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American Power Act

American Power Act



Facts about the Clean Energy Jobs and American Power Act

The Clean Energy Jobs and American Power Act was an act that was introduced by Senator Boxer, the Senate committee chair of the Committee on Environment and Public Works on October 23, 2009. The Committee on Environment and Public Works in the Senate voted and approved The Clean Energy Jobs and American Power Act in an 11-1 vote. This was an expanded version of the bill that Senators John Kerry and Barbara Boxer introduced the month previously. This previous bill, often called the Kerry-Boxer bill, attempted to reduce pollution, create clean energy employment, and protected national security by improving domestic energy production and fighting global climate change.

The Clean Energy Jobs and American Power Act released works to fill the gaps regarding the distribution of allowances for greenhouse gas emission as well as other provisions, but it is still considered incomplete as it acts as a placeholder for other important issues like carbon market oversight and international trade measures. 

Like the previous draft, the Clean Energy Jobs and American Power Act draws heavily from the provisions regarding climate in the American Clean Energy & Security Act, which was passed by the House on June 26, 2009. However, the American Powers Act differs in many important areas, such as reducing the scope of the EPA regulatory authority and 2020 reduction target.  

Overview of the Clean Energy Jobs and American Power Act

The goal of the Clean Energy Jobs and American Power Act is to promote energy independence, create jobs in clean energy, transition the country into a clean energy economy, and lower global warming pollution. The main feature of the American Power Act creates a program for “Pollution Reduction and Investment” which is aimed at starting an economy-wide, program that is market-based for lowering greenhouse gas emissions.  Businesses that are covered by the program would be held accountable for their greenhouse gas emission allowances.

The American Power Act also included complementary measures such as targeting emission standards, supporting research, expanding programs to improve and increase water and energy efficiency, and developing and deploying low carbon energy alternatives.  Lastly, the American Powers Act has provisions that try to ease the transition into an economy of clean energy by protecting energy-intensive industries, workers, and consumers from the power of higher energy costs.

Scope of Coverage of the Clean Energy Jobs and American Power Act

The Clean Energy Jobs and American Power Act covers the seven greenhouse gases that are discussed in the House bill:  methane, carbon dioxide, nitrous oxide, perfluorocarbons, hydrofluorocarbons, nitrogen trifluoride, sulfur hexafluoride.  Bodies that are covered by the American Powers Act include big stationary sources that have yearly greenhouse gas emissions exceeding 25,000 tons, importers and producers of petroleum fuels, natural gas distributors, hydrofluorocarbon gas producers, and other stated large sources.  Around 85% of greenhouse gas emissions produced nationally are also included under the cap.  A separate cap is placed hydrofluorocarbons is in place. Additionally, perfluorocarbon production emissions may also be separately regulated based on an impending resolution delegated to the Environmental Protection Agency.  The American Power Act also requests a decision by the EPA regarding whether more domestic regulations on black carbon are needed.

Targets of the Clean Energy Jobs and American Power Act

The Clean Energy Jobs and American Power Act creates a more stringent 20%reduction target for the sources discussed under the 2005 cap levels in 2020 in comparison to the 17% reduction proposed in the House bill.  The other targets discussed in the bill are the same. This includes a 3% reduction from the levels of 2005 by 2012, a 42% reduction by 2030, and an 83% reduction by 2050.

Distribution of Allowances of the Clean Energy Jobs and American Power Act

The version of the bill that passed Committee for Environment and Public Works gives detailed information on just how the allowances are to be distributed.  Though most of the allowance values are dedicated, many of the entities receiving them and the amounts they are receiving are similar to the values found in the House-passed bill, although with a few differences.  Like the House bill, 35% of the allowances are given to electricity while 9% are for natural gas local distribution companies and 1.5% are for states for propane and home heating oil. The free allocation is also given to refineries and to industries that are energy-intensive and trade-exposed in order to prevent carbon leakage (meaning the company relocates to another country that does not have a comparable greenhouse gas mitigation program).  

To ease the switch to a low carbon economy even further, allowance value is given to financially support technology for the deployment of carbon capture and storage, renewable programs and energy efficiency on a state level, transportation programs, advanced energy technologies, and clean vehicles. It also supports programs for worker transition and training for employees who are pressured by the low carbon energy shift and train workers in the nuclear industry.

Additionally, the allowance value can be used to distinguish early action to reduce greenhouse gas emissions, support programs that create forestry reductions and supplemental domestic agriculture, supply allowances that go to the Market Stability Reserve, fund international and domestic adaptation programs, support clean technology programs internationally, and reduce deforestation occurring in developing countries. 

The Clean Energy Jobs and American Power Act provides allowance value for energy refunds for moderate and low income households and creates rebates for all energy consumers starting in 2026. Unlike the previous House bill, the American Power Act creates allowance value to support water efficiency programs, building code enforcement, training for workers in the nuclear power industry, training for nuclear power industry workers, and transportation planning programs.  The American Power Act also distinguishes itself from the House bill by calling for an initial auction of 10% of annual allowances (which goes up to 25% by 2040) for the purpose of ensuring that sure the bill does not increase to the budget deficit. The allowance value distribution for all remaining purposes would happen after these allowances are first set apart from the total.