1.This Act may be cited as the
Carbon Leakage Mitigation Study Act of
2009
.
2.In this Act:
(1)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)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)
(A)The term compensatory measure means any
provision of a cap-and-trade program intended to mitigate the risk of carbon
leakage.
(B)The
term compensatory measure includes a provision described in
subparagraph (A) relating to—
(i)emission
allowance allocation; or
(ii)a
border tax adjustment.
(4)The term greenhouse gas means any gas designated
as a greenhouse gas under a cap-and-trade program.
(5)The
term output means the total tonnage or other standard unit of
production (as determined by the Secretary) produced by a manufacturing
facility.
(6)The
term Secretary means the Secretary of Energy.
3.Industry
productivity and carbon leakage study
(a)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)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)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.
4.Study of
measures to mitigate carbon leakage
(a)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)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)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.