Comparative Analysis of Climate Change Bills in the U.S. Senate

• Date: 01 July 2009
• Author: Kenneth R. Richards and Stephanie Hayes Richards

7-2009 nEwS & anaLYSiS 39 ELR 10601

Comparative Analysis of Climate

Change Bills in the U.S. Senate

by Kenneth R. Richards and Stephanie Hayes Richards

Kenneth R. Richards is Associate Professor, School of Public and Environmental Aairs, and

Aliated Associate Professor, Maurer School of Law, Indiana University. Stephanie Hayes Richards

is managing principal of Bloomington Energy and Environmental Intelligence, LLC.

The U.S. current nancial conditions notwithstand-

ing, climate change remains at the forefront of our

national policy agenda. e question remains, how-

ever, whether the U.S. Congress will take decisive action on

the issue before t he U.S. Environmental Protection A gency

(EPA) issues regulations under the Clean Air Act (CAA).1

On February 17, 2009, EPA began its reconsideration of

whether carbon dioxide (CO2) should be regulated as a crite-

ria pollutant under the CAA. On April 17, EPA issued a pro-

posed endangerment nding for greenhouse gases (GHGs)

and will begin a period of public comment before beginning

the regulation process.

As an alternative, President Barack Obama has asked the

111th Congress to send him cap-and-trade legislation that

limits carbon emissions. On March 31, Reps. Henry Wax-

man (D-Ca.) and Edward Markey (D-Mass.) issued a discus-

sion draft of a comprehensive climate change and energy bill.

is is not the rst time that Congress ha s considered

comprehensive climate legislation. During the 110th Con-

gress, three climate change bills were considered in the U.S.

Senate: the Bingaman-Specter Bill (S. 1766),2 the Lieberman-

Warner Bill (S. 2191),3 and the Manager’s Amendment to the

Lieberman-Warner Bill (S. 3036).4 In the midst of political

disagreements and the u rgency of the U.S. economic crisis,

the Senate was unable to pass a climate change bill during

the 110th Congress. However, a comparison of the bills and

consideration of their timing suggests that the Senate was

evolving toward an increasingly sophisticated and cost-eec-

tive approach to climate legislation.

Lawmakers can learn much from a carefu l analysis of

previous climate legislation, par ticularly the key elements of

broad climate legislation, the policy principles that should

guide development of the legislation, and some pitfalls to

avoid in the process.

1. 42 U.S.C. §§7401-7671q, ELR S. CAA §§101-618.

2. S. 1766, 110th Cong. (2007).

3. S. 2191, 110th Cong. (2007).

4. S. 3036, 110th Cong. (2007). Although S. 3036 is also known as the Lieber-

man-Warner Bill, for purposes of clarity, it will hereinafter be referred to as the

Manager’s Amendment to distinguish it from S. 2191.

is Article provides a summary of policy recommenda-

tions identied from an examination of the major Senate

climate change bills. A more detai led analysis that provides

additional insight into the most important dierences among

the Lieberman-Warner Bill, the Bingaman-Specter Bill, and

the Manager’s Amendment is available for online viewing.5

Working through the lens of sound policy principles, the

more detailed report provides a comprehensive review of the

three primary Senate bills in the 110th Congress. e report

begins with a brief review of the criteria and fundamental

principles used to e valuate policy options. en, it works

through the major elements of the bill with a side-by-side

comparison, emphasizing the strengths a nd weaknesses of

each bill and the remaining need for improvement.

e results are pleasantly surprising. While there

remain s substanti al room for improvement from a policy

eciency perspective, the Manager’s A mendment has

incorporated many sound policy principles. Some of the

improvements include:

• An environmental safety valve that places a minimum

price below which the government will not sell allow-

ances at auction;

• A requirement t hat any estimation methodologies

adopted under the osets lead to independently repro-

ducible results when tested by teams of experts;

• Assignment of a portion of the auction revenues to the

Decit Reduction Fund;6

• Reduction in the number of provisions that inter-

fere with the price signals t hat form the very ba sis of

the cap-and-trade system, particularly by potentially

reducing the use of subsidies to low-income consumers

and reducing the magnitude of the carbon capture and

storage (CCS) bonus allowances;

5. See Social Science Research Network, Kenneth R. Richards and Stephanie

Richards, e Evolution and Anatomy of Recent Climate Change Bills in the U.S.

Senate: Critique and Recommendations, at http://papers.ssrn.com/sol3/papers.

cfm?abstract_id=1368903.

6. S. 3036 §1401.