Continuing a message from his January 2013 inaugural speech, on February 12 2013 President Obama devoted a portion of his State of the Union address to climate change. He surprised many with his request that Congress enact "market-based" climate change legislation. Efforts to pass market-based cap and trade legislation failed in 2010, when the Democrats controlled both congressional houses and the White House. Alternatively, the president indicated that he would take executive action should Congress fail to act. His statement suggests that the administration will continue to regulate greenhouse gas emissions through administrative regulation.

In other climate change-related activity, and a day after the president's State of the Union address, Environment and Public Works Committee Chair Barbara Boxer held a public briefing focused on the science surrounding climate change. She and her committee colleague Bernie Sanders also released upstream climate change legislation (S332) that would impose a $20 carbon tax per ton of carbon content on fuels that emit carbon dioxide or methane – specifically coal, petroleum and natural gas. In a departure from previous economy-wide measures, including the most recent 2010 cap and trade legislation and state greenhouse gas control measures, this bill would not levy a fee on downstream energy producers such as manufacturers and coal-fired power plants. It calculates the fee based on the carbon content of the fuel (or the carbon equivalent methane content of the fuel), and imposes the fee on the fuel producer or importer. While the measure may be the subject of Senate hearings, there is little expectation that it will have genuine legislative traction.

For further information on this topic please contact Rick Boucher, Roger Martella, Sean Moran or Catherine Karen at Sidley Austin LLP by telephone (+1 202 736 8000), fax (+1 202 736 8711) or email (rboucher@sidley.com, rmartella@sidley.com, sean.moran@sidley.com or ckaren@sidley.com)

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