Last week, Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.), and Joe Lieberman (I-Conn.) unveiled a “basic framework for climate action” that combines caps on greenhouse gas (GHG) with offshore oil and gas exploration and an emphasis on nuclear power. At the same time, Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine.) introduced legislation to cap the amount of fossil carbon sold but reduce the role of Wall Street in carbon markets.

A Basic Framework for Climate Action

The first three senators on Thursday submitted aspects of the Kerry-Graham-Lieberman plan in a letter (PDF) to President Barack Obama. The proposal calls for a near-term pollution reduction target of 17% below 2005 emissions levels and a long-term target of 80% below 2005 levels. This will be achieved with investment in clean energy technologies to allow companies to meet pollution reduction obligations in a cost-effective manner, the letter said.

To maintain energy independence, the senators urged that the U.S. maintain its ability to refine petroleum products—and to make that a national security priority. The proposal also requires the federal government share oil and natural gas revenues with states.

Added to that, it supports incentives for nuclear technology manufacturing as well as construction of new nuclear power plants. “We will make it easier to finance the construction of new nuclear power plants and improve the efficiency of the licensing process for traditional as well as small modular reactors, while fully respecting safety and environmental concerns,” the letter said.

A major component in the bipartisan “framework” also involves ensuring a future for coal power. The letter said: “As Senator Byrd pointed out in a recent op-ed, ‘No deliberate effort to do away with the coal industry could ever succeed in Washington because there is no available alternative energy supply that could immediately supplant the use of coal for base load power generation in America.’”

 “He also acknowledged that, ‘to deny the mounting science of climate change is to stick our heads in the sand and say ‘deal me out’… The truth is that some form of climate legislation will likely become public policy because most American voters want a healthier environment.”

A Cap on Carbon Trade Bill

The Carbon Limits and Energy for America’s Renewal (CLEAR) Act (PDF) introduced on Thursday by Sens. Cantwell and Collins looks to cap the amount of carbon sold in the U.S. while shutting out financial speculators. Instead of placing carbon limits on most major polluters, the bill also seeks to focus only on producers and importers of fossil fuels—mines, natural gas producers, oil producers—rather than power plants.

In other words, a power plant that burns coal would not be required to buy carbon permits; they would be paid for by the mining company that mined the coal.

The companies covered by their legislation would be required to buy permits for their carbon emissions in monthly auctions beginning in 2012, when the president would be expected to set the initial target amount of carbon from fossil fuels. Trading of the permits, or “shares” would be open only to capped entities and would be highly regulated.

The bill prescribes that by 2020, U.S. GHG emissions would be 20% below 2005 emission levels and 83% below 2005 levels by 2050.

“The CLEAR Act’s ‘upstream’ point of regulation means that only 2,000 to 3,000 fossil fuel producers and importers will face any new compliance obligations, greatly reducing any regulatory bureaucracy,” the senators said in a statement on Thursday.

Sources: Sen. John Kerry, Sen. Maria Cantwell