Democrats up ante with draft US climate bill

The race to develop a US climate change bill entered a new phase yesterday with the release of a discussion draft bill from the House Energy and Commerce Committee that sets even more ambitious emission reduction targets than those being proposed by Barack Obama.

The American Clean Energy and Security Act, which has been put forward by senior House Democrats Henry A. Waxman and Edward J. Markey, sets out plans for a nationwide cap-and-trade scheme designed to deliver cuts in greenhouse gas emissions of 20 per cent below 2005 levels by 2020 and 83 per cent below 2005 levels by 2050.

In contrast, president Obama's proposals require a cut in emissions of just 14 per cent by 2020, although the 2050 target is similar.

The Waxman-Markey bill also includes proposals that would require the US to produce a quarter of its electricity from renewable sources by 2025, as well as new standards to drive up energy efficiency, promote electric cars and increase funding to tackle deforestation and accelerate the roll out of carbon capture technologies.

However, there are no details about the extent to which pollution permits should be auctioned, nor does it put limits on how the revenue raised from a cap-and-trade scheme should be spent.

Obama's proposals have also yet to outline how many carbon credits would be auctioned, but it has been confirmed that around two-thirds of the revenue raised will be returned to the public through tax breaks designed to help them cope with higher energy bills, while much of the rest will be used to fund clean tech developments.

Neither set of proposals has Republican support, and the calls for higher emission targets combined with the absence of detail on how permits will be distributed in the Waxman-Markey bill suggests that it represents an opening gambit in negotiations that are expected to dominate much of the year.

Green groups welcomed the new bill as a "strong starting point", arguing that it increases the chances of legislation being finalised before international climate talks in Copenhagen in December – a move observers say would strengthen US authority at the talks.

"This draft, which sets firm limits on the amount of greenhouse gas emissions and makes investments in clean energy and jobs, sends an important signal both domestically and abroad," said Jonathan Lash, president of the World Resources Institute. "This signal is critical as international climate negotiations approach in December."

However, Greenpeace expressed concern that the bill allows too many imported carbon offset credits to be used to count towards the targets, while the recently launched Climate Action Partnership of big businesses said that while it supported the bill, there needed to be significant free allocation of carbon allowances to help limit the impact on the economy.