Whether and how fast Congress will adopt climate legislation remains uncertain. On May 12, 2010, Senators John Kerry and Joseph Lieberman released their federal energy bill, known as the American Power Act. The bill would create a cap-and-trade system for global warming pollutants, and it seeks to reduce incrementally emissions of these pollutants to 17% of 2005 levels by 2050. The bill encourages nuclear power generation, supports development of renewable energy and energy efficiency measures, and creates a national strategy for carbon capture and sequestration.

The Kerry-Lieberman bill is similar in a number of respects to H.R. 2454, the American Clean Energy and Security Act (ACES), passed by the House in June 2009. Both bills set almost identical emissions reduction targets and include a phase-in plan for cap-and-trade programs with start dates that vary by industry sector. Both bills would also preempt EPA's regulation of GHG emissions from stationary sources in PSD and Title V permits in instances where GHG emissions were the sole pollutants triggering the permit requirement. They would also preempt EPA from establishing National Ambient Air Quality Standards (NAAQS) for GHGs or new source performance standards for sources subject to emissions caps. There are important differences between the bills as well. For instance, under the Senate bill, large industrial sources would be subject to GHG regulation in 2016, two years later than under the House proposal. The Kerry-Lieberman bill, in contrast to the House bill, does not call for a national renewable energy standard. Also missing from the Kerry-Lieberman bill are several provisions in the House bill regarding energy efficiency initiatives. With respect to state cap-and-trade programs, the Kerry-Lieberman bill would permanently preempt state cap-and-trade programs, while the House bill would suspend such state programs from 2012 to 2017 but then allow parallel programs.

The Kerry-Lieberman bill is still in draft form and is intended to serve as a catalyst for further negotiation in the Senate. Prospects for passage this year of a climate change bill in the Senate remain uncertain.

The Kerry-Lieberman bill is available here.