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Soon after the failure of the Copenhagen conference, Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) unveiled the CLEAR (Carbon Limits and Energy for America’s Renewal) Act a simpler version than the repeatative and verbose Waxman-Markley climate bill that was passed last summer.Broadly it stated.
•100% of the carbon permits for the U.S. economy would be auctioned from day one – there were no free permit giveaways.
•75% of the auction revenue would be returned directly to the public as equal per person dividends, to offset his rising energy costs
•25% of the auction revenue would be devoted to investments in energy efficiency, clean energy, adaptation to climate change, and assistance for sectors hurt by the transition from the fossil-fueled economy.
•Zero offsets were allowed: polluters cannot avoid curbing use of fossil fuels by paying someone else to ostensibly clean up after them
Though the reason of introducing auction permits to largely payback the consumer is not understood, it was evident that there was no loophole in the proposed law which could be exploited by the industry at the taxpayers expense. At best you could say it was a 25% efficient scheme, as it spend a quarter on energy efficiency and clean energy. The return of auction funds as dividends to the energy subscriber was at best an inefficient use of resources. Why take out money from the users pocket if it has ultimately go back to him?
Now a new Bill in the Senate to drop Cap and trade is being drafted by Massachusetts Democrat John Kerry, Connecticut independent Joseph Lieberman and Lindsey Graham, a South Carolina Republican. Hopefully it will end the controversial and harmful Cap and Trade Scheme and Carbon Trading once for all.
Is it time to get back to serious business of re-constructing energy needs, now that Cap-and Trade is dead, and so is the Carbon economy? It is too early to say. Scrapping proposals to trade carbon credits for all polluters, the senators are working on a plan for the electric-power industry to switch to alternative energy including nuclear energy. Nothing wrong in that if a clear defination of 50% 50% investment is defined and Clean Coal is booted out of the investment plans.
If Clean coal remains as a alternative energy resource, the subsidies to the fossil fuel industry will largely remain, and these funds will go down the drain. Oil refiners might start paying carbon taxes or fees that would go back to them, as they will profit handsomely from the resurrection of clean coal in the form of technology transfer fees. Nothing wrong if the funds go to the energy sector instead of the infrastructure sector like highways and bridges. However the funds must be used for alternative energy funding only. Besides fundamentally Carbon should not bein any way a money spinning tool of the polluters, who have been making money by selling free carbon auctions as it happened in Europe under EU-ETS since 2005.
The "scrap trading" approach is being negotiated with the oil industry as well as the chamber of commerce besides other stakeholders drawing a broader consesus. Surprisingly the meeting of minds is more than during passing of the original cap-and- trade bill that was passed by the House last year by a paper thin margin, only to be finally stalled in the Senate.
However there still remains a area of confusion over the ultimate shape of the new Bill. Some sources say that a new quixotic Cap and Dividend theory is emerging, as the consesus opinion, which prima facie adds inefficiency. Though it will do away with the complex Cap and Trade that wasted 15 years since the Kyoto Conference and Billions of Dollars in Tax payers funds, it will just not be enough.
Why the US lawmakers don't keep objectives simple and workable is perhaps because of the myraid of lobbies they have to appease to get the law through. However by adding complexity they not only make the schemes inefficient and unenforceable but also lose valuable time in developing alternate energy resources
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