Lieberman-Warner Climate Change Legislation

On March 14, 2008, EPA issued its analysis of the S.2191, the Lieberman-Warner Climate Security Act of 2008. S.2191 places declining GHG emission caps upstream on petroleum, natural gas, as well as manufacturers of F-gases and N20 and downstream on coal facilities. The bill establishes a cap and trade system which permits the use of domestic offsets and international credits. There also are bonus allowances for carbon capture and storage and set-asides for agriculture & forestry sequestration and landfill and coal mine methane mitigation. According to EPA, the greatest emission abatement under S.2191 occurs in CO2 emissions from the electricity sector. EPA states that the transportation sector provides a relatively small proportion of CO2 emissions abatement via S.2191 reflecting a relatively modest indirect price signal an upstream cap and trade program sends to the transportation sector. Per EPA’s assessment, the price signal provided by S.2191 is equivalent to only $0.53 increase in the price of gasoline in 2030, not high enough to cause large changes in the demand for transportation or changes in how transportation services are provided. For a copy of EPA’s analysis, click here.