Trinity Consultants

`An Industrial Perspective - Strategic Carbon Management,` presented in July 2008

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S.3036 – Lieberman-Warner Climate Security Act

  • Emission Targets
    • Between 2005 and 2012: 5,775 million metric tons of CO2equivalent, the estimated levels during 2005
    • Between 2012 and 2020: Further reductions of ~2 percentper year should result in a 19% reduction below currentlevels
    • Between 2012 and 2050: Emissions should be reduced by71% by 2050
  • Status
    • Markup by committee on December 5, 2007, approved by an11 to 8 vote in committee
    • Recently adjusted the bill to be “deficit neutral”
    • Failed to reach cloture on June 6, 2008
    • Will be reintroduced likely in next congressional session

S.3036 – Lieberman-Warner Climate Security Act

  • This program will both allocate and auction allowances through a variety of methods.
    • Allocation = free emissions. Auction = not free emissions
  • Cost-Containment Auctions – from 2012 through 2027
    • Initial cost-containment auction price shall be no lower than $22 and no higher than $30
    • Cost-containment auction pool – 6,000,000,000 emissions allowances established for calendar years 2030through 2050
    • Cost-containment auction limit – in general shall be limit on quantity of emission allowances to sell; limitin 2012 is 450,000,000 emission allowances
  • Regular Auctions – regular, annual auctions that are not cost-containment auctions
    • Initial regular auction reserve price in 2012 is $10
  • Early Action -- from 2012 through 2025 (starting at 5% and leveling off at 1%/year) and inrecognition of verified GHG emissions reductions, emission allowances will be distributed toowners and operators of Covered Facilities for actions taken after January 1, 1994 but before date ofenactment
    • Free Allowance Allocations
    • Sector dependent
      • Number of allowances for a facility will be determined by multiplying
      • Number of allowances available for distribution by
      • Facility’s share of annual average of aggregate quantity of petroleum-based products produced or imported duringthe 3 calendar years preceding allowance distribution

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