(Adds new sections about key supporters and risks)
Dec 17 A "cap and dividend" bill introduced in
the U.S. Senate last week would reduce the role of Wall Street
in carbon markets by returning money raised from emissions
credit auctions to the public.
It stands in contrast to the climate bill stalled in the
Senate that would likely have a "cap and trade" market at its
heart more open to trading of emissions permits by companies
Senate Majority Leader Harry Reid hopes climate legislation
could be taken up by the full Senate in early spring.
Below are some of the differences between the two market
plans. Cap and trade is represented as "C&T" while the other
STATUS OF THE BILLS
* A climate bill with C&T passed narrowly in the House of
Representatives in June, known as Waxman-Markey after its
sponsors. In the Senate, Democrat John Kerry, Republican
Lindsey Graham, and independent Joe Lieberman, are working on
compromise legislation that builds on the House bill, but they
have not decided on they method to price carbon. They are
casting the bill as one that would create jobs
* The C&D bill was introduced last week by Senators Maria
Cantwell, a Democrat, and Susan Collins, a Republican. It comes
late in the game as many lawmakers are already committed to
C&T. It would also have to be passed in the House.
* The Obama administration, many Democrats in Congress and
major environmental groups support C&T, saying it is the most
efficient way to cut emissions.
* The C&D bill has not been out long enough to garner as
HOW THE BILLS ARE BEING TOUTED - JOBS AND CHECKS
* Kerry, Graham and Lieberman are touting the compromise
bill, which would likely contain C&T, as legislation that will
add jobs in clean energy like nuclear and solar and wind
* C&D would result in tax-free monthly checks sent to every
American and averaging $1,100 a year for a family of four.
* C&T opponents do not want Washington to establish what
could become a trillion-dollar carbon market after recent
massive mismanagement in the banking industry and lack of
* C&D opponents say the system does not give companies
enough flexibility to convert to renewable energy like wind and
solar or buy offsets.
COMPLEXITY OF THE BILLS
* C&T bill, known as Kerry-Boxer in the Senate, is over
* C&D came in at under 40 pages.
TARGETS OF THE 2 PLANS
* C&T targets big polluters, such as power plants, oil
refineries, and makers of glass, cement and chemicals.
Transportation sources would also be targeted.
* C&D only targets producers and importers of fossil fuels
such as coal mining companies and oil importers.
HOW THEY WOULD WORK
* C&T would initially auction 25 percent of the permits to
pollute and distribute the rest of the permits to polluters.
The proceeds would go to state regulators to invest in cutting
power bills or to develop energy efficiency programs.
Companies and investors would be allowed to sell the
permits in a market to polluters that need the credits to meet
an ever-declining emissions cap. The market gives companies the
option of cutting their own output of greenhouse gases or
buying credits representing emissions cuts.
* C&D would institute monthly auctions in which companies
covered by the legislation would have to buy permits to
pollute. Most of the proceeds would go to the public, while 25
percent would go to the development of clean energy.
* C&T backers are focusing on a 17 percent cut by 2020
under 2005 levels, with much stronger cuts by 2050.
* C&D backers want a reduction of 20 percent by 2020 under
2005 levels and stronger cuts by 2050.
(Reporting by Timothy Gardner; Editing by David Gregorio)