Climate Stewardship Act of 2003
Legislative Activity
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Rereferred to Senate Committee on Environment and Public Works by Unanimous Consent.
October 30, 2003
View full timeline
Introduced in Senate
January 9, 2003
Sponsor introductory remarks on measure. (CR S166-167, S173-174)
January 9, 2003
Read twice and referred to the Committee on Environment and Public Works. (text of measure as introduced: CR S167-173)
January 9, 2003
Senate Committee on Environment and Public Works discharged by Unanimous Consent.
October 29, 2003
Measure laid before Senate. (consideration: CR S13484-13509)
October 29, 2003
Considered by Senate. (consideration: CR S13572-13598)
October 30, 2003
Rereferred to Senate Committee on Environment and Public Works by Unanimous Consent.
October 30, 2003
Floor Debate
17 membersWhat members said about S. 139 on the floor




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Floor Debate
17 membersWhat members said about S. 139 on the floor
Mr. President, as chairman of the Committee on Environment and Public Works, I have previously addressed the Senate to discuss the issue of so-called global warming. I have taken a special interest…
Mr. President, it is my understanding there are 3 hours tonight equally divided, which would be an hour and a half for each side. Because of something that happened today in Colorado, I yield up to 7…
Mr. President, I have an amendment on behalf of the Senator from Arizona, Mr. McCain, myself, and several other Senators, which I send to the desk at this time. Mr. President, I ask unanimous consent…
Mr. President, as many of my colleagues in the Senate know, I have been fascinated and awed by the complexity of the climate change issue for quite some time. Certainly, being born and raised in the…
Mr. President, I rise today to introduce the Crane Conservation Act of 2003. I am very pleased that the Senator from Louisiana, Ms. Landrieu, has joined me as a cosponsor of this bill. I propose this…
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Will the Senator yield for a question? Is the Senator aware the major attack on this legislation will be related to the validity of the entire issue of climate change? Will the Senator yield for a…
Mr. President, I thank the Senator from Oklahoma for his kind words. The two of us will try to explain to our colleagues the real meaning of this legislation proposed by Senator Lieberman and Senator…
Mr. President, I rise today to re-introduce legislation at the start of this new Congress to protect those living along the California-Mexican border from harmful power plant emissions. This bill,…
Mr. President, anyone who has picked up a copy of this legislation and read it has to be forgiven if he or she was soon reminded of the words of Yogi Berra, ``It's deja vu all over again.'' After…
Mr. President, I rise in support of the McCain- Lieberman amendment. I would like to begin by thanking the distinguished Senators from Arizona and Connecticut for their work on this bill. Their…
Mr. President, I come to the floor today to discuss the very critical issue of global warming and to summarize events of recent years that have led us to this point. We are discussing the paramount…
Mr. President, like all of my colleagues I have been watching the presidential campaign with great interest, and I have noticed that the Democratic nominee has been making comments, particularly in…
Mr. President, I rise today to join my friend and colleague, Senator McCain, to introduce the first ever comprehensive legislation to limit the emissions of greenhouse gases in the United States.…
Show 11 more
Mr. President, I rise today to join my friend and colleague, Senator McCain, to introduce the first ever comprehensive legislation to limit the emissions of greenhouse gases in the United States.…
I thank the Senator very much. I am proud to rise in support of the bipartisan climate change legislation offered by Senators Lieberman and McCain. I will be brief in my remarks, because I believe…
Mr. President, I commend Chairman McCain for his extraordinary leadership on this issue, and Senator Lieberman for being able at this point for the first time to debate global climate change here in…
Mr. President, I rise today to support the Climate Stewardship Act of 2003. As a cosponsor of S. 139, I commend Senators Lieberman and McCain for their bipartisan efforts to craft an important first…
Mr. President, fellow colleagues, please do not overreact by the claim that the climate is changing. The climate has always changed naturally. Thanks in large part to scientific research carried out…
Mr. President, I will yield in a minute to the Senator from Nebraska. Last night we went into a lot of detail in this debate and I used three groups of scientists, numbering over 20,000, who refute…
Mr. President, I rise today in strong support of the Climate Stewardship Act. I hope the Senate will seize the historic opportunity before it today and vote to begin seriously dealing with this…
Mr. President, I would like to take a few moments to discuss S. 139, the Climate Stewardship Act and lay out the reasons I am supporting this bill. The chief reason I support this bill is that I…
Mr. President, how much time remains on each side? Who is the minority side? How much time is controlled by Senator Inhofe and how much time is controlled by Senator Lieberman? Mr. President, I would…
Mr. President, in 1997, the Senate unanimously passed the Byrd-Hagel resolution that stated that the Senate would reject any climate agreement that did not mandate ``new specific scheduled…
Mr. President, I thank the chairman of the Environment and Public Works Committee, the committee I believe properly has jurisdiction over this issue, a committee on which I serve and which has…
Bill Text
2 versions available
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 139 Reference Change Senate (RCS)]
108th CONGRESS
1st Session
S. 139
To provide for a program of scientific research on abrupt climate
change, to accelerate the reduction of greenhouse gas emissions in the
United States by establishing a market-driven system of greenhouse gas
tradeable allowances that could be used interchangeably with passenger
vehicle fuel economy standard credits, to limit greenhouse gas
emissions in the United States and reduce dependence upon foreign oil,
and ensure benefits to consumers from the trading in such allowances.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 9, 2003
Mr. Lieberman (for himself, Mr. McCain, Mr. Durbin, Mr. Akaka, Mrs.
Feinstein, Ms. Snowe, Mrs. Murray, Mr. Lautenberg, and Mr. Nelson of
Nebraska) introduced the following bill; which was read twice and
referred to the Committee on Environment and Public Works
October 30, 2003
Rereferrred to the Committee on Environment and Public Works by
unanimous consent
_______________________________________________________________________
A BILL
To provide for a program of scientific research on abrupt climate
change, to accelerate the reduction of greenhouse gas emissions in the
United States by establishing a market-driven system of greenhouse gas
tradeable allowances that could be used interchangeably with passenger
vehicle fuel economy standard credits, to limit greenhouse gas
emissions in the United States and reduce dependence upon foreign oil,
and ensure benefits to consumers from the trading in such allowances.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Climate Stewardship Act of 2003''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definitions.
TITLE I--FEDERAL CLIMATE CHANGE RESEARCH AND RELATED ACTIVITIES
Sec. 101. National Science Foundation scholarships.
Sec. 102. Commerce Department study of technology transfer barriers.
Sec. 103. Report on United States impact of Kyoto protocol.
Sec. 104. Research grants.
Sec. 105. Abrupt climate change research.
Sec. 106. NIST greenhouse gas functions.
Sec. 107. Development of new measurement technologies.
Sec. 108. Enhanced environmental measurements and standards.
Sec. 109. Technology development and diffusion.
TITLE II--NATIONAL GREENHOUSE GAS DATABASE
Sec. 201. National greenhouse gas database and registry established.
Sec. 202. Inventory of greenhouse gas emissions for covered entities.
Sec. 203. Greenhouse gas reduction reporting.
Sec. 204. Measurement and verification.
TITLE III--MARKET-DRIVEN GREENHOUSE GAS REDUCTIONS
Subtitle A--Emission Reduction Requirements; Use of Tradeable
Allowances
Sec. 311. Covered entities must submit allowances for emissions.
Sec. 312. Compliance.
Sec. 313. Tradeable allowances and fuel economy standard credits.
Sec. 314. Borrowing against future reductions.
Sec. 315. Other uses of tradeable allowances.
Sec. 316. Exemption of source categories.
Subtitle B--Establishment and Allocation of Tradeable Allowances
Sec. 331. Establishment of tradeable allowances.
Sec. 332. Determination of tradeable allowance allocations.
Sec. 333. Allocation of tradeable allowances.
Sec. 334. Initial allocations for early participation and accelerated
participation.
Sec. 335. Bonus for accelerated participation.
Sec. 336. Ensuring target adequacy.
Subtitle C--Climate Change Credit Corporation
Sec. 351. Establishment.
Sec. 352. Purposes and functions.
Subtitle D--Sequestration Accounting; Penalties
Sec. 371. Sequestration accounting.
Sec. 372. Penalties.
SEC. 3. DEFINITIONS.
In this Act:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Baseline.--The term ``baseline'' means the historic
greenhouse gas emission levels of an entity, as adjusted upward
by the Administrator to reflect actual reductions that are
verified in accordance with--
(A) regulations promulgated under section
201(c)(1); and
(B) relevant standards and methods developed under
this title.
(3) Covered sectors.--The term ``covered sectors'' means
the electricity, transportation, industry, and commercial
sectors, as such terms are used in the Inventory.
(4) Covered entity.--The term ``covered entity'' means an
entity (including a branch, department, agency, or
instrumentality of Federal, State, or local government) that--
(A) owns or controls a source of greenhouse gas
emissions in the electric power, industrial, or
commercial sectors of the United States economy (as
defined in the Inventory), refines or imports petroleum
products for use in transportation, or produces or
imports hydrofluorocarbons, perfluorocarbons, or sulfur
hexafluoride; and
(B) emits over 10,000 metric tons of greenhouse gas
per year, measured in units of carbon dioxide
equivalence, or produces or imports--
(i) petroleum products that, when
combusted, will emit,
(ii) hydrofluorocarbons, perfluorocarbons,
or sulfur hexafluoride that, when used, will
emit, or
(iii) other greenhouse gases that, when
used, will emit,
over 10,000 metric tons of greenhouse gas per year,
measured in units of carbon dioxide equivalence.
(5) Database.--The term ``database'' means the National
Greenhouse Gas Database established under section 201.
(6) Direct emissions.--The term ``direct emissions'' means
greenhouse gas emissions by an entity from a facility that is
owned or controlled by that entity.
(7) Facility.--The term ``facility'' means a building,
structure, or installation located on any 1 or more contiguous
or adjacent properties of an entity in the United States.
(8) Greenhouse gas.--The term ``greenhouse gas'' means--
(A) carbon dioxide;
(B) methane;
(C) nitrous oxide;
(D) hydrofluorocarbons;
(E) perfluorocarbons; and
(F) sulfur hexafluoride.
(9) Indirect emissions.--The term ``indirect emissions''
means greenhouse gas emissions that are--
(A) a result of the activities of an entity; but
(B) emitted from a facility owned or controlled by
another entity; and
(C) not reported as direct emissions by the entity
from which they were emitted.
(10) Inventory.--The term ``Inventory'' means the Inventory
of U.S. Greenhouse Gas Emissions and Sinks, prepared in
compliance with the United Nations Framework Convention on
Climate Change Decision 3/CP.5).
(11) Phase i allotment.--The term ``Phase I allotment''
means--
(A) the amount of emissions emitted by a covered
sector, as identified in the Inventory for the calendar
year preceding the calendar year in which this Act is
enacted (reduced by the amount of allowances allocated
to early and accelerated participants under section 334
of this Act); multiplied by--
(B) the result of--
(i) the total greenhouse emissions for all
covered sectors for the year 2000, as
identified in the 2000 Inventory; divided by
(ii) the total greenhouse emissions for all
covered sectors for the calendar year preceding
the date of enactment of this Act, as
identified in the Inventory.
(12) Phase ii allotment.--The term ``Phase II allotment''
means--
(A) the amount of emissions emitted by a covered
sector, as identified in the Inventory for the calendar
year preceding the calendar year in which this Act is
enacted (reduced by the amount of allowances allocated
to early and accelerated participants under section 334
of this Act); multiplied by--
(B) the result of--
(i) the total greenhouse emissions for all
covered sectors for the year 1990, as
identified in the 1990 Inventory; divided by
(ii) the total greenhouse emissions for all
covered sectors for the calendar year preceding
the date of enactment of this Act, as
identified in the Inventory.
(13) Registry.--The term ``registry'' means the registry of
greenhouse gas emission reductions established under section
201(b)(2).
(14) Secretary.--The term ``Secretary'' means the Secretary
of Commerce.
(15) Sequestration.--
(A) In general.--The term ``sequestration'' means
the capture, long-term separation, isolation, or
removal of greenhouse gases from the atmosphere.
(B) Inclusions.--The term ``sequestration''
includes--
(i) agricultural and conservation
practices;
(ii) reforestation;
(iii) forest preservation; and
(iv) any other appropriate method of
capture, long-term separation, isolation, or
removal of greenhouse gases from the
atmosphere, as determined by the Administrator.
(C) Exclusions.--The term ``sequestration'' does
not include--
(i) any conversion of, or negative impact
on, a native ecosystem; or
(ii) any introduction of non-native species
or genetically modified organisms.
(16) Source category.--The term ``source category'' means a
process or activity that leads to direct emissions of
greenhouse gases, as listed in the Inventory.
TITLE I--FEDERAL CLIMATE CHANGE RESEARCH AND RELATED ACTIVITIES
SEC. 101. NATIONAL SCIENCE FOUNDATION SCHOLARSHIPS.
The Director of the National Science Foundation shall establish a
scholarship program for post-secondary students studying global climate
change, including capability in observation, analysis, modeling,
paleoclimatology, consequences, and adaptation.
SEC. 102. COMMERCE DEPARTMENT STUDY OF TECHNOLOGY TRANSFER BARRIERS.
(a) Study.--The Assistant Secretary of Technology Policy at
Department of Commerce shall conduct a study of technology transfer
barriers, best practices, and outcomes of technology transfer
activities at Federal laboratories related to the licensing and
commercialization of energy efficient technologies. The study shall be
submitted to the Senate Committee on Commerce, Science, and
Transportation and the House of Representatives Committee on Science
within 6 months after the date of enactment of this Act. The Assistant
Secretary shall work with the existing interagency working group to
address identified barriers.
(b) Agency Report To Include Information on Technology Transfer
Income and Royalties.--Paragraph (2)(B) of section 11(f) of the
Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710(f))
is amended--
(1) by striking ``and'' after the semicolon in clause (vi);
(2) by redesignating clause (vii) as clause (ix); and
(3) by inserting after clause (vi) the following:
``(vii) the number of fully-executed
licenses which received royalty income in the
preceding fiscal year for climate-change or
energy-efficient technology;
``(viii) the total earned royalty income
for climate-change or energy-efficient
technology; and''.
(c) Increased Incentives for Development of Climate-Change or
Energy-Efficient Technology.--Section 14(a) of the Stevenson-Wydler
Technology Innovation Act of 1980 (15 U.S.C. 3710c(a)) is amended--
(1) by striking ``15 percent,'' in paragraph (1)(A) and
inserting ``15 percent (25 percent for climate change-related
technologies),''; and
(2) by inserting ``($250,000 for climate change-related
technologies)'' after ``$150,000'' each place it appears in
paragraph (3).
SEC. 103. REPORT ON UNITED STATES IMPACT OF KYOTO PROTOCOL.
Within 6 months after the date of enactment of this Act, the
Secretary shall submit a report to the Senate Committee on Commerce,
Science, and Transportation and the House of Representatives Committee
on Science on the effects that the entry into force of the Kyoto
Protocol will have on--
(1) United States industry and its ability to compete
globally;
(2) international cooperation on scientific research and
development; and
(3) United States participation in international
environmental climate change mitigation efforts and technology
deployment.
SEC. 104. RESEARCH GRANTS.
Section 105 of the Global Change Research Act of 1990 (15 U.S.C.
2935) is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following:
``(c) Research Grants.--
``(1) Committee to develop list of priority research
areas.--The Committee shall develop a list of priority areas
for research and development on climate change that are not
being addressed by Federal agencies.
``(2) Director of ostp to transmit list to nsf.--The
Director of the Office of Science and Technology Policy shall
transmit the list to the National Science Foundation.
``(3) Funding through nsf.--
``(A) Budget request.--The National Science
Foundation shall include, as part of the annual request
for appropriations for the Science and Technology
Policy Institute, a request for appropriations to fund
research in the priority areas on the list developed
under paragraph (1).
``(B) Authorization.--For fiscal year 2004 and each
fiscal year thereafter, there are authorized to be
appropriated to the National Science Foundation not
less than $17,000,000, to be made available through the
Science and Technology Policy Institute, for research
in those priority areas.''.
SEC. 105. ABRUPT CLIMATE CHANGE RESEARCH.
(a) In General.--The Secretary, through the National Oceanic and
Atmospheric Administration, shall carry out a program of scientific
research on potential abrupt climate change designed--
(1) to develop a global array of terrestrial and
oceanographic indicators of paleoclimate in order sufficiently
to identify and describe past instances of abrupt climate
change;
(2) to improve understanding of thresholds and
nonlinearities in geophysical systems related to the mechanisms
of abrupt climate change;
(3) to incorporate these mechanisms into advanced
geophysical models of climate change; and
(4) to test the output of these models against an improved
global array of records of past abrupt climate changes.
(b) Abrupt Climate Change Defined.--In this section, the term
``abrupt climate change'' means a change in climate that occurs so
rapidly or unexpectedly that human or natural systems may have
difficulty adapting to it.
SEC. 106. NIST GREENHOUSE GAS FUNCTIONS.
Section 2(c) of the National Institute of Standards and Technology
Act (15 U.S.C. 272(c)) is amended--
(1) by striking ``and'' after the semicolon in paragraph
(21);
(2) by redesignating paragraph (22) as paragraph (23); and
(3) by inserting after paragraph (21) the following:
``(22) perform research to develop enhanced measurements,
calibrations, standards, and technologies which will enable the
reduced production in the United States of greenhouse gases
associated with global warming, including carbon dioxide,
methane, nitrous oxide, ozone, perfluorocarbons,
hydrofluorocarbons, and sulfur hexafluoride; and''.
SEC. 107. DEVELOPMENT OF NEW MEASUREMENT TECHNOLOGIES.
The Secretary shall initiate a program to develop, with technical
assistance from appropriate Federal agencies, innovative standards and
measurement technologies (including technologies to measure carbon
changes due to changes in land use cover) to calculate--
(1) greenhouse gas emissions and reductions from
agriculture, forestry, and other land use practices;
(2) noncarbon dioxide greenhouse gas emissions from
transportation;
(3) greenhouse gas emissions from facilities or sources
using remote sensing technology; and
(4) any other greenhouse gas emission or reductions for
which no accurate or reliable measurement technology exists.
SEC. 108. ENHANCED ENVIRONMENTAL MEASUREMENTS AND STANDARDS.
The National Institute of Standards and Technology Act (15 U.S.C.
271 et seq.) is amended--
(1) by redesignating sections 17 through 32 as sections 18
through 33, respectively; and
(2) by inserting after section 16 the following:
``SEC. 17. CLIMATE CHANGE STANDARDS AND PROCESSES.
``(a) In General.--The Director shall establish within the
Institute a program to perform and support research on global climate
change standards and processes, with the goal of providing scientific
and technical knowledge applicable to the reduction of greenhouse gases
(as defined in section 3(8) of the Climate Stewardship Act of 2003).
``(b) Research Program.--
``(1) In general.--The Director is authorized to conduct,
directly or through contracts or grants, a global climate
change standards and processes research program.
``(2) Research projects.--The specific contents and
priorities of the research program shall be determined in
consultation with appropriate Federal agencies, including the
Environmental Protection Agency, the National Oceanic and
Atmospheric Administration, and the National Aeronautics and
Space Administration. The program generally shall include basic
and applied research--
``(A) to develop and provide the enhanced
measurements, calibrations, data, models, and reference
material standards which will enable the monitoring of
greenhouse gases;
``(B) to assist in establishing a baseline
reference point for future trading in greenhouse gases
and the measurement of progress in emissions reduction;
``(C) that will be exchanged internationally as
scientific or technical information which has the
stated purpose of developing mutually recognized
measurements, standards, and procedures for reducing
greenhouse gases; and
``(D) to assist in developing improved industrial
processes designed to reduce or eliminate greenhouse
gases.
``(c) National Measurement Laboratories.--
``(1) In general.--In carrying out this section, the
Director shall utilize the collective skills of the National
Measurement Laboratories of the National Institute of Standards
and Technology to improve the accuracy of measurements that
will permit better understanding and control of these
industrial chemical processes and result in the reduction or
elimination of greenhouse gases.
``(2) Material, process, and building research.--The
National Measurement Laboratories shall conduct research under
this subsection that
includes--
``(A) developing material and manufacturing
processes which are designed for energy efficiency and
reduced greenhouse gas emissions into the environment;
``(B) developing environmentally-friendly, `green'
chemical processes to be used by industry; and
``(C) enhancing building performance with a focus
in developing standards or tools which will help
incorporate low- or no-emission technologies into
building designs.
``(3) Standards and tools.--The National Measurement
Laboratories shall develop standards and tools under this
subsection that include software to assist designers in
selecting alternate building materials, performance data on
materials, artificial intelligence-aided design procedures for
building subsystems and `smart buildings', and improved test
methods and rating procedures for evaluating the energy
performance of residential and commercial appliances and
products.
``(d) National Voluntary Laboratory Accreditation Program.--The
Director shall utilize the National Voluntary Laboratory Accreditation
Program under this section to establish a program to include specific
calibration or test standards and related methods and protocols
assembled to satisfy the unique needs for accreditation in measuring
the production of greenhouse gases. In carrying out this subsection the
Director may cooperate with other departments and agencies of the
Federal Government, State and local governments, and private
organizations.''.
SEC. 109. TECHNOLOGY DEVELOPMENT AND DIFFUSION.
The Director of the National Institute of Standards and Technology,
through the Manufacturing Extension Partnership Program, may develop a
program to support the implementation of new ``green'' manufacturing
technologies and techniques by the more than 380,000 small
manufacturers.
TITLE II--NATIONAL GREENHOUSE GAS DATABASE
SEC. 201. NATIONAL GREENHOUSE GAS DATABASE AND REGISTRY ESTABLISHED.
(a) Establishment.--As soon as practicable after the date of
enactment of this Act, the Administrator, in coordination with the
Secretary, the Secretary of Energy, the Secretary of Agriculture, and
private sector and nongovernmental organizations, shall establish,
operate, and maintain a database, to be known as the ``National
Greenhouse Gas Database'', to collect, verify, and analyze information
on greenhouse gas emissions by entities.
(b) National Greenhouse Gas Database Components.--The database
shall consist of--
(1) an inventory of greenhouse gas emissions; and
(2) a registry of greenhouse gas emission reductions and
increases in greenhouse gas sequestrations.
(c) Comprehensive System.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Administrator shall promulgate
regulations to implement a comprehensive system for greenhouse
gas emissions reporting, inventorying, and reductions
registration.
(2) Requirements.--The Administrator shall ensure, to the
maximum extent practicable, that--
(A) the comprehensive system described in paragraph
(1) is designed to--
(i) maximize completeness, transparency,
and accuracy of information reported; and
(ii) minimize costs incurred by entities in
measuring and reporting greenhouse gas
emissions; and
(B) the regulations promulgated under paragraph (1)
establish procedures and protocols necessary--
(i) to prevent the reporting of some or all
of the same greenhouse gas emissions or
emission reductions by more than 1 reporting
entity;
(ii) to provide for corrections to errors
in data submitted to the database;
(iii) to provide for adjustment to data by
reporting entities that have had a significant
organizational change (including mergers,
acquisitions, and divestiture), in order to
maintain comparability among data in the database over time;
(iv) to provide for adjustments to reflect
new technologies or methods for measuring or
calculating greenhouse gas emissions;
(v) to account for changes in registration
of ownership of emission reductions resulting
from a voluntary private transaction between
reporting entities; and
(vi) to clarify the responsibility for
reporting in the case of any facility owned or
controlled by more than 1 entity.
(3) Serial numbers.--Through regulations promulgated under
paragraph (1), the Administrator shall develop and implement a
system that provides--
(A) for the verification of submitted emissions
reductions;
(B) for the provision of unique serial numbers to
identify the verified emission reductions made by an
entity relative to the baseline of the entity; and
(C) for the tracking of the reductions associated
with the serial numbers.
SEC. 202. INVENTORY OF GREENHOUSE GAS EMISSIONS FOR COVERED ENTITIES.
(a) In General.--Not later than July 1st of each calendar year
after 2008, a covered entity shall submit to the Administrator a report
that describes, for the preceding calendar year, the entity-wide
greenhouse gas emissions (as reported at the facility level),
including--
(1) the total quantity of direct greenhouse gas emissions
from stationary sources, expressed in units of carbon dioxide
equivalence;
(2) the amount of petroleum products sold or imported and
the amount of greenhouse gases, expressed in carbon dioxide
equivalents, that would be produced when these products are
used for transportation; and
(3) such other categories of emissions as the Administrator
determines in the regulations promulgated under section
201(c)(1) may be practicable and useful for the purposes of
this Act, such as--
(A) indirect emissions from imported electricity,
heat, and steam;
(B) process and fugitive emissions; and
(C) production or importation of greenhouse gases.
(b) Collection and Analysis of Data.--The Administrator shall
collect and analyze information reported under subsection (a) for use
under title III.
SEC. 203. GREENHOUSE GAS REDUCTION REPORTING.
(a) In General.--Subject to the requirements described in
subsection (b)--
(1) a covered entity may register greenhouse gas emission
reductions achieved after 1990 and before 2010 under this
section; and
(2) an entity that is not a covered entity may register
greenhouse gas emission reductions achieved at any time since
1990 under this section.
(b) Requirements.--
(1) In general.--The requirements referred to in subsection
(a) are that an entity (other than an entity described in
paragraph (2)) shall--
(A) establish a baseline; and
(B) submit the report described in subsection
(c)(1).
(2) Requirements applicable to entities entering into
certain agreements.--An entity that enters into an agreement
with a participant in the registry for the purpose of a carbon
sequestration project shall not be required to comply with the
requirements specified in paragraph (1) unless that entity is
required to comply with the requirements by reason of an
activity other than the agreement.
(c) Reports.--
(1) Required report.--Not later than July 1st of the each
calendar year beginning more than 2 years after the date of
enactment of this Act, but subject to paragraph (3), an entity
described in subsection (a) shall submit to the Administrator a
report that describes, for the preceding calendar year, the
entity-wide greenhouse gas emissions (as reported at the
facility level), including--
(A) the total quantity of direct greenhouse gas
emissions from stationary sources, expressed in units
of carbon dioxide equivalence;
(B) the amount of petroleum products sold or
imported and the amount of greenhouse gases, expressed
in carbon dioxide equivalents, that would be produced
when these products are used by vehicles; and
(C) such other categories of emissions as the
Administrator determines in the regulations promulgated
under section 201(c)(1) may be practicable and useful
for the purposes of this Act, such as--
(i) indirect emissions from imported
electricity, heat, and steam;
(ii) process and fugitive emissions; and
(iii) production or importation of
greenhouse gases.
(2) Voluntary reporting.--An entity described in subsection
(a) may (along with establishing a baseline and reporting
emissions under this section)--
(A) submit a report described in paragraph (1)
before the date specified in that paragraph for the
purposes of achieving and commoditizing greenhouse gas
reductions through use of the registry; and
(B) submit to the Administrator, for inclusion in
the registry, information that has been verified in
accordance with regulations promulgated under section
201(c)(1) and that relates to--
(i) any entity-wide greenhouse gas emission
reductions activities of the entity that were
carried out during or after 1990 and before the
establishment of the National Greenhouse Gas
Database, verified in accordance with
regulations promulgated under section 201(c)(1), and submitted to the
Administrator before the date that is 4 years after the date of
enactment of this Act; and
(ii) with respect to the calendar year
preceding the calendar year in which the
information is submitted, any project or
activity that results in an entity-wide
reduction of greenhouse gas emissions or an
increase in net sequestration of a greenhouse
gas that is carried out by the entity.
(3) Provision of verification information by reporting
entities.--Each entity that submits a report under this
subsection shall provide information sufficient for the
Administrator to verify, in accordance with measurement and
verification methods and standards developed under section 203,
that the greenhouse gas report of the reporting entity--
(A) has been accurately reported; and
(B) in the case of each voluntary report under
paragraph (2), represents--
(i) actual reductions in direct greenhouse
gas emissions--
(I) relative to historic emission
levels of the entity; and
(II) after accounting for any
increases in indirect emissions
described in paragraph (1)(C)(i); or
(ii) actual increases in net sequestration.
(4) Failure to submit report.--An entity that participates
or has participated in the registry and that fails to submit a
report required under this subsection shall be prohibited from
using, or allowing another entity to use, its registered
emissions reductions or increases in sequestration to satisfy
the requirements of section 311.
(5) Independent third-party verification.--To meet the
requirements of this section and section 203, an entity that is
required to submit a report under this section may--
(A) obtain independent third-party verification;
and
(B) present the results of the third-party
verification to the Administrator.
(6) Availability of data.--
(A) In general.--The Administrator shall ensure
that information in the database is--
(i) published; and
(ii) accessible to the public, including in
electronic format on the Internet.
(B) Exception.--Subparagraph (A) shall not apply in
any case in which the Administrator determines that
publishing or otherwise making available information
described in that subparagraph poses a risk to national
security.
(7) Data infrastructure.--The Administrator shall ensure,
to the maximum extent practicable, that the database uses, and
is integrated with, Federal, State, and regional greenhouse gas
data collection and reporting systems in effect as of the date
of enactment of this Act.
(8) Additional issues to be considered.--In promulgating
the regulations under section 201(c)(1) and implementing the
database, the Administrator shall take into consideration a
broad range of issues involved in establishing an effective
database, including--
(A) the appropriate allowances for reporting each
greenhouse gas;
(B) the data and information systems and measures
necessary to identify, track, and verify greenhouse gas
emissions in a manner that will encourage private
sector trading and exchanges;
(C) the greenhouse gas reduction and sequestration
methods and standards applied in other countries, as
applicable or relevant;
(D) the extent to which available fossil fuels,
greenhouse gas emissions, and greenhouse gas production
and importation data are adequate to implement the
database; and
(E) the differences in, and potential uniqueness
of, the facilities, operations, and business and other
relevant practices of persons and entities in the
private and public sectors that may be expected to
participate in the database.
(d) Annual Report.--The Administrator shall publish an annual
report that--
(1) describes the total greenhouse gas emissions and
emission reductions reported to the database during the year
covered by the report;
(2) provides entity-by-entity and sector-by-sector analyses
of the emissions and emission reductions reported;
(3) describes the atmospheric concentrations of greenhouse
gases; and
(4) provides a comparison of current and past atmospheric
concentrations of greenhouse gases.
SEC. 204. MEASUREMENT AND VERIFICATION.
(a) Standards.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall develop
comprehensive measurement and verification methods and
standards to ensure a consistent and technically accurate
record of greenhouse gas emissions, emission reductions,
sequestration, and atmospheric concentrations for use in the
registry.
(2) Requirements.--The development of methods and standards
under paragraph (1) shall include--
(A) a requirement that a covered entity use a
continuous emissions monitoring system, or another
system of measuring or estimating emissions that is
determined by the Secretary to provide information with
the same precision, reliability, accessibility, and
timeliness as a continuous emissions monitoring system provides;
(B) establishment of standardized measurement and
verification practices for reports made by all entities
participating in the registry, taking into account--
(i) protocols and standards in use by
entities desiring to participate in the
registry as of the date of development of the
methods and standards under paragraph (1);
(ii) boundary issues, such as leakage and
shifted use;
(iii) avoidance of double counting of
greenhouse gas emissions and emission
reductions;
(iv) protocols to prevent a covered entity
from avoiding the requirements of this Act by
reorganization into multiple entities that are
under common control; and
(v) such other factors as the Secretary, in
consultation with the Administrator, determines
to be appropriate;
(C) establishment of measurement and verification
standards applicable to actions taken to reduce, avoid,
or sequester greenhouse gas emissions;
(D) in coordination with the Secretary of
Agriculture, standards to measure the results of the
use of carbon sequestration and carbon recapture
technologies, including--
(i) organic soil carbon sequestration
practices; and
(ii) forest preservation and reforestation
activities that adequately address the issues
of permanence, leakage, and verification;
(E) establishment of such other measurement and
verification standards as the Secretary, in
consultation with the Secretary of Agriculture, the
Administrator, and the Secretary of Energy, determines
to be appropriate;
(F) establishment of standards for obtaining the
Secretary's approval of the suitability of geological
storage sites that include evaluation of both the
geology of the site and the entity's capacity to manage
the site; and
(G) establishment of other features that, as
determined by the Secretary, will allow entities to
adequately establish a fair and reliable measurement
and reporting system.
(b) Review and Revision.--The Secretary shall periodically review,
and revise as necessary, the methods and standards developed under
subsection (a).
(c) Public Participation.--The Secretary shall--
(1) make available to the public for comment, in draft form
and for a period of at least 90 days, the methods and standards
developed under subsection (a); and
(2) after the 90-day period referred to in paragraph (1),
in coordination with the Secretary of Energy, the Secretary of
Agriculture, and the Administrator, adopt the methods and
standards developed under subsection (a) for use in
implementing the database.
(d) Experts and Consultants.--
(1) In general.--The Secretary may obtain the services of
experts and consultants in the private and nonprofit sectors in
accordance with section 3109 of title 5, United States Code, in
the areas of greenhouse gas measurement, certification, and
emission trading.
(2) Available arrangements.--In obtaining any service
described in paragraph (1), the Secretary may use any available
grant, contract, cooperative agreement, or other arrangement
authorized by law.
TITLE III--MARKET-DRIVEN GREENHOUSE GAS REDUCTIONS
Subtitle A--Emission Reduction Requirements; Use of Tradeable
Allowances
SEC. 311. COVERED ENTITIES MUST SUBMIT ALLOWANCES FOR EMISSIONS.
(a) In General.--Beginning with calendar year 2010--
(1) each covered entity in the electric generation,
industrial, and commercial sectors shall submit to the
Administrator one tradeable allowance for every metric ton of
greenhouse gases, measured in units of carbon dioxide
equivalence, that it emits;
(2) producer or importer of hydrofluorocarbons,
perfluorocarbons, or sulfur hexafluoride that is a covered
entity shall submit to the Administrator one tradeable
allowance for every metric ton of hydrofluorocarbons,
perfluorocarbons, or sulfur hexafluoride it produces or
imports, measured in units of carbon dioxide equivalence; and
(3) each petroleum refiner or importer that is a covered
entity shall submit one tradeable allowance for every unit of
petroleum product it sells that will produce one metric ton of
greenhouse gases, measured in units of carbon dioxide
equivalence, when used for transportation.
(b) Determination of Transportation Sector Amount.--For the
transportation sector, the Administrator shall determine the amount of
greenhouse gases, measured in units of carbon dioxide equivalence, that
will be emitted when petroleum products are used for transportation.
(c) Exception for Certain Deposited Emissions.--Notwithstanding
subsection (a), a covered entity is not required to submit a tradeable
allowance for any amount of greenhouse gas that would otherwise have
been emitted from a source under the ownership or control of that
entity if--
(1) the emission is deposited in a geological storage
facility approved by the Administrator under section
204(a)(2)(F); and
(2) the entity agrees to submit tradeable allowances for
any portion of the deposited emission that is subsequently
emitted from that facility.
SEC. 312. COMPLIANCE.
(a) In General.--
(1) Source of tradeable allowances used.--A covered entity
may use a tradeable allowance to meet the requirements of this
section without regard to whether the tradeable allowance was
allocated to it under subtitle B or acquired from another
entity or the Climate Change Credit Corporation established
under section 351.
(2) Verification by Administrator.--At various times during
each year, the Administrator shall determine whether each
covered entity has met the requirements of this section. In
making that determination, the Administrator shall--
(A) take into account tradeable allowances
allocated to, or acquired by, that covered entity; and
(B) retire the serial number assigned to each such
tradeable allowance so used.
(b) Alternative Means of Compliance From 2010 Through 2015.--For
the years 2010, 2011, 2012, 2013, 2014, and 2015, a covered entity may
satisfy 15 percent of its total allowance submission requirement under
this section by--
(1) submitting tradeable allowances from another nation's
market in greenhouse gas emissions if--
(A) the Secretary certifies that the other nation's
system for trading in greenhouse gas emissions is
complete, accurate, and transparent and reviews that
determination at least once every 5 years;
(B) the other nation has adopted enforceable limits
on its greenhouse gas emissions which the tradeable
allowances were issued to implement; and
(C) the covered entity certifies that the tradeable
allowance has been retired unused in the other nation's
market;
(2) submitting a registered net increase in sequestration,
as registered in the National Greenhouse Gas Database
established under section 201, adjusted, if necessary, to
comply with the accounting standards and methods established
under section 372;
(3) submitting a greenhouse gas emissions reduction (other
than a registered net increase in sequestration) that was
registered in the National Greenhouse Gas Database by a person
that is not a covered entity; or
(4) submitting credits obtained from the Administrator
under section 314
(c) Alternative Means of Compliance After 2015.--For years
beginning after 2015, a covered entity may meet the requirements of
this section by any means described in subsection (b), except that for
the purpose of applying subsection (d) after 2015, ``10 percent'' shall
be substituted for ``15 percent''.
SEC. 313. TRADEABLE ALLOWANCES AND FUEL ECONOMY STANDARD CREDITS.
(a) In General.--Section 32903 of title 49, United States Code, is
amended by striking the second sentence of subsection (a) and inserting
``The credits may be--
``(1) applied to any of the 3 model years immediately
following the model year for which the credits are earned; or
``(2) if the average fuel economy of a manufacturer exceeds
the fuel efficiency standards by more than 20 percent, sold to
the registry established under section 201 of the Climate
Stewardship Act of 2003.''.
(b) Conversion Ratio.--The Secretary of Transportation, in
consultation with the Administrator, shall determine the conversion
factor to be used for purposes of credits purchased from, or sold to,
the registry established under section 201 of this Act and fuel economy
standard credits under section 32903 of title 49, United States Code.
(c) Reduction of Transportation Sector Allocation.--If any
manufacturer sells credits under section 32903(a)(2) of title 49,
United States Code, to the registry established under section 201 of
this Act in any calendar year, the amount of tradeable allowances
allocated to the transportation sector under section 311(b) for the
next calendar year, and the total allocation of tradeable allowance
available for allocation in the next calendar year, shall be reduced by
an amount equivalent to the sum of the credits, measured in units of
carbon dioxide equivalents, sold to the registry by such manufacturers
during the preceding calendar year.
SEC. 314. BORROWING AGAINST FUTURE REDUCTIONS.
(a) In General.--The Administrator shall establish a program under
which a covered entity may--
(1) receive a credit in the current calendar year for
anticipated reductions in emissions in a future calendar year;
and
(2) use the credit in lieu of a tradeable allowance to meet
the requirements of this Act for the current calendar year,
subject to the limitation imposed by section 312(b).
(b) Determination of Tradeable Allowance Credits.--The
Administrator may make credits available under subsection (a) only for
anticipated reductions in emissions that--
(1) are attributable to the realization of capital
investments in equipment, the construction, reconstruction, or
acquisition of facilities, or the deployment of new
technologies--
(A) for which the covered entity has executed a
binding contract and secured, or applied for, all
necessary permits and operating or implementation
authority;
(B) that will not become operational within the
current calendar year; and
(C) that will become operational and begin to
reduce emissions from the covered source within 5 years
after the year in which the credit is used; and
(2) will be realized within 5 years after the year in which
the credit is used.
(c) Carrying Cost.--If a covered entity uses a credit under this
section to meet the requirements of this Act for a calendar year
(referred to as the use year), the tradeable allowance requirement for
the year from which the credit was taken (referred to as the source
year) shall be increased by an amount equal to--
(1) 10 percent for each credit borrowed from the source
year; multiplied by
(2) the number of years beginning after the use year and
before the source year.
(d) Maximum Borrowing Period.--A credit from a year beginning more
than 5 years after the current year may not be used to meet the
requirements of this Act for the current year.
(e) Failure To Achieve Reductions Generating Credit.--If a covered
entity that uses a credit under this section fails to achieve the
anticipated reduction for which the credit was granted for the year
from which the credit was taken, then--
(1) the covered entity's requirements under this Act for
that year shall be increased by the amount of the credit, plus
the amount determined under subsection (c);
(2) any tradeable allowances submitted by the covered
entity for that year shall be counted first against the
increase in those requirements; and
(3) the covered entity may not use credits under this
section to meet the increased requirements.
SEC. 315. OTHER USES OF TRADEABLE ALLOWANCES.
(a) In General.--Tradeable allowances may be sold, exchanged,
purchased, retired, or used as provided in this section.
(b) Intersector Trading.--Covered entities may purchase or
otherwise acquire tradeable allowances from other covered sectors to
satisfy the requirements of section 311.
(c) Climate Change Credit Organization.--The Climate Change Credit
Corporation established under section 351 may sell tradeable allowances
allocated to it under section 332(a)(2) to any covered entity or to any
investor, broker, or dealer in such tradeable allowances. The Climate
Change Credit Corporation shall use all proceeds from such sales in
accordance with the provisions of section 352.
(d) Banking of Tradeable Allowances.--Notwithstanding the
requirements of section 311, a covered entity that has more than a
sufficient amount of tradeable allowances to satisfy the requirements
of section 311, may refrain from submitting a tradeable allowance to
satisfy the requirements in order to sell, exchange, or use the
tradeable allowance in the future.
SEC. 316. EXEMPTION OF SOURCE CATEGORIES.
(a) In General.--The Administrator may grant an exemption from the
requirements of this Act to a source category if the Administrator
determines, after public notice and comment, that it is not feasible to
measure or estimate emissions from that source category.
(b) Reduction of Limitations.--If the Administrator exempts a
source category under subsection (a), the Administrator shall also
reduce the total tradeable allowances under section 321(a) as follows:
(1) 2010 limitation.--For the tradeable allowances under
section 311(a)(1), the Administrator shall reduce the total by
the amount of greenhouse gas emissions that the exempted source
category emitted in calendar year 2000, as identified in the
2000 Inventory.
(2) 2016 limitation.--For the tradeable allowances under
subsection 311(a)(2), the Administrator shall reduce the total
by the amount of greenhouse gas emissions that the exempted
source category emitted in calendar year 1990, as identified in
the 1990 Inventory.
(c) Limitation on Exemption.--The Administrator may not grant an
exemption under subsection (a) to carbon dioxide produced from fossil
fuel.
Subtitle B--Establishment and Allocation of Tradeable Allowances
SEC. 331. ESTABLISHMENT OF TRADEABLE ALLOWANCES.
(a) In General.--The Administrator shall promulgate regulations to
establish tradeable allowances, denominated in units of carbon dioxide
equivalence--
(1) for calendar years beginning after 2009 and before
2016, equal to--
(A) 5896 million metric tons, measured in units of
carbon dioxide equivalence, reduced by
(B) the amount of emissions of greenhouse gases in
calendar year 2000 from non-covered entities; and
(2) for calendar years beginning after 2015, equal to--
(A) 5123 million metric tons, measured in units of
carbon dioxide equivalence, reduced by
(B) the amount of emissions of greenhouse gases in
calendar year 1990 from non-covered entities.
(b) Serial Numbers.--The Administrator shall assign a unique serial
number to each tradeable allowance established under subsection (a),
and shall take such action as may be necessary to prevent
counterfeiting of tradeable allowances.
(c) Nature of Tradeable Allowances.--A tradeable allowance is not a
property right, and nothing in this title or any other provision of law
limits the authority of the United States to terminate or limit a
tradeable allowance.
(d) Non-covered entity.--In this section:
(1) In general.--The term ``non-covered entity'' means an
entity that--
(A) owns or controls a source of greenhouse gas
emissions in the electric power, industrial, or
commercial sectors of the United States economy (as
defined in the Inventory), refines or imports petroleum
products for use in transportation, or produces or
imports hydrofluorocarbons, perfluorocarbons, or sulfur
hexafluoride; and
(B) is not a covered entity, determined by applying
the definition in section 3(4) for the year 2000 (for
the purpose of subsection (a)(1)(B)) or the year 1990
(for the purpose of subsection (a)(2)(B)).
(2) Exception.--Notwithstanding paragraph (1), an entity
that is a covered entity for any calendar year beginning after
2009 shall not be considered to be a non-covered entity for the
purpose of either subsection (a)(1)(B) or subsection (a)(2)(B)
only because it emitted, or its products would have emitted, 10,000
metric tons or less of greenhouse gas, measured in units of carbon
dioxide equivalence, in the year 2000 or 1990, respectively.
SEC. 332. DETERMINATION OF TRADEABLE ALLOWANCE ALLOCATIONS.
(a) In General.--The Secretary shall determine--
(1) the amount of tradeable allowances to be allocated to
each covered sector of that sector's Phase I and Phase II
allotments; and
(2) the amount of tradeable allowances to be allocated to
the Climate Change Credit Corporation established under section
351.
(b) Allocation Factors.--In making the determination required by
subsection (a), the Secretary shall consider--
(1) the distributive effect of the allocations on household
income and net worth of individuals;
(2) the impact of the allocations on corporate income,
taxes, and asset value;
(3) the impact of the allocations on income levels of
consumers and on their energy consumption;
(4) the effects of the allocations in terms of economic
efficiency;
(5) the ability of covered entities to pass through
compliance costs to their customers; and
(6) the degree to which the amount of allocations to the
covered sectors should decrease over time.
(c) Allocation Recommendations and Implementation.--Before
allocating or providing tradeable allowances under subsection (a) and
within 24 months after the date of enactment of this Act, the Secretary
shall submit the determinations under subsection (a) to the Senate
Committee on Commerce, Science, and Transportation, the Senate
Committee on Environment and Public Works, the House of Representatives
Committee on Science, and the House of Representatives Committee on
Energy and Commerce. The Secretary's determinations under paragraph
(1), including the allocations and provision of tradeable allowances
pursuant to that determination, are deemed to be a major rule (as
defined in section 804(2) of title 5, United States Code), and subject
to the provisions of chapter 8 of that title.
SEC. 333. ALLOCATION OF TRADEABLE ALLOWANCES.
(a) In General.--Beginning with calendar year 2010 and after taking
into account any initial allocations under section 334, the
Administrator shall--
(1) allocate to each covered sector that sector's Phase I
and Phase II allotments determined by the Administrator under
section 332 (adjusted for any such initial allocations and the
allocation to the Climate Change Credit Corporation established
under section 351); and
(2) allocate to the Climate Change Credit Corporation
established under section 351 the tradeable allowances
allocable to that Corporation.
(b) Intrasectorial Allotments.--The Administrator shall, by
regulation, establish a process for the allocation of tradeable
allowances under this section, without cost to facilities within each
sector, that will--
(1) encourage investments that increase the efficiency of
the processes that produce greenhouse gas emissions;
(2) minimize the costs to the government of allocating the
tradeable allowances;
(3) not penalize a covered entity for registered emissions
reductions made before 2010; and
(4) provide sufficient allocation for new entrants into the
sector.
(c) Point Source Allocation.--The Administrator shall allocate the
tradeable allowances for the electricity generation, industrial, and
commercial sectors to the entities owning or controlling the point
sources of greenhouse gas emissions within that sector.
(d) Hydrofluorocarbons, Perfluorocarbons, and Sulfur
Hexafluoride.--The Administrator shall allocate the tradeable
allowances for producers or importers of hydrofluorocarbons,
perfluorocarbons, or sulfur hexafluoride one tradeable allowance for
every metric ton of hydrofluorocarbons, perfluorocarbons, or sulfur
hexafluoride produced or imported, measured in units of carbon dioxide
equivalence.
(e) Special Rule for Allocation Within the Transportation Sector.--
The Administrator shall allocate the tradeable allowances for the
transportation sector to petroleum refiners or importers that produce
or import petroleum products that will be used as fuel for
transportation.
SEC. 334. INITIAL ALLOCATIONS FOR EARLY PARTICIPATION AND ACCELERATED
PARTICIPATION.
Before making any allocations under section 333, the Administrator
shall allocate--
(1) to any covered entity an amount of tradeable allowances
equivalent to the amount of greenhouse gas emissions reductions
registered by that covered entity in the national greenhouse
gas database if--
(A) the covered entity has requested to use the
registered reduction in the year of allocation;
(B) the reduction was registered prior to 2010; and
(C) the Administrator retires the unique serial
number assigned to the reduction under section
201(c)(3); and
(2) to any covered entity that has entered into an
accelerated participation agreement under section 335, such
tradeable allowances as the Administrator has determined to be
appropriate under that section.
SEC. 335. BONUS FOR ACCELERATED PARTICIPATION.
(a) In General.--If a covered entity executes an agreement with the
Administrator under which it agrees to reduce its level of greenhouse
gas emissions to a level no greater than the level of its greenhouse
gas emissions for calendar year 1990 by the year 2010, then, for the 6-
year period beginning with calendar year 2010, the Administrator
shall--
(1) provide additional tradeable allowances to that entity
when allocating allowances under section 334 in order to
recognize the additional emissions reductions that will be
required of the covered entity;
(2) allow that entity to satisfy 20 percent of its
requirements under section 311 by--
(A) submitting tradeable allowances from another
nation's market in greenhouse gas emissions under the
conditions described in section 312(b)(1);
(B) submitting a registered net increase in
sequestration, as registered in the National Greenhouse
Gas Database established under section 201, and as
adjusted by the appropriate sequestration discount rate
established under section 372; or
(C) submitting a greenhouse gas emission reduction
(other than a registered net increase in sequestration)
that was registered in the National Greenhouse Gas
Database by a person that is not a covered entity.
(b) Termination.--An entity that executes an agreement described in
subsection (a) may terminate the agreement at any time.
(c) Failure To Meet Commitment.--If an entity that executes an
agreement described in subsection (a) fails to achieve the level of
emissions to which it committed by calendar year 2010--
(1) its requirements under section 311 shall be increased
by the amount of any tradeable allowances provided to it under
subsection (a)(1); and
(2) any tradeable allowances submitted thereafter shall be
counted first against the increase in those requirements.
SEC. 336. ENSURING TARGET ADEQUACY.
(a) In General.--Beginning 2 years after the date of enactment of
this Act, the Under Secretary of Commerce for Oceans and Atmosphere
shall review the allowances established by subsection (a) no less
frequently than biennially--
(1) to re-evaluate the levels established by that
subsection, after taking into account the best available
science and the most currently available data, and
(2) to re-evaluate the environmental and public health
impacts of specific concentration levels of greenhouse gases,
to determine whether the allowances established by subsection (a)
continue to be consistent with the objective of the United Nations'
Framework Convention on Climate Change of stabilizing levels of
greenhouse gas emissions at a level that will prevent dangerous
anthropogenic interference with the climate system.
(b) Review of 2010 and 2016 Levels.--The Under Secretary shall
specifically review in 2008 the level established under section
311(a)(1) and, in 2012, the level established under section 311(a)(2),
and transmit a report on his reviews, together with any
recommendations, including legislative recommendations, for
modification of the levels, to the Senate Committee on Commerce,
Science, and Transportation, the Senate Committee on Environment and
Public Works, the House of Representatives Committee on Science, and
the House of Representatives Committee on Energy and Commerce.
Subtitle C--Climate Change Credit Corporation
SEC. 351. ESTABLISHMENT.
(a) In General.--The Climate Change Credit Corporation is
established as a nonprofit corporation without stock. The Corporation
shall not be considered to be an agency or establishment of the United
States Government.
(b) Applicable Laws.--The Corporation shall be subject to the
provisions of this title and, to the extent consistent with this title,
to the District of Columbia Business Corporation Act.
(c) Board of Directors.--The Corporation shall have a board of
directors of 5 individuals who are citizens of the United States, of
whom 1 shall be elected annually by the board to serve as chairman. No
more than 3 members of the board serving at any time may be affiliated
with the same political party. The members of the board shall be
appointed by the President of the United States, by and with the advice
and consent of the Senate and shall serve for terms of 5 years.
SEC. 352. PURPOSES AND FUNCTIONS.
(a) Trading.--The Corporation--
(1) shall receive and manage tradeable allowances allocated
to it under section 333(a)(2); and
(2) shall buy and sell tradeable allowances, whether
allocated to it under that section or obtained by purchase,
trade, or donation from other entities; but
(3) may not retire tradeable allowances unused.
(b) Use of Tradeable Allowances and Proceeds.--
(1) In general.--The Corporation shall use the tradeable
allowances, and proceeds derived from its trading activities in
tradeable allowances, to reduce costs borne by consumers as a
result of the greenhouse gas reduction requirements of this
Act. The reductions--
(A) may be obtained by buy-down, subsidy,
negotiation of discounts, consumer rebates, or
otherwise;
(B) shall be, as nearly as possible, equitably
distributed across all regions of the United States;
and
(C) may include arrangements for preferential
treatment to consumers who can least afford any such
increased costs.
(2) Transition assistance to dislocated workers and
communities.--The Corporation shall allocate a percentage of
the proceeds derived from its trading activities in tradeable
allowances to provide transition assistance to dislocated
workers and communities. Transition assistance may take the
form of--
(A) grants to employers, employer associations, and
representatives of employees--
(i) to provide training, adjustment
assistance, and employment services to
dislocated workers; and
(ii) to make income-maintenance and needs-
related payments to dislocated workers; and
(B) grants to State and local governments to assist
communities in attracting new employers or providing
essential local government services.
(3) Phase-out of transition assistance.--The percentage
allocated by the Corporation under paragraph (2)--
(A) shall be 20 percent for 2010;
(B) shall be reduced by 2 percentage points each
year thereafter; and
(C) may not be reduced below zero.
(c) Annual Report.--The Corporation shall issue an annual report
setting forth the results of its operations for the year.
Subtitle D--Sequestration Accounting; Penalties
SEC. 371. SEQUESTRATION ACCOUNTING.
(a) Sequestration Accounting.--If a covered entity uses a
registered net increase in sequestration to satisfy the requirements of
section 311 for any year, that covered entity shall submit information
to the Administrator every 5 years thereafter sufficient to allow the
Administrator to determine, using the methods and standards created
under section 204, whether that net increase in sequestration still
exists. Unless the Administrator determines that the net increase in
sequestration continues to exist, the covered entity shall offset any
loss of sequestration by submitting additional tradeable allowances of
equivalent amount in the calender year following that determination.
(b) Regulations Required.--The Secretary, acting through the Under
Secretary of Commerce for Science and Technology, in coordination with
the Secretary of Agriculture, the Secretary of Energy, and the
Administrator, shall issue regulations establishing the sequestration
accounting rules for all classes of sequestration projects.
(c) Criteria for Regulations.--In issuing regulations under this
section, the Secretary shall use the following criteria:
(1) If the range of possible amounts of net increase in
sequestration for a particular class of sequestration project
is not more than 10 percent of the median of that range, the
amount of sequestration awarded shall be equal to the median
value of that range.
(2) If the range of possible amounts of net increase in
sequestration for a particular class of sequestration project
is more than 10 percent of the median of that range, the amount
of sequestration awarded shall be equal to the fifth percentile
of that range.
(3) The regulations shall include procedures for accounting
for potential leakage from sequestration projects and for
ensuring that any registered increase in sequestration is in
addition that which would have occurred if this Act had not
been
enacted.
(d) Updates.--The Secretary shall update the sequestration
accounting rules for every class of sequestration project at least once
every 5 years.
SEC. 372. PENALTIES.
Any covered entity that fails to meet the requirements of section
311 for a year shall be liable for a civil penalty, payable to the
Administrator, equal to thrice the market value (determined as of the
last day of the year at issue) of the tradeable allowances that would
be necessary for that covered entity to meet those requirements on the
date of the emission that resulted in the violation.
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