They seek to “combine the very best ideas from the public and private sectors and from across the ideological spectrum to achieve the structurally simplest, most economically responsible and environmentally effective result possible,” say Democrat John Kerry, Republican Lindsey Graham and Independent Joe Lieberman, the trio of senators working on the bill, say in their letter.

The four-page summary (PDF) outlines ‘principles and guidelines’ the lawmakers will follow in an ongoing effort to draft legislation that can obtain the 60 votes necessary in the Senate. Because it borrows from prior legislative work, much of the outline is familiar, and, as promised, there are supports for coal, nuclear and oil and gas exploration.

The outline comes hard on the heels of the US Environmental Protection Agency’s endangerment finding and move to regulate greenhouse gasses under the Clean Air Act.

Regulatory predictability

“By failing to legislate, Congress is ceding the policy reins to the EPA and ignoring our responsibility to our constituents,” the senators write. “We are working with our colleagues, the Administration and outside stakeholders to strike a sensible balance and determine the appropriate way to provide regulatory predictability.”

Regulatory predictability is exactly what US businesses have been clamouring for. They have largely bristled at the notion of an EPA crack-down, however.

The outline contains language that advocates of nascent regional cap-and-trade regimes won’t like to hear:

“The absence of national greenhouse gas emissions standards has invited a patchwork of inconsistent state and regional regulations,” the senators write. “Since it is not reasonable to expect businesses to comply with fifty different standards, it is imperative that a federal pollution control system be meaningful and be set by federally elected officials.”

Pre-emption concerns

So far, only the US Northeast has a functioning cap-and-trade regime, and it only covers carbon dioxide emissions from the electricity generating sector. Other markets are forming in the West, including several Canadian provinces, and the Midwest. And participants don’t want to see the sort of federal pre-emption described in the senators’ proposal.

Oregon Governor Ted Kulongoski, whose state is a member of the Western Climate Initiative (WCI), is concerned that Congress will pass a federal standard that is weaker than the ones states are enacting.

“I want the option that if the Western Climate Initiative wants to do more than the federal standard that we be given the opportunity to do that,” he said last week.

According to the WCI web site, it has as its goal a 15% reduction from 2005 levels by 2020.

The senators’ outline favours cap-and-trade over a carbon tax or other “command-and-control regulations”. It calls for the previously articulated greenhouse gas emissions reduction target of 17% below 2005 levels by 2020 – the same figure Obama articulated ahead of Copenhagen – and 80% below 2005 over the long term.

They are considering price collars and a strategic reserve for the carbon market to keep volatility in check, as well as ‘vigilant’ oversight to prevent market abuse. Support is planned for low- and middle-income people, “who spend a disproportionately large amount of their income on energy”.

Breaking the habit

The outline includes a lengthy section on securing energy independence.

“We find ourselves more dependent on foreign oil today than any other time in our nation's history, and that is unacceptable. Every day, we spend nearly $1 billion to sustain our addiction to foreign energy sources - and we ship Americans’ hard earned dollars overseas, some of which finds its way to extremist or terrorist organizations,” the senators write.

To break this habit, they call for “development and deployment of new clean energy technologies and increasing our supply of domestically produced oil and natural gas on land and offshore”. They also seek energy efficiency improvements and maintaining the country’s ability to refine petroleum products.

“It is our belief that we can preserve our refining capacity without sacrificing our environmental goals,” they write. “If energy independence is to be a priority, we must keep the entire energy cycle right here at home.”

Nuclear and coal

A prominent role is given to renewing America’s nuclear industry.

“[S]uccessful legislation must also recognize the important role for clean nuclear power in our low-emissions future,” the senators write. “America has lost its nuclear technology manufacturing base, and we must rebuild it in order to compete in the global marketplace. Our legislation will encourage the construction of new nuclear power plants and provide funding to train the next generation of nuclear workers. We will make it easier to finance the construction of new nuclear power plants and improve the efficiency of the licensing process for traditional as well as small modular reactors, while fully respecting safety and environmental concerns.”

Likewise, coal, currently the largest source of American electricity, is ensured a future in the proposal. “We will commit significant resources to the rapid development and deployment of clean coal technology, and dedicated support for early deployment of carbon capture and sequestration,” the senators write.

The senators’ push for increased offshore oil and gas exploration and nuclear will surely raise the hackles of environmentalists and left-leaning senators, just as it may also gain votes from those on the right. The challenge will be striking the right balance that leaves the final measure with 60 votes in support – a number necessary to overcome procedural roadblocks during debate, likely to begin early next year.

Manufacturing, offsets

Other provisions include assistance to manufacturers “to avoid carbon leakage” and other measures to keep manufacturing jobs in the US. The efforts would be “compatible with our obligations under the World Trade Organization”.

The outline says emissions from agriculture will not be regulated, but instead provide farmers incentives and offset projects to reduce carbon emissions.

“While we are still discussing the details of the offset program with our colleagues, we have reached agreement that we will include significant amounts of real, monitored and verified domestic and international offsets and other incentives in our system in order to contain costs and create opportunities for farmers, ranchers and forest owners to benefit from climate change legislation,” the senators write.

They also allude to a role for international offsets and “acknowledge the role the United States can play to help provide long-term financing to assist developing countries adapt to climate change, generate energy cleanly and reduce emissions from deforestation,” though no hard figures are given.

The senators conclude by emphasizing that the outline is a work in progress, but one they are committed to completing:

“Together, we can and will pass climate change and energy independence legislation this Congress.”