CAP Makes Recommendations for Utility-Only Cap

The Center for American Progress has released a detailed road map of just how Senate Majority Harry Reid (D-Nev.) should combine various climate and energy proposals to form a comprehensive bill that will make progressives happy.

The report — which is authored by CAP senior fellow Dan Weiss and special assistants for energy policy Susan Lyon and Tina Ramos — includes a prescription for a utility-only cap on carbon emissions that draws from bills authored by Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.); Kerry and Barbara Boxer (D-Calif.); and Maria Cantwell (D-Wash.) and Susan Collins (R-Maine). The bills are the American Power Act, the Clean Energy Jobs and American Power Act and the Carbon Limits and Energy for America’s Renewal Act, respectively.

According to the report:

• Utilities should commit to do their share by reducing their emissions by 17 percent below 2005 levels by 2020 and 42 percent by 2030 (APA).
• The program should begin in 2013 (APA).
• Each emitter should have to have one pollution allowance for every ton of pollution it emits (APA, CEJAPA, CLEAR).
• Only power plants that emit 25,000 tons or more of greenhouse gases annually should be required to have allowances (APA, CEJAPA).
• The federal government should auction off the allowances, beginning with a minimum price of $14 per ton and a maximum price of $25 per ton in 2013. This floor price should level the price difference between dirty coal-fired power and cleaner natural gas generated electricity.
• The floor and ceiling prices should rise by 3 percent per year plus inflation (APA).
• Only covered emitters should be allowed to buy allowances, and unused allowances should be sold in a government auction. No allowance trading between emitters would be allowed (CLEAR).
• Two-thirds of the allowances should be given to the local distribution companies, which must return their value to their ratepayers (APA).
• The proceeds from auctioning the remaining one-third of allowances should be invested in additional protection for low-income households; clean energy technology research, development and deployment; carbon capture and storage technology research and pilot projects; deficit reduction; and protection of tropical forests (APA).

The report also includes recommendations on an oil spill response, energy efficiency and a renewable energy standard.