	Introduction

A discussion draft of broad legislation to reduce greenhouse gas emissions was released March 31, 2009, by Representative Waxman, Chairman of the House Committee on Energy and Commerce, and Representative Markey, Chairman of the Energy and Environment Subcommittee. The draft legislation, titled the American Clean Energy and Security Act of 2009, proposes a "cap and trade" system to control carbon dioxide and other greenhouse gases that have been associated with global climate change. The proposed cap-and-trade system would cover electric utilities and other entities that together are responsible for 85% of U.S. greenhouse gas emissions. Covered entities would need permits (called allowances) to emit carbon dioxide and other greenhouse gases, and unused allowances could be banked for future use or sold. The number of allowances issued each year would be gradually reduced until greenhouse gas emissions from covered entities were cut 83% below 2005 levels in 2050. To address concerns that greenhouse gas controls could place U.S. manufacturers at a competitive disadvantage, the draft bill authorizes compensation to certain industrial sectors. The draft bill would require retail electricity suppliers to meet a certain percentage of their power load with electricity generated from renewable resources, starting at 6% in 2012 and gradually rising to 25% in 2025. Several major issues are not addressed by the draft bill and are still under discussion, such as how to allocate emission allowances and how to assist workers and consumers affected by the cap-and-trade system. Substantial controversy is also continuing over the draft bill's renewable energy mandate on electricity suppliers. Federal Renewable Electricity Standard

Establishes a federal Renewable Electricity Standard to promote renewable energy production. 611 of the draft. Federal training and funding assistance is provided to states that adopt advanced building efficiency codes. The goal is to encourage owners and occupants to reduce energy use. Emission allowances." Amounts of allowances auctioned "to be supplied." State programs."
A discussion draft of legislation to reduce greenhouse gas emissions was released March 31, 2009, by Representative Waxman, Chairman of the House Committee on Energy and Commerce, and Representative Markey, Chairman of the Energy and Environment Subcommittee. The draft legislation, titled the American Clean Energy and Security Act of 2009, proposes a "cap and trade" system to control carbon dioxide and other greenhouse gases that have been associated with global climate change.
The proposed cap-and-trade system would cover electric utilities and other entities that together are responsible for 85% of U.S. greenhouse gas emissions. Covered entities would need permits (called allowances) to emit carbon dioxide and other greenhouse gases, and unused allowances could be banked for future use or sold. The number of allowances issued each year would be gradually reduced until greenhouse gas emissions from covered entities were cut 83% below 2005 levels in 2050.
To address concerns that greenhouse gas controls could place U.S. manufacturers at a competitive disadvantage, the draft bill authorizes compensation to certain industrial sectors. The discussion draft indicates that provisions to assist workers and consumers affected by the cap-and-trade system remain to be written.
The draft bill would require retail electricity suppliers to meet a certain percentage of their power load with electricity generated from renewable resources, starting at 6% in 2012 and gradually rising to 25% in 2025. A state could meet up to one-fifth of that requirement with energy efficiency measures. Deployment of "smart grid" technologies would be encouraged, as would technologies to capture and sequester carbon emissions. Standards would be required to reduce carbon emissions from motor vehicle fuel, and federal support for building electric vehicles would be authorized.
Energy efficiency provisions in the draft bill include state incentives for adopting advanced building efficiency codes, codification of appliance efficiency standards, and transportation efficiency goals.
Several major issues are not addressed by the draft bill and are still under discussion. A key unanswered question is how to allocate emission allowances. Industry groups contend that allowances should initially be provided at no cost, to reduce economic disruption. Others have proposed that allowances be auctioned to raise revenue for consumer protection, industry rebates, and other transitional programs.
Substantial controversy is also continuing over the draft bill's renewable energy mandate on electricity suppliers. Regional differences in renewable energy resources have prompted criticism that a national renewable electricity standard would be unworkable, or that the goal of 25% renewables by 2025 is unrealistic.