HOUSE CLIMATE BILL TO HAVE FREE ALLOWANCES

U.S. House climate bill to include free carbon permits
Ayesha Rascoe (w/Christian Wiessner), 23 April 2009 (Reuters)

"A U.S. House of Representatives bill aimed at fighting global warming will allow some polluters access to free permits to emit greenhouse gas emissions in its cap-and-trade system, Democratic Representative Edward Markey said…

"Markey and House Energy and Commerce Chairman Henry Waxman unveiled climate-change legislation last month that would limit greenhouse gas emissions and require companies to acquire permits to emit carbon dioxide."

They called it a "discussion draft" because they intend to negotiate. (click to enlarge)

"U.S. President Barack Obama has supported auctioning all carbon permits, essentially making big polluters such as coal-powered power plants pay heavily for their emissions. The White House has indicated flexibility on this point, however.

"Markey said backers of the bill are talking with all members of the Energy and Commerce Committee on how to structure the carbon allowances…[I]nfluential committee member Democrat Representative Rick Boucher of Virginia is planning to unveil a proposal that would give 40 percent of carbon allowances to utilities and 20 percent to industrial companies and refineries…"

They've long known the debate would hinge on the percent of credits auctioned. (click to enlarge)

"The issue of how carbon permits are distributed will be key to the success or failure of the bill…Republicans have been strongly opposed to the measure…Democrats from heavy industrial states have voiced concerns about placing too much burden on companies by forcing them to buy permits…Representative Jay Inslee said lawmakers are working to find consensus…Obama's climate change plan would use the revenue from the sale of carbon permits for investments in clean energy technology and to offset higher energy costs for consumers through tax breaks."

"…Democratic leaders want [the bill] approved by the panel by Memorial Day, with a full chamber vote later this year…U.S. utilities…urged lawmakers… to provide power companies with free permits to emit greenhouse gases, at least initially….[T]he Edison Electric Institute…supports a gradual transition to a full auction system, with utilities being allocated 40 percent of all allowances annually until technology that can trap and store carbon emissions from coal power plants is commercially viable…"