The United States Senate is on break for summer recess, so the Lieberman-Warner Climate Security Act (CSA), a bill intended to nationally lower greenhouse gas emissions, remains unpassed. But with an election victory by Barack Obama continuing to look likely, it's possible the bill could be passed this year.
expensive, unproven technology intended mainly for coal plants, received huge subsidies in the newer 2008 version, thanks to a heavy handed lobbying effort. The general aim of the CSA is to reduce emissions through a cap and trade system that would regulate installations emitting more than 10,000 metric tons of CO2 yearly. The bill, using 2005 emissions levels as a reference, would require reductions of 4 percent of total C02 emissions by 2012, 19 percent by 2020, and 71 percent by 2050. But in the time since it was first introduced, the text of the legislation has been heavily influenced by the energy industry’s Washington apparatus. According to a Pew Climate Analysis, roughly 87 percent of the initial emissions credits created would be given away, with the rest being auctioned to regulated emitters in the bill's first year. The amount would slowly reducing to around 30 percent by 2031. One Democrat source I've spoken with claims Title X of the Boxer amendment to the bill, summarized here, closely resemble language suggested by coal industry lobbyists. Title X delivers 1 percent of the funds from auctioned allowances to carbon capture and sequestration, to the tune of $15.7 billion. But under certain of those CCS projects will additionally receive a hefty 3 percent of all allowances from 2012 to 2025, 4 percent from 2026-2030, and 1 percent from 2031-2050. Compare that to the 0.75 percent of auction funds that would go to an efficient building fund, to use just one example. Buildings consume almost half of all electricity generated nationwide, and are widely acknowledged to be one of the ripest areas for change, with plenty of room for simple improvements, like adding insulation to old structures, that could drastically reduce our electricity usage. Yet inefficient carbon capture projects get several times as much funding, for a process that has yet to be demonstrated at commercial scale. The CCS subsidies are in addition to substantial emission credit giveaways to power utilities, with the bill allocating 19 percent of non-auctioned permits to utilities at its inception. The bill provides hundreds of billions of dollars in subsidies and emissions credits to the fossil fuel industry, with the biggest allocations going to the biggest emitters. With the coal industry throwing around campaign donations and lobbying heavily, CCS startups could win big. The Bush administration has already authorized $1.3 billion in funding for CCS in June. Startups in the CCS game would be popping the champagne corks, were the bill to overcome a Republican filibuster and the president, eager to make his mark before Obama gets the chance, signed the CSA into law. A McCain administration would also see the passage of a similar bill, as it closely mirrors the senator's proposed climate legislation.
Specifically, the companies that would benefit from the legislation would be those who captured or used CO2 as part of an industrial process. Companies like CalStar Cement and Khosla Ventures-backed Calera, which uses CO2 to produce concrete, would find more willing financing partners in the energy industry. Ethanol producers SequesCO and Algenol Biofuels, which use CO2 as a feedstock, would also see an uptick in business from coal based contracts. Wind and solar research and offset projects are funded by the bill, but not at nearly the same levels as CCS subsidies. This might have something to do with Senator Robert Byrd of West Virgina, a powerful figure as the Senate's second-ranking Democrat. Coal is central to the West Virginian economy, and coincidentally central to the CSA's emissions reduction strategy.