAP--starts at $12 per metric ton of CO 2-equivalent in the first year of the program and rises steadily each year thereafter at 5 percent above the rate of inflation. If technology improves rapidly and if additional GHG reduction policies are adopted, the TAP option will never be engaged. Conversely, if technology improves less rapidly than expected and program costs exceed predictions, companies could make a payment into the energy technology deployment fund at the TAP price, to cover a portion or all of their allowance submission requirement.
Under the act, carbon dioxide (CO2) emissions from petroleum and natural gas are regulated ``upstream''--that is, at or close to the point of fuel production. For these fuels, regulated entities are required to submit tradable allowances equal to the carbon content of fuels produced or processed at their facilities. Regulated entities that must submit allowances include: petroleum refineries, natural gas processing facilities, fossil fuel importers, large coal-consuming facilities, and producers/importers of non-CO2 GHGs. GHG emissions from coal are regulated ``downstream'' at the point of fuel consumption.
The proposal sets out a detailed methodology for distributing tradable emission allowances. At the beginning of the program in 2012, a majority--53 percent--of allowances are given out for free to the private sector. This amount is gradually reduced each year after the first 5 years of the program. In addition, 8 percent of allowances will be set aside annually to create incentives for carbon capture and storage to jump-start these critical technologies; 24 percent of total allowances will be auctioned by the government to generate much-needed revenue for the research, development, and deployment of low- and no-carbon technologies, to provide for climate change adaptation measures, and to provide assistance to low-income households; 5 percent of allowances are reserved to promote agricultural sequestration; and 1 percent of the allowances will reward companies that have undertaken ``early actions'' to reduce emissions before program implementation. Another 9 percent of the allowances are to be distributed directly to States which can use associated revenues at their discretion to address regional impacts, promote technology or energy efficiency, and enhance energy security.
To effectively engage developing countries, the act would fund joint research and development partnerships and technology transfer programs similar to the Asia Pacific Partnership. The bill also calls for a 5-year review process that provides an opportunity to reassess domestic action in light of efforts by our major trade partners--and relevant scientific and technological developments. If other countries are deemed to be making inadequate efforts, the President could recommend to Congress that products imported from such countries must be accompanied by allowances--from a separate reserve of allowances--sufficient to cover their embedded greenhouse-gas content. If there is sufficient international progress in reducing global greenhouse gas emissions, the President could recommend changes in the U.S. program designed to achieve further reductions--e.g., to at least 60 percent below 2006 levels by 2050.
There are many other provisions of this comprehensive legislation that help set the U.S. on the right track in taking meaningful steps to combat global climate change and put our trading partners on notice that we take this issue very seriously. Strong U.S. leadership will go a long way in moving the Nation and the world toward a cleaner and more sustainable future. I am pleased that the legislation we introduce today has so much support from labor groups, energy companies, and conservation and sportsmen organizations. Senator BINGAMAN and I intend to work closely with our colleagues and all interested stakeholders to answer questions and consider feedback on our proposal.
I invite my colleagues to join us in cosponsoring the Low Carbon Economy Act of 2007 and I look forward to a meaningful debate on global climate change and the U.S. role in leading the world in technology development.