Udall-Petri Keep America Competitive Global Warming Policy Act of 2006 (HR 5049) Bill Newman Climate Policy Center October 16, 2006

The Legislative Frame Byrd-Hagel Resolution, July 1997, 95-0 –“United States should not be a signatory to any protocol…that would mandate new commitments to reduce greenhouse gases unless the protocol mandates new specific commitments from the developing countries” and –Must not result in serious harm to the US economy Bingaman Resolution, June 2005, –Mandatory GHG emissions policy to slow, stop and reduce GHG emissions –Must not substantially harm US economy –Must encourage comparable action by other nations that are major trading partners and key contributors to global emission

Udall-Petri Economywide Upstream All GHGs Prospective cap Safety valve Escalation of the safety valve linked to comparable actions by the 5 largest developing country GHG emitters Unlimited domestic sequestration Public Purpose Allocation

What EIA says about Udall-Petri Reduce GHG emissions by 11% by 2030 Early reductions will come from non-CO2 GHGs and by 2030, 68% of the CO2 energy-related emissions reductions will come from the electricity sector Safety value will be triggered between In 2030, it will raise between $120b and $145b It will raise between $1.3t and $1.5t between its effective date and 2030 It will reduce cumulative GDP by.11% between now and 2030 Were there no safety valve, average annual GDP loss would double $43b or.24% GDP Electricity prices will increase by 6% from BAU but coal demand will decrease by 46% from the AEO 2006 reference case Nuclear capacity will increase by gigawatts from 6 gigawatts increase from the AEO 2006 reference case

Public Purpose Allocation-Hybrid R & D/ARPA-E: 25% Developing Countries/State Department:10% Auction/US Treasury:25% Adversely Impacted/EPA:40% –Workers and Communities:15% –Industries: Oil and Gas producers:5%, Coal Producers:5%, Fossil-fuel Generators: 5%, Energy Intensive Industries and Non-CO2 GHG producers:5% –LIHEAP Recipients: 5% Different from CAA of 1990 and other pending proposals