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To: no1coalking who wrote (1478)	11/1/2007 1:27:26 PM
From: no1coalking	Read Replies (1) \| Respond to of 2774

Senate Panel Backs Cap-and-Trade For Limiting Greenhouse Gases By SIOBHAN HUGHES November 1, 2007 12:48 p.m. WASHINGTON -- A U.S. Senate panel on Thursday voted to create a cap-and-trade system that would limit the amount of greenhouse gases emitted by factories, power plants, and transportation companies in the world's largest economy. A Senate Environment and Public Works subcommittee approved the legislation by 4-3. Under the bill, companies would get allowances starting in 2012 to release a certain amount of carbon dioxide and other greenhouse gases. The number of emission allowances would gradually decrease by 70% by 2050. Companies could buy or sell the permits on a market, in what supporters hope would create an incentive to keep emissions low. MORE • CBO Study Casts Doubt on CO2 Caps1Congress is acting after a United Nations panel estimated that emissions of greenhouse gases must be reduced by 50% to 85% below 2000 levels by 2050 in order to avoid severe damage to the environment. A cap-and-trade system is widely seen as the most politically feasible approach, although economists say that taxing emissions such as carbon-dioxide would be simpler and leave less room for loopholes. "With the scientific evidence mounting that we are fast approaching a dangerous tipping point beyond which climate change will accelerate rapidly, we really urgently need to move the bill forward," said Sen. Joseph Lieberman (I., Conn.) the subcommittee chairman and one of the authors of the legislation. Republicans said that they opposed the measure because of the effects on the U.S. economy. "I have tremendous concerns regarding the impact," said Sen. John Barrasso (R., Wyo.). He said that his state shipped about 450 tons of coal last year, and "this legislation puts that industry at risk." Under the bill, the Environmental Protection Agency would have responsibility for allocating the credits. Initially, some 18% of the credits would be auctioned off by a new body, called the Climate Change Credit Corporation. By the 2036 calendar year, the corporation would auction off 73% of the allowances. Of the auction proceeds, some 55% would be used for so-called energy technology deployment, including to encourage the development of new automobiles. Free Allowances Electric-power utilities -- many of which are coal-fired -- and industries would be given free credits as the program gets under way. During the first five years of the program alone, some 19% of allowances would be handed to electric-power companies, and 20% would be allocated to industrial companies. The free allowances would be phased out by 2036, and would be tradeable. Some environmentalists are wary of a system that awards so many free credits to some of the nation's biggest polluters. According to Clean Air Watch, a non-profit group, the free credits would amount to a "windfall" profit for electric-power producers because those companies would already have raised rates to cover the costs associated with reducing carbon-dioxide emissions. "I do not believe that we should be giving the power sector or the industrial sector windfall profits," said Sen. Bernie Sanders (I., Vt.). But Mr. Lieberman said that Congress needed to help companies as they dealt with the costs of lowering or offsetting emissions. "We have to offer some help on the road to getting there," he said. Offsets Companies would be able to stay within their emissions caps through activities that would offset their pollution, such as planting trees or paying a farmer to reduce methane emissions. Companies could submit "offset" allowances totaling as much as 15% of emission permits that must be submitted. Sanders complained that the offsets would be "nearly sure" to "bust" the emission caps. But Mr. Lieberman said that the offsets were necessary. It "creates a different way for us to achieve the ultimate goal, and that's the important point," he said. Businesses, many people believe, have been slow to embark on major emissions reduction efforts because of lack of certainty about the rules of the road. By providing clear rules, Congress could usher in an era of change. Congress is rolling out the legislation as Democratic leaders are at an impasse over a separate bill that addresses global warming in a different way. The Democrats have promised to combine differing House and Senate energy bills into a single bill and send it to President Bush by the end of the year. But the Democrats have yet to act, in part because Texas's two Republican Senators are refusing to allow Congress to go forward with a conference until Democrats drop from a plan to finance investments in alternative energy by rolling back tax breaks on oil and gas companies.