A recent UCS report confirmed that the United States must cut global warming pollution by at least 80 percent below 2000 levels by 2050 to avoid the most severe effects of climate change. According to the study, cutting emissions soon is essential. Across the nation, we have laid important groundwork and celebrated some concrete victories that will help us reach this goal:

• Last year, Congress passed an Energy Bill into law that increases fuel economy and energy efficiency standards that will also help reduce global warming pollution.
• Twenty-five states and the District of Columbia have now enacted standards that require electric utilities to increase their use of wind, solar, and other renewable energy. Congress is now considering a national renewable electricity standard.
• Last year, California passed the most comprehensive global warming policy in the country, capping the state’s global warming emissions across industry sectors at 1990 levels by 2020. New Jersey and Florida have followed with similar policies.
• Twelve states have adopted clean car standards to reduce global warming pollution from autos by 30 percent over the next decade. Three additional states are in the adoption process.
• In the Northeast, ten states are working to implement the landmark Regional Greenhouse Gas Initiative—a plan to reduce global warming pollution from power plants.

Despite these important accomplishments, the United States still doesn’t have comprehensive climate legislation to reduce global warming pollution at the national level. We need Congress to take action now on a strong policy that helps prevent dangerous warming. We have a small window of opportunity—and we must act now.

Lieberman-Warner Climate Security Act (S.2191)

Last year, two members of the Senate Environment and Public Works Committee, Senators Joseph Lieberman (I-CT) and John Warner (R-VA) took a positive step to help fight global warming by introducing the Lieberman-Warner Climate Security Act (S.2191). Although the bill includes a strong framework for reducing global warming emissions, the Senate will need to make some important improvements to ensure its effectiveness in preventing the worst effects of climate change.

Strongest Elements of Lieberman-Warner Climate Security Act

Public Benefits: The bill creates a market for each allowable ton of global warming pollution, which is called an emission allowance. Some of these allowances are auctioned to polluters and the revenue generated will support important public programs: 54 percent for technology development and deployment (mostly climate-friendly technology, but also advanced coal); 18 percent to support low-income U.S. energy consumers; 18 percent for wildlife and habitat adaptation; 5 percent for worker-training programs, and 5 percent for international adaptation and national security.

Free Allowances for Important Programs: The bill provides benefits in the form of free emission allowances for:

• electricity providers that must use them to provide cost savings for low- to middle-income energy consumers;
• states that enact emission reduction requirements that are more stringent than the federal policy; and
• tropical countries that reduce emissions from deforestation, which account for about 20 percent of worldwide global warming emissions.

Adaptation Assistance: The United States is responsible for 25 percent of worldwide global warming emissions, but the world's most vulnerable people will bear the brunt of the effects. The bill creates a fund to be administered by the U.S. Agency for International Development, the State Department, and the Environmental Protection Agency (EPA) that supports overseas efforts to help the world’s least developed countries adapt to climate change and U.S. national security.

Clean Technology and Low Carbon Agriculture Provisions: The bill includes energy efficiency measures, including incentives for states to enact building and other efficiency standards. It also includes incentives to encourage farmers to use farming practices that produce less global warming pollution.

Verifiable Offsets: The bill includes procedures and standards the EPA must use to ensure that pollution offsets—which let polluters avoid making emission cuts themselves by paying for pollution-reducing projects elsewhere—are real, permanent, verifiable, and additional (i.e. they would not have occurred under a business-as-usual scenario).

Areas for Improvement

Long-Term Pollution Reduction Target: The bill covers most facilities under the following sectors: industry, electric utilities, refineries, and natural gas commercial and residential heating, which make up about 80 percent of the economy. It sets targets to reduce emissions from covered sectors to approximately 15 percent below 2005 levels by 2020 and approximately 70 percent below 2005 levels by 2050. While there are energy efficiency standards and incentives, as well as incentives for low-carbon agricultural practices, the impact of these provisions is not clear and could result in insufficient economy-wide reductions. To avoid dangerous warming, the bill should cover more of the economy and ensure economy-wide emissions reductions of at least 15 percent by 2020 and 80 percent by 2050.

Scientific Review: The bill calls for the National Academies of Science (NAS) to periodically review the reduction requirements and the effectiveness of the program to ensure that reductions are sufficient to forestall catastrophic impacts of global warming. The bill also requires the EPA to make recommendations for further action needed based on the NAS review. However, the bill must provide the EPA with the authority to adjust the emissions reduction targets and create regulations to ensure the adjusted targets are met.

Distribution of Allowances: Selling emission allowances at an auction is the best way to distribute them, because it allows the market to set the price and will generate revenue for public benefit programs. By contrast, giving away allowances can drive down their value and undermine the market-based incentives for reducing pollution and investing in clean technologies. The bill initially auctions only 26.5 percent and gives away 73.5 percent of emission allowances—29 percent to polluters (industry and electric utilities), 9 percent to companies that took early action or store the pollution they produce, and 35.5 percent to other entities (agriculture interests, states, and low- to middle- income energy consumers). The bill phases out the giveaways for industry and electric utilities by 2030, as well as those for companies that took early action or store their pollution, so that 69.5 percent of the allowances are auctioned in that year. States with similar climate legislation, including the majority of states within the Northeast Regional Greenhouse Gas Initiative, already require or announced their intention to require auctioning 100 percent of emission allowances. Ideally, the bill should follow this example and eliminate free allowances to polluters, or at least should reduce them significantly.

International Forest Protection: Tropical deforestation represents 20 percent of worldwide greenhouse gas emissions—almost exactly the same as China’s total emissions. Reducing emissions by slowing deforestation, according to the United Nations Intergovernmental Panel on Climate Change (2007), can make “a very significant contribution” to the fight against global warming, at low cost. Unfortunately, a recent amendment cut the guaranteed allowances for the International Forests Protection program. Restoring the full allowances for international forests would provide the minimum level of funding needed to encourage tropical nations to reduce their emissions, protect wildlife habitat, and send the right message for upcoming international climate negotiations.

Limits on Offsets: The language regarding verification of emission offsets, where polluters pay for pollution-reducing projects elsewhere instead of cutting their own pollution, is positive. However, the bill allows polluters to offset up to 15 percent of their total emissions, which means they could achieve most, or even all their initial reduction requirements through offsets. This will delay much-needed technological changes and could make future reduction targets harder and more expensive to achieve. The bill should limit offsets to a very small portion of the actual pollution reductions required for each polluter.

Cost-Containment: The bill attempts to contain the cost of complying with emission reduction targets by creating a Carbon Market Efficiency Board, which has certain powers to influence the market. Among these are the ability to let polluters use more offsets and the potential to temporarily increase the total number of available allowances, essentially raising the reduction target for a short period. Other proposals to contain costs could be far more damaging—including the idea of setting a ceiling on carbon prices, above which pollution reductions would stop. Nevertheless, the board's powers should be more limited. Its ability to increase overall emission allowances should be curtailed and the board should not have the authority to trump any future tightening of emissions reductions.