Draft green-industry outline may help climate talks

The draft proposal – dated July 19 and circulating on Capitol Hill -- would block key EPA greenhouse gas regulations in exchange for the imposition of new emissions limits.
 
The three-page draft summary of “key elements” that would make up a utility-focused carbon-pricing plan also contains the outlines of a deal on allocating valuable emissions credits and a method for containing costs to power companies.
 
The draft would also retain emissions reduction goals through mid-century that the Obama administration and Senate climate advocates have proposed. This includes reducing greenhouse gas emissions from power plants 17 percent below 2005 levels by 2020; 42 percent by 2030 and 83 percent by 2050, according to a copy of the draft summary obtained by The Hill.
 
The companies involved in the talks include Duke Energy and Exelon, which are among the nation’s largest utilities. Environmental groups involved include the Natural Resources Defense Council, Environmental Defense Fund and the Pew Center on Global Climate Change.
 
An agreement still looms with the Edison Electric Institute – the influential trade association representing investor-owned utilities. EEI’s endorsement could help pay greater dividends in future efforts to bring along centrists in both parties. There are also a host of other potential pitfalls that complicate trying to do a Senate climate bill this year -- including election-year politics and other legislative priorities.
 
But the draft compromise may give a glimmer of hope to Senate Democratic leaders.
 
The draft includes language that would mirror or be similar to language in a draft plan Kerry and Lieberman have offered regarding allocation of emissions credits to power companies and ways to contain the costs of a carbon-pricing plan to these businesses.

It also echoes that draft in giving consumer rebates to pay for higher electricity costs.
 
It mirrors that Kerry-Lieberman draft in offering emission credit allocations from 2013 through 2029. This includes allocating 75 percent of free allowances based on historic emissions and 25 percent based on retail sales. A House-passed climate bill had a formula split evenly between historic emissions and retail sales. The change from the House bill is a bid to try to satisfy Senate Democrats from the Midwest and Great Plains, who argued the House bill hurts coal use and their electric power companies.
 
Elsewhere, to help contain costs to businesses, the draft in 2013 would establish an initial “price ceiling” of $20 per ton for purchasing emission credits and a “price floor” of $12 per ton.
 
Both the floor and ceiling prices would increase five percent plus inflation annually through 2020 and seven percent plus inflation annually beginning in 2021.
 
Participating electric utilities would get regulatory relief from future EPA greenhouse gas rules, with the exception of any regulations controlling more conventional pollutants like nitrogen oxide, sulfur dioxide, particulate matter, lead and ozone. This is also consistent with language included in the Kerry-Lieberman draft.
 
It also includes new performance standards for new coal production in the draft from the two senators, as well as help for carbon capture and sequestration.