Their bill comes just a day after three senators – John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) – released a “framework” of a compromise climate and energy bill they hope can win 60 votes.
The Cantwell-Collins plan requires a declining limit on the amount of carbon from fossil energy sources in U.S. commerce, and directly refunds 75 percent of the revenues from government auctions of emissions permits to consumers in order to offset higher energy costs.
The emissions limits are applied only to entities that produce or import products like oil and coal for sale in the U.S. economy -- a sharp contrast to the major House and Senate cap-and-trade plans that govern a larger universe of sources, such as power plants and factories.
A family of four would receive an average of $1,100 annually through 2030 under the “cap and refund” approach, according to Cantwell’s office.
The bill aims to slash U.S. emissions by 20 percent by 2020 and 83 percent by 2050, relative to 2005 levels.
Trading of emissions permits – or “carbon shares” under the bill’s phrasing – would be limited to parties subject to the emissions limits, such as petroleum producers and coal companies. Companies holding these carbon shares would be barred from participating in carbon derivatives markets.
Beyond the 75 percent of proceeds from federal emissions permit auctions steered to consumers, the remaining 25 percent would go to a new “clean energy reinvestment trust fund.”
Money from this fund would provide aid to workers and industries affected by the emissions-curbing mandate; programs to develop and deploy low-carbon energy sources; home weatherization programs; and various other initiatives to reduce emissions and adapt to climate change.
“This bill provides a simple approach to getting off of carbon and on to clean energy alternatives,” Cantwell said in a prepared statement. She added that the bill “provides businesses and investors with a simple, predictable mechanism that will open the way to clean energy expansion while achieving America’s goals of reducing carbon emission.”
Collins said the bill would help curb dependence on oil imports and boost alternative energy and energy efficiency. “Climate change legislation must protect consumers and industries that could be hit with higher energy prices. Such legislation also must provide predictability so that businesses can plan, invest, and create jobs,” she said.
Cantwell called the bill a manageable and transparent approach.
“Thirty-nine pages of legislative text combines novel design elements, including an upstream cap on fossil carbon as it enters the economy, a one hundred percent auction open only to energy producers and importers (and not Wall Street) with prices set by the market within a bounded price collar, and equal monthly distribution of auction revenues to every American,” a summary from her office states.