[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1189 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1189

To require the Secretary of Energy to conduct a study of the impact of 
 energy and climate policy on the competitiveness of energy-intensive 
         manufacturing and measures to mitigate those effects.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 4, 2009

  Mr. Bayh (for himself and Mr. Brown) introduced the following bill; 
   which was read twice and referred to the Committee on Energy and 
                           Natural Resources

_______________________________________________________________________

                                 A BILL


 
To require the Secretary of Energy to conduct a study of the impact of 
 energy and climate policy on the competitiveness of energy-intensive 
         manufacturing and measures to mitigate those effects.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Carbon Leakage Mitigation Study Act 
of 2009''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Cap-and-trade program.--The term ``cap-and-trade 
        program'' means an economy-wide program enacted by Congress 
        under which greenhouse gas emission allowances are distributed 
        or auctioned to control those emissions under the Clean Air Act 
        (42 U.S.C. 7401 et seq.).
            (2) Carbon leakage.--The term ``carbon leakage'' means any 
        substantial increase (as determined by the Secretary) in 
        greenhouse gas emissions--
                    (A) by a manufacturing facility located in a 
                country without a greenhouse gas emission regulation 
                commensurate to a cap-and-trade program; or
                    (B) that is caused by an incremental cost of 
                production increase in the United States as a result of 
                a domestic cap-and-trade program.
            (3) Compensatory measure.--
                    (A) In general.--The term ``compensatory measure'' 
                means any provision of a cap-and-trade program intended 
                to mitigate the risk of carbon leakage.
                    (B) Inclusions.--The term ``compensatory measure'' 
                includes a provision described in subparagraph (A) 
                relating to--
                            (i) emission allowance allocation; or
                            (ii) a border tax adjustment.
            (4) Greenhouse gas.--The term ``greenhouse gas'' means any 
        gas designated as a greenhouse gas under a cap-and-trade 
        program.
            (5) Output.--The term ``output'' means the total tonnage or 
        other standard unit of production (as determined by the 
        Secretary) produced by a manufacturing facility.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.

SEC. 3. INDUSTRY PRODUCTIVITY AND CARBON LEAKAGE STUDY.

    (a) In General.--Not later than 120 days after the date of 
enactment of this Act, the Secretary, in consultation with the 
Secretary of Commerce, the Administrator of the Environmental 
Protection Agency, and the heads of other appropriate Federal 
departments and agencies, shall conduct a study--
            (1) to characterize the relative risk of carbon leakage and 
        changes in output and investment in United States industrial 
        sectors and subsectors caused by a potential cap-and-trade 
        program implemented in the United States, in the absence of 
        commensurate greenhouse gas emission regulations in other 
        countries; and
            (2) to estimate the change in output in industrial sectors 
        and subsectors of the United States that are determined to be 
        at risk of significant carbon leakage.
    (b) Inclusions.--The study under subsection (a) shall include an 
assessment of--
            (1) expected United States industrial production, imports, 
        and exports, absent a cap-and-trade program;
            (2) the direct and indirect energy intensity and greenhouse 
        gas intensity of United States industries in relation to gross 
        value-added, cost of production, and total shipment values;
            (3) the price elasticity of United States industries;
            (4) the trade elasticity of United States industries;
            (5) the trade intensity (calculated as imports plus 
        exports, relative to domestic consumption) of United States 
        industries;
            (6) other qualitative indicators of the ability of United 
        States industries to pass on cost increases to consumers, such 
        as--
                    (A) market structure and concentration;
                    (B) level of product differentiation;
                    (C) the availability of close substitutes for 
                customers; and
                    (D) factors that constrain the response of foreign 
                producers to an increase in United States production 
                costs;
            (7) the overall risk of carbon leakage, expressed in list 
        form by sector and subsector of the United States economy, 
        resulting from a cap-and-trade program;
            (8) the impacts on the production, profitability, 
        greenhouse gas emissions, and level of employment of industries 
        at risk of carbon leakage, expressed--
                    (A) by sector and subsector, separately and in 
                aggregate, as a percentage of gross domestic product;
                    (B) in relation to national production, trade, and 
                employment projections under a potential cap-and-trade 
                program; and
                    (C) as compared to baseline projections absent a 
                cap-and-trade program;
            (9) the manner in which the economic impacts of climate 
        change policies compare to changes over time in other factors 
        affecting production and investment by industries, such as--
                    (A) changes in production costs;
                    (B) currency exchange rates;
                    (C) consumer preference; and
                    (D) other relevant factors; and
            (10) the highest-priority trading partners of the 
        industries at risk of carbon leakage, listed in order of 
        priority.
    (c) Report.--On completion of the study under this section, the 
Secretary shall submit to Congress a report describing the results of 
the study, including recommendations regarding data collection 
activities and subsequent studies by the Secretary, if any.

SEC. 4. STUDY OF MEASURES TO MITIGATE CARBON LEAKAGE.

    (a) In General.--Not later than 180 days after the date of 
enactment of this Act, but not earlier than the date of submission to 
Congress of the report regarding the competitiveness study under 
section 3(c), the Secretary, in consultation with the Secretary of 
Commerce, the Administrator of the Environmental Protection Agency, and 
the heads of other appropriate Federal departments and agencies, shall 
conduct a study to evaluate the impact of potential compensatory 
measures to prevent carbon leakage resulting from a cap-and-trade 
program.
    (b) Inclusions.--The study under subsection (a) shall include an 
assessment of--
            (1) compensatory measures used by other jurisdictions to 
        prevent carbon leakage under regional, national, or 
        multinational climate policies;
            (2) the projected risk of carbon leakage from United States 
        industries under potential prices on greenhouse gas emissions 
        and realistic scenarios for international climate policy, with 
        compensatory measures, including--
                    (A) the production, profitability, and level of 
                employment of the industries at risk of carbon leakage, 
                expressed separately and in aggregate;
                    (B) expected changes in the domestic market shares 
                of products produced in the United States, as compared 
                to products imported into the United States; and
                    (C) expected changes in the foreign market shares 
                of products produced in the United States, as compared 
                to products produced by other countries; and
            (3) the consistency of compensatory measures with 
        international trade commitments (including principles of the 
        World Trade Organization).
    (c) Report.--On completion of the study under this section, the 
Secretary shall submit to Congress a report describing the results of 
the study, including recommendations of the Secretary, if any.
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