Fight looms on U.S. climate price controls
Electric utilities and heavy industry will fight for stronger controls on the prices of greenhouse gas permits than those offered in a draft climate bill unveiled on Wednesday by lawmakers in the Senate.
Electric utilities and heavy industry will fight for stronger controls on the prices of greenhouse gas permits than those offered in a draft climate bill unveiled on Wednesday by lawmakers in the Senate.
The bill proposed by Democratic Senators Barbara Boxer and John Kerry features a so-called "soft collar" on the price of permits to emit greenhouse gases like carbon dioxide.
The mechanism seeks to protect polluters, like power plants, cement makers and oil refiners, from excessive costs should prices in a national emissions cap-and-trade market spike.
It could also protect consumers, as industry would likely pass high emissions costs on to prices for things like electricity, motor fuels and materials.
Unlike a hard collar that would simply prevent prices from getting too high or too low, a soft collar would allow the U.S. Environmental Protection Agency to auction off permits to pollute from a reserve once permits hit the $28-per-ton level.
The Boxer-Kerry proposed bill would go a step further than the House bill by escalating the $28 ceiling by 7 percent a year plus the price of inflation from 2018, rather than escalating it by 5 percent plus inflation.
As the bill stands now, it won't likely do enough to attract the 60 votes needed to make it "filibuster-proof" to pass the Senate.
"We believe the 'soft' price collar mechanism in the climate bill may need to be strengthened (into a hard collar) to gain support from moderate rust-belt Democrats," Whitney Stanco, a policy analyst for Concept Capital's Washington Research Group, wrote in a note on Wednesday.
Democratic Senators on climate regulation in the industrial states include Sherrod Brown from Ohio, Debbie Stabenow in Michigan, and Evan Bayh in Indiana.
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