Last week Senator Barbara Boxer, chairman of the Senate Environment and Public Works Committee, and Senator John Kerry, chairman of the Senate Foreign Relations Committee, introduced the Clean Energy Jobs and American Power Act. Similar to the House-passed H.R. 2454, the American Clean Energy and Security Act (ACES), the Clean Energy Jobs and American Power Act (Kerry-Boxer) is designed to address various energy and environmental issues, including national levels of greenhouse gas (GHG) emissions, research and development of innovative technologies, worker training, and "green" job creation.

The Kerry-Boxer bill does, however, contain some key differences compared to ACES. Foremost, the GHG emissions reduction target of 20 percent below 2005 levels by 2020 in Kerry-Boxer is more stringent than the 17 percent emissions reduction target in ACES. Additionally, the Kerry-Boxer bill includes a cost-containment mechanism that enables the Commodity Futures Trading Commission (CFTC) to issue additional allowances from a market stability fund if the price per allowance exceeds $28 in 2012.

A further difference in the Kerry-Boxer bill includes the right of the Environmental Protection Agency to regulate GHG emissions, which was significantly limited in ACES. In addition, Kerry-Boxer empowers the CFTC to wholly regulate the carbon market created by the bill's cap-and-trade program, rather than share jurisdiction with the Federal Energy Regulatory Commission as stipulated by ACES. The Kerry-Boxer bill also offers new incentives to increase the use of nuclear power.

While there are a number of new federal requirements in Kerry-Boxer, such as provisions designed to spur communities to plan more public transportation and bike paths, there are also a number of financially funded grant options to address many of these new mandates.

Similar to when ACES was introduced in the House, the draft Kerry-Boxer bill is silent on how emissions allowances will be distributed. Allowance allocations will be decided at a time closer to when the bill is considered by the full Senate Environment and Public Works Committee, possibly by the end of October. Five other relevant Senate committees also have jurisdiction over a climate bill, and their plans for consideration are uncertain at this time.