[Congressional Record (Bound Edition), Volume 154 (2008), Part 8]
[Extensions of Remarks]
[Pages 11744-11746]
[From the U.S. Government Publishing Office, www.gpo.gov]




     THE INVESTING IN CLIMATE ACTION AND PROTECTION ACT (H.R. 6186)

                                 ______
                                 

                         HON. EDWARD J. MARKEY

                            of massachusetts

                    in the house of representatives

                         Thursday, June 5, 2008

  Mr. MARKEY. Madam Speaker, yesterday I introduced, H.R. 6186, the 
``Investing in Climate Action and Protection Act,'' or ``iCAP Act.'' I 
would like to call the attention of my colleagues to the following 
subtitle-by-subtitle summary of the bill:
               TITLE I--CAPPING GREENHOUSE GAS EMISSIONS

     SECTION 101. AMENDMENT TO THE CLEAN AIR ACT

       Section 101 of the bill adds a new Title VII to the Clean 
     Air Act, the subtitles of which are summarized below.

     Subtitle A: Tracking Emissions

       Subtitle A establishes a process through which EPA may 
     designate new greenhouse gases and directs EPA to determine 
     the quantity of each greenhouse gas that makes the same 
     contribution to global warming as one metric ton of carbon 
     dioxide. EPA is also directed to establish a national 
     greenhouse gas registry.

     Subtitle B: Reducing Emissions

       Subtitle B directs EPA to establish a separate quantity of 
     emission allowances for each calendar year from 2012 through 
     2050. The bill covers emissions of carbon dioxide 
     (CO2), methane (CH4), nitrous oxide 
     (N2O), hydro fluorocarbons (HFCs), 
     perfluorocarbons (PFCs), sulfur hexafluoride 
     (SF6), and nitrogen trifluoride (NF3)--
     plus any other anthropogenic gas that EPA designates as a 
     greenhouse gas. Each emission allowance is equal to one 
     metric ton CO2--equivalent--the quantity of a 
     greenhouse gas that makes the same contribution to global 
     warming as one metric ton of CO2. The emissions 
     ``cap'' will cover 87 percent of U.S. greenhouse gas 
     emissions. The cap reduces covered emissions to 2005 levels 
     by 2012, to 20 percent below 2005 levels in 2020, and 85 
     percent below 2005 levels in 2050.
       The bill requires the owner or operator of each ``covered 
     entity,'' at the end of each calendar year from 2012 through 
     2050, to submit to EPA one emission allowance for each metric 
     ton CO2-equivalent of greenhouse gases that it 
     emitted or that was contained in the fuels or chemicals it 
     put into commerce that year. Covered entities include: (1) 
     electric power and industrial facilities; (2) entities that 
     produce or import petroleum- or coal-based liquid or gaseous 
     fuels; (3) entities that produce or import HFCs, PFCs, 
     SF6, or NF3; (4) natural gas local 
     distribution companies; and (5) geological carbon 
     sequestration sites. Entities that do not meet a 10,000 
     CO2-equivalent threshold will not be required to 
     submit allowances. HFC producers will not be required to 
     submit allowances until 2020 in order to ensure success in 
     meeting Montreal Protocol targets and to allow HFC 
     substitutes to come to market.
       A covered entity may submit domestic offset credits 
     approved by EPA under subtitle E in lieu of emission 
     allowances to satisfy up to 15 percent of its compliance 
     requirement. A covered entity may also submit international 
     emission allowances or offset credits approved by EPA under 
     subtitle F to satisfy up to 15 percent of its compliance 
     requirement. A covered entity may also submit destruction 
     credits--issued by EPA to entities that convert a greenhouse 
     gas (other than methane) to a gas with a lower global warming 
     potential--in lieu of emission allowances.

     Subtitle C: Distribution of Allowances

       Subtitle C directs EPA to auction virtually all of the 
     emission allowances each year, beginning with 94 percent 
     auction from 2012-2019 and transitioning to 100 percent 
     auction in 2020. Six percent of allowances from 2012 through 
     2019 will be distributed to U.S. manufacturers of trade-
     exposed primary goods (such as iron and steel, cement, 
     aluminum, bulk glass, and paper) as a transitional measure to 
     avoid shifting production abroad.
       Auction proceeds will be used for a variety of public 
     benefit purposes. Up to 0.5 percent of proceeds will be used 
     to cover the costs of EPA and Federal Energy Regulatory 
     Commission administration of the bill. Fifty million dollars 
     per year will be dedicated to climate change education 
     programs and centers for excellence established under 
     Subtitle H of Title III. All remaining proceeds will be 
     divided among 10 funds that will support the programs 
     described in Title III and Title IV of the bill.

     Subtitle D: Trading, Banking, and Borrowing

       Subtitle D establishes rules for the trading, banking, and 
     borrowing of emission allowances. Anyone may buy, sell, or 
     transfer emission allowances, or submit them to EPA for 
     retirement. Unlimited ``banking'' of allowances for future 
     use is permitted. A covered entity may also borrow allowances 
     from EPA (to be drawn from the emissions budget for future 
     years) to meet up to 15 percent of its annual compliance 
     obligation, but an allowance ``loan'' must be repaid within 5 
     years with 10 percent annual interest.

     Subtitle E: Offsets

       Subtitle E establishes a program to issue offset credits to 
     entities that carry out

[[Page 11745]]

     projects in the United States that achieve real, verifiable, 
     additional, permanent, and enforceable reductions in 
     emissions or increases in storage of carbon in plants and 
     soils. Four types of projects will be eligible to receive 
     offset credits: (1) reductions in (outside-the-cap) 
     greenhouse gas emissions from oil and gas systems; (2) 
     reductions in greenhouse gas emissions from livestock 
     operations; (3) reductions in greenhouse gas emissions from 
     coal mines; and (4) increases in biological carbon 
     sequestration through afforestation and reforestation. 
     Activities covered by the cap or by 3 performance standards 
     in subtitle H, or receiving support under Title III are not 
     eligible to earn offset credits. Subtitle E directs EPA to 
     establish rigorous monitoring, quantification, and accounting 
     protocols and standards for approval of offset credits.

     Subtitle F: International Emission Allowances and Offset 
       Credits

       Subtitle F directs EPA to establish regulations providing 
     for approval of emission allowances from foreign greenhouse 
     markets that impose mandatory absolute limits on emissions 
     that are of comparable stringency to the program established 
     by this bill.
       Subtitle F also directs EPA to establish regulations 
     providing for approval of categories and subcategories of 
     international offset credits that meet certain criteria. Only 
     credits generated from projects in countries that have taken 
     action on climate change comparable to that of the United 
     States, or in countries that have very low emissions or are 
     among the least developed of developing countries, are 
     eligible for use under this title.

     Subtitle G: Global Effort to Reduce Greenhouse Gas Emissions

       Subtitle G directs the President to determine whether each 
     foreign country has taken action to reduce greenhouse gas 
     emissions that is ``comparable'' to that of the United 
     States, taking into account the level of economic development 
     of each country. If, by 2020, any country has not taken 
     ``comparable'' action, the President is authorized to require 
     importers of trade-exposed primary goods (e.g., iron and 
     steel, cement, aluminum, bulk glass, and paper) from those 
     countries to purchase special ``international reserve 
     allowances'' to account for the greenhouse gas emissions from 
     the production of the goods. Least-developed countries and 
     countries with low greenhouse gas emissions will be exempt 
     from this requirement.

     Subtitle H: Standards for Coal-Fired Power Plants and Non-
       Covered Facilities

       Subtitle H directs EPA to promulgate performance standards 
     for certain sources not included under the cap--such as coal 
     mines, landfills, wastewater treatment operations, and large 
     animal feeding operations--that emit at least 10,000 metric 
     tons CO2-equivalent per year. These standards will 
     require such sources to apply best available control 
     technologies or practices.
       Subtitle H also establishes performance standards requiring 
     any new coal-fired power plant on which construction begins 
     after January 1, 2009, to achieve capture and geological 
     sequestration of 85 percent of their CO2 emissions 
     within a defined time frame.

     SECTION 102: CONFORMING AMENDMENTS

       Section 102 of the Act amends sections 113, 114, and 307 of 
     the Clean Air Act to make the Act's existing mechanisms for 
     enforcement, inspections, administrative process, and 
     judicial review applicable to the new Title VII of the Act.

     SECTION 103: COMPLEMENTARY POLICIES FOR HYDROFLUOROCARBONS

       To ensure proper use and disposal of HFCs and other 
     fluorinated gases used as substitutes for ozone-depleting 
     substances, this section amends sections 608 and 609 of the 
     Clean Air Act to extend to these substances the requirements 
     of the Clean Air Act that already apply to the sale, use, and 
     disposal of chlorofluorocarbons (CFCs) and 
     hydrochlorofluorocarbons (HCFCs).

     SECTION 104: WAIVER OF PREEMPTION FOR CALIFORNIA STANDARDS 
                   FOR VEHICLE GREENHOUSE GAS EMISSIONS

       This section overrides EPA's December 2007 denial of 
     California's petition for a waiver of preemption under the 
     Clean Air Act of its greenhouse gas emissions standards for 
     vehicles.

     SECTION 105: LOW-CARBON FUEL STANDARD

       This section amends section 211 of the Clean Air Act to 
     establish a Low-Carbon Fuel Standard (LCFS). The LCFS 
     establishes a market-based system to incentivize reductions 
     in the lifecycle greenhouse gas emissions associated with the 
     production and use of transportation fuels. The LCFS is 
     integrated with the current Renewable Fuel Standard.
                   TITLE II--CARBON MARKET OVERSIGHT
       Title II creates a new Office of Carbon Market Oversight 
     (``OCMO'') within the Federal Energy Regulatory Commission, 
     which is charged with ensuring transparency, fairness, and 
     stability in the market for emission allowances, offset 
     credits, and derivatives thereof (collectively referred to as 
     ``regulated instruments''). The OCMO will establish rules 
     requiring registration of (1) self-regulating ``registered 
     carbon trading facilities'' on which regulated instruments 
     are traded, (2) ``carbon clearing organizations'' that 
     provide clearing services to trading facilities, and (3) 
     brokers and dealers trading in regulated instruments.
       Trading of regulated instruments generally will be limited 
     to registered exchanges, except that large institutions and 
     high net-worth individuals are permitted to trade regulated 
     derivatives off-exchange. To ensure market transparency and 
     stability, the OCMO will establish regulations providing for 
     reporting of trading activity by large traders in regulated 
     instruments and may adopt position limits or position 
     accountability requirements. Title II establishes rules 
     against fraud and market manipulation, enforceable through 
     administrative penalties, civil enforcement suits, or 
     criminal prosecution. Finally, the OCMO will provide 
     quarterly reports to Congress on the functioning of the 
     carbon market and its effects on the U.S. economy.
          TITLE III--INVESTING IN AMERICA'S LOW-CARBON FUTURE

     Subtitle A: Climate Trust Tax Credits and Rebates

       Under Subtitle A, an estimated $4.3 trillion (55 to 58.5 
     percent of auction proceeds) will be used for refundable tax 
     credits and rebates for middle- and low-income households, to 
     compensate for any increase in energy costs resulting from 
     the bill. Tax credits will be used to reach middle-income 
     wage earners and senior citizens, and cash rebates will be 
     used to reach low-income households. Households earning under 
     $110,000 will be eligible, and virtually all costs from 
     climate regulation will be covered for households earning 
     under $70,000.

     Subtitle B: Low-Carbon Technology Fund

       Under Subtitle B, an estimated $963 billion (12.5 percent 
     of auction proceeds) will be used to fund low-carbon energy 
     technology programs administered by the Department of Energy. 
     These include existing RD&D programs for renewable 
     electricity generation, carbon capture and sequestration 
     (CCS), electric transmission and distribution efficiency, 
     cellulosic ethanol, low-emission vehicles, building and 
     industrial efficiency, energy storage technologies, and the 
     Advanced Research Projects Agency-Energy. Subtitle B also 
     establishes new programs to promote the deployment of large-
     scale and distributed renewable energy generation and to 
     provide cost-sharing grants to cover the incremental costs of 
     implementing CCS technology at coal-fired power plants that 
     commence construction before 2020.

     Subtitle C: National Energy Efficiency Fund

       Under Subtitle C, an estimated $963 billion (12.5 percent 
     of auction proceeds) will be used to fund an array of 
     efficiency programs. These include: (1) a program to award 
     incentive payments to States based on the level of energy 
     savings each State achieves annually through consumer 
     efficiency programs; (2) programs to award grants to States 
     that implement building efficiency and recycling policies; 
     (3) funding for the Weatherization Assistance Program for 
     low-income persons and the Low Income Home Energy Assistance 
     Program; and (4) grants to support State and local mass 
     transit and ``smart growth'' projects to reduce vehicle miles 
     traveled.

     Subtitle D: Agriculture and Forestry Carbon Fund

       Under Subtitle D, an estimated $378 billion (4.5 to 5 
     percent of auction proceeds) will be used to fund a program, 
     administered by the Department of Agriculture, to support 
     projects by U.S. farmers and foresters that increase 
     biological sequestration of carbon and reduce greenhouse gas 
     emissions through improved agricultural soil management and 
     forest management practices. USDA is also directed to 
     undertake a supporting program of research, education, and 
     outreach.

     Subtitle E: Green Jobs Training and Worker Transition 
       Assistance

       Under Subtitle E, an estimated $147 billion (1.5 to 2 
     percent of auction proceeds) will be used to fund the green 
     jobs training programs established under the Energy 
     Independence and Security Act of 2007, and a program, 
     administered by the Department of Labor, which will provide 
     training, income support, and tax credits for health care 
     insurance for up to two years to any workers affected by the 
     transition to a new low-carbon economy.

     Subtitle F: National Climate Change Adaptation Program

       Under Subtitle F, an estimated $185 billion (2 to 2.5 
     percent of auction proceeds) will be used to support a 
     comprehensive program to increase America's resilience to the 
     impacts of climate change. Under this program, NOAA will 
     periodically assess America's vulnerability to such impacts 
     and provide assistance to federal, state, local, and tribal 
     decision makers in developing adaptation strategies. Subtitle 
     F directs federal agencies to develop and implement plans to 
     address climate change impacts within their jurisdictions and 
     provides funding for State, local, and tribal government 
     projects to reduce vulnerability to climate change impacts.

     Subtitle G: Natural Resource Conservation Fund

       Under Subtitle G, an estimated $147 billion (1.5 to 2 
     percent of auction proceeds) will be

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     used to support measures, implemented by federal land and 
     natural resource management agencies, the States, and Indian 
     tribes to protect U.S. natural resources, wildlife, and 
     fisheries against adverse impacts from climate change.

     Subtitle H: Climate Change Education and Centers for 
       Excellence

       Under Subtitle H, an estimated $2 billion ($50 million per 
     year) will be used to provide support, through the National 
     Science Foundation and EPA, for the development and 
     implementation of climate change education programs and to 
     provide cost-sharing grants supporting the establishment, at 
     colleges, universities, and non-profit organizations, of 
     national centers for excellence on climate change science, 
     technology, and policy.
                  TITLE IV--ENCOURAGING GLOBAL ACTION

     Subtitle A: International Forest Protection Fund

       Under Subtitle A, an estimated $147 billion (1.5 to 2 
     percent of auction proceeds) will be used to support policies 
     in qualifying developing countries that reduce emissions from 
     deforestation and forest degradation or increase carbon 
     sequestration through restoration of forests and degraded 
     lands, afforestation, and improved forest management. 
     Countries that initially do not qualify are eligible for 
     capacity-building grants to prepare them for participation.

     Subtitle B: International Clean Technology Fund

       Under Subtitle B, an estimated $301 billion (3.5 to 4 
     percent of auction proceeds) will be used to provide support 
     for the adoption of clean energy and efficiency technologies 
     by major-emitting developing countries that the President 
     certifies as having taken ``comparable action'' to combat 
     climate change, taking into account the country's level of 
     economic development.

     Subtitle C: International Climate Change Adaptation Fund

       Under Subtitle C, an estimated $185 billion (2 to 2.5 
     percent of auction proceeds) will be used to support an 
     international adaptation program, to be administered by the 
     U.S. Agency for International Development, which will fund 
     projects to assist the most vulnerable developing countries 
     in adapting to the impacts of climate change.
TITLE V--LEGAL FRAMEWORK FOR GEOLOGICAL SEQUESTRATION OF CARBON DIOXIDE
       Title V amends the Safe Drinking Water Act to require EPA 
     to develop comprehensive regulatory standards for underground 
     injection of carbon dioxide, and directs EPA to establish a 
     task force charged with providing Congress with 
     recommendations regarding the legal framework to govern 
     liability with respect to closed geological storage sites.
                TITLE VI--BUILDING EFFICIENCY STANDARDS
       Title VI incorporates provisions from the House-passed 
     version of the energy bill from 2007, requiring the 
     Department of Energy to develop model building efficiency 
     codes that States are required to adopt and enforce. States 
     that do so become eligible for funding from the National 
     Energy Efficiency Fund (described in subtitle C of Title 
     III).
                 TITLE VII--REVIEWS AND RECOMMENDATIONS
       Title VII establishes a comprehensive framework for 
     periodic review and reports to Congress, by the National 
     Academy of Sciences (NAS), the Government Accountability 
     Office (GAO), and relevant federal agencies, of all major 
     aspects of the bill. Every five years, an interagency body 
     will make recommendations to the President, and the President 
     will in turn make recommendations to Congress, on changes to 
     the framework established by the bill. Title VII also 
     provides for expedited Congressional consideration of a 
     presidential recommendation to tighten the bill's emissions 
     cap if the NAS's findings indicate such action is necessary.

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