A major coalition of corporations and environmental groups is urging Congress to pass by year's end a mandatory, economywide cap-and-trade program to reduce U.S. emissions of carbon dioxide and other heat-trapping gases to 20 percent of 2005 levels by 2050.
The U.S. Climate Action Partnership's "Blueprint for Legislative Action," which comes five days before President-elect Barack Obama's inauguration, calls for a national greenhouse gas registry with a single price for trading carbon. The blueprint suggests a starting floor price of $10 per metric ton of carbon allocations to companies as well as a "reserve of credits" that would come from offsets derived from forest conservation and renewable energy projects, among other things.
Congress should set an initial upper level limit on the use of offsets for company compliance in any year of 1.5 billion metric tons of domestic and 1.5 billion metric tons of international offsets, the blueprint noted. A congressionally created Carbon Market Board should have the power to set offset limits going forward.
"We think this is a good foundation for long-term economic growth because this country can lead in clean technologies," said General Electric Co. CEO Jeff Immelt during a morning news conference at the Capitol. He was flanked by two-dozen other corporate and environmental group executives who make up U.S. CAP's membership.
U.S. CAP's more than 30 members are urging Congress to pass a cap-and-trade bill this session to help meet interim targets. The blueprint calls for emissions to be 97-102 percent of 2005 levels by 2012, 80-86 percent of levels by 2020 and 58 percent of 2005 levels by 2030.
"We're motivated both by the economic crisis that affects the country and the environmental crisis," said Jonathan Lash, president of the World Resources Institute.
But at least one U.S. CAP member -- ConocoPhillips CEO Jim Mulva -- conceded privately that the prospect of Congress passing a cap-and-trade bill this year is unlikely given the deep recession.
"It may likely be 2010," Mulva said following a speech at the National Press Club on Tuesday.
In a hearing today, House Energy and Commerce Chairman Henry Waxman (D-Calif.) said he plans to move a climate bill through his committee by Memorial Day (see related story).
"It's a pretty ambitious goal," a Waxman aide said. "It'll be a busy spring."
At the U.S. CAP news conference, Pew Center on Climate Change director Eileen Clausen would not attach a price tag to the program, broadly promoting it as a measure that would "revitalize" the U.S. economy with green jobs. The cost of the program will depend significantly upon the combination of emission-reduction targets and the level of offsets that are permitted from emission reductions from uncapped sources in the United States and abroad, the report underscored.
U.S. CAP's 80 percent by 2050 emissions reduction target and carbon-trading program is consistent with the cap-and-trade program Obama supports, the companies contend.
Brent Blackwelder, president of the environmental group Friends of the Earth -- which is not a U.S. CAP member -- called the interim emissions-reduction targets "deeply flawed" and said carbon offsets would amount to "loopholes" for polluters.
"Offsets can allow U.S. corporate polluters to continue producing more than their fair share of greenhouse gas emissions, and it is nearly impossible to verify that such offsets, especially on the international market, end up producing the intended emissions reductions elsewhere," Blackwelder said.
The Union of Concerned Scientists, which is not a coalition member, is also calling for stronger interim targets.
"The coalition's target of reducing pollution 14 to 20 percent below today's levels by 2020 is inadequate," said Alden Meyer, UCS's director of strategy and policy. "A more aggressive target is both necessary and possible. Cuts of 20 to 25 percent are achievable with current and emerging technologies."
The blueprint would require any coal or solid-fueled power plant that emits more than 10,000 metric tons of CO2 annually and is permitted after Jan. 1, 2015, to emit no more than 1,100 pounds of CO2 per megawatt-hour. The plan also calls on U.S. EPA to set final regulations for carbon capture, transport and storage by Jan. 1, 2012.
New plants would need to be ready for carbon capture and storage retrofits.
"We must find a way to remove the carbon from coal," said Jim Rogers, CEO of Duke Energy, a U.S. CAP member. "If we don't find a way, coal will not be a viable option or equal contributor in a low-carbon world."
Brian Murray, director for economic analysis Duke University's Nicholas Institute, called the coalition plan "an equitable solution to a difficult problem."
"A comprehensive carbon cap-and-trade system, with a robust market for carbon offsets and strong provisions to contain costs, should simultaneously ratchet down carbon emissions, spur new low-carbon technology and allow continued economic growth."
Not every U.S. CAP member agreed. The National Wildlife Federation, which joined U.S. CAP last year, dropped out of the coalition today. A NWF spokesman declined to elaborate on the move but issued a written statement that suggested the environmental group also felt the emissions reduction targets were not aggressive enough.
"Our understanding of global warming has changed markedly as scientists have observed the changes taking place around the world and warned that climate change is accelerating faster than we thought a short while ago," the statement said.
"We look forward to continuing our dialogue with U.S. CAP and its members, albeit in a different role," the statement concluded.
Click here to read the U.S. CAP blueprint.