(Reuters) - A compromise U.S. climate change bill is being drafted by Democratic Senator John Kerry, Independent Senator Joseph Lieberman and Republican Senator Lindsey Graham.
The bill is expected to be formally unveiled next Monday. But Reuters has obtained many of the details likely to be included.
Here is what’s known so far, according to sources, although details could change before next Monday:
— A 17 percent reduction in overall greenhouse gas emissions by 2020, from 2005 levels, would be the goal. Many scientists think that is insufficient to keep global temperatures from rising a dangerous 2 degrees Celsius (3.5 F) above pre-industrial times. The bill hopes to achieve around 80 percent reductions by 2050.
— The Environmental Protection Agency would be prohibited from regulating carbon dioxide emissions. State and regional “cap and trade” programs to reduce carbon pollution would be terminated. States could still impose energy-efficiency standards and renewable energy standards.
— Electric power utilities would be put under a cap and trade program, starting in 2012, to force them to reduce carbon emissions. Cap and trade forces a reduction in carbon pollution over the years and required pollution permits could be traded on a regulated market.
Still unclear is how the pollution permits would be allocated to utilities and whether all of them would initially be given away for free or whether some would be sold.
The legislation is expected to avoid the term “cap and trade,” in favor of something more descriptive, possibly “pollution reduction targets.”
— Manufacturers would be incorporated into the same program starting in 2016.
— A new fee placed on refined motor fuels before they are shipped to gasoline stations would be the mechanism for reducing carbon emissions in the transportation sector. The fee would be linked to the carbon pollution credits traded in the utility sector. Senators were fighting over how the revenues from the fee would be used by the federal government, with many insisting they be used to help develop electric cars and other green projects. Many Republicans would like to see the money used to repair roads and bridges.
— New incentives would be included for heavy trucks to switch from diesel fuel to cleaner-burning natural gas.
— Domestic and international “offsets” would be allowed to help companies achieve pollution-reduction goals. Instead of reducing some of their smokestack emissions, they could invest in projects that aim to cut emissions, such as saving forests. More details on the number and type of offsets were unknown.
— Additional government loan guarantees, possibly $54 billion, to encourage the nuclear power industry to expand its capacity. But it was unclear whether new nuclear power would be counted in a new initiative requiring utilities to use “renewable” energy.
— More government funds to help the coal industry develop clean technology, such as “carbon capture and sequestration.” Last month, $10 billion was included in one draft, but changes were more recently made and details were not available.
— An expansion of offshore oil and gas drilling in parts of Alaska and the East, excluding the Northeast. There’s been a fight over whether states would share some of the federal revenues generated from the new drilling, with some senators vehemently opposed, either because they are against expanded drilling or they come from non-coastal states.
— A price collar to prevent large market fluctuations in the price of carbon pollution permits. Early indications were that the collar would aim to keep prices in the range of $10-$30 per ton, but that may have been altered recently.
— Consumer rebates to help cover the costs of higher energy prices.
— Border protections for energy-intensive industries, such as steel, paper, glass and chemical manufacturers. The goal is to have a weapon in hand that would be deployed by the United States if foreign countries with weaker climate controls tried to flood the United States with their cheaper products.
— Senators also were fighting over an oil industry proposal to allow states, instead of Washington, to regulate the production of natural gas from shale.
— Pollution-reduction would be aimed at larger companies, such as those with emissions above 25,000 tons a year.
Reporting by Richard Cowan; Editing by Eric Beech