Two more U.S. Senators jumped into the climate bill debate on Friday, offering a proposal that would cap planet-warming emissions but reduce the role of Wall Street in carbon markets. Unlike the climate bill passed by the House of Representatives earlier this year, financial speculators would be shut out of carbon markets created under this legislation, introduced by moderate Senators Maria Cantwell, a Democrat, and Susan Collins, a Republican.
Instead of placing carbon limits on most major polluters, the bill would focus only on producers and importers of fossil fuels such as coal mining companies and not power plants and manufacturers. The companies covered by their legislation would be required to buy permits for their carbon emissions in monthly auctions. The majority of the revenue from the auctions would be refunded back to consumers to offset higher energy costs, with the remaining 25 percent going to clean energy development.
This market, known as “cap and dividend”, would be more streamlined than the House’s cap and trade scheme. The new legislation further muddles the landscape for climate regulation in the Senate, where lawmakers are trying to reach a consensus to overcome the regional and economic concerns that have stalled action so far. On Thursday, a bipartisan trio of Senators unveiled their own framework for addressing global warming, which would marry a cap and trade system limiting carbon emissions with incentives for more domestic energy production.
The Senators John Kerry, Lindsey Graham, and Joe Lieberman have been working to win votes from climate fence sitters in both parties. The White House hailed their framework as a “positive development” toward reaching a bipartisan agreement in the Senate.
The three Senators signaled their climate control system would likely follow the same contours of the House-passed bill, which covered most major polluters.Under the House bill, major emitters such as refiners and utilities would be required to acquire carbon permits. Initially, most permits would be allocated to industries for free with the rest auctioned off. Critics of the House bill and previous Senate proposals have complained they are too broad in scope and that complex carbon and offset markets would invite manipulation and abuse from financial speculators.