October 26, 2009 / 5:40 PM / 8 years ago

FACTBOX-Distribution of CO2 permits in US Senate bill

  Oct 26 (Reuters) - The climate bill introduced by
Democrats in the U.S. Senate would initially give away the
majority of permits to emit greenhouse gases to entities like
electricity distributors and big energy users, such as steel
and cement plants, in a cap-and-trade program.
 The distribution of the permits in the Senate bill,
announced late on Friday, was similar to that of the bill that
was narrowly passed in the House of Representatives in June.
 There were some changes. Oil refiners, for example, made
out slightly better, getting 2.25 percent of the permits
instead of 2 percent. The Senate bill would also auction more
of the permits than the House bill.
 To avoid windfall profits for big polluters, an aim of the
bill would be to give the permits, worth billions of dollars,
to power and natural gas distributors rather than big fossil
fuel-burning power plants. The idea is that the distributors,
which are regulated by the states, would pass on breaks to
consumers through lower bills or investments in energy
efficiency.
 The legislation can still be amended and it's unlikely the
Senate will act this year on climate change amid opposition
from many Republicans and some moderate Democrats, as well as
Congress' preoccupation with healthcare reform.
 Below is a breakdown of how most of the permits would be
distributed in the Senate bill.
 PERMITS TO BE AUCTIONED:                            25 pct
 - Fifteen percent with proceeds pushed to low- and
moderate-income households to protect them from rising energy
costs from cap and trade. Would increase to 18.5 percent of
permits auctioned after 2029.
 - Ten percent with proceeds going to reducing the deficit
from 2012 to 2029, increasing to 22 of permits in 2030.
 THE REST OF PERMITS TO BE GIVEN AWAY INITIALLY TO:
 LOCAL ELECTRIC DISTRIBUTION COMPANIES               30 pct
 - Distributors, which are regulated by the states, must use
the allocations to protect consumers from electricity price
increases.
 - Allocations to phase out from 2026 to 2030.
 MERCHANT COAL, LONG TERM POWER PURCHASE AGREEMENTS   5 pct
 HEAVY INDUSTRIES LIKE CEMENT AND STEEL         4 to 15 pct
 - Allocations would start at 4 percent in 2012 and 2013,
then move to 15 percent through 2015. They would start to
decrease after that.
 STATES                                         4 to 10 pct
 - For investments in renewable energy and energy
efficiency. Would start at 10 percent then slip to about 4
percent in 2022.
 LOCAL NATURAL GAS DISTRIBUTION COMPANIES             9 pct
 - Also regulated by the states, must be used to protect
consumers from rises in natural gas prices
 - Phases out from 2026 to 2030
 NUCLEAR                                        
 - Training for workers                             0.5 pct
 TROPICAL DEFORESTATION OFFSETS                       5 pct
 ADVANCED AUTO TECHNOLOGY                             3 pct
 OIL REFINERS                                      2.25 pct
 CARBON CAPTURE AND STORAGE                   1.75 to 5 pct
 (Reporting by Timothy Gardner)


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