Friday, February 15, 2013

Senators Sanders, Boxer propose legislation to institute GHG price on large stationary sources and remove support for fossil fuel industries

Sens. Bernie Sanders (I-Vt.) and Barbara Boxer (D-Calif.) introduced legislation that would set an escalating fee on greenhouse gas emissions from large stationary sources to fund investments in energy efficiency and sustainable energy technologies and also provide rebates to consumers to offset increases in energy prices. The legislation also proposes numerous actions against financing and support for fossil fuel industries.

The proposal was drafted as two measures, the Climate Protection Act-which sets the carbon price and finance programs for sustainable technologies-and the Sustainable Energy Act-which ends federal support for fossil fuel companies and research and extends tax incentives for renewables. Among the financing provisions of the legislation are:

  • Price on carbon. The legislation would enact a fee of $20 per ton or carbon or methane equivalent, rising at 5.6% per year over a 10-year period. Applied upstream, the fee would apply to 2,869 of the largest stationary sources, covering about 85% of US greenhouse gas emissions, according to the Congressional Research Service.

    The Congressional Budget Office estimates this would raise $1.2 trillion in revenue over 10 years and reduce GHG emissions by approximately 20% from 2005 levels by 2025.

  • Investment in energy efficiency and sustainable energy. A portion of the revenues raised would be used to weatherize 1 million homes per year; triple the budget for ARPA-E; create a sustainable technologies finance program to leverage $500 billion for investments; invest in domestic manufacturing; and fund $1 billion per year in worker training.

  • Rebate program. The Family Clean Energy Rebate Program would use 60% of the funds from the carbon fee and use the model developed by Alaska's oil dividend to provide a monthly rebate to every legal US resident to offset potential energy price increases.

  • International sources. Imported fuels and products would also be charged the same carbon fee that domestic fuels and products play, unless the exporting nation has similar climate program and already charges a fee on carbon.

  • Debt reduction. Approximately $300 billion would go to debt reduction over 10 years.

The Sustainable Energy Act eliminates a number of areas of financial benefit for fossil fuel companies and research, including the elimination of royalty relief. It also repeals sections of existing energy legislation dealing with ultra-deepwater and unconventional natural gas and other petroleum resources; removes limits on liability for offshore operations and pipeline operators; rescinds all unobligated funds to the World Bank and the Ex-Im Bank for financing projects that support coal, oil, or natural gas; terminates the DOE Office of Fossil Energy Research and Development; prohibits the use of DOT funds to award any grant, loan, loan guarantee, or provide any other direct assistance to any rail or port project that transports coal, oil, or natural gas; terminates fossil fuel tax breaks; and institutes numerous other accounting and tax changes on the fossil fuel industries.

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