S 1177 IS
110th CONGRESS
1st Session
S. 1177
To amend the Clean Air Act to establish a national uniform multiple
air pollutant regulatory program for the electric generating sector.
IN THE SENATE OF THE UNITED STATES
April 20, 2007
Mr. CARPER (for himself, Mr. SUNUNU, Mr. GREGG, Mr. DODD, Mrs. FEINSTEIN,
Mrs. LINCOLN, Mr. LIEBERMAN, and Ms. COLLINS) introduced the following bill;
which was read twice and referred to the Committee on Environment and Public
Works
A BILL
To amend the Clean Air Act to establish a national uniform multiple
air pollutant regulatory program for the electric generating sector.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Clean Air Planning Act of 2007'.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings- Congress finds that--
(1) in 1992, the Unites States became a signatory to the United Nations
Framework Convention on Climate Change, done at New York on May 9, 1992, in
recognition of the need to begin to reverse the adverse effects of global
warming by decreasing greenhouse gas emission levels to 1990 levels;
(2) fossil fuel-fired electric generating facilities, consisting of
facilities fueled by coal, fuel oil, and natural gas, produce nearly 2/3 of
the electricity generated in the United States;
(3) fossil fuel-fired electric generating facilities produce
approximately 67 percent of the total sulfur dioxide emissions, 23 percent
of the total nitrogen oxides emissions, 40 percent of the total carbon
dioxide emissions, and 40 percent of the total mercury emissions, in the
United States;
(4)(A) in 1977, in amending the Clean Air Act (42 U.S.C. 7401 et seq.),
Congress sought to prevent adverse impacts caused by manmade pollution on
national parks and wilderness areas designated as class I areas under
section 162(a) of that Act (42 U.S.C. 7472(a));
(B) as of the date of enactment of this Act--
(i) many class I areas are impaired by haze pollution;
(ii) the ecosystems of many class I areas are impacted by deposits of
acidic and toxic compounds; and
(iii) the air quality of many class I areas fails to meet national
ambient air quality standards; and
(C)(i) fossil-fuel fired electric generating units are the major source
of air pollution impacting class I areas; and
(ii) proposed new fossil-fuel fired electric generating units threaten
to increase air pollution in class I areas throughout the United
States;
(5)(A) on implementing an acid rain program in 1990, the Administrator
of the Environmental Protection Agency (referred to in this subsection as
the `Administrator') overestimated the actual cost of sulfur dioxide permits
by more than a factor of 5; and
(B) after years of carrying out the program, the Administrator
acknowledged that `independent studies show that real life experiences with
the program reveal greater cost savings than initially expected, due in
large part to the efficiencies achieved through emissions trading';
(6)(A) nearly 3/4 of all powerplant boilers in operation on the date of
enactment of this Act are more than 30 years old, and most continue to
operate without modern pollution control technology; and
(B) those older powerplants release approximately 99 percent of the
sulfur dioxide, 98 percent of the nitrogen oxides, and 91 percent of the
carbon dioxide emitted from all powerplants;
(7)(A) many electric generating facilities have been exempt from the
emission limitations applicable to new units based on the expectation that
over time the units would be retired or updated with new pollution control
equipment; but
(B) many of the exempted units continue to operate and emit pollutants
at relatively high rates;
(8) according to the analysis by the Administrator of the rule of the
Administrator entitled the `Clean Air Interstate Rule' (70 Fed. Reg. 25162
(May 12, 2005)), the majority of the 1,168 outdated coal-fired powerplant
boilers in operation in the eastern United States on the date of enactment
of this Act will operate without sulfur dioxide scrubbers and advanced
nitrogen oxide controls even after the implementation of that rule is
completed in 2020, such that--
(A) 858 plants will operate without sulfur dioxide scrubbers;
and
(B) 915 powerplants will operate without advanced nitrogen oxide
controls;
(9) according to the Energy Outlook for 2006 of the Energy Information
Administration, carbon dioxide emissions from electric generating units in
the Unites States have increased by 32 percent during the period of 1990
through 2006;
(10) the deployment by the electric utility sector of zero- and
low-emitting generation technologies should be accelerated given the
increase in carbon dioxide emissions from the electric utility sector
described in paragraph (9);
(11) the ability of owners of electric generating facilities to plan
effectively for the future is impeded by the uncertainties surrounding
future environmental regulatory requirements that are imposed inefficiently
on a piecemeal basis;
(12) many owners of electric generating units have failed--
(A) to install best available control technology for emissions
reductions; and
(B) to retire the units, as anticipated by Congress in the new source
review provisions of the prevention of significant deterioration and
nonattainment programs of the Clean Air Act (42 U.S.C. 7401 et
seq.);
(13) according to the Administrator, many owners of electric generating
units carried out projects to extend the economic lives of the units without
upgrading the emission controls of the units to best available control
technology levels;
(14) according to the National Energy Technology Laboratory of the
Department of Energy--
(A) as of the date of enactment of this Act, 159 new coal-fired
electric generating units are proposed to be constructed, which would
produce 96 gigawatts of new electric generating capacity; and
(B) if the units described in subparagraph (A) are constructed, the
units would produce--
(i) an incremental increase of 500,000,000 tons of carbon dioxide
per year from the production by the power sector in the United States as
in existence on the date of enactment of this Act; and
(ii) an estimated 30,000,000,000 additional tons of carbon dioxide
over the course of the useful lives of the units (assuming a lifespan of
60 years);
(15) total emissions of carbon dioxide from the United States should be
on a reduction pathway to achieve a 60 percent to 80 percent reduction from
current levels by 2050;
(16) pollution from electric generating facilities in existence on the
date of enactment of this Act can be reduced through the adoption of modern
technologies and practices;
(17) a report of the Congressional Budget Office, dated September 19,
2006, concluded that--
(A) relying exclusively on research and development funding is not the
most effective strategy for reducing greenhouse gas emissions;
and
(B) combining research and development funding with a
gradually-increasing limitation on emissions is a more cost-effective
approach;
(18)(A) agriculture can be part of the solution to reducing greenhouse
gas emissions;
(B) less productive agricultural land can be reforested with carbon
dioxide-consuming trees;
(C) farming practices can be improved to increase the absorption and
retention of carbon in agricultural soils;
(D) biomass from agricultural sources (including corn and grass) could
be used to produce biofuels that can take the place of high-carbon fossil
fuels used in transportation and power generation; and
(E) many of the farming practices and land use changes involved in
achieving those reductions have multiple benefits, including--
(i) improving soil, water, and air quality;
(ii) increasing wildlife habitat; and
(iii) providing additional recreational opportunities; and
(19) States and regions have increasingly adopted programs to address
carbon dioxide emissions from electric generating facilities, and Federal
regulations relating to carbon dioxide emissions should take those programs
into consideration.
(b) Purposes- The purposes of this Act are--
(1) to protect and preserve the environment and safeguard public health
by ensuring that substantial emission reductions are achieved at fossil
fuel-fired electric generating facilities;
(2) to reduce significantly the quantities of mercury, carbon dioxide,
sulfur dioxide, and nitrogen oxides that enter the environment as a result
of the combustion of fossil fuels;
(3) to ensure that air quality of national parks and all other class I
areas (as designated by section 162(a) of the Clean Air Act (42 U.S.C.
7472(a))) impacted by emissions from fossil-fuel fired electric generating
units is significantly improved by 2016, the year in which the National Park
System celebrates its 100th anniversary;
(4) to encourage the development and use of renewable energy;
(5) to internalize the cost of protecting the values of public health,
air, land, and water quality;
(6) to provide a period of environmental regulatory stability for owners
and operators of electric generating facilities so as to promote improved
management of existing assets and new capital investments;
(7) to achieve emission reductions from electric generating facilities
in a cost-effective manner;
(8) to establish a mandatory cap-and-trade system for the electric power
sector that is part of an economy-wide national greenhouse gas trading
market;
(9) to provide for the future integration of additional sectors of the
economy into such a greenhouse gas trading market; and
(10) to establish a regulatory system that, by 2050, will allow for a
reduction in United States greenhouse gas emissions to a level of
approximately 20 percent to 40 percent of levels of emissions as of the date
of enactment of this Act.
SEC. 3. INTEGRATED AIR QUALITY PLANNING FOR THE ELECTRIC GENERATING
SECTOR.
The Clean Air Act (42 U.S.C. 7401 et seq.) is amended by adding at the end
the following:
`TITLE VII--INTEGRATED AIR QUALITY PLANNING FOR THE ELECTRIC GENERATING
SECTOR
`TITLE VII--INTEGRATED AIR QUALITY PLANNING FOR THE ELECTRIC GENERATING
SECTOR
`Sec. 702. National pollutant tonnage limitations.
`Sec. 703. Nitrogen oxide trading program.
`Sec. 704. Mercury program.
`Sec. 705. Carbon dioxide allowance trading program.
`Sec. 706. Distribution of allowances between auctions and allocations;
nature of allowances.
`Sec. 707. Auction of allowances.
`Sec. 708. Climate Action Trust Fund.
`SEC. 701. DEFINITIONS.
`(i) IN GENERAL- The term `affected unit', with respect to carbon
dioxide, means a fossil fuel-fired electric generating facility
(including a cogeneration facility) that--
`(I) on or after January 1, 1985, served as a generator with a
nameplate capacity greater than 25 megawatts; and
`(II) produces electricity for sale.
`(ii) INCLUSION- The term `affected unit', with respect to nuclear
facilities, includes only incremental nuclear generation
facilities.
`(B) MERCURY- The term `affected unit', with respect to mercury, means
a coal-fired electric generating facility (including a cogeneration
facility) that--
`(i) on or after January 1, 1985, served as a generator with a
nameplate capacity greater than 25 megawatts; and
`(ii) produces electricity for sale.
`(C) NITROGEN OXIDES- The term `affected unit', with respect to
nitrogen oxides, means a fossil fuel-fired electric generating facility
(including a cogeneration facility) that--
`(i) on or after January 1, 1985, served as a generator with a
nameplate capacity greater than 25 megawatts; and
`(ii) produces electricity for sale.
`(D) SULFUR DIOXIDE- The term `affected unit', with respect to sulfur
dioxide, has the meaning given the term in section 402.
`(2) CARBON DIOXIDE ALLOWANCE- The term `carbon dioxide allowance' means
an authorization allocated by the Administrator under this title to emit 1
ton of carbon dioxide during or after a specified calendar year.
`(3) COGENERATION FACILITY- The term `cogeneration facility' means a
facility that--
`(B) supplies, on a net annual basis, to any utility power
distribution system for sale--
`(i) more than 1/3 of the potential electric output capacity of the
facility; and
`(ii) more than 219,000 megawatt-hours of electrical
output.
`(4) COVERED UNIT- The term `covered unit' means--
`(B) with respect to incremental nuclear generation, a nuclear
generating unit; and
`(C) a renewable energy unit.
`(5) FOSSIL FUEL-FIRED- The term `fossil fuel-fired', with respect to an
electric generating facility, means the combustion of fossil fuel by the
electric generating facility, alone or in combination with any other fuel,
in any case in which the fossil fuel combusted comprises, or is projected to
comprise, more than 20 percent of the annual heat input of the electric
generating facility, on a Btu basis, during any calendar year.
`(6) FUND- The term `Fund' means the Climate Action Trust Fund
established by section 708(a)(1).
`(7) GREENHOUSE GAS- The term `greenhouse gas' means--
`(E) perfluorocarbons; and
`(F) sulfur hexafluoride.
`(8) INCREMENTAL NUCLEAR GENERATION- The term `incremental nuclear
generation' means, as determined by the Administrator and measured in
megawatt hours, the difference between--
`(A) the quantity of electricity generated by a nuclear generating
unit in a calendar year; and
`(B) the quantity of electricity generated by the nuclear generating
unit in calendar year 1990.
`(9) NEW UNIT- The term `new unit' means an affected unit that has
operated for not more than 3 years and is not eligible to receive--
`(A) sulfur dioxide allowances under section 417(b);
`(B) nitrogen oxide allowances under section 703(c)(2); or
`(C) carbon dioxide allowances under section 705(d).
`(10) NITROGEN OXIDE ALLOWANCE- The term `nitrogen oxide allowance'
means an authorization allocated by the Administrator under this title to
emit 1 ton of nitrogen oxides during or after a specified calendar
year.
`(11) NUCLEAR GENERATING UNIT- The term `nuclear generating unit' means
an electric generating facility that--
`(A) uses nuclear energy to supply electricity to the electric power
grid; and
`(B) entered operation in calendar year 1990 or earlier.
`(12) RENEWABLE ENERGY- The term `renewable energy' means electric
energy generated from solar energy, wind, hydroelectric energy, biomass,
landfill gas, ocean energy (including tidal, wave, current, and thermal
energy), or geothermal energy.
`(13) SEQUESTRATION- The term `sequestration' means the action of
sequestering carbon by--
`(A) enhancing a natural carbon sink (such as through afforestation);
or
`(B)(i) capturing the carbon dioxide emitted from a fossil fuel-based
energy system; and
`(ii)(I) storing the carbon in a geologic formation for not less than
300 years in a manner that prevents any release of the carbon dioxide in a
quantity greater than 1 percent of the total quantity so stored;
or
`(II) converting the carbon to a benign solid material through a
biological or chemical process.
`(14) SULFUR DIOXIDE ALLOWANCE- The term `sulfur dioxide allowance' has
the meaning given the term `allowance' in section 402.
`SEC. 702. NATIONAL POLLUTANT TONNAGE LIMITATIONS.
`(a) Sulfur Dioxide- The annual tonnage limitation for emissions of sulfur
dioxide from affected units in the United States shall be equal to--
`(1) for each of calendar years 2012 through 2014, 3,500,000 tons;
and
`(2) for calendar year 2015 and each calendar year thereafter, 2,000,000
tons.
`(1) DEFINITIONS- In this subsection:
`(A) ZONE 1 STATE- The term `Zone 1 State' means the District of
Columbia or any of the States of Alabama, Arkansas, Connecticut, Delaware,
Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine,
Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New
Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode
Island, South Carolina, Tennessee, Texas, Vermont, Virginia, West
Virginia, and Wisconsin.
`(B) ZONE 2 STATE- The term `Zone 2 State' means any State within the
48 contiguous States that is not a Zone 1 State.
`(i) IN GENERAL- Beginning on January 1, 2012, it shall be unlawful
for an affected unit in a Zone 1 State to emit a total amount of
nitrogen oxides during a year in excess of the number of nitrogen oxide
allowances held for the affected unit for that year by the owner or
operator of the affected unit.
`(ii) LIMITATION- Only nitrogen oxide allowances under paragraph
(3)(A) shall be held in order to meet the requirements of clause
(i).
`(i) IN GENERAL- Beginning on January 1, 2012, it shall be unlawful
for an affected unit in a Zone 2 State to emit a total amount of
nitrogen oxides during a year in excess of the number of nitrogen oxide
allowances held for the affected unit for that year by the owner or
operator of the affected unit.
`(ii) LIMITATION- Only nitrogen oxide allowances under paragraph
(3)(B) shall be held in order to meet the requirements of clause
(i).
`(3) LIMITATIONS ON TOTAL EMISSIONS-
`(A) ZONE 1 LIMITATIONS- The Administrator shall allocate an annual
tonnage limitation for emissions of nitrogen oxides from affected units in
the Zone 1 States in an amount equal to--
`(i) for each of calendar years 2012 through 2014, 1,390,000 tons;
and
`(ii) for calendar year 2015 and each calendar year thereafter,
1,300,000 tons.
`(B) ZONE 2 LIMITATIONS- The Administrator shall allocate an annual
tonnage limitation for emissions of nitrogen oxides from affected units in
the Zone 2 States in an amount equal to--
`(i) for each of calendar years 2012 through 2014, 400,000 tons;
and
`(ii) for calendar year 2015 and each calendar year thereafter,
320,000 tons.
`(c) Mercury- The emission of mercury from affected units shall be limited
in accordance with section 704.
`(1) IN GENERAL- The annual tonnage limitation for emissions of carbon
dioxide from affected units in the United States shall be equal to, as
determined by the Administrator based on certified and quality-assured
continuous emissions monitoring data for carbon dioxide reported to the
Administrator by affected units in accordance with this Act--
`(A) for each of calendar years 2012 through 2014, the quantity of
emissions emitted from affected units in calendar year 2006;
`(B) for calendar year 2015, the quantity of emissions emitted from
affected units in calendar year 2001;
`(C) for each of calendar years 2016 through 2019, the aggregate
quantity of emissions emitted from affected units during the calendar year
that is 1 percent less than the aggregate quantity of emissions from
affected units allowed pursuant to this section during the preceding
calendar year; and
`(D) for calendar year 2020 and each calendar year thereafter, the
aggregate quantity of emissions emitted during the calendar year that is
1.5 percent less than the aggregate quantity of emissions from affected
units allowed pursuant to this section during the preceding calendar
year.
`(2) ADDITIONAL LIMITATIONS- For calendar year 2030 and each calendar
year thereafter, in accordance with subsection (e), the Administrator shall
take into consideration the practicability of increasing the reduction in
emissions of carbon dioxide required for the calendar year to at least 3
percent less than the aggregate quantity of emissions emitted during the
preceding calendar year.
`(e) Review of Annual Tonnage Limitations and Mercury Emissions
Requirements-
`(1) DETERMINATION BY ADMINISTRATOR- Not later than 10 years after the
date of enactment of this title and every 10 years thereafter, the
Administrator shall determine--
`(A) after considering impacts on human health, the environment, the
economy, and costs, whether 1 or more of the annual tonnage limitations
should be revised; and
`(B) whether the mercury emission requirements under section 704
should be revised in accordance with the risk standards described in
section 112(f)(2).
`(2) DETERMINATION NOT TO REVISE- If the Administrator determines under
paragraph (1) that no annual tonnage limitation or mercury emission
requirement should be revised, the Administrator shall publish in the
Federal Register--
`(A) a notice of the determination; and
`(B) the reasons for the determination.
`(3) DETERMINATION TO REVISE- If the Administrator determines under
paragraph (1) that 1 or more of the annual tonnage limitations or mercury
emissions requirements should be revised, the Administrator shall publish in
the Federal Register--
`(A) not later than 10 years and 180 days after the date of enactment
of this title, proposed regulations implementing the revisions;
and
`(B) not later than 11 years and 180 days after the date of enactment
of this title, final regulations implementing the revisions.
`(4) ADMINISTRATION- The duty of the Administrator to make a
determination under paragraph (1) shall be--
`(A) considered to be a nondiscretionary duty;
`(B) enforceable through a citizen suit under section 304;
and
`(C) subject to rulemaking procedures and judicial review under
section 307.
`(5) REQUIREMENT- No revision of an annual tonnage limitation or mercury
emission requirement under this subsection shall result in a limitation or
emission requirement that is less stringent than an existing applicable
requirement under this title.
`(f) Reduction of Emissions From Specified Affected Units- Notwithstanding
the annual tonnage limitations and mercury emissions requirements established
under this section, the Federal Government or a State government may require
that emissions from a specified affected unit be reduced.
`(g) General Enforcement-
`(1) IN GENERAL- It shall be unlawful for any individual or entity
subject to this title to violate any requirement or prohibition under this
title.
`(2) TREATMENT OF EXCESS EMISSIONS- In calculating any penalty for
violation of this title, each ton of emissions of sulfur dioxide, nitrogen
oxides, mercury, or a greenhouse gas emitted by a covered unit during a
calendar year in excess of the allowances held for use by the covered unit
for the calendar year shall be considered to be a separate violation of the
applicable limitation under this title.
`SEC. 703. NITROGEN OXIDE TRADING PROGRAM.
`(1) IN GENERAL- Not later than January 1, 2010, the Administrator shall
promulgate regulations to establish for affected units in the United States
a nitrogen oxide allowance trading program.
`(2) REQUIREMENTS- Regulations promulgated under paragraph (1) shall
establish requirements for the allowance trading program under this section,
including requirements concerning--
`(A)(i) the generation, allocation, issuance, recording, tracking,
transfer, and use of nitrogen oxide allowances; and
`(ii) the public availability of all information concerning the
activities described in clause (i) that is not confidential;
`(B) compliance with subsection (e)(1);
`(C) the monitoring and reporting of emissions under paragraphs (2)
and (3) of subsection (e); and
`(D) excess emission penalties under subsection (e)(4).
`(3) MIXED FUEL, COGENERATION FACILITIES AND COMBINED HEAT AND POWER
FACILITIES- The Administrator shall promulgate such regulations as the
Administrator determines to be necessary to ensure the equitable issuance of
allowances to--
`(A) facilities that use more than 1 energy source to produce
electricity; and
`(B) facilities that produce electricity in addition to another
service or product.
`(1) ESTABLISHMENT- For each calendar year, based on projections of
electricity output from new units, the Administrator, in consultation with
the Secretary of Energy, shall establish by regulation a reserve of nitrogen
oxide allowances to be set aside for use by new units in Zone 1 States, and
a reserve of nitrogen oxide allowances to be set aside for use by new units
in Zone 2 States, that is not less than 5 percent of the total allowances
allocated to affected units for the calendar year.
`(2) UNUSED ALLOWANCES- For each calendar year, the Administrator shall
reallocate, to all affected units, any unused nitrogen oxide allowances from
the new unit reserve established under paragraph (1) in the proportion
that--
`(A) the number of allowances allocated to each affected unit for the
calendar year; bears to
`(B) the number of allowances allocated to all affected units for the
calendar year.
`(c) Nitrogen Oxide Allocations-
`(1) TIMING OF ALLOCATIONS- The Administrator shall allocate nitrogen
oxide allowances to affected units by not later than December 31 of calendar
year 2008 and each calendar year thereafter, for the fourth calendar year
that begins after that December 31.
`(2) ALLOCATIONS TO AFFECTED UNITS THAT ARE NOT NEW UNITS-
`(A) ZONE 1 STATES- The Administrator shall allocate, to each affected
unit in a Zone 1 State that is not a new unit, a quantity of nitrogen
oxide allowances that is equal to the product obtained by
multiplying--
`(i) the quantity of nitrogen oxide allowances available for
allocation under paragraph (3)(A); and
`(ii) the quotient obtained by dividing--
`(I) the annual average quantity of electricity generated by the
unit during the most recent 3-calendar year period for which data are
available, updated each calendar year and measured in megawatt hours;
and
`(II) the total of the average quantities described in subclause
(I) with respect to all affected units in all Zone 1
States.
`(B) ZONE 2 STATES- The Administrator shall allocate, to each affected
unit in a Zone 2 State that is not a new unit, a quantity of nitrogen
oxide allowances that is equal to the product obtained by
multiplying--
`(i) the quantity of nitrogen oxide allowances available for
allocation under paragraph (3)(B); and
`(ii) the quotient obtained by dividing--
`(I) the annual average quantity of electricity generated by the
unit during the most recent 3-calendar year period for which data are
available, updated each calendar year and measured in megawatt hours;
and
`(II) the total of the average quantities described in subclause
(I) with respect to all affected units in all Zone 2
States.
`(3) QUANTITY TO BE ALLOCATED-
`(A) ZONE 1 STATES- For each calendar year, the quantity of nitrogen
oxide allowances allocated under paragraph (2)(A) to affected units that
are not new units shall be equal to the difference between--
`(i) the annual tonnage limitation for emissions of nitrogen oxides
from affected units specified in section 702(b)(3)(A) for the calendar
year; and
`(ii) the quantity of nitrogen oxide allowances placed in the new
unit reserve established under subsection (b) for the calendar
year.
`(B) ZONE 2 STATES- For each calendar year, the quantity of nitrogen
oxide allowances allocated under paragraph (2)(B) to affected units that
are not new units shall be equal to the difference between--
`(i) the annual tonnage limitation for emissions of nitrogen oxides
from affected units specified in section 702(b)(3)(B) for the calendar
year; and
`(ii) the quantity of nitrogen oxide allowances placed in the new
unit reserve established under subsection (b) for the calendar
year.
`(4) ADJUSTMENT OF ALLOCATIONS- If, for any calendar year, the total
quantities of allowances allocated under paragraph (2) are not equal to the
applicable quantities determined under paragraph (3), the Administrator
shall adjust the quantities of allowances allocated to affected units that
are not new units on a pro-rata basis so that the quantities are equal to
the applicable quantities determined under paragraph (3).
`(5) ALLOCATION TO NEW UNITS-
`(A) METHODOLOGY- The Administrator shall promulgate regulations to
establish a methodology for allocating nitrogen oxide allowances to new
units.
`(B) QUANTITY OF NITROGEN OXIDE ALLOWANCES ALLOCATED- The
Administrator shall determine the quantity of nitrogen oxide allowances to
be allocated to each new unit based on the projected emissions from the
new unit.
`(6) ALLOWANCE NOT A PROPERTY RIGHT- A nitrogen oxide allowance--
`(A) is not a property right; and
`(B) may be terminated or limited by the Administrator.
`(7) NO JUDICIAL REVIEW- An allocation of nitrogen allowances by the
Administrator under this subsection shall not be subject to judicial
review.
`(d) Nitrogen Oxide Allowance Transfer System-
`(1) USE OF ALLOWANCES- The regulations promulgated under subsection
(a)(1) shall--
`(A) prohibit the use (but not the transfer in accordance with
paragraph (3)) of any nitrogen oxide allowance before the calendar year
for which the allowance is allocated;
`(B) provide that unused nitrogen oxide allowances may be carried
forward and added to nitrogen oxide allowances allocated for subsequent
years; and
`(C) provide that unused nitrogen oxide allowances may be transferred
by--
`(i) the person to which the allowances are allocated;
or
`(ii) any person to which the allowances are
transferred.
`(2) USE BY PERSONS TO WHICH ALLOWANCES ARE TRANSFERRED- Any person to
which nitrogen oxide allowances are transferred under paragraph
(1)(C)--
`(A) may use the nitrogen oxide allowances in the calendar year for
which the nitrogen oxide allowances were allocated, or in a subsequent
calendar year, to demonstrate compliance with subsection (e)(1);
or
`(B) may transfer the nitrogen oxide allowances to any other person
for the purpose of demonstration of that compliance.
`(3) CERTIFICATION OF TRANSFER- A transfer of a nitrogen oxide allowance
shall not take effect until a written certification of the transfer,
authorized by a responsible official of the person making the transfer, is
received and recorded by the Administrator.
`(4) PERMIT REQUIREMENTS- An allocation or transfer of nitrogen oxide
allowances to an affected unit shall, after recording by the Administrator,
be considered to be part of the federally enforceable permit of the affected
unit under this Act, without a requirement for any further review or
revision of the permit.
`(e) Compliance and Enforcement-
`(1) IN GENERAL- For calendar year 2012 and each calendar year
thereafter, the operator of each affected unit shall surrender to the
Administrator a quantity of nitrogen oxide allowances that is equal to the
total tons of nitrogen oxides emitted by the affected unit during the
calendar year.
`(2) MONITORING SYSTEM- The Administrator shall promulgate regulations
requiring--
`(A) operation, reporting, and certification of continuous emissions
monitoring systems to accurately measure the quantity of nitrogen oxides
that is emitted from each affected unit; and
`(B) verification and reporting of nitrogen oxides emissions at each
affected unit.
`(A) IN GENERAL- Not less often than quarterly, the owner or operator
of an affected unit shall submit to the Administrator a report on the
monitoring of emissions of nitrogen oxides carried out by the owner or
operator in accordance with the regulations promulgated under paragraph
(2).
`(B) AUTHORIZATION- Each report submitted under subparagraph (A) shall
be authorized by a responsible official of the affected unit, who shall
certify the accuracy of the report.
`(C) PUBLIC REPORTING- The Administrator shall make available to the
public, through 1 or more published reports and 1 or more forms of
electronic media, data concerning the emissions of nitrogen oxides from
each affected unit.
`(A) IN GENERAL- The owner or operator of an affected unit that emits
nitrogen oxides in excess of the nitrogen oxide allowances that the owner
or operator holds for use for the affected unit for the calendar year
shall--
`(i) pay an excess emissions penalty determined under subparagraph
(B); and
`(ii) offset the excess emissions by at least an equal quantity in
the following calendar year or such other period as the Administrator
shall prescribe.
`(B) DETERMINATION OF EXCESS EMISSIONS PENALTY- The excess emissions
penalty for nitrogen oxides shall be equal to the product obtained by
multiplying--
`(i) the number of tons of nitrogen oxides emitted in excess of the
total quantity of nitrogen oxide allowances held; and
`(ii) 2 times the average price of a nitrogen oxide allowance for
the Zone and calendar year in which the excess emissions occurred, as
determined by the Administrator.
`(f) Treatment of Existing Programs-
`(1) IN GENERAL- Except as provided in paragraph (2), the provisions of
the rule of the Administrator entitled the `Clean Air Interstate Rule' (70
Fed. Reg. 25162 (May 12, 2005)) (or a successor regulation) providing for
the establishment of an annual emissions cap and trading program for oxides
of nitrogen shall terminate on the later of--
`(A) the effective date of the regulations promulgated under this
section; and
`(2) EXCEPTION- Notwithstanding paragraph (1), any provision of the rule
referred to in that paragraph (or a successor regulation) relating to the
establishment of a seasonal ozone emission cap-and-trade program for
nitrogen oxides shall remain in full force and effect.
`SEC. 704. MERCURY PROGRAM.
`(a) Definition of Inlet Mercury- In this section, the term `inlet
mercury' means the quantity of mercury found--
`(1) in the as-fired coal of an affected unit; or
`(2) for an affected unit using coal that is subjected to an advanced
coal cleaning technology, in the as-mined coal of the affected unit.
`(b) Annual Limitation for Certain Units- On an annual average calendar
year basis with respect to inlet mercury, an affected unit that commences
operation on or after the date of enactment of this title shall be subject to
the less stringent emission limitation of--
`(1) 90 percent capture of inlet mercury; or
`(2) an emission rate of 0.0060 lbs/GWh.
`(c) Annual Limitation for Existing Units- An affected unit in operation
on the date of enactment of this title shall be subject to the following
emission limitations on an annual average calendar year basis with respect to
inlet mercury:
`(1) CALENDAR YEARS 2012 THROUGH 2014- For the period beginning on
January 1, 2012, and ending on December 31, 2014, the less stringent
limitation of--
`(A) 60 percent capture of inlet mercury; and
`(B) an emission rate of 0.02 lbs/GWh.
`(2) CALENDAR YEAR 2015 AND THEREAFTER- For calendar year 2015 and each
calendar year thereafter, the less stringent limitation of--
`(A) 90 percent capture of inlet mercury; and
`(B) an emission rate of 0.0060 lbs/GWh.
`(d) Averaging Across Units- An owner or operator of an affected unit may
demonstrate compliance with the annual average limitations under subsections
(b) and (c) by averaging emissions from all affected units at a single
facility.
`(e) Monitoring System- The Administrator shall promulgate regulations
requiring--
`(1) operation, reporting, and certification of continuous emissions
monitoring systems to accurately measure the quantity of mercury that is
emitted from each affected unit; and
`(2) verification and reporting of mercury emissions at each affected
unit.
`(1) IN GENERAL- Not less often than quarterly, the owner or operator of
an affected unit shall submit to the Administrator a report on the
monitoring of emissions of mercury carried out by the owner or operator in
accordance with the regulations promulgated under subsection (e).
`(2) AUTHORIZATION- Each report submitted under paragraph (1) shall be
authorized by a responsible official of the affected unit, who shall certify
the accuracy of the report.
`(3) PUBLIC REPORTING- The Administrator shall make available to the
public, through 1 or more published reports and 1 or more forms of
electronic media, data concerning the emission of mercury from each affected
unit.
`(1) IN GENERAL- The owner or operator of an affected unit that emits
mercury in excess of the emission limitation described in subsection (b) or
(c) shall pay an excess emissions penalty determined under paragraph
(2).
`(2) DETERMINATION OF EXCESS EMISSIONS PENALTY- The excess emissions
penalty for mercury shall be an amount equal to $50,000 for each pound of
mercury emitted in excess of the emission limitation described in subsection
(b) or (c), as pro-rated for each fraction of a pound.
`SEC. 705. CARBON DIOXIDE ALLOWANCE TRADING PROGRAM.
`(a) Definitions- In this section:
`(1) ALLOWANCE- The term `allowance' means--
`(A) a carbon dioxide allowance;
`(B) an offset allowance; or
`(C) an early reduction allowance.
`(2) EARLY REDUCTION ALLOWANCE- The term `early reduction allowance'
means a carbon dioxide allowance issued under subsection (g) for a project
in the United States to reduce emissions of greenhouse gases or to sequester
greenhouse gases that is carried out in calendar years 2000 through
2012.
`(3) OFFSET ALLOWANCE- The term `offset allowance' means a carbon
dioxide allowance issued under subsection (e) for a project to reduce
emissions of greenhouse gases or to sequester greenhouse gases.
`(1) IN GENERAL- Not later than 2 years after the date of enactment of
this title, the Administrator shall promulgate regulations to establish an
allowance trading program for covered units in the United States.
`(2) REQUIREMENTS- Regulations promulgated under paragraph (1) shall
establish requirements for the carbon dioxide allowance trading program
under this section, including requirements concerning--
`(A) the allocation, issuance, and use of carbon dioxide
allowances;
`(B) the reserve and allocation of carbon dioxide allowances for new
units and new renewable energy units;
`(C) the issuance, certification, and use of offset
allowances;
`(D) the issuance, certification, and use of early reduction
allowances;
`(E) the transfer of allowances;
`(F) the monitoring, tracking, and reporting of carbon dioxide
emissions;
`(G) compliance and enforcement; and
`(H) the public availability of carbon dioxide emissions
information.
`(3) INTERACTION WITH DEPARTMENT OF AGRICULTURE-
`(A) IN GENERAL- Except as provided in subparagraph (B), the
Administrator shall promulgate all regulations relating to offsets under
this title.
`(B) OFFSETS- The Administrator shall promulgate regulations relating
to offsets produced by agricultural sequestration practices in
consultation with the Secretary of Agriculture.
`(1) ESTABLISHMENT- For each calendar year, based on projections of
electricity output from new units, the Administrator, in consultation with
the Secretary of Energy, shall establish by regulation a reserve of carbon
dioxide allowances to be allocated to new covered units for the calendar
year.
`(A) IN GENERAL- The number of allowances allocated under paragraph
(1) during a calendar year shall be not more than 2 percent of the total
number of allowances allocated to covered units for the calendar
year.
`(B) REQUIREMENT- Notwithstanding any other provision of this Act, no
allowance shall be allocated to any coal-fired covered unit or any
coal-fired new unit unless that covered unit or new unit--
`(i) is powered by a qualifying advanced clean coal technology (as
defined pursuant to subsection (d)(2)); or
`(ii) entered operation before January 1, 2007.
`(3) UNUSED ALLOWANCES- For each calendar year, the Administrator shall
reallocate, to all covered units, any unused carbon dioxide allowances from
the new unit reserve established under paragraph (1) in the proportion
that--
`(A) the number of allowances allocated to each covered unit for the
calendar year; bears to
`(B) the number of allowances allocated to all covered units for the
calendar year.
`(d) Incentives for Clean Coal Technology-
`(1) ESTABLISHMENT- The Administrator shall establish by regulation a
reserve of carbon dioxide allowances to be set aside during a calendar year
to encourage the deployment of clean coal technologies.
`(2) DEFINING QUALIFYING ADVANCED CLEAN COAL TECHNOLOGIES-
`(A) DEFINITION OF AVAILABLE TECHNOLOGY- In this paragraph, the term
`available technology' means any coal combustion technology that achieves
an output-based emission rate of, as applicable--
`(i) 1,100 pounds of carbon dioxide per megawatt-hour;
and
`(ii) 0.0060 pounds of mercury per gigawatt-hour.
`(B) CRITERIA AND STANDARDS- Not later than July 1, 2009, the
Administrator shall establish criteria and standards to define the term
`qualifying advanced clean coal technology' with respect to electric power
generation.
`(C) REQUIREMENT- In establishing criteria and standards under
subparagraph (B), the Administrator shall ensure that the qualifying
advanced clean coal technologies represent an advance in available
technology, taking into consideration--
`(i) net thermal efficiency;
`(ii) measures to capture and sequester carbon dioxide;
and
`(iii) output-based emission rates for--
`(III) oxides of nitrogen;
`(IV) filterable and condensable particulate matter;
and
`(D) REVIEW AND REVISION-
`(i) IN GENERAL- Not later than July 1, 2010, and each July 1
thereafter, the Administrator shall review and, if appropriate, revise
the criteria and standards under subparagraph (B) based on technological
advances during the preceding calendar year.
`(ii) NOTICE AND COMMENT NOT REQUIRED- Subject to clause (iii),
after the initial criteria and standards are established under
subparagraph (B), no subsequent review or revision under this
subparagraph shall be subject to the notice and comment provisions of
section 553 of title 5, United States Code.
`(iii) EFFECT- Nothing in clause (ii) precludes the application of
the notice and comment provisions of section 553 of title 5, United
States Code, as the Administrator determines to be
practicable.
`(3) QUANTITY AND DISTRIBUTION OF ALLOWANCES-
`(A) QUANTITY- The Administrator shall set aside by regulation an
annual quantity of carbon dioxide allowances for qualifying advanced clean
coal technologies equal to 3 percent of the annual tonnage limitation
established under section 702(d) for the period beginning on January 1,
2012, and ending on December 31, 2025.
`(i) IN GENERAL- The Administrator shall establish by regulation a
methodology for distributing the carbon dioxide allowances set aside
under subparagraph (A) to encourage the deployment of advanced clean
coal technologies.
`(ii) REVIEW AND REVISION-
`(I) IN GENERAL- Not later than July 1, 2009, and each July 1
thereafter, the Administrator shall review and, if appropriate, revise
the criteria and standards under clause (i) based on technological
advances during the preceding calendar year.
`(II) NOTICE AND COMMENT NOT REQUIRED- Subject to subclause (III),
after the initial criteria and standards are established under clause
(i), no subsequent review or revision under this subparagraph shall be
subject to the notice and comment provisions of section 553 of title
5, United States Code.
`(III) EFFECT- Nothing in subclause (II) precludes the application
of the notice and comment provisions of section 553 of title 5, United
States Code, as the Administrator determines to be
practicable.
`(4) TREATMENT OF CORRESPONDENCE- The correspondence of the Office of
Air Quality Planning and Standards addressing best available control
technology requirements for proposed coal-fired power plant projects and
dated December 13, 2005--
`(A) shall be considered to be inconsistent with section 169(3);
and
`(B) shall be treated as void and of no effect as of the date of
issuance of the correspondence.
`(e) Carbon Dioxide Allowance Allocation to Covered Units That Are Not New
Units and Clean Coal Technology Reserve-
`(1) TIMING OF ALLOCATIONS- The Administrator shall allocate carbon
dioxide allowances to covered units that are not new units--
`(A) not later than December 31, 2008, for calendar year 2012;
and
`(B) not later than December 31 of calendar year 2009 and each
calendar year thereafter, for the fourth calendar year that begins after
that December 31.
`(A) IN GENERAL- The Administrator shall allocate to each covered unit
that is not a new unit a quantity of carbon dioxide allowances that is
equal to the product obtained by multiplying--
`(i) the quantity of carbon dioxide allowances available for
allocation under subparagraph (B); and
`(ii) the quotient obtained by dividing--
`(I) the annual average quantity of electricity generated by the
unit during the most recent 3-calendar year period for which data are
available, updated each calendar year and measured in megawatt hours;
and
`(II) the total of the average quantities described in subclause
(I) with respect to all such units.
`(B) QUANTITY TO BE ALLOCATED- For each calendar year, the quantity of
carbon dioxide allowances allocated under subparagraph (A) to covered
units that are not new units shall be equal to the difference
between--
`(i) the annual tonnage limitation for emissions of carbon dioxide
from covered units specified in section 702(d) for the calendar year;
and
`(I) the quantity of carbon dioxide allowances placed in the new
unit reserve established under subsection (c) for the calendar year;
and
`(II) the quantity of carbon dioxide allowances reserved to
provide incentives for advanced clean coal technologies under
subsection (d) for the calendar year.
`(C) REQUIREMENT- Notwithstanding any other provision of this title,
no allowance shall be allocated to any coal-fired unit that was previously
a new unit unless the unit--
`(i) is powered by a qualifying advanced clean coal technology (as
defined pursuant to subsection (d)(2)); or
`(ii) entered operation before January 1, 2007.
`(1) REGULATIONS- Regulations promulgated pursuant to subsection (b)(1)
shall establish requirements for the issuance, certification, and use of
offset allowances for greenhouse gas reduction or sequestration projects
carried out in the United States or any other country, including
requirements--
`(A) that projects not cause or contribute to adverse effects on human
health or the environment;
`(B) that projects result in greenhouse gas reductions that are real,
surplus, enforceable, verifiable, permanent, and not used more than once,
as determined by the Administrator;
`(C) for methodology for calculating the carbon dioxide equivalent
reductions attributable to projects;
`(D) for the monitoring, reporting, and verification of the greenhouse
gas reductions from projects; and
`(E) for accounting principles used to quantify the greenhouse gas
reductions of projects that require--
`(i) the consideration of all greenhouse gas impacts of a
project;
`(ii) the consistent application of accounting
principles;
`(iv) to the maximum extent practicable, accuracy; and
`(v) the use of conservative assumptions in cases in which
uncertainties require the use of assumptions.
`(2) STATE OFFSET METHODS- In promulgating regulations pursuant to
subsection (b)(1), the Administrator shall take into consideration offset
methods developed, as of the date of enactment of this title, by the State
of California or any other State pursuant to the Regional Greenhouse Gas
Initiative or a similar regulatory program of comparable rigor, as
determined by the Administrator.
`(3) APPROVED CATEGORIES OF OFFSET PROJECTS-
`(A) IN GENERAL- Greenhouse gas reduction or sequestration projects
from the following types of operations and projects shall be eligible to
create offsets for use under this section:
`(i) Landfill operations.
`(ii) Agricultural manure management projects.
`(iii) Agricultural soil sequestration projects.
`(iv) Forest based projects, including conservation-based forest
management projects, reforestation projects, and conservation
projects.
`(v) Reduction in emission of sulfur hexafluoride
projects.
`(vi) Energy efficiency projects.
`(vii) Wastewater treatment facilities.
`(viii) Coal mining operations.
`(ix) Natural gas transmission and distribution systems.
`(x) Electrical transmission and distribution systems.
`(xi) Fossil fuel combustion at commercial and residential
buildings.
`(i) INITIAL PROTOCOLS- Not later than January 1, 2009, the
Administrator shall develop specific offset protocols for at least a
majority of the project types described in subparagraph (A), with
priority given to project types with the greatest greenhouse gas
reduction or sequestration potential, as determined by the
Administrator.
`(ii) SUBSEQUENT PROTOCOLS- Not later than January 1, 2010, the
Administrator shall develop a specific offset protocol for each project
type for which a protocol was not developed under clause
(i).
`(4) CREATION OF ADDITIONAL CATEGORIES OF GREENHOUSE GAS EMISSIONS
REDUCTION OFFSET PROJECTS-
`(A) IN GENERAL- Subject to subparagraph (B), the Administrator, by
regulation, may create additional categories of greenhouse gas emissions
reduction or sequestration offset projects for types of projects for which
the Administrator determines that compliance with the regulations
promulgated pursuant to subsection (b)(1) is feasible.
`(B) EXCLUSIONS- Regulations promulgated pursuant to subparagraph (A)
shall not include any greenhouse gas emission reduction or sequestration
offset project (or type of project) that affects--
`(i) a motor vehicle (as defined in section 216);
`(ii) a nonroad engine (as defined in section 216); or
`(iii) a stationary source (as defined in section 302) that is not a
covered unit.
`(5) PROHIBITION ON USE- Notwithstanding paragraphs (3) and (4), a
greenhouse gas emissions reduction or sequestration offset project shall not
be eligible to receive an offset credit for use under this section beginning
on the date on which the reduction or sequestration achieved by the project
is required by law (including regulations) or another legally binding
requirement.
`(g) Early Reduction Allowances-
`(1) IN GENERAL- Not later than January 1, 2009, the Administrator shall
promulgate regulations for the issuance, certification, and use of early
reduction allowances for greenhouse gas reduction or sequestration projects
carried out during calendar years 2000 through 2012.
`(2) ELIGIBLE PROJECTS- A greenhouse gas reduction or sequestration
project shall be eligible for early reduction allowances if the
project--
`(A) is carried out in the United States;
`(B) meets the regulations promulgated by the Administrator under
paragraph (1) that the Administrator determines to be applicable to the
project; and
`(i) under section 1605(b) of the Energy Policy Act of 1992 (42
U.S.C. 13385(b));
`(ii) under a voluntary climate change program of the Environmental
Protection Agency, such as the Climate Leaders program; or
`(iii) to a State or regional greenhouse gas registry.
`(3) LIMITATION- The quantity of early reduction allowances available
for greenhouse gas reduction or sequestration projects in calendar years
2000 through 2012 shall not exceed 10 percent of the carbon dioxide emission
tonnage limitation for calendar year 2012 under section 702(d).
`(h) Use and Transfer of Allowances-
`(1) USE IN OTHER CARBON DIOXIDE ALLOWANCE TRADING PROGRAMS-
`(A) IN GENERAL- Allowances may be used in any other carbon dioxide
allowance trading program that is approved by the Administrator for use of
the allowances.
`(B) MONITORING- The Administrator shall review each transfer of an
allowance into or out of the allowance trading program under this
section.
`(2) USE BEFORE APPLICABLE CALENDAR YEAR- Allowances may not be used
before the calendar year for which the allowance was allocated.
`(A) IN GENERAL- Notwithstanding paragraph (2), allowances may be
transferred before the calendar year for which the allowances were
allocated.
`(B) LIMITATION- The transfer of an allowance shall not take effect
until receipt and recording by the Administrator of a written
certification of the transfer, which is executed by an authorized official
of the person making the transfer.
`(4) USE BY PERSONS TO WHICH CARBON DIOXIDE ALLOWANCES ARE TRANSFERRED-
Any person to which carbon dioxide allowances are transferred under
paragraph (3)(A) may use the carbon dioxide allowances in the calendar year
for which the carbon dioxide allowances were allocated, or in a subsequent
calendar year, to demonstrate compliance with subsection (i)(1).
`(5) PERMIT REQUIREMENTS- An allocation or transfer of allowances to a
covered unit shall be considered to be part of the federally enforceable
permit of the covered unit under this Act, without a requirement for further
review or revision of the permit.
`(i) Compliance and Enforcement-
`(1) IN GENERAL- For the period of calendar years 2012 and 2013, and for
each 2-calendar-year period thereafter, the owner of each covered unit shall
surrender to the Administrator a quantity of allowances that is equal to the
total tons of carbon dioxide emitted by the covered unit during the
2-calendar-year period.
`(A) IN GENERAL- The owner or operator of a covered unit that emits
carbon dioxide in excess of the allowances that the owner or operator
holds for use for the covered unit for the 2-calendar-year period
shall--
`(i) pay an excess emissions penalty determined under subparagraph
(B); and
`(ii) offset the excess emissions by at least an equal quantity in
the following 2-calendar-year period or such other period as the
Administrator shall prescribe.
`(B) DETERMINATION OF EXCESS EMISSIONS PENALTY- The excess emissions
penalty for carbon dioxide shall be equal to the product obtained by
multiplying--
`(i) the number of tons of carbon dioxide emitted in excess of the
total quantity of allowances held; and
`(ii) 2 times the average price of a carbon dioxide allowance for
the 2-calendar-year period in which the excess emissions occurred, as
determined by the Administrator.
`(3) MONITORING SYSTEM- The Administrator shall promulgate regulations
requiring--
`(A) operation, reporting, and certification of continuous emissions
monitoring systems to accurately measure the quantity of carbon dioxide
that is emitted from each covered unit; and
`(B) verification and reporting of carbon dioxide emissions at each
covered unit.
`(A) IN GENERAL- Not less often than quarterly, the owner or operator
of a covered unit shall submit to the Administrator a report on the
monitoring of emissions of carbon dioxide carried out by the owner or
operator in accordance with the regulations promulgated under paragraph
(3).
`(B) AUTHORIZATION- Each report submitted under subparagraph (A) shall
be authorized by a responsible official of the covered unit, who shall
certify the accuracy of the report.
`(C) PUBLIC REPORTING- The Administrator shall make available to the
public, through 1 or more published reports and 1 or more forms of
electronic media, data concerning the emission of carbon dioxide from each
covered unit.
`(j) Allowance Not a Property Right- An allowance--
`(1) is not a property right; and
`(2) may be terminated or limited by the Administrator.
`(k) No Judicial Review- An allocation or issuance of an allowance by the
Administrator shall not be subject to judicial review.
`SEC. 706. DISTRIBUTION OF ALLOWANCES BETWEEN AUCTIONS AND ALLOCATIONS;
NATURE OF ALLOWANCES.
`(a) Distribution of Allowances Between Auctions and Allocations-
`(1) IN GENERAL- For each calendar year, the total quantity of
allowances to be auctioned and allocated under this title shall be equal to
the annual tonnage limitation for emissions of greenhouse gases from
affected units specified in section 702 for the calendar year.
`(2) DISTRIBUTION- The proportion of allowances to be auctioned pursuant
to section 707 and allocated pursuant to section 705 for each calendar year
beginning in calendar year 2012 shall be as follows:
`Percentages of Allowances To Be Auctioned and Allocated
--------------------------------------------------------------------------
Calendar year Percentage to be auctioned Percentage to be allocated
--------------------------------------------------------------------------
2012 18 82
2013 21 79
2014 24 76
2015 27 73
2016 30 70
2017 33 67
2018 36 64
2019 39 61
2020 42 58
2021 45 55
2022 48 52
2023 51 49
2024 54 46
2025 57 43
2026 60 40
2027 63 37
2028 66 34
2029 69 41
2030 72 28
2031 75 25
2032 80 20
2033 85 15
2034 90 10
2035 95 5
2036 and thereafter 100 0
--------------------------------------------------------------------------
`(b) Nature of Allowances- An allowance--
`(1) shall not be considered to be a property right; and
`(2) may be terminated or limited by the Administrator.
`(c) No Judicial Review- An auction or allocation of an allowance by the
Administrator shall not be subject to judicial review.
`SEC. 707. AUCTION OF ALLOWANCES.
`(a) In General- Not later than 2 years after the date of enactment of
this title, the Administrator shall promulgate regulations establishing a
procedure for the auction of the quantity of allowances specified in section
706(a) for each calendar year.
`(b) Deposit of Proceeds- The Administrator shall deposit all proceeds
from auctions conducted under this section in the Fund for use in accordance
with section 708.
`SEC. 708. CLIMATE ACTION TRUST FUND.
`(a) Establishment and Administration-
`(1) IN GENERAL- There is established in the general fund of the
Treasury a fund, to be known as the `Climate Action Trust Fund', consisting
of--
`(A) such amounts as are deposited in the Fund under paragraph (2);
and
`(B) any interest earned on investment of amounts in the Fund under
paragraph (4).
`(2) TRANSFERS TO FUND- The Secretary of the Treasury shall deposit in
the Fund amounts equivalent to the proceeds received by the Administrator as
a result of the conduct of auctions of allowances under section 707.
`(3) EXPENDITURES FROM FUND-
`(A) IN GENERAL- Subject to subparagraph (B), the Administrator shall
use amounts in the Fund to carry out the programs described in this
section.
`(B) ADMINISTRATIVE EXPENSES- Of amounts in the Fund, there shall be
made available to pay the administrative expenses necessary to carry out
this title, as adjusted for changes beginning on January 1, 2007, in
accordance with the Consumer Price Index for All-Urban Consumers published
by the Department of Labor--
`(i) $90,000,000 for each fiscal year, to the Administrator;
and
`(ii) $30,000,000 for each fiscal year, to the Secretary of
Agriculture.
`(4) INVESTMENT OF AMOUNTS-
`(A) IN GENERAL- The Secretary of Treasury shall invest such portion
of the Fund as is not, in the judgment of the Administrator, required to
meet current withdrawals.
`(B) INTEREST-BEARING OBLIGATIONS- Investments may be made only in
interest-bearing obligations of the United States.
`(C) ACQUISITION OF OBLIGATIONS- For the purpose of investments under
paragraph (1), obligations may be acquired--
`(i) on original issue at the issue price; or
`(ii) by purchase of outstanding obligations at the market
price.
`(D) SALE OF OBLIGATIONS- Any obligation acquired by the Fund may be
sold by the Administrator at the market price.
`(E) RETURN OF PROCEEDS TO FUND- The interest on, and the proceeds
from the sale or redemption of, any obligations held in the Fund shall be
credited to, and form a part of, the Fund.
`(5) REGULATIONS- Not later than 2 years after the date of enactment of
this title, the Administrator, in consultation with the Secretary of Energy
and the Secretary of Agriculture, shall promulgate such regulations as are
necessary to administer the Fund in accordance with this section.
`(1) NO FURTHER APPROPRIATION- The Administrator shall distribute
amounts in the Fund for use in accordance with this section, without further
appropriation.
`(A) IN GENERAL- Not later than 3 years after the date of enactment of
this title, the Administrator, in consultation with the Secretary of
Energy and the Secretary of Agriculture, shall promulgate regulations
establishing an innovative low- and zero-emitting carbon technologies
program, a clean coal technologies program, a research and analysis
program, and an energy efficiency technology program that
include--
`(i) the funding mechanisms that will be available to support the
development and deployment of the technologies addressed by each
program, including low-interest loans, loan guarantees, grants, and
financial awards; and
`(ii) the criteria for the methods by which proposals will be funded
to develop and deploy the technologies.
`(B) REVISION OF CRITERIA- Not later than January 1, 2014, and every 3
years thereafter, the Administrator shall review and, if appropriate,
revise, based on technological advances, the criteria referred to in
subparagraph (A)(ii).
`(C) ADAPTATION ASSISTANCE FOR WORKERS AND COMMUNITIES- Not later than
3 years after the date of enactment of this title, the Administrator, in
consultation with the Secretary of Energy, shall promulgate regulations
governing the distribution of funds pursuant to subsection (g).
`(3) PROGRESS REPORTS- Not later than January 1, 2015, and every 5 years
thereafter, the Administrator shall prepare and submit to the President and
Congress a report containing an evaluation of the effectiveness of the
distribution of funds under this section.
`(c) Innovative Low- and Zero-Emitting Carbon Electricity Generation
Technologies Program-
`(1) IN GENERAL- For each calendar year, of amounts remaining in the
Fund after making the expenditures described in subsection (a)(3)(B), the
Administrator shall use not more than 35 percent to support the development
and deployment of low- and zero-emitting carbon electricity generation
technologies.
`(2) REGULATIONS- The regulations establishing the innovative low- and
zero-emitting carbon electricity generation technologies program referred to
in subsection (b)(2)(A) shall establish the areas of technology development
that will qualify for funding under that program, including technologies for
the generation of electricity from renewable energy sources.
`(d) Clean Coal Technologies Program-
`(1) IN GENERAL- For each calendar year, of amounts remaining in the
Fund after making the expenditures described in subsection (a)(3)(B), the
Administrator shall use not more than 20 percent to support the development
and deployment of clean coal technologies.
`(2) REGULATIONS- The criteria and standards established pursuant to
section 705(d)(2) to define the term `clean coal technology' shall establish
criteria for use of a technology in the clean coal technologies program
under subsection (b)(2)(A).
`(e) Energy Efficiency Technology Program-
`(1) IN GENERAL- For each calendar year, of amounts remaining in the
Fund after making the expenditures described in subsection (a)(3)(B), the
Administrator shall use not more than 15 percent to support the development
and deployment of technologies for increasing the efficiency of energy end
use in buildings and industry.
`(2) REGULATIONS- The regulations establishing the energy efficiency
program referred to in subsection (b)(2)(A) shall establish the areas of
technology development that will qualify for funding under the energy
efficiency program.
`(f) Federal Funding of Research Into and Development of Energy and
Efficiency Technologies, Carbon Lifecycle Analysis, and Agricultural
Practices- For each calendar year, the Administrator shall use not more than
10 percent of the amounts in the Fund to support research into and development
of--
`(1) energy and efficiency technologies;
`(2) carbon lifecycle analyses of energy generation technologies and
practices; and
`(3) agricultural practices that sequester or reduce atmospheric
greenhouse gases.
`(g) Adaptation Assistance for Workers and Communities Negatively Affected
by Climate Change and Greenhouse Gas Regulation- For each calendar year, of
amounts remaining in the Fund after making the expenditures described in
subsection (a)(3)(B), the Administrator shall use at least 10 percent to
provide adaptation assistance for workers and communities--
`(1) to address local or regional impacts of climate change and the
impacts, if any, from greenhouse gas regulation, including by providing
assistance to displaced workers and disproportionately affected communities;
and
`(2) to mitigate impacts of climate change and the impacts, if any, from
greenhouse gas regulation on low-income energy consumers.
`(h) Fish and Wildlife Habitat-
`(1) IN GENERAL- For each calendar year, of amounts remaining in the
Fund after making the expenditures described in subsection (a)(3)(B), the
Administrator shall use at least 10 percent to mitigate the impacts of
climate change on fish and wildlife habitat in accordance with this
subsection.
`(2) WILDLIFE RESTORATION FUND-
`(A) IN GENERAL- For each calendar year, the Administrator shall
transfer not less than 70 percent of the amounts made available under
paragraph (1) to the Federal aid to wildlife restoration fund established
under section 3(a)(1) of the Pittman-Robertson Wildlife Restoration Act
(16 U.S.C. 669b(a)(1))--
`(i) to carry out climate change impact mitigation actions pursuant
to comprehensive wildlife conservation strategies; and
`(ii) to provide relevant information, training, monitoring, and
other assistance to develop climate change impact mitigation and
adaptation plans and integrate the plans into State comprehensive
wildlife conservation strategies.
`(B) AVAILABILITY- Amounts transferred to the Federal aid to wildlife
restoration fund under this paragraph shall--
`(i) be available, without further appropriation, for obligation and
expenditure; and
`(ii) remain available until expended.
`(3) PROTECTION OF NATURAL RESOURCES-
`(A) IN GENERAL- For each calendar year, the Administrator, in
consultation with the Secretary of Agriculture, the Secretary of Commerce,
the Chief of Engineers, and State and national wildlife conservation
organizations, shall transfer not more than 30 percent of the funds made
available under paragraph (1) to the Secretary of the Interior for use in
carrying out Federal and State programs and projects--
`(i) to protect natural communities that are most vulnerable to
climate change;
`(ii) to restore and protect natural resources that directly guard
against damages from climate change events; and
`(iii) to restore and protect ecosystem services that are most
vulnerable to climate change.
`(B) ADMINISTRATION- Amounts transferred to the Secretary of the
Interior under this paragraph shall--
`(i) be available, without further appropriation, for obligation and
expenditure;
`(ii) remain available until expended;
`(iii)(I) be obligated not later than 2 years after the date of
transfer; or
`(II) if the amounts are not obligated in accordance with subclause
(I), be transferred to the Federal aid to wildlife restoration fund for
use in accordance with paragraph (2); and
`(iv) supplement, and not supplant, the amount of Federal, State,
and local funds otherwise expended to carry out programs and projects
described in subparagraph (A).
`(C) PROGRAMS AND PROJECTS- Programs and projects for which funds may
be used under this paragraph include--
`(i) Federal programs and projects--
`(I) to identify Federal land and water at greatest risk of being
damaged or depleted by climate change;
`(II) to monitor Federal land and water to allow for early
detection of impacts;
`(III) to develop adaptation strategies to minimize the damage;
and
`(IV) to restore and protect Federal land and water at the
greatest risk of being damaged or depleted by climate
change;
`(ii) Federal programs and projects to identify climate change risks
and develop adaptation strategies for natural grassland, wetlands,
migratory corridors, and other habitats vulnerable to climate change on
private land enrolled in--
`(I) the wetlands reserve program established under subchapter C
of chapter 1 of subtitle D of title XII of the Food Security Act of
1985 (16 U.S.C. 3837 et seq.);
`(II) the grassland reserve program established under subchapter C
of chapter 2 of subtitle D of title XII of that Act (16 U.S.C. 3838n
et seq.); and
`(III) the wildlife habitat incentive program established under
section 1240N of that Act (16 U.S.C. 3839bb-1);
`(iii) programs and projects under the North American Wetlands
Conservation Act (16 U.S.C. 4401 et seq.), the North American Bird
Conservation Initiative, and the Neotropical Migratory Bird Conservation
Act (16 U.S.C. 6101 et seq.) to protect habitat for migratory birds that
are vulnerable to climate change impacts;
`(iv) programs and projects--
`(I) to identify coastal and marine resources (such as coastal
wetlands, coral reefs, submerged aquatic vegetation, shellfish beds,
and other coastal or marine ecosystems) at the greatest risk of being
damaged by climate change;
`(II) to monitor those resources to allow for early detection of
impacts;
`(III) to develop adaptation strategies;
`(IV) to protect and restore those resources; and
`(V) to integrate climate change adaptation requirements into
State plans developed under the coastal zone management program
established under the Coastal Zone Management Act of 1972 (16 U.S.C.
1451 et seq.), the national estuary program established under section
320 of the Federal Water Pollution Control Act (33 U.S.C. 1330), the
Coastal and Estuarine Land Conservation Program established under the
fourth proviso of the matter under the heading `PROCUREMENT,
ACQUISITION, AND CONSTRUCTION (INCLUDING TRANSFERS OF FUNDS)' of title
II of the Departments of Commerce, Justice, and State, the Judiciary,
and Related Agencies Appropriations Act, 2002 (16 U.S.C. 1456d), or
other comparable State programs;
`(v) programs and projects to conserve habitat for endangered
species and species of conservation concern that are vulnerable to the
impact of climate change;
`(vi) programs and projects under the Forest Legacy Program
established under section 7 of the Cooperative Forestry Assistance Act
(16 U.S.C. 2103c), to support State efforts to protect environmentally
sensitive forest land through conservation easements to provide refuges
for wildlife;
`(vii) other Federal or State programs and projects identified by
the heads of agencies described in subparagraph (A) as high
priorities--
`(I) to protect natural communities that are most vulnerable to
climate change;
`(II) to restore and protect natural resources that directly guard
against damages from climate change events; and
`(III) to restore and protect ecosystem services that are most
vulnerable to climate change;
`(viii) to address climate change in Federal land use planning and
plan implementation and to integrate climate change adaptation
strategies into--
`(I) comprehensive conservation plans prepared under section 4(e)
of the National Wildlife Refuge System Administration Act of 1966 (16
U.S.C. 668dd(e));
`(II) general management plans for units of the National Park
System;
`(III) resource management plans of the Bureau of Land Management;
and
`(IV) land and resource management plans under the Forest and
Rangeland Renewable Resources Planning Act of 1974 (16 U.S.C. 1600 et
seq.) and the National Forest Management Act of 1976 (16 U.S.C. 1600
et seq.); and
`(ix) projects to promote sharing of information on climate change
wildlife impacts and mitigation strategies across agencies, including
funding efforts to strengthen and restore habitat that improves the
ability of fish and wildlife to adapt successfully to climate change
through the Wildlife Conservation and Restoration Account established by
section 3(a)(2) of the Pittman-Robertson Wildlife Restoration Act (16
U.S.C. 669b(a)(2)).'.
SEC. 4. NEW SOURCE REVIEW PROGRAM.
Section 165 of the Clean Air Act (42 U.S.C. 7475) is amended by adding at
the end the following:
`(f) Revisions to New Source Review Program-
`(1) DEFINITIONS- In this subsection:
`(A) AFFECTED UNIT- The term `affected unit' has the meaning given the
term in section 701.
`(B) NEW SOURCE REVIEW PROGRAM- The term `new source review program'
means the program to carry out this part and part D.
`(2) PERFORMANCE STANDARDS-
`(A) IN GENERAL- Except as provided in subparagraph (B), beginning
January 1, 2020, and on each January 1 thereafter, each affected unit that
has been in operation 40 or more years as of that January 1, and that
operates for more than 500 hours per calendar year, shall meet performance
standards of--
`(i) 2 lbs/MWh for sulfur dioxide; and
`(ii) 1 lbs/MWh for nitrogen oxides.
`(i) IN GENERAL- Notwithstanding subparagraph (A), an affected unit
that, as of January 1, 2020, is required to meet a more stringent
performance standard than the applicable standard under subparagraph (A)
shall continue to meet the more stringent standard.
`(ii) MODIFICATION OF AFFECTED UNITS- The requirements of this
section shall not affect in any way any requirement under section
111(a)(4), this part, or part D governing modifications of major
stationary sources.
`(3) NO EFFECT ON OTHER REQUIREMENTS AND RETENTION OF STATE AUTHORITY-
Nothing in this subsection affects--
`(A) any State authority under section 116; or
`(B) the obligation of any State or local government or any major
emitting facility to comply with the requirements of this
section.'.
SEC. 5. REVISIONS TO SULFUR DIOXIDE ALLOWANCE PROGRAM.
(a) In General- Title IV of the Clean Air Act (relating to acid deposition
control) (42 U.S.C. 7651 et seq.) is amended by adding at the end the
following:
`SEC. 417. REVISIONS TO SULFUR DIOXIDE ALLOWANCE PROGRAM.
`(a) Definitions- In this section, the terms `affected unit' and `new
unit' have the meanings given the terms in section 701.
`(b) Regulations- Not later than January 1, 2008, the Administrator shall
promulgate such revisions to the regulations to implement this title as the
Administrator determines to be necessary to implement section 702(a).
`(1) ESTABLISHMENT- Subject to the annual tonnage limitation for
emissions of sulfur dioxide from affected units specified in section 702(a),
the Administrator shall establish by regulation a reserve of allowances to
be set aside for use by new units.
`(2) DETERMINATION OF QUANTITY- The Administrator, in consultation with
the Secretary of Energy, shall determine, based on projections of
electricity output for new units--
`(A) not later than June 30, 2008, the quantity of allowances required
to be held in reserve for new units for each of calendar years 2012
through 2014; and
`(B) not later than June 30 of each fifth calendar year thereafter,
the quantity of allowances required to be held in reserve for new units
for the following 5-calendar year period.
`(A) REGULATIONS- The Administrator shall promulgate regulations to
establish a methodology for allocating allowances to new units.
`(B) NO JUDICIAL REVIEW- An allocation of allowances by the
Administrator under this subsection shall not be subject to judicial
review.
`(A) REGULATIONS- Subject to the annual tonnage limitation for
emissions of sulfur dioxide from affected units specified in section
702(a), and subject to the reserve of allowances for new units under
subsection (c), the Administrator shall promulgate regulations to govern
the allocation of allowances to affected units that are not new
units.
`(B) REQUIRED ELEMENTS- The regulations shall provide for--
`(i) the allocation of allowances on a fair and equitable basis
between affected units that received allowances under section 405 and
affected units that are not new units and that did not receive
allowances under that section, using for both categories of units the
same or similar allocation methodology as was used under section 405;
and
`(ii) the pro-rata distribution of allowances to all units described
in clause (i), subject to the annual tonnage limitation for emissions of
sulfur dioxide from affected units specified in section
702(a).
`(2) TIMING OF ALLOCATIONS- The Administrator shall allocate allowances
to affected units--
`(A) not later than December 31, 2007, for calendar years 2010 and
2011; and
`(B) not later than December 31 of calendar year 2008 and each
calendar year thereafter, for the fourth calendar year that begins after
that December 31.
`(3) NO JUDICIAL REVIEW- An allocation of allowances by the
Administrator under this subsection shall not be subject to judicial
review.'.
(b) Definition of Allowance- Section 402 of the Clean Air Act (relating to
acid deposition control) (42 U.S.C. 7651a) is amended by striking paragraph
(3) and inserting the following:
`(3) ALLOWANCE- The term `allowance' means an authorization, allocated
by the Administrator to an affected unit under this title, to emit, during
or after a specified calendar year, a quantity of sulfur dioxide determined
by the Administrator and specified in the regulations promulgated under
section 417(b).'.
(c) Excess Emissions- Section 411 of the Clean Air Act (relating to acid
deposition control) (42 U.S.C. 7651j) is amended by striking subsections (a)
and (b) and inserting the following:
`(a) In General- The owner or operator of a new unit or an affected unit
that emits sulfur dioxide in excess of the sulfur dioxide allowances that the
owner or operator holds for use for the new unit or affected unit for the
calendar year shall--
`(1) pay an excess emissions penalty determined under subsection (b);
and
`(2) offset the excess emissions by at least an equal quantity in the
following calendar year or such other period as the Administrator shall
prescribe.
`(b) Determination of Excess Emissions Penalty-
`(1) IN GENERAL- The excess emissions penalty for sulfur dioxide shall
be equal to the product obtained by multiplying--
`(A) the quantity of sulfur dioxide emitted in excess of the total
quantity of sulfur dioxide allowances held; and
`(B) 2 times the average price of a sulfur dioxide allowance for the
calendar year in which the excess emissions occurred, as determined by the
Administrator.
`(2) TREATMENT- An excess emissions penalty under paragraph (1)--
`(A) shall be due and payable without demand to the Administrator, in
accordance with applicable regulations promulgated by the Administrator,
by not later than 18 months after the date of enactment of the Clean Air
Planning Act of 2007; and
`(B) shall not diminish the liability of the owner or operator of the
affected unit with respect to any fine, penalty, or assessment applicable
to the affected unit for the same violation under any other provision of
this Act.'.
(d) Technical Amendments-
(1) Title IV of the Clean Air Act (relating to noise pollution) (42
U.S.C. 7641 et seq.)--
(A) is amended by redesignating sections 401 through 403 as sections
801 through 803, respectively; and
(B) is redesignated as title VIII and moved to appear at the end of
that Act.
(2) The table of contents for title IV of the Clean Air Act (relating to
acid deposition control) (42 U.S.C. prec. 7651) is amended by adding at the
end the following:
`Sec. 417. Revisions to sulfur dioxide allowance program.'.
SEC. 6. ENVIRONMENTAL PROTECTION AGENCY PROGRAM TO REDUCE CARBON DIOXIDE
FROM NEW COAL-FIRED ELECTRIC GENERATING UNITS.
Section 111 of the Clean Air Act (42 U.S.C. 7411) is amended by adding at
the end the following:
`(k) Standards of Performance for New Electric Generating Units-
`(1) STANDARD OF PERFORMANCE-
`(A) IN GENERAL- Each covered unit that commences operation on or
after January 1, 2015, shall meet the following standards of
performance:
`(i) For each of calendar years 2015 through 2025, an emission
limitation of 1,100 pounds of carbon dioxide per megawatt-hour or
less.
`(ii) For calendar year 2025 and each calendar year thereafter, an
emission limitation of 285 pounds of carbon dioxide per megawatt-hour or
less.
`(B) REVIEW AND REVISION-
`(i) IN GENERAL- Not later than January 1, 2015, and every 5 years
thereafter, the Administrator shall complete a review of the standard of
performance under subparagraph (A) (or a modified standard, if
applicable) to determine whether the standard requires revision, based
on the best available technological system of continuous emission
reduction on the date on which the review is conducted.
`(ii) PUBLICATION- The Administrator shall publish each
determination under clause (i) not later than the deadline for the
determination under that clause.
`(iii) TREATMENT- A determination of the Administrator under clause
(i) shall be considered to be a final agency action for purposes of
section 307(b)(1).
`(2) TREATMENT OF CERTAIN CARBON DIOXIDE- Carbon dioxide that is
injected into a geological formation in a manner that prevents any release
of the carbon dioxide into the atmosphere shall not be considered to be a
carbon dioxide emission from an electric generating unit for purposes of
meeting an applicable standard under paragraph (1).'.
SEC. 7. RELATIONSHIP TO OTHER LAW.
(a) Regulation of Hazardous Air Pollutants- Section 112(n)(1) of the Clean
Air Act (42 U.S.C. 7412(n)(1)) is amended by striking subparagraph (A) and
inserting the following:
`(i) IN GENERAL- Not later than 18 months after the date of
enactment of the Clean Air Planning Act of 2007, the Administrator shall
promulgate regulations under this section limiting the emission from
electric utility steam generating units of hazardous air pollutants,
other than mercury, as the Administrator determines to be appropriate
and necessary in accordance with the standards under this section,
including subsections (b)(2) and (f).
`(ii) REQUIREMENTS- The regulations under clause (i)
shall--
`(I) require compliance with applicable standards as expeditiously
as practicable, but not later than 3 years after the effective date of
the regulations; and
`(II) be in accordance with other applicable requirements under
this section.
`(iii) EFFECTIVE DATE- The regulations under clause (i) shall be
effective on the date of promulgation of the regulations.'.
(b) No Effect on Other Federal and State Requirements- Except as otherwise
specifically provided in this Act, nothing in this Act or an amendment made by
this Act--
(1) affects any permitting, monitoring, or enforcement obligation of the
Administrator of the Environmental Protection Agency under the Clean Air Act
(42 U.S.C. 7401 et seq.) or any remedy provided under that Act;
(2) affects any requirement applicable to, or liability of, an electric
generating facility under that Act;
(3) requires a change in, affects, or limits any State law that
regulates electric utility rates or charges, including prudence review under
State law; or
(4) precludes a State or political subdivision of a State from adopting
and enforcing any requirement for the control or abatement of air pollution,
except that a State or political subdivision may not adopt or enforce any
emission standard or limitation that is less stringent than the requirements
imposed under that Act.
END