In essence, the 648-page draft opens what promises to be a lengthy and contentious debate in Congress over the proper regulatory framework to address climate change, and how to best advance national clean energy development and energy efficiency.

While Obama’s party has a comfortable majority in the House of Representatives, the bloc is sharply divided over those issues.

Republicans have already lined up in opposition to most of Obama’s environmental policies, which they contend will raise energy costs for consumers struggling with a recessionary economy and leave industry less competitive in global markets.

Representatives Henry Waxman of California and Edward Markey of Massachusetts, co-sponsors of the legislation, deliberately omitted several of the most controversial issues in the hope of reaching a compromise in negotiations on the House floor and later with the Senate.

The bill, called American Clean Energy and Security Act of 2009, requires that emissions of carbon dioxide, nitrous oxide and five other greenhouse gases be lowered 20% from 2005 levels by 2020. In contrast, Obama’s plan calls for a 14% reduction by then and 80% less by mid-century.

It also creates a mandatory carbon cap-and-trade system for electric utilities, oil companies, large industrial sources and other entities that are responsible for 85% of US global warming emissions. Polluters responsible for 25,000 tons a year of CO2 equivalent are not included.

Covered entities are required to have tradable allowances for each ton of pollution emissions. The draft allows those polluters to exceed their allowances if they can obtain ``offsets’’ at lower cost from other sources up to a maximum yearly 2b tons – split evenly between domestic and international sources. Offset users must submit five tons of credits for every four tons of emissions being offset.

The bill, however, does not spell out how pollution allowances would be distributed. It also avoids the controversial issue of whether they will be auctioned or given for free.

The Obama administration assumes that the federal government will begin to receive revenue from auctioning off pollution allowances by 2012, and estimates $646b will be raised by 2019 if all allowances are auctioned.

The Waxman-Markey bill is similar in content to a proposal by the US Climate Action Partnership (USCAP), a group that includes 26 major companies, Environmental Defense Fund, National Resources Defense Council and The Nature Conservancy.

While applauding the bill, USCAP noted that its call for pollution allowances to be initially distributed free was not heeded.

Elsewhere, the bill calls for creation of a nationwide renewable portfolio standard – the Senate calls it renewable energy standard – that would require all regions of the country to produce 6% of their electricity from renewable energy sources in 2012 and 25% by 2025.

This proposal, which Waxman and Markey last year said they wanted, has been under fire from lawmakers in both parties representing districts in the Southeast and parts of the Midwest short on renewable energy resources – at least with current technology.

How ``renewable energy resource’’ is defined is another point of friction. The bill ``qualifies’’ hydropower to electricity generated solely from increased efficiency achieved, or additions of capacity made on, or after, 1 January 2001. This would rule out tens of thousands of megawatts of generating capacity in place nationwide.

Among other things, the bill also sets parameters for modernization of the electrical grid, calls for increased production of electric plug-in vehicles and offers $10bn to develop carbon capture and storage technology at coal-burning plants.

``This legislation will create millions of clean energy jobs, put America on the path to energy independence, and cut global warming pollution.” Waxman said in a statement. “Our goal is to strengthen our economy by making America the world leader in new clean energy and energy efficiency technologies.”

House Speaker Nancy Pelosi lauded the bill saying, ``The scope of this effort is historic and overdue.’’