Summary of the Climate Protection Act of 2013 (S.332)

The Climate Protection Act would impose a “carbon pollution fee” on any manufacturer, producer, or importer of a “carbon polluting substance.” (Imports from countries with equivalent carbon measures would be exempt.) The sponsors anticipate that the fee would be paid by 3,000 entities and generate about $1.2 trillion over ten years. The revenue would fund investments in energy efficiency and wind, solar, geothermal and biomass energy; programs to train workers for clean energy jobs; deficit reduction; and weatherization of U.S. homes. The bill would also provide rebates to consumers to offset increases in expenses associated with increases in the costs of oil, coal or natural gas. In addition, the bill would require disclosure of all chemicals used in hydraulic fracturing processes.Title I – Carbon Pollution Fee

Sec. 1. Short Title.

This Act may be cited as the “Climate Protection Act of 2013.

Sec. 101. Carbon Pollution Fee

Title I of the Clean Air Act would be amended by adding sections 195 – 198, summarized below.

“PART E-Carbon Pollution Fee

“Sec. 195. Definitions

Among other things, “carbon polluting substance” would be defined as coal, petroleum, any petroleum product, or natural gas that when used, releases greenhouse gas emissions, and that is extracted, manufactured, or produced in the U.S. or imported for consumption, use or warehousing.

A “carbon pollution-intensive good” would be defined as a good identified by the Administrator of the Environmental Protection Agency (EPA) as iron, steel, a steel mill product, aluminum, cement, glass, pulp, paper, a chemical, or an industrial ceramic. It would also be any other manufactured product that the EPA Administrator determined was transferred for the purpose of being further manufactured, and during manufacture, generated greenhouse gas emissions in amounts comparable (on an emission-per dollar output basis) to emissions generated in the manufacture or production of the specific products listed above. If any of the above were used as inputs, the input would also be considered a carbon pollution-intensive good.

“Sec. 196. Imposition of Carbon Pollution Fee

Manufacturers, producers and/or importers of a carbon polluting substance would be required to pay a carbon pollution fee.

The carbon pollution fee would be assessed per ton of carbon dioxide content of the carbon polluting substance. A fraction of the fee would be imposed to account for fractional tonnage.

For the first year, covered entities would be charged $20 per ton of carbon dioxide content. For each of the next ten years, the fee would increase at an annual rate of 5.6 percent (rounded to the nearest dollar). Beginning in the twelfth year of the program, the rate would remain the same.

Carbon polluting substances that would be exported, used as a feedstock in a way that did not result in the emission of the substance, or produced with the use of another carbon polluting substance for which the fee was paid would be exempt.

“Sec. 197. Carbon Equivalency Fee

The fee would be paid for carbon pollution-intensive goods imported to the United States, unless exported from countries with equivalent carbon measures in place.

The import fee would be determined annually, differentiated by class of product and country of origin, taking into account the amount of greenhouse gas emissions released during the manufacture and transport of the good.

The fee would cease if the EPA Administrator determined it was no longer appropriate.

Fifty percent of the revenue collected from the import fee would fund climate change adaptation; improving the resiliency of critical infrastructure; protecting environmental quality and wildlife; and international commitments made by the United States to assist with climate change adaptation.

The remaining fifty percent of revenue would fund the improvement of transportation-related critical infrastructure and the addition of electric vehicle charging stations.

 “Sec. 198. Report to Congress

Within five years of enactment, the EPA Administrator would report to Congress on how best to administer the carbon fee program after its twelfth year. The recommendations would include a future fee schedule and future investments to reduce greenhouse gas emissions and adapt to climate change.

Sec. 102. Residential environmental rebate program

Sixty percent of the revenue collected from the fee (not including the import fee) would be authorized for the EPA Administrator to provide monthly rebates for U.S. citizens and legal residents.

Sec. 103. Pollution Reduction Trust Fund

Forty percent of the revenue collected from the fee (not including the import fee) would be allocated to a Pollution Reduction Trust Fund within the U.S. Treasury. The following allocations would be made from the Trust Fund:

  • $7.5 billion would be made available to the Administrator of the EPA for each of the first 10 years of the program. At a minimum, the Administrator would reserve 25 percent of this amount for energy efficiency investments in energy-intensive or trade-exposed industries.
  • $5 billion would be made available to the Secretary of Energy to carry out weatherization for low income persons (as established under the Energy Conservation and Production Act), for each of the first 10 years following enactment.
  • $1 billion would be made available to the Secretary of Labor for each of the first 10 years, for job training, education and transition assistance for workers seeking to transition to clean energy jobs.
  • $2 billion would be made available to the Advanced Research Projects Agency-Energy (ARPA-E) for each of the first 10 years.
  • The balance would be used to reduce the federal debt.

Title II – Sustainable Technologies Finance Program

Sec. 201. Sustainable Technologies Finance Program

The EPA Administrator would be required to establish a program, including any necessary regulations, called the Sustainable Technologies Finance Program. Under this program, the EPA Administrator would provide loans, credit instruments, loan guarantees, and other financial assistance for projects that reduce greenhouse gas emissions. Eligible projects would include: wind, solar, geothermal, advanced biomass and biofuels, ocean and tidal energy, hydropower, advanced transportation projects and energy efficiency technologies.

Starting on October 1, 2013 and on each October 1 through 2022, out of any funds in the Treasury not otherwise appropriated, the Secretary of Treasury would transfer $5 billion to the EPA Administrator to carry out this section.

Sec. 202. Budgetary Effects

The budgetary effects of this title would be determined by the Senate Budget Committee’s latest statement on “Budgetary Effects of PAYGO Legislation.

Title III – Environmental Protection

Sec. 301. Regulation of hydraulic fracturing

The exemption from the Safe Drinking Water Act (SDWA § 1421 (d)(1)) for hydraulic fracturing would be ended.

Entities performing hydraulic fracturing would publicly disclose all chemicals intended to be used in underground injection prior to the commencement of any hydraulic fracturing operations, and all chemicals actually used in underground injection after operations have ceased.

The Safe Drinking Water Act would be amended to authorize the EPA Administrator to issue orders that evaluate civil penalties for violations up to $10,000 for each day of a past or current violation, up to a maximum administrative penalty of $125,000. Such an order would be limited to instances where the EPA Administrator was previously authorized to bring a civil action under the Safe Water Drinking Act.

Sec. 302. Reports to Congress

Within two years of enactment, the EPA Administrator would report to Congress on the amount of methane emissions discharged from any leak in natural gas infrastructure.

The EPA Administrator would be required to enter into an agreement with the National Academy of Sciences under which the Academy would conduct a study detailing the quantity of greenhouse gas emissions not covered by programs found in this legislation. The Academy would also provide recommendations on additional programs that would further reduce greenhouse gas emissions.

Sec. 303. Sense of Congress relating to reduction of greenhouse gas emissions

This section expresses the sense of Congress that the United States should carry out activities to ensure greenhouse gas emission reductions of at least 80 percent below 2005 levels by 2050.