WASHINGTON — The Senate Environment and Public Works Committee on Wednesday offered legislation to slash greenhouse gas emissions in the coming decades while adding protections for consumers and industries.
The measure would be the country's most ambitious effort to reshape the economy, change the way energy is produced and used, and head off potentially catastrophic climate changes such as rising sea levels and mass extinctions.
For the first time, the bill sets a system that would cap the overall amount of earth-warming pollution that U.S. companies can emit and reduces the amount each year though 2050.
Companies would be required to pay for permits to pollute. They could sell or save permits they don't need to use immediately, and in some cases the government would grant permits to help companies make the transition to an economy in which carbon is controlled.
The new measure adds several major new elements to a version of the bill passed by the Senate Environment and Public Works Committee in December. The Senate will start debate on the new version of the legislation the first week in June.
The new parts include:
_ A cost containment plan. If the price of carbon allowances sold on the market reaches a certain level, a limited amount of additional allowances would be released onto the market to lower the price. These allowances would be borrowed from future amounts, so that the end goal in 2050 could still be met.
_ Help for consumers: The bill would set aside an estimated $800 billion in tax relief from the sale of allowances through 2050 for people who need help paying for energy. The details remain to be worked out.
It also provides an estimated $911 billion through 2050 that would be distributed through local electric and gas distribution companies to help consumers offset higher energy prices and to promote efficiency and clean energy.
_ Proceeds from the sales of some allowances would be transferred to the Treasury to ensure that the system would not increase the deficit.
Just under half of all pollution permits would be sold at auction. The rest would be handed out to carbon-intensive industries to help them make the transition to cleaner energy and to states and other public entities to reduce energy-related hardships, improve efficiency and cope with problems caused by global warming.
The legislation says that 89 percent of all permits would be used for public purposes. Proceeds from some of the allowances would be used to develop clean-energy technologies.
Although the bill covers most of the greenhouse gases emitted in the United States, its goal for reductions by 2050 is less than what international scientists say is needed to prevent catastrophic climate change.
"I think the bill has been strengthened enormously," said Sen. Barbara Boxer, D-Calif., the chairwoman of the Senate environment panel. She said the bill would create new jobs, ensure a level playing field for American businesses and protect consumers so that they don't suffer from high costs.
Boxer said she hopes that over time the goals for emissions can be toughened.
Republican John McCain and Democrats Hillary Clinton and Barack Obama all support an economy-wide cap and trade program. President Bush prefers voluntary reductions.
Boxer said it was important to start work on the bill.
"Landmark bills don't pass in a week or a day," she said.
One hot part of the debate will be on how to ensure that China and India impose emissions cuts of their own.
The new bill would require that importers pay a fee for products from companies that do not have emission limits. Some experts say such fees could spark retaliatory trade measures or encourage the countries to sell their products elsewhere, and would not be effective in getting them to impose emissions cuts.
A study released Wednesday by two Washington research organizations, the Peterson Institute for International Economics and the World Resources Institute, argued that the best way to ensure a level playing field would be to pursue international agreements and target relief at U.S. industries most affected by emissions controls and facing international competition.
The report "Leveling the Carbon Playing Field: International Competition and U.S. Climate Policy Design" can be read at www.wri.org.
The legislation is called the Lieberman-Warner Climate Security Act, after its cosponsors, Sens. Joe Lieberman, an independent Democrat from Connecticut, and John Warner, a Republican from Virginia.
ON THE WEB
To read the latest version of the bill: http://epw.senate.gov, click on "information on the Boxer-Lieberman-Warner Substitute to the Lieberman-Warner Climate Security Act, S. 2191"