1.This Act may be cited as
the Containing and Managing Climate
Change Costs Efficiently Act
.
2.The purposes of this Act are—
(1)to ensure that the imposition of limits on
greenhouse gas emissions will not significantly harm the economy of the United
States; and
(2)to establish a Carbon Market Efficiency
Board to ensure the implementation and maintenance of a stable, functioning,
and efficient market in tradeable permits to emit greenhouse gases.
3.Establishment of
Carbon Market Efficiency Board
(a)There
is established a board, to be known as the Carbon Market Efficiency
Board
(referred to in this Act as the Board).
(b)The
purposes of the Board are—
(1)to promote the
achievement of the environmental objectives (including any national mandatory
greenhouse gas emissions cap and reduction targets) of the United
States;
(2)to observe the
national greenhouse gas emission market and evaluate periods during which the
cost of permits provided under Federal law might pose significant harm to the
economy;
(3)to conduct
observation during the 2-year period following the establishment of a market
program for permits under Federal law, and to provide temporary, short-term
relief at any time at which the program is determined to pose a significant
harm to the economy using the cost relief measures prescribed under section 5;
and
(4)to submit to the
President and Congress quarterly reports—
(A)describing the
status of each greenhouse gas emission market established under Federal law,
the economic effects of the markets, regional, industrial, and consumer
responses to the markets, any corrective measures that should be carried out to
relieve excessive costs of the markets, and plans to compensate for those
measures;
(B)that are timely
and succinct to ensure regular monitoring of market trends; and
(C)that are prepared
independently by the Board.
(c)
(1)The
Board shall be composed of 7 members, to be appointed by the President, by and
with the advice and consent of the Senate.
(2)In
appointing members of the Board under paragraph (1), the President
shall—
(A)ensure fair
representation of the financial, agricultural, industrial, and commercial
sectors, and the geographical regions, of the United States; and
(B)appoint not more
than 1 member from each such geographical region.
(3)
(A)A member of the Board shall be compensated at a rate
equal to the daily equivalent of the annual rate of basic pay prescribed for
level II of the Executive Schedule under section 5313 of title 5, United States
Code, for each day (including travel time) during which the member is engaged
in the performance of the duties of the Board.
(B)The
Chairperson of the Board shall be compensated at a rate equal to the daily
equivalent of the annual rate of basic pay prescribed for level I of the
Executive Schedule under section 5312 of title 5, United States Code, for each
day (including travel time) during which the member is engaged in the
performance of the duties of the Board.
(4)
(A)An individual employed by, or holding any official
relationship (including any shareholder) with, any entity engaged in the
generation, transmission, distribution, or sale of energy, or an individual who
has any pecuniary interest in the generation, transmission, distribution, or
sale of energy, shall not be appointed to the Board under this
subsection.
(B)A member of the Board shall not hold any other
employment during the term of service of the member.
(d)
(1)
(A)The term of a member of the Board shall be 14 years,
except that the members first appointed to the Board shall be appointed for
terms in a manner that ensures that—
(i)the
term of not more than 1 member shall expire during any 2-year period;
and
(ii)no
member serves a term of more than 14 years.
(B)A member shall take the oath of office of the Board by not
later than 15 days after the date on which the member is appointed under
subsection (c)(1).
(C)
(i)A member may be removed from the Board on determination
of the President for cause.
(ii)The
President shall submit to Congress a notification of any determination by the
President to remove a member of the Board for cause under clause (i).
(2)
(A)A vacancy on the Board—
(i)shall not affect
the powers of the Board; and
(ii)shall be filled
in the same manner as the original appointment was made.
(B)Service until
new appointmentA member of the Board the term of whom has
expired or otherwise been terminated shall continue to serve until the date on
which a replacement is appointed under subparagraph (A)(ii), as the President
determines to be appropriate.
(e)Chairperson and
vice-chairpersonOf members of the Board, the President shall
appoint—
(1)1 member to serve
as Chairperson of the Board for a term of 4 years; and
(2)1 member to serve
as Vice-Chairperson of the Board for a term of 4 years.
(f)
(1)The Board shall hold the initial meeting of the Board as
soon as practicable after the date on which all members have been appointed to
the Board under subsection (c)(1).
(2)A meeting of the Board shall be presided over by—
(A)the
Chairperson;
(B)in any case in
which the Chairperson is absent, the Vice-Chairperson; or
(C)in any case in
which the Chairperson and Vice-Chairperson are absent, a chairperson pro
tempore, to be elected by the members of the Board.
4.
(a)
(1)The
Board shall collect and analyze relevant market information to promote a full
understanding of the dynamics of each greenhouse gas emission market
established under Federal law.
(2)The
Board shall gather such information as the Board determines to be appropriate
regarding the status of the markets, including information relating to—
(A)permit allocation
and availability;
(B)the price of
permits;
(C)macro- and micro-
economic effects of the markets; and
(D)the success of
the markets in achieving the environmental objectives of the markets.
(b)Treatment as
primary activity
(1)During the initial 2-year period of operation of the
Board, information gathering under subsection (a) shall be the primary activity
of the Board.
(2)After the 2-year period described in paragraph (1), the
Board shall assume authority to implement the cost-relief measures described in
section 5(a).
(c)During
the 2-year period beginning on the date on which the initial greenhouse gas
emission market established under Federal law begins operation, the Board
shall—
(1)conduct a study
of other markets for tradeable permits to emit covered greenhouse gases in the
United States; and
(2)not later than
180 days after that date, submit to Congress a report describing the status of
the initial market, specifically with respect to volatility within the market
and the average price of greenhouse gas permits during that 180-day
period.
(d)Employment of
cost relief measures
(1)If the Board determines that a greenhouse gas emission
market established under Federal law poses a significant harm to the economy of
the United States, the Board shall carry out such cost relief measures relating
to that market as the Board determines to be appropriate under section
5(a).
(2)During the 2-year period beginning on the date on which
the initial greenhouse gas emission market established under Federal law begins
operation, if the Board determines that the average daily closing price of
greenhouse gas permits during a 180-day period exceeds the upper range of the
estimate provided under section 6, the Board shall—
(A)increase the
quantity of permits that covered entities may borrow from the prescribed
allocations of the covered entities for future years; and
(B)take subsequent
action as described in section 5(a)(2).
(3)Any
action carried out pursuant to this subsection shall be subject to the
requirements of section 5(a)(3)(B).
(e)The
Board shall submit to the President and Congress quarterly reports—
(1)describing the
status of each greenhouse gas emission market established under Federal law,
the economic effects of the markets, regional, industrial, and consumer
responses to the markets, any corrective measures that should be carried out to
relieve excessive costs of the markets, and plans to compensate for those
measures; and
(2)that are prepared
independently by the Board, and not in partnership with Federal
agencies.
5.
(a)
(1)Beginning on the day after the date of expiration of the
2-year period described in section 4(b), the Board may carry out 1 or more of
the following cost relief measures to ensure functioning, stable, and efficient
markets for tradeable permits to emit greenhouse gases:
(A)Increase the
quantity of permits that covered entities may borrow from the prescribed
allocations of the covered entities for future years.
(B)Expand the period
during which a covered entity may repay the allocating agency for a permit
borrowed as described in subparagraph (A).
(C)Lower the
interest rate at which a permit may be borrowed as described in subparagraph
(A).
(D)Expand the total
quantity of permits made available to all covered entities at any given time by
borrowing against the total allowable quantity of permits to be provided for
future years.
(2)On determination by the Board to carry out a cost relief
measure pursuant to paragraph (1), the Board shall—
(A)allow the cost
relief measure to be used only during the applicable allocation year;
(B)exercise the cost
relief measure incrementally, and only as needed to avoid significant economic
harm during the applicable allocation year;
(C)specify the terms
of the relief to be achieved using the cost relief measure, including
requirements for entity-level or national market-level compensation to be
achieved by a specific date or within a specific time period;
(D)in accordance
with section 4(e), submit to the President and Congress a report describing the
actions carried out by the Board and recommendations for the terms under which
the cost relief measure should be authorized by Congress and carried out by
Federal entities; and
(E)evaluate, at the
end of the applicable allocation year, actions that need to be carried out
during subsequent years to compensate for any cost relief measure carried out
during the applicable allocation year.
(3)Action on
expansion of borrowing
(A)If the Board carries out a cost relief measure pursuant
to paragraph (1) that results in the expansion of borrowing of permits under
Federal law, and if the average daily closing price of permits for the 180-day
period beginning on the date on which borrowing is so expanded exceeds the
upper range of the estimate provided under section 6, the Board shall increase
the quantity of permits available for the applicable allocation year in
accordance with this paragraph.
(B)An
increase in the quantity of permits under subparagraph (A) shall—
(i)apply to all
covered entities;
(ii)be allocated in
accordance with the applicable formulas and procedures established under this
Act;
(iii)be equal to not
more than 5 percent of the total quantity of permits otherwise available for
the applicable allocation year under this Act;
(iv)remain in effect
only for the applicable allocation year;
(v)specify the date
by which the increase shall be repaid by covered entities through a
proportionate reduction of permits available for subsequent allocation years;
and
(vi)require the
repayment under clause (v) to be made by not later than the later of—
(I)the date that is
15 years after the date on which the increase is provided; and
(II)the date on
which the subsequent applicable phase of greenhouse gas reductions takes effect
under this Act.
(b)Not
more frequently than semiannually, the Board may levy on participants in any
permit trading system established under Federal law, in proportion to the
capital stock and surplus of the participants, an assessment sufficient to pay
the estimated expenses of the Board and the salaries of members of and
employees of the Board during the 180-day period beginning on the date on which
the assessment is levied, taking into account any deficit carried forward from
the preceding 180-day period.
(c)Nothing
in this section gives the Board the authority—
(1)to consider or
prescribe entity-level petitions for relief from the costs of a permit
allocation or trading program established under Federal law;
(2)to carry out any
investigative or punitive process under the jurisdiction of any Federal or
State court;
(3)to interfere
with, modify, or adjust any permit allocation scheme established under Federal
law; or
(4)to modify the
goals of any limit on greenhouse gas emissions.
6.Estimate of
costs to economy of limiting greenhouse gas emissionsThe Director of the Congressional Budget
Office, using economic and scientific analyses, shall submit to Congress a
report that describes the projected price range at which greenhouse gas permits
are expected to trade during the initial 2-year period of the initial
greenhouse gas emission market established under Federal law.
7.Authorization of
appropriationsThere are
authorized to be appropriated such sums as are necessary to carry out this
Act.