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Last week the chairs of two key Congressional Committees released a draft of the most far-reaching energy and climate change legislation ever proposed in the U.S. The four titles of the bill, which has dozens of subsections, encompass:

  1. A clean energy title that promotes renewable sources of energy, carbon capture and sequestration technologies, low-carbon fuels, electric vehicles, and the smart grid and electricity transmission;
  2. An energy efficiency title that increases energy efficiency across all sectors of the economy, including buildings, appliances, transportation, and industry;
  3. A global warming title that places limits on emissions of heat-trapping pollutants; and
  4. A transitioning title intended to protect US consumers and industry and promotes green jobs during the transition to a clean energy economy.

Congressional leaders hope to get the bill through the House by the end of May and signed by the President prior to the United Nations Climate Change Conference in Copenhagen this December.

Among the more controversial provisions of the bill is the effort to cut carbon emissions 20 percent below 2005 levels by 2020 and to require companies to acquire permits to release greenhouse gases. The prospects for the bill are cloudy. The bill should make it through several House committees that have jurisdiction, but may run into trouble in the Senate where there is strong Republican opposition and some wavering Democrats.

A major roadblock to the bill will be the state of the economy. Any change in energy policy of this magnitude is likely to impose new costs on consumers and businesses. For those who do not see an imminent threat from global warming and believe that energy problems can be solved through more offshore drilling, this bill is an anathema. The administration, however, has significant power to act unilaterally on many of these issues under the Clean Air Act, thereby leaving Congress out of the decision making. There is clearly a long and tortuous path for the bill between May and December.