The Climate Stewardship Act (H.R.4067), as proposed by Reps. Wayne T. Gilchrest (R-MD) and John W. Olver (D-MA), would require the Administrator of the Environmental Protection Act (EPA) to promulgate regulations to limit greenhouse gas (GHG) emissions from the electricity generation, transportation, industrial, and commercial economic sectors. The covered sectors accounted for approximately 85% of the overall US emissions in the year 2000. The bill also would provide for the trading of emissions allowances and reductions through a National Greenhouse Gas Database that would contain an inventory of emissions and registry of reductions.
Target: Starting in 2010, the bill would cap U.S. aggregate emissions for the covered sectors at the 2000 level. The bill's emissions limits would not apply to the agricultural and the residential sectors. Certain subsectors would be exempt if the Administrator determined that it was not feasible to measure their GHG emissions.
Allowances: An entity that is in a covered sector, or that produces or imports synthetic GHGs (HFCs, PFCs, and SF6), would be subject to the requirements of this bill if it:
(a) owns at least one facility that annually emits more than 10,000 metric tons of GHGs, measured in units of carbon dioxide equivalents (MTCO2E);
(b) produces or imports petroleum products that, when combusted, would emit more than 10,000 MTCO2E; or
(c) produces or imports synthetic GHGs that, when used, would emit more than 10,000 MTCO2E.
Each covered entity would be required to submit to the EPA one tradeable allowance for each MTCO2E emitted directly, emitted through the combustion of petroleum products, and emitted through the use of synthetic GHGs.
Allocation of Allowances: The Secretary of Commerce would determine the amount of allowances to be given away or "grandfathered" to covered entities and the amount to be auctioned. The Secretary's determination would be subject to a number of allocation factors identified in the bill. Proceeds from the auction would be used to reduce energy costs of consumers and assist disproportionately affected workers and industries.
Flexibility Mechanisms: Covered entities would have flexibility in acquiring their allowances. In addition to the allowances grandfathered to them, covered entities could trade with other covered entities to acquire additional allowances, if necessary. Also, any entity would be allowed to satisfy up to 15% of its total allowance requirements by submitting:
(a) tradeable allowances from another nation's market in GHGs;
(b) a registered net increase in sequestration;
(c) a GHG emission reduction registered by a non-covered entity; and
(d) allowances borrowed against future reductions.
A covered entity that agreed to emit no more than its 1990 levels by 2010 would be allowed to meet up to 20% of its requirement through (a) international credits, (b) sequestration, and (c) registered reductions, but not (d) borrowed credits.
National Greenhouse Gas Database: The EPA Administrator would be required to implement a comprehensive system for reporting and inventorying GHG emissions and for registering GHG reductions and sequestration. Covered entities would be required to report their GHG emissions and non-covered entities (including those in the agricultural sector) would be allowed to register GHG emission reductions achieved since 1990 and sequestration.
Penalty: Any covered entity not meeting its emissions limits would be fined for each ton of GHGs over the limit at the rate of three times the market value of a ton of GHG.
Climate Change Effects on Coastal and Oceanic Resources: The bill would amend the Coastal Zone Management Act to require the National Oceanic and Atmospheric Administration to report periodically on the possible and projected impacts of climate change on coastal communities and oceanic and coastal ecosystems. The bill would also require the Department of Commerce to identify adaptation measures that might be used to protect these resources and to estimate the costs of the measures.
Research: The bill would establish an abrupt climate change research program at the Commerce Department and a program at the National Institute of Standards and Technology in climate change-relevant standards and measurement technologies.