[Congressional Record Volume 153, Number 63 (Thursday, April 19, 2007)]
[Senate]
[Pages S4759-S4764]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALEXANDER:
  S. 1168. A bill to amend the Clean Air Act to establish a regulatory 
program for sulfur dioxide, nitrogen oxides mercury, and carbon dioxide 
emissions from the electric generating sector; to the Committee on 
Environment and Public Works.
  Mr. ALEXANDER. Mr. President, today I introduce legislation to reduce 
air pollution and the threat of global warming by enacting strict 
standards on the four major pollutants from powerplants. I send the 
legislation to the desk and ask it be introduced.
  The PRESIDING OFFICER. The bill will be received and appropriately 
referred.
  Mr. ALEXANDER. Mr. President, I am pleased that Senator Joe 
Lieberman, of Connecticut, who chairs a key environmental subcommittee, 
will be the bill's lead cosponsor, so it will be known as the 
Alexander-Lieberman Clean Air Climate Change Act of 2007. It will 
establish an aggressive but practical and achievable set of limits on 
four key pollutants. This is a little different sort of clean air and 
climate change bill, and I would like to talk for a few minutes about 
exactly what it does and why we are doing it this way.
  Most of us in the Senate can be measured by where we come from. I 
come from the Great Smoky Mountains. When I go home tomorrow afternoon, 
after we hopefully start the competitiveness legislation debate, I will 
go to my home about 2 miles from the Great Smoky Mountains National 
Park. When the Cherokees named the Great Smoky Mountains, which today 
have become our most visited national park, they were not talking about 
smog and soot. Unfortunately, today they probably would be. There has 
been a lot of recent progress, but air pollution is still a serious 
health problem, causing illnesses from asthma to premature death, and 
making it harder to attract new jobs.
  To be specific about that, recently, over the last 20 years, the auto 
industry has become important to Tennessee.
  Tennessee was in competition recently for a Toyota plant that nearly 
came to Chattanooga but went to Mississippi. In the last 25 years, one-
third of our manufacturing jobs have become auto jobs. I can remember 
when there were not any, and I was Governor, and the Nissan plant 
decided to come to Tennessee in 1980. The first thing I had to do as 
Governor was to help them go down to the air quality board and get a 
permit to paint 500,000 cars and trucks a year. That is a lot of paint, 
and produces a lot of emissions in the area. If Tennessee had not had 
clean air at that time, that Nissan plant would have been in Georgia. 
So clean air is not only about our health, although the more we learn 
about the effects of nitrogen pollutants and sulfur pollutants, the 
more that we learn that it and mercury are about our health, clean air 
is also about our ability to attract jobs. So we want to make sure that 
when Nissan or Toyota or any of the suppliers of any automobile 
company--General Motors with a Saturn plant in Tennessee--when they 
want to look at our State for expansion--they are not limited by our 
inability to meet clean air standards.
  We also have jobs that come from another direction. In Tennessee, 
tourism is big business. Many people know about Yellowstone in the 
West, but the Great Smoky Mountains have three times as many visitors 
as any Western park, nearly 10 million visitors a year, and they come 
to see the Great Smokies, not to see smog, not to see soot. They want 
to enjoy it.
  When I go into Sevierville, Dolly Parton's hometown, and ask the 
Chamber of Commerce right there next to Maryville where I grew up, what 
is your No. 1 issue, these conservative Republicans in Sevier County 
say to me: Clean air. That is what the Chamber of Commerce there says, 
clean air. So we Tennesseans think clean air is important for our 
health, because we love to look at our mountains and because of our 
jobs.
  I am the chairman of the Tennessee Valley Authority Congressional 
Caucus. I sit on the Senate's Environment and Public Works Committee. I 
am especially delighted that Senator Lieberman, who is the cosponsor of 
this legislation, not only is on that committee, but he chairs one of 
the major subcommittees on the Environment and Public Works Committee 
that has to do with global warming.
  What we are hoping is that this legislation, which I am about to 
describe, along with legislation Senator Carper of Delaware is 
introducing today or tomorrow, will help move along the debate about 
how we deal with global warming in our country.
  In the legislation I have presented, the Alexander-Lieberman 
legislation, we seek to preserve our jobs while we clean the air and 
preserve the planet. We have a number of concerns in our country, and 
global warming is only one of those. So I would argue that the 
provisions we have set out are aggressive, but they are practical and 
they are achievable. They set schedules for powerplants to reduce 
emissions for sulfur dioxide, for nitrogen oxide, for mercury, and for 
carbon dioxide. Doing so will relieve some of the worst air-related 
health environmental problems such as ozone, acid rain, mercury 
contamination, and global warming.
  I think it is important to note that one of the differences with this 
Alexander-Lieberman bill is it proposes carbon caps only on powerplants 
that produce electricity; it does not propose carbon caps on the 
economy as a whole.
  Now, why would we only do that? Well, here are the reasons for that: 
No. 1, when we talk about global warming and carbon, we are dealing 
with a huge, complex economy. This country of ours produces and uses 
about 25 percent of all of the energy in the world. We have businesses 
that range from the shoe shop to Google to chemical plants.

[[Page S4760]]

  I think we have to be very careful in Washington about coming up with 
great schemes and great ideas that sound good here but that might not 
apply to everyone across the country, because everyone across the 
country has a natural conservatism about the wisdom of those who are in 
Washington. We could scare them to death with some talk of an 
economywide global warming bill. So I am more comfortable thinking 
sector by sector. I want our steps to be practical and cost effective.
  I do believe a market-based cap and trade system for powerplants 
makes a lot of sense. Powerplants are the logical place to start with 
carbon regulation. Powerplants produce about 40 percent of all the 
carbon in our economy. Powerplants are increasing emissions of carbon 
at a rate faster than any other large segment in our economy. We have 
selected in our legislation what we call a market-based cap and trade 
system to regulate the amount of carbon that is produced. This is not a 
new idea. The market-based cap and trade system was actually introduced 
by a Republican administration in which I served in the Cabinet, the 
first George Bush. It was a part of the Clean Air Act amendments in 
1990. It was introduced because we were concerned about the amount of 
sulfur coming out of powerplants. Basically it created a lot of 
flexibility for those powerplants. It used a market system. We have now 
had 15 years experience with it. It has worked very well. It has 
significantly reduced the amount of sulfur in the air. It has done it 
in a way that most everyone concedes is the lowest possible cost of 
regulation.
  It is a minimal amount of rules from here, a maximum amount of market 
decisions and individual decisions by individual utilities. So we have 
had that system in effect since 1990. There has been a similar system 
in effect for nitrogen. There has been a similar cap and trade system 
in Europe. We have a lot of experience with cap and trade. So we have 
elected to use a similar cap and trade market-based system to regulate 
the carbon coming out of the same smokestacks that sulfur, nitrogen, 
and mercury come out of. We can already measure the amount of carbon 
coming out, so we do not have to guess about that. We do not have to 
invent a new system.

  We do have to be careful about what the standards are, what the dates 
are. We want to know what the costs will be to the ratepayers. We want 
to keep electric rates as low as we possibly can, as well as making the 
energy clean.
  But if we are concerned about global warming in this generation, 
because I think we should be, then powerplants are a good place to 
start. It is time to finish the job of cleaning the air of sulfur, of 
too much sulfur, too much nitrogen, and too much mercury. It is time to 
take the right first step with controlling carbon emissions. It is time 
to acknowledge that climate change is real, that human activity is a 
big part of the problem, and that it is up to us to act.
  Now not only am I glad to be working with Senator Lieberman, who will 
be the lead cosponsor of this legislation, he, of course, is already a 
leader in this area and he has an economywide piece of legislation 
which he introduced. Senator McCain in the last session--I am not about 
to try to speak for another Senator, but I think Senator Lieberman is 
taking the position he would like to see several good trains moving 
down the track toward the same station in hopes that one of them 
eventually gets there, and that we can learn from each other.
  That is the attitude I take with the legislation Senator Carper has 
described today and that he is introducing today or tomorrow. Senator 
Carper and I have worked together through two Congresses on four 
pollutant legislation. A lot has happened since we started working. For 
example, the Administration, to its credit, through the Environmental 
Protection Agency, has stiffened requirements for sulfur and nitrogen. 
I applaud President Bush for that. They are very good requirements. 
They have also proposed the regulation of mercury for the first time in 
our country's history. I applaud the EPA for that. So a lot has changed 
since Senator Carper and I first started.
  Also we have learned a lot. Senators who do not always have their 
mouths open learn a lot. We have discovered one of the most difficult 
areas in fashioning a market-based cap and trade system for sulfur or 
for nitrogen or for carbon is who pays for it. We called that the 
allocation system.
  Senator Carper and I started out with what we called an output 
system. We thought that sounded pretty good. It would be based upon the 
amount of electricity you would be putting out. But the more we studied 
it, he came to a different conclusion and I came to a different 
conclusion. I came to the conclusion that we should use historical 
emissions. In other words, we are saying to a utility in the United 
States: We are about to impose upon you some requirements for cleaning 
up more sulfur, cleaning up more nitrogen, cleaning up mercury--for the 
first time--and regulating the emissions of carbon for the first time, 
and I understand that is a significant cost.
  That capital cost will have to be borne in the end by ratepayers. So, 
in my view, it seems to me that the fairest way to impose that cost 
would be through what we call the historical allocation system. That is 
the way we have done it with allowances for sulfur and nitrogen for the 
last 15 years.
  In fact, the input or the historical allowance system as the way to 
pay the bill has been the way it is done almost everywhere, I believe.
  But there is another way to allocate that is called the output. 
Senator Carper selected that. There is still a third way to allocate 
the costs of doing whatever regulation we do, and that is called the 
auction. A market-based cap and trade system sounds complicated, but it 
is not so complicated. It basically says to each emitter of one of the 
pollutants: You have an allowance to emit one ton of that sulfur or of 
that carbon, and as long as you emit that much, you are okay. If you 
emit more than that, you are going to have to buy allowances to emit 
that much more from someone else. So it costs you more. Or if you emit 
less, you can sell your allowance. Then as the law goes along over the 
years, 2009 or 2010 to 2015, the amount of pollutants that come down, 
your allowance total drops down as well.
  One of the favored proposals mostly--and especially by many 
environmental groups--is an auction of those allowances. Well, I have 
resisted. I have been careful about the auctions. I have been to a lot 
of auctions. I know they must have them in Minnesota as well as 
Tennessee. I have yet to see one where the purpose of the auction was 
not to get the highest possible price.
  Well, if I am paying my electric bill down in Memphis, or if I am at 
Eastman Chemical in east Tennessee or ALCOA trying to keep my electric 
costs in line, I am not interested in my Senator coming to Washington 
and having an auction to raise my electric rates to the highest 
possible price.
  So also there is the temptation that if you auction off these 
allowances, and there are a lot of them when we are talking about 
carbon allowances, many more than when we are talking about sulfur 
allowances over the last 15 years. They will bring in a lot of money. 
And whenever you bring in a lot of money, and 100 different Senators 
and lots of Congressmen know there is a pot of money, they will come up 
with a lot of ways to spend that money. And where will that money come 
from? Well, it has got to come from the man or women or family paying 
the electric bill in Nashville, or Knoxville. So I have been 
conservative about the use of auctions.
  Senator Lieberman and I, in this bill, say 75 percent of the 
allowance comes from historical emissions and 25 percent are sold in an 
auction. This gets way down in the weeds, as we say. But one of the 
things that I think may be beneficial from Senator Carper going ahead 
with his bill, which relies on an output system that becomes a 100-
percent auction, and way we go ahead in the Alexander-Lieberman bill 
with 75-percent input and 25-percent auction, may be that our 
colleagues will do as we have been doing over the last few months, and 
spend a little more time understanding allowances and auctions, and we 
can come to a better conclusion about this.
  I value greatly my relationship with Senator Carper and respect his 
leadership in this area. He chairs one of the principal subcommittees 
on the Environment Committee upon which I serve

[[Page S4761]]

and the Presiding Officer serves. What I hope is he and I are moving 
into a new stage of our working relationship on clean air and climate 
change, and the result of that will be that all of our ideas will be 
out in front of our colleagues and that it will move the debate along.
  I would emphasize, we agree, he and I, on a lot more than we disagree 
on. In fact, I believe on all of the standards and deadlines for 
meeting those standards for nitrogen, sulfur, and mercury, we agree. We 
agree there should not be a cap and trade system for mercury because 
mercury is a neurotoxin, and down in east Tennessee where I live, we do 
not want TVA buying a lot of allowances so they can emit a lot more 
mercury, because it doesn't go up in the air and blow into North 
Carolina, it goes up in the air and comes right down on top of us, for 
the most part. We don't want that.
  We don't want that. The more we learn about mercury, the less we want 
it. We don't have cap and trade for mercury, although we do suggest 
that for carbon.
  Climate change has become the issue of the moment. Everybody is 
talking about it. There are movies about it. The Vice President was 
here testifying about it. It is not the only issue that faces us that 
has to do with air pollution. I am more concerned in Tennessee about 
sulfur, nitrogen, and mercury than I am about carbon. That is why this 
is a four-pollutant bill. We ought to address all of these at once.
  I was in this body 40 years ago as a staff assistant working for 
Howard Baker. I remember very well when Senator Baker, a Republican, 
and Senator Muskie of Maine, a Democrat, worked together on the 
committee on which the Presiding Officer and I now serve. They passed 
the first Clean Water Act and the first Clean Air Act. The Clean Water 
Act, some people have said, is the most important piece of urban 
renewal legislation ever enacted because the rivers of America had 
gotten so dirty, nobody wanted to live on them. The rivers of America 
are where most of our great cities are. As soon as they were cleaned 
up, people moved back to the cities and around the rivers. That was 
1970 and 1971.
  It is appropriate to think about that now because Earth Day is coming 
up this weekend. I can remember Earth Day, which began in 1970. 
Suddenly the environment, which had been an issue that was reserved for 
only a few people, became a national craze. It was almost like a hula 
hoop. Everybody was interested in the environment and recycling. Former 
Senator Gaylord Nelson was a leader in creating Earth Day. I can 
remember sitting in a meeting of President Nixon and the Republican 
leadership in 1970 when I was on the White House staff, and President 
Nixon was trying to explain to the Republican leaders the importance of 
environmental issues. It was 8 o'clock in the morning, and they weren't 
listening very well. It was a new subject. But Gaylord Nelson was doing 
it. The kids were doing it. People were recycling. The Republican 
President was talking to the Republican leadership, and Senator Baker, 
Senator Muskie, and the Congress passed the first Clean Air and Clean 
Water Acts.
  Many of us who have lived a while can remember things are better 
today in many ways. When I was a student at Vanderbilt in Nashville, it 
was so smoggy in the mornings, you couldn't see downtown. Your clothes 
got dirty during the day. Things got gradually better. In 1990, when 
the first President Bush was in office, we passed important Clean Air 
Act amendments, and the first cap and trade system for sulfur began. 
What also happened was that we learned more about how damaging these 
pollutants are to our health.
  As a result, the standards which we once thought were high seemed 
low. Knoxville, the biggest city near where I grew up, near the Smoky 
Mountains, is the 14th most polluted city for ozone. Ozone irritates 
lung tissue, increases the risk of dying prematurely, increases the 
swelling of lung tissue. It increases the risk of being hospitalized 
with worsened lung diseases and triggering asthma attacks. At risk in 
Knoxville County alone are 176,000 children, 112,000 seniors, 15,000 
children with asthma, and 50,000 adults with asthma. Ozone is not 
emitted directly from tailpipes and smokestacks. The raw ingredients 
come from coal-fired powerplants and cars.
  Sulfur is in many ways our biggest problem. It is the primary 
contributor to haze. It causes difficulty in breathing. It causes 
damage to lung tissue and respiratory disease and premature death.
  We know that mercury is also a problem. Monitoring by the National 
Park Service in the Great Smoky Mountains has found high levels of 
mercury deposits from air pollution. Mercury pollution of rivers and 
streams contaminates the fish we eat and poses a serious threat to 
children and pregnant women.
  This bill is a clean air and a climate change bill. I hope our 
committee, as we take advantage of this resurgence of interest in the 
quality of air and our health and what we need to do about it, we won't 
just do part of the job. I would like to look at the whole picture. 
What we do in this bill is take the standards that the EPA has created 
for nitrogen and sulfur and put them into law. We make them a little 
stricter, but basically we put them into law. We take the mercury rule 
of the EPA, and we put it into law. We make it even stricter. The EPA 
says get rid of 70 percent of it. We say get rid of 90 percent. Then 
for the first time we put into law carbon caps on electric powerplants 
which produce 40 percent of all the carbon produced in the United 
States and are the fastest growing sector producing carbon in America.
  I hope my colleagues will carefully consider this sector-by-sector 
approach to climate change. Carbon caps might be the best way--I 
believe they are--for dealing with electric powerplants. When it comes 
to fuel, there may be another strategy that makes sense. We could deal 
with that sector in a different way. For example, when we were dealing 
with sulfur, we didn't put a cap and trade on diesel fuel. We did on 
powerplants. But when we got to diesel fuel, we just said that you have 
to have ultra low sulfur diesel for big trucks, which just now went 
into effect.
  There is also the large segment of building energy use. If we took 
the sector of building energy use, the fuel segment, and the electric 
powerplants, if we added that to a few stationery sources in America 
and developed strategies that were aggressive but practical and cost-
effective for each of those segments, we would be up in the 85 to 90 
percent of all the carbon we produce in America. That makes a lot more 
sense to me than trying to devise some one-size-fits-all system that 
affects every little shop, store, or farm in America. If we can get 
most of it this way, maybe we can learn something so that someday we 
can get the rest of it.
  I ask unanimous consent to have printed in the Record at the 
conclusion of my remarks a section-by-section description of the 
Alexander-Lieberman bill, a one-page summary of the Alexander-Lieberman 
Clean Air/Climate Change Act of 2007, as well as a short memorandum 
which we describe as discussion points and with which I will conclude 
my remarks by going over in just a moment, and a letter from the 
National Parks Conservation Association endorsing the bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibits 1 through 4.)
  Mr. ALEXANDER. Senator Lieberman and I don't have all the answers 
with this legislation. I feel much more comfortable with this 
legislation today than I did with any I helped introduce last year or 
the year before because I have learned a lot more. But I will guarantee 
my colleagues that there are several areas in which I would welcome 
advice. Over the last several weeks, I have met with a dozen, two dozen 
environmental groups, utilities, Tennessee citizens, others who had 
suggestions. For example, the discussion points that I have put into 
the record contain five points that are arguable. I have come to a 
tentative conclusion on them. That is in the bill. But there is another 
side to the point. I am looking for advice.
  For example, should we cap only carbon or all greenhouse gases 
emitted from electricity plants? I chose to cap CO2 only. 
That is because this is a four-pollutant bill--sulfur, nitrogen, 
mercury, and carbon. It is not primarily a climate change bill.
  Another consideration is that it seems Europe's experience is that it 
may be better to cap just carbon and

[[Page S4762]]

not all greenhouse gases. That is a question we can debate.
  What should the size of an auction be in terms of the allowances? I 
discussed that earlier. Senator Lieberman and I have chosen 25 percent 
of the total number of allowances. Senator Carper, in his bill, 
eventually goes to 100 percent. There are arguments on both sides.
  What influenced my decision was, I wanted to keep the costs down as 
much as possible. I was afraid that if we used some different kind of 
allowance allocation, we might literally take money away from the 
emitters that they ought to be using to put scrubbers on to reduce 
sulfur, nitrogen, mercury, or carbon and pay it to other utilities.
  What rules should govern the use of offset allowances by electric 
plants? Offsets are an ingenious idea. The idea would be that an 
emitter of carbon might be able to pay somebody else to reduce their 
output of carbon and, therefore, we would end up with the same amount 
of carbon. There are many advantages to that. For example, the 
Tennessee Valley Authority might pay a Tennessee farmer to manage his 
livestock crop in a way as to not produce as much methane, might pay a 
Tennessee farmer to plant a lot of trees. Both of those things would 
reduce greenhouse gases, and the farmer would have more money in his 
pocket. That is a good idea.
  The downside of offsets is that if they are unregulated entirely, it 
seems to me they could become a gimmick or a fad or worse. What we have 
done in this bill is adopt a system of offsets from a consortium of 
States ranging from Maryland to Maine--that includes Senator 
Lieberman's State of Connecticut--and used those model rules on 
offsets. That tends to limit the way offsets may be used. It is a good 
place to at least begin. In other words, a utility might produce more 
carbon, but it might pay someone else who is reducing carbon by using 
biomass or by sequestering carbon in some other way.
  There is a question about how should new coal-fired electric plants 
be treated. There are probably 160 new coal plants on the drawing 
boards. Some of them hope to escape the rules Congress is considering 
about capping the output of carbon. I don't think they should. This 
bill would apply to all coal-fired powerplants, including those on the 
drawing boards. It also would give an incentive to the first 30 of 
those plants to meet a high standard of clean coal technology. We don't 
want to encourage the use of natural gas in this bill. That is the last 
thing we want to do. We don't want to discourage the use of coal. We 
have a lot of coal. It would help make us energy independent. We want 
to encourage the creation of the kind of technology that will permit us 
to use coal in a clean way that either recaptures the carbon and stores 
it or finds some other way to deal with it.
  Finally, what should the CO2 cap levels be? We can debate 
that, and I am sure we will. But the cap level we pick in this 
legislation is to say, let's freeze at the level of last year, starting 
with 2011, and go down step by step into 2025 to 1.5 billion metric 
tons. This is our contribution to the debate.
  We have learned enough about our health, about our ability to attract 
jobs, to know we need to finish the job of cleaning up the air of 
nitrogen, of sulfur, and of mercury; and we need to take the right 
first step to begin to control the emission of carbon to deal with 
global warming. I believe the right first step is a market-based cap 
and trade system of electricity plants which is described here.
  May I also say this: Some people say: Well, let's wait until China 
does it. Let's wait until India does it. The great danger is that we 
will not unleash the technological genius of the United States of 
America to clean our air and to deal efficiently and inexpensively with 
the emissions of carbon. If we do not figure that out, India and China 
are going to build so many dirty coal powerplants that it will not make 
any difference what we do because the wind will blow the dirty air 
around here, and we will suffer and the planet will suffer whatever the 
consequences are of global warming and of the other pollutants that 
come from coal.
  So we have an obligation not just to the world to do this, we have to 
do this for ourselves because 100, 200, 300, 400, 500 new coal-fired 
powerplants in India and China will obliterate any of the good work we 
might do here. I believe if we take the aggressive but practical cost-
effective steps in this Clean Air/Climate Change Act, we will unleash 
the great entrepreneurial spirit of our country. We will be able to 
create an inexpensive way to deal with carbon on a segment-by-segment 
basis, deal with the other pollutants, and India and China will have to 
follow. The rest of the world will follow, and we will be better off.
  I cannot imagine more interesting and exciting work to be doing. This 
is the kind of subject on which we should be working together on a 
bipartisan basis.
  I thank Senator Lieberman for joining me in cosponsoring this 
legislation. I salute Senator Carper for his continued leadership. I 
look forward to working with him.

                               Exhibit 1

 Clean Air/Climate Change Act of 2007, Section by Section Description, 
                             April 19, 2007


                      TITLE I: GENERAL PROVISIONS

     Sec. 101. New Source Performance Standard
       Requires all new coal-fired electricity plants constructed 
     or modified after January 1, 2015, to meet a performance 
     standard of 1,100 pounds of carbon dioxide (CO2) 
     per megawatthour of electricity generated (MWh).
       Between January 1, 2011 and December 31, 2020, 5 percent of 
     the total CO2 allowances will be set aside for new 
     coal-fired power plants built after enactment that meet this 
     performance standard.
     Sec. 102. New Source Review Program
       Beginning January 1, 2020, electricity plants that have 
     been operating for 40 years or more have to meet a 
     performance standard of 2 pounds of sulfur dioxide per MWh 
     and 1 pound of nitrogen oxides per MWh.
     Sec. 103. Integrated Air Quality Planning for the Electric 
         Generating Sector
       Cuts sulfur dioxide and nitrogen oxide emissions in two 
     phases:
       Phase One--codifies Phase One of the Clean Air Interstate 
     Rule (CAIR).
       Phase Two--in 2015, replaces CAIR with a national program, 
     reducing the current SO2 cap of 9.4 million tons 
     to 2.0 million tons per year and establishing eastern and 
     western NOx caps totaling 1.6 million tons per year.
       Requires mercury emissions to be cut by 90 percent in 2015 
     without trading.
       Establishes a Climate Champions Program that authorizes EPA 
     to recognize electricity plants that meet a 1,100 pound of 
     CO2 per MWh.
       Reduces carbon dioxide emissions as follows:
       2011-2014 2.3 billion metric tons of CO2
       2015-2019 2.1 billion metric tons
       2020-2024 1.8 billion metric tons
       2025 and thereafter 1.5 billion metric tons
       Authorizes an auction of 25 percent of the CO2 
     allowances to be used to mitigate increased electricity 
     costs, if any, of consumers and energy-intensive industries.
     Sec. 104. Revisions to Sulfur Dioxide Allowance Program
       Updates the allowance allocation formulas of the Title IV 
     SO2 program to meet the 2015 cap of 2.0 million 
     tons per year and to include allowances for electricity 
     plants built from 1990 to 2006.
     Sec. 105. Air Quality Forecasts and Warnings
       Requires the Administrator of the National Oceanic and 
     Atmospheric Administration (NOAA), in cooperation with the 
     EPA Administrator, to issue air quality forecasts and 
     warnings.
     Sec. 106. Relationship to Other Law
       Requires the EPA Administrator within 2 years to promulgate 
     regulations for the underground injection of CO2 
     in a manner that protects human health and the environment.


                    TITLE II: GREENHOUSE GAS OFFSETS

     Sec. 201. Greenhouse Gas Offsets
       Establishes standards for offset allowances in six 
     categories: landfill methane capture and destruction; sulfur 
     hexafluoride reductions; sequestration of carbon due to 
     afforestation or reforestation; reduction and avoidance of 
     carbon dioxide emissions from natural gas, oil, and propane 
     end-use combustion due to end-use energy efficiency; avoided 
     methane emissions from agricultural manure management 
     operations; and eligible biomass.
                                  ____


                               Exhibit 2


        Alexander-Lieberman Clean Air/Climate Change Act of 2007

                       Why legislation is needed

       To improve public health and reduce the threat of global 
     warming, Congress must enact electricity sector legislation 
     that puts stricter standards on sulfur and nitrogen 
     pollution, cuts mercury emissions by 90 percent, and places 
     the first caps on carbon emissions.
       The Environmental Protection Agency's new rules to limit 
     sulfur, nitrogen, and mercury don't go far enough, fast 
     enough.
       Under current law, too many communities live with air that 
     is unhealthy to breathe, and mercury continues to pollute our 
     rivers and streams.
       The Clean Air/Climate Change Act sets aggressive, but 
     practical and achievable limits

[[Page S4763]]

     for reducing four pollutants in order to preserve our jobs 
     while we clean the air and preserve our planet.

             Why the bill focuses on the electricity sector

       Electricity plants are the logical place to start because:
       They produce 40% of the CO2 in our country, at a 
     rate almost twice as fast as any other large segment of the 
     economy.
       We have 15 years' experience with a market-based cap and 
     trade program to reduce sulfur emissions.

                 How Clean Air/Climate Change Act works

       The Clean Air/Climate Change Act of 2007 provides an 
     aggressive--yet achievable--schedule for power plants to 
     reduce emissions and alleviate some of our worst air-related 
     health and environmental problems, such as ozone, acid rain, 
     mercury contamination, and global warming.
       Specifically, the Clean Air/Climate Change Act would:
       Cut sulfur dioxide (SO2) emissions by 82 percent 
     by 2015. This acid rain-causing pollution would be cut from 
     today's 11 million tons to a cap of 2 million tons in 2015.
       Cut emissions of nitrogen oxides (NOx) by 68 
     percent by 2015. Ozone pollution would be cut from today's 5 
     million tons to a cap of 1.6 million tons in 2015.
       Cut mercury emissions at each power plant by 90 percent in 
     2015. This is a stringent, yet achievable goal that would 
     greatly reduce the risks this neurotoxin poses to children 
     and pregnant women.
       Implement a cap, trade, and offsets program to reduce 
     CO2 emissions. CO2 emissions would be 
     capped at 2.3 billion metric tons in 2011, 2.1 billion metric 
     tons in 2015, 1.8 billion metric tons in 2020, and 1.5 
     billion metric tons in 2025 and beyond.

                          Innovative features

       In order to encourage prompt, deep yet cost-effective 
     CO2 reductions, the Clean Air/Climate Change Act 
     contains several innovative features, including:
       Climate Champions Program. Establishes a reserve of 5% of 
     all CO2 allowances as an incentive for new coal-
     fired electricity plants that meet a performance standard of 
     1,100 pounds of CO2 per megawatthour between 2011 
     and 2020. (This performance standard is comparable to an IGCC 
     coal plant with 60% CO2 capture and storage.)
       Minimizes costs. Auctions 25% of the CO2 
     allowances and authorizes the proceeds to be used to mitigate 
     increased electricity costs (if any) to consumers and energy-
     intensive industry.
       Discourages fuel switching from coal to natural gas. The 
     use of natural gas to generate electricity can create 
     volatility in electricity prices for consumers.
       Flexible compliance. Permits the use of offsets so that 
     companies may meet their carbon emissions reduction flexibly 
     and cost-effectively.
                                  ____


                               Exhibit 3

        Clean Air/Climate Change Act of 2007, Discussion Points


            Issues that Sen. Alexander would like to discuss

       1. Should Congress cap only CO2 or all 
     greenhouse gases emitted from electricity plants?
       2. What size should an auction be?
       3. What rules should govern the use of offset allowances 
     electricity plants?
       4. How should new coal-fired electricity plants be treated?
       5. What should CO2 cap levels be?
                                  ____

     1. Should Congress cap only CO2 or all greenhouse 
         gases emitted from electricity plants
       Clean Air/Climate Change Oct
       Caps CO2 only.
       Discussion
       In his bill, Sen. Alexander chose to cap CO2 
     only. In part, that decision is a result of the Clean Air/
     Climate Change Act being a bill that limits the four major 
     pollutants emitted from electricity plants: sulfur dioxide, 
     nitrogen oxides, mercury, and carbon dioxide. It is not 
     primarily a climate change bill.
       Another consideration is the experience gained from Phase 
     One of the European Union's Emissions Trading Scheme (EU 
     ETS), the largest cap and trade program in the world. The EU 
     ETS capped only CO2 in its first phase. Phase Two 
     of that program, which starts in 2008, will cap six 
     greenhouse gases: carbon dioxide, methane, nitrogen oxides, 
     perflourocarbons hydrofluorocarbons, and sulfur hexaflouride
       The U.K. House of Commons Environmental Audit Committee in 
     its Fourth Report (dated March 27, 2005) recommended that 
     Phase Two not be expanded to include gases other than carbon 
     dioxide.
       Instead, the House of Commons Committee recommended minimal 
     significant changes to the shape and scope of the trading 
     program.
       The House of Commons Committee also recommended non-carbon 
     greenhouse gases be addressed through regulation and not 
     through trading.
       What is the best approach?
     2. What size should an auction be
       Clean Air/Climate Change Act
       Auctions 25 percent of CO2 allowances.
       Uses the proceeds to offset increased electricity costs (if 
     any) of consumers and energy-intensive industries.
       Discussion
       The total value of the CO2 allowances will be 
     much higher than the total value of SO2 allowances 
     because there will be about 1,000 times more CO2 
     allowances than SO2 allowances. Because 
     CO2 allowances will be so much more valuable, 
     economists recommend that there be an auction.
       In its 2004 report, the National Commission on Energy 
     Policy (NCEP) recommended that 10 percent of allowances be 
     auctioned. However, in March 2007 NCEP changed its 
     recommendation on allocation. NCEP now recommends that 50 
     percent of allowances be auctioned.
       Similarly, a March 2007 NCEP paper states that businesses 
     and consumers at the end of the energy supply chain--not oil, 
     natural gas, and electric utilities--bear the largest share 
     of the costs of a greenhouse gas emissions cap-and-trade 
     program.
       Auctioning 25 percent of the CO2 allowances for 
     the power sector would generate revenues sufficient to 
     protect consumers from higher electricity rates.
       The Regional Greenhouse Gas Initiative (RGGI) model rule 
     recommends that 25 percent of CO2 allowances be 
     auctioned.
     3. What rules should govern the use of offset allowances by 
         electricity plants?
       Clean Air/Climate Change Act
       Includes the RGGI model rules on offsets.
       Offset types: landfill methane capture and destruction; 
     sulfur hexafluoride reductions; sequestration of carbon 
     through afforestation or reforestation; reduction and 
     avoidance of carbon dioxide emissions from natural gas, oil, 
     and propane end-use combustion due to end-use energy 
     efficiency; avoided methane emissions from agricultural 
     management operations; and eligible biomass.
       Discussion
       Allowing electricity plants to meet their CO2 
     reductions through offsets provides compliance flexibility 
     that greatly reduces costs to consumers and industry.
       Offsets must be real reductions, however, and not gimmicks.
       RGGI's model rules on offsets were adopted in an extensive, 
     multi-state stakeholder process.
       Sen. Alexander is seeking additional measures to include in 
     a four pollutant law that will prevent fuel switching to 
     natural gas, as the use of natural gas to generate 
     electricity can create volatility in electricity prices for 
     consumers.
     4. How should new coal-fired electricity plants be treated
       Clean Air/Climate Change Act
       New fossil fuel electricity plants coming on line after 
     January 1, 2007 will be required to purchase 100 percent of 
     their required allowances.
       Between January 1, 2007 and December 31, 2020, 5 percent of 
     the total CO2 allowances will be set aside as an 
     incentive for new coal-fired power plants that meet a 
     performance standard of 1,100 pounds of CO2 per 
     megawatt hour.
       In 2015, all new coal-fired electricity plants must meet 
     this performance standard.
       Discussion
       Electricity sector climate legislation should actively 
     discourage the construction of new conventional fossil fuel 
     power plant and encourage technologies that allow for the 
     capture and sequestration of CO2.
       A performance standard of 1,100 pounds of CO2 
     per MWh (the same standard used in California for electricity 
     purchases from out-of-state coal-fired power plants) will 
     ensure that new coal-fired power plants capture at least 60 
     percent of their CO2.
       Denying CO2 allowances to plants that fail to 
     meet this standard is a powerful disincentive to building 
     conventional coal plants that lack lack carbon capture 
     technology.
       Otherwise, new conventional coal plants will lock in high 
     CO2 emissions for years.
       Inclusion of natural gas-fired plants in this program is 
     important to avoid creating an incentive to shift more 
     generation to natural gas.
     What should CO2 cap levels be
       Clean Air/Climate Chance Act
       The power sector CO2 cap should decline over 
     time on the following schedule: 2011-2014, 2.3 billion metric 
     tons; 2015-2019, 2.1 million metric tons; 2020-2024, 1.8 
     billion metric tons; and 2025 and beyond; 1.5 billion metric 
     tons.
       Discussion
       This an aggressive yet achievable cap that starts with 
     limiting electricity sector CO2 to the level 
     emitted in 2006 and then declines in a step wise manner out 
     to 2025.
       An electricity sector CO2 cap on 1.5 billion 
     metric tons is roughly equivalent to the electricity sector 
     cap in the Lieberman-McCain Climate Stewardship and 
     Innovation Act.
       Electricity plants emit 40 percent of U.S. carbon dioxide. 
     Emissions from this major sector source of carbon dioxide 
     need to be reduced now in order to preserve the option of 
     stabilizing atmospheric concentrations at 450 parts per 
     million, the level that scientists believe will most likely 
     prevent some of the worst global warming impacts being 
     projected.
       Delaying emissions reductions will make the job more 
     challenging and expensive down the road.

[[Page S4764]]

     
                                  ____
                               Exhibit 4

                                                    National Parks


                                     Conservation Association,

                                   Washington, DC, April 18, 2007.
     Hon. Lamar Alexander,
     U.S. Senate,
     Washington, DC.
       Dear Senator Alexander: On behalf of the National Parks 
     Conservation Association, we strongly commend you for 
     introducing the Clean Air/Climate Change Act of 2007, a bill 
     designed to provide healthier air to millions of Americans, 
     help restore clear skies to our national parks, and take 
     important steps toward addressing global warming.
       As I know you are well aware, coal-fired power plants are a 
     leading source of the pollutants that cause asthma attacks 
     and respiratory disease in humans, habitat damage and hazy 
     skies in our parks, and mercury-laden fish in our rivers and 
     lakes. They are also the main industrial source of the 
     pollution that causes global warming. Technologies are 
     readily available that can allow these plants to operate much 
     more cleanly. The Clean Air/Climate Change Act would employ 
     flexible market mechanisms and adequate lead-time so these 
     technologies can be affordably applied at these plants to 
     help restore air quality and diminish the causes of global 
     warming. Starting with the coal-fired power plants, which are 
     the worst offenders, before proceeding to address other 
     polluters makes strategic and economic sense.
       Taken together, the provisions in the Clean Air/Climate 
     Change Act provide a comprehensive and balanced solution to 
     the problem of coal-fired power plant pollution. The National 
     Parks Conservation Association is pleased to support the 
     Clean Air/Climate Change Act of 2007. From all of us, thank 
     you for your strong leadership on this incredibly important 
     subject.
           Sincerely,
                                                Thomas C. Kiernan,
                                                        President.
                                 ______