Market-Based Greenhouse Gas Control:
Selected Proposals in the 111th Congress
Jonathan L. Ramseur
Analyst in Environmental Policy
Larry Parker
Specialist in Energy and Environmental Policy
Brent D. Yacobucci
Specialist in Energy and Environmental Policy
May 27, 2009
Congressional Research Service
7-5700
www.crs.gov
R40556
CRS Report for Congress
P
repared for Members and Committees of Congress

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

Summary
As of the date of this report, Members in the 111th Congress have introduced seven stand-alone
proposals that would control greenhouse gas (GHG) emissions. The proposals offered to date
would employ market-based approaches—either a cap-and-trade or carbon tax system, or some
combination thereof—to reduce GHG emissions. The legislative proposals are varied in their
overall approaches in controlling GHG emissions. Some control emissions by setting a quantity
(or cap); others control emissions by setting a price (or tax/fee). In addition, the proposals differ
in their inclusion of particular design elements, such as whether or not to allow offsets (emission
reduction opportunities from economic sectors not directly addressed by the primary approach).
H.R. 2454 (Waxman/Markey) has been the primary energy and climate change legislative
proposal in the 111th Congress. It was introduced May 15, 2009, and subsequently modified and
offered as a “Manager’s Amendment” (May 18, 2009) for markup in the House Committee on
Energy and Commerce. After making several amendments to the bill (most relating to the bill’s
energy provisions), the committee ordered the bill reported May 21, 2009.
H.R. 2454 (Waxman/Markey) and H.R. 1862 (Van Hollen) would establish cap-and-trade
programs, but they would differ in their implementation. For example, the latter would not allow
offsets to be used for compliance purposes, while the former would allow covered entities to
satisfy an increasing percentage (approximately 30% in 2012) of their compliance obligation with
offsets. H.R. 1666 (Doggett) would also create a cap-and-trade system, but in the early years of
the program, the number of emission allowances distributed would be based on achieving a
specified allowance price.
Three of the proposals—H.R. 594 (Stark), H.R. 1337 (Larson), and H.R. 2380 (Inglis)—would
use a carbon tax approach to address carbon dioxide (CO2) emissions from fossil fuel
combustion. H.R. 1683 (McDermott) would establish a program that may be described as a
dynamic carbon tax: its tax rate would be linked with annual emission allocations (or caps).
A key element in GHG emission reduction bills is how, to whom, and for what purpose the value
of emission allowances or carbon tax revenue would be distributed. The distribution strategy is a
critical policy decision, because it would affect (1) the overall cost of the program and (2) how
program costs are distributed throughout the economy. In the early years of the program, H.R.
2454 would distribute allowances at no cost to both covered and non-covered entities to support
various policy objectives. In addition, an increasing percentage (approximately 18% in 2016) of
the allowances would be sold through auction. As with the distribution of no-cost allowances,
auction revenues would be used to further various policy objectives.

Congressional Research Service

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

Contents
Introduction ................................................................................................................................ 1
Legislative Proposals .................................................................................................................. 2
Legislative Activity..................................................................................................................... 4

Tables
Table 1. Comparison of Key Provisions in GHG Emission Control Bills...................................... 5

Contacts
Author Contact Information ...................................................................................................... 17

Congressional Research Service

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

Introduction
There is a growing interest in developing a federal program that would address concerns over
global climate change by directly controlling greenhouse gas (GHG)1 emissions. Legislative
proposals have generally focused on market-based approaches, but some proposals have included
a mix of market and non-market strategies.2
Market-based mechanisms that limit GHG emissions can be divided into two types: quantity
control (e.g., cap-and-trade) and price control (e.g., carbon tax or fee). To some extent, a carbon
tax and a cap-and-trade program would produce similar effects. For example, both are estimated
to increase the price of fossil fuels, which would ultimately be borne by consumers, particularly
households. Preference for a carbon tax or a cap-and-trade program ultimately depends on which
variable one wants to directly control—emissions or costs.3
Although Members have introduced and debated GHG emission control proposals—both cap-
and-trade and carbon tax programs—in previous Congresses,4 the Obama administration’s stated
commitment to GHG emission reduction has raised interest in developing a workable program.
The President has stated that he would like a program that would reduce U.S. GHG emissions
14% below 2005 levels by 2020 and 83% below 2005 levels by 2050.5 He has also stated that
auctioning emission allowances is his preferred allocation strategy.6 This position contrasts
starkly with the previous Administration, which had rejected the concept of mandatory emissions
reductions, instead focusing on voluntary initiatives to reduce the growth in GHG emissions (i.e.,
emissions intensity targets).
In addition to the policy shift in the executive branch, a number of states have taken actions in
recent years that directly address GHG emissions. For example, 23 states have joined one of the
three regional partnerships that would require GHG (or just carbon dioxide) emission reductions.
One of these partnerships—the Regional Greenhouse Gas Initiative (RGGI)—took effect January
2009.7 Industry stakeholders are especially concerned that the states will create a patchwork of
climate change regulations across the nation. This prospect is causing some industry leaders to
call for a federal climate change program. Some have stated a preference for a cap-and-trade
system; others have indicated a preference for a carbon tax approach.

1 Under the United Nations Framework Convention on Climate Change (UNFCCC), GHGs are carbon dioxide (CO2),
methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride
(SF6). Some greenhouse gases are controlled under the Montreal Protocol on Substances that Deplete the Ozone Layer,
and are not covered under UNFCCC.
2 For a comprehensive discussion of different approaches to climate change, see CRS Report RL34513, Climate
Change: Current Issues and Policy Tools, by Jane A. Leggett.
3 For a further discussion, see CRS Report R40242, Carbon Tax and Greenhouse Gas Control: Options and
Considerations for Congress, by Jonathan L. Ramseur and Larry Parker.
4 CRS Report RL33846, Greenhouse Gas Reduction: Cap-and-Trade Bills in the 110th Congress, by Larry Parker,
Brent D. Yacobucci, and Jonathan L. Ramseur; and CRS Report RL34067, Climate Change Legislation in the 110th
Congress, by Jonathan L. Ramseur and Brent D. Yacobucci.
5 This target is roughly equivalent to reducing to 1990 levels by 2020 and 80% below 1990 levels by 2050.
6 See CRS Report RL34502, Emission Allowance Allocation in a Cap-and-Trade Program: Options and
Considerations, by Jonathan L. Ramseur.
7 CRS Report RL33812, Climate Change: Action by States to Address Greenhouse Gas Emissions, by Jonathan L.
Ramseur.
Congressional Research Service
1

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

Another potential driver of market-based federal legislation is the possibility that EPA is seeking
to control GHG emission under existing Clean Air Act authority. On April 17, 2009, the agency
proposed an “endangerment finding” under Section 202 of the Clean Air Act, which would permit
it, for the first time, to regulate pollutants for their effect as greenhouse gases.8 Further, on May
19, 2009, President Obama announced a plan to integrate federal fuel economy standards (under
the Energy Policy and Conservation Act) with federal vehicle emissions standards (under the
Clean Air Act) and state standards (driven by California’s rulemaking action).9 In general,
industry stakeholders are opposed to broad regulatory action on greenhouse gases, because the
method of control would likely be performance or technology-based standards, instead of a
market-based approach.
The timetable for ongoing international negotiations on climate change may provide further
stimulation for U.S. legislative action. In December 2007, the Conference of the Parties (COP) to
the UNFCCC agreed to a “Bali Action Plan” to negotiate (parallel to a process under the Kyoto
Protocol) new GHG mitigation actions and other commitments for the post-2012 period. The
negotiators are due to reach agreement by the end of 2009 (at their 15th meeting, in Copenhagen,
Denmark).10 Many observers have highlighted the importance of having U.S. legislation passed
before the December 2009 Copenhagen meetings.
In the context of these events and efforts, Members in the 111th Congress have introduced several
proposals that would use market-based approaches to reduce GHG emissions. This report focuses
on these legislative proposals.
Legislative Proposals
In the 111th Congress, Members have introduced seven bills that include provisions to impose or
permit some form of market-based controls on GHG emissions. General descriptions of these
bills follow. The major provisions of the bills are compared in Table 1.
H.R. 2454, introduced May 15, 2009, by Representatives Waxman and Markey, includes
numerous energy policy provisions as well as cap-and-trade provisions (Titles III and IV). As
ordered reported, H.R. 2454 would set up a cap-and-trade system that would reduce GHG
emissions from covered sources to 17% below 2005 levels by 2020 and 83% below 2005 levels
by 2050. Covered entities in the draft account for approximately 85% of U.S. total GHG
emissions. The proposal would allow covered entities to submit offsets to cover an increasing
percentage (approximately 30% in 2012) of compliance obligations, but the types of eligible
offset projects would be determined by EPA through a rulemaking process. Unlike previous cap-
and-trade proposals (from previous Congresses), the draft creates a rolling two-year compliance
period. H.R. 2454 would distribute allowances to both covered and non-covered entities at no
cost to support various policy objectives. In addition, an increasing percentage (approximately

8 The proposal appeared in the Federal Register April 24, 2009 (74 FR 18886). See also, CRS Report R40145, Clean
Air Issues in the 111th Congress, by James E. McCarthy.
9 The White House, Office of the Press Secretary, President Obama Announces National Fuel Efficiency Policy,
Washington, DC, May 19, 2009, http://www.whitehouse.gov/the_press_office/President-Obama-Announces-National-
Fuel-Efficiency-Policy/.
10 CRS Report R40001, A U.S.-centric Chronology of the International Climate Change Negotiations, by Jane A.
Leggett.
Congressional Research Service
2

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

18% in 2016) of the allowances would be sold through auction. As with the distribution of no-
cost allowances, auction revenues would be used to further various policy objectives (Table 1).
H.R. 594, introduced January 15, 2009, by Representative Stark, would impose a carbon-content
tax on fossil fuels starting at $10/ton11 and increasing by $10 every year. The tax would apply to
fossil fuels as they enter the U.S. economy (i.e., at the production or importation level). The bill
does not specify how the tax revenues would be applied.
H.R. 1337, introduced March 5, 2009, by Representative Larson, would impose a carbon-content
tax on fossil fuels starting at $15/ton. The tax would increase by $10 each year, but if identified
emission targets (established by EPA, based on reaching 80% below 2005 emissions by 2050) are
not met, the tax would increase by $15 in that year. The tax revenues would be used to support (1)
a payroll tax rebate (2) affected industry transition assistance; and (3) clean energy technology.
The vast majority of the revenue would support the payroll tax rebate. The proposal also would
impose a carbon equivalency fee on imported carbon-intensive goods.
H.R. 1666, introduced March 23, 2009, by Representative Doggett, would establish a cap-and-
trade program to reduce greenhouse gas emissions from covered sources from 6.153 billion
metric tons in 2012 to 253 million in 2050. The program would be administered through the
Department of the Treasury and 100% of the allowances would be auctioned. In order to mitigate
price volatility in the early years of the program, the bill would establish a Climate Program
Oversight and Coordination Board to set targets for allowance prices and manage quarterly
auctions to maintain a smooth allowance price path. The managed price program would run from
2012 through 2019, and, depending on a review, revisions would be made for 2020 and beyond. If
the price path resulted in excess emissions from the expectations set out in the bill, those
emissions would be made up through additional reduction in the years 2020 through 2030.
Auction revenues would be put in an Auction Revenue Trust Fund at Treasury, but no specific
purpose is delineated in the bill for them.
H.R. 1683, introduced March 24, 2009, by Representative McDermott, would establish a hybrid
approach to GHG emission control. The approach may be described as a dynamic carbon-content
tax. Producers and importers of GHG emission substances—fossil fuels and other GHG emission
inputs—would be required to purchase emission permits for each ton of emissions that would
occur from the combustion or use of the GHG emission substance. Permits may not be traded or
exchanged, thus the purchase requirement would effectively act as a carbon-content tax (or fee).
The Department of the Treasury would determine the (annual) price for emission permits based
on annual emission allocations (or caps) identified in the bill. Treasury would publish price
schedules every five years, but the sale price may be modified (under certain conditions and to a
limited extent) within the five-year periods. If the permits sold exceed allocations allotted in a
particular year, subsequent year allocations would be reduced, thus imposing an overall cap.
H.R. 1862, introduced April 1, 2009, by Representative Van Hollen, would cap emissions
associated with the combustion of CO2. Fossil fuel producers and importers would be required to
surrender carbon permits in relation to the carbon dioxide emissions generated through the
combustion of fossil fuels the entities sold during the previous year. The cap would decline
annually, leading to an 85% reduction below 2005 CO2 emissions from covered entities by 2050.

11 Some proposals (including H.R. 594 and H.R. 1337) measure emissions in short tons; other bills use metric tons
(sometimes spelled as tonne). A short ton is 2,000 pounds. A metric ton (or tonne) is approximately 2,205 pounds.
Congressional Research Service
3

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

All of the carbon permits would be sold through an auction process. Approximately 100% of the
auction proceeds would be redistributed monthly to those with a social security number.
H.R. 2380, introduced May 13, 2009, by Representative Inglis, would impose a carbon-content
tax on fossil fuels starting at $15/ton. The tax rate would increase by an equal percentage each
year (approximately 6.5%), until it reached $100/ton in 2040 (not including cost-of-living rate
adjustments). All of the tax revenue would be used to offset reductions in the payroll tax paid by
employees, employers, and self-employed persons. The proposal would impose a tax on carbon-
intensive imported goods.
One bill has been introduced to address a specific issue surrounding cap-and-trade allowance
allocations. H.R. 1759, introduced by Representatives Inslee and Doyle, would set up an
allowance distribution scheme to assist energy-intensive industries that are trade-exposed and
potentially subject to carbon leakage.12 The bill would provide free allowances to such industries
to compensate them for complying with emission reductions (direct costs) and for increased
electricity costs resulting from utilities complying with a reduction program (indirect costs).
Compensation would be based on 85% of the specific industry’s greenhouse gas intensity per unit
of output for direct costs, and 85% of the specific industry’s electricity efficiency per unit of
output for indirect costs. Phase-out of the free allowance allocation would begin in 2026 and
continue over 10 years, unless the EPA determines it appropriate to either delay or accelerate it.
Legislative Activity
H.R. 2454 (Waxman/Markey, introduced May 15, 2009) was subsequently modified (both
technical and substantive changes) and offered as a “Manager’s Amendment” May 18, 2009. On
that day, the bill began markup in the House Committee on Energy and Commerce. After making
several amendments to the bill—most of which did not affect the cap-and-trade program—the
committee ordered the bill reported May 21, 2009. The version summarized in Table 1 reflects
the bill as ordered reported by the committee. In addition, H.R. 2454 was referred to multiple
House Committees—Foreign Affairs, Financial Services, Education and Labor, Science and
Technology, Transportation and Infrastructure, Natural Resources, Agriculture, and Ways and
Means—“for a period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the committee concerned.”13

12 Concerns have been raised that if the United States adopts a carbon control policy, industries that must control their
emissions or that find their feedstock or energy bills rising because of costs passed-through by suppliers may be less
competitive and may lose global market share (and jobs) to competitors in countries lacking comparable carbon
policies. In addition, this potential shift in production could result in some of the U.S. carbon reductions being diluted
by increased production in more carbon-intensive countries (commonly known as “carbon leakage”). See CRS Report
R40100, “Carbon Leakage” and Trade: Issues and Approaches, by Larry Parker and John Blodgett.
13 Introductory text of H.R. 2454.
Congressional Research Service
4

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

Table 1. Comparison of Key Provisions in GHG Emission Control Bills
H.R. 2454
H.R. 594
H.R. 1337
H.R. 1666
H.R. 1683
H.R. 1862
H.R. 2380
(Waxman-
Topic

(Stark)

(Larson)

(Doggett)

(McDermott)

(Van Hollen)

(Inglis)

Markey)a
Emission
Carbon-
Carbon-
Absolute
cap
on Hybrid
cap/tax
Absolute
cap
on Carbon-content Absolute
cap
on
reduction/
content tax on
content tax
total greenhouse
approach on GHG
CO2 emissions
tax on fossil fuels,
total greenhouse
limitation
fossil fuels,
on fossil fuels,
gas emissions
emissions; covered
associated with
starting at
gas (GHG)
scheme
starting at
starting at
from all covered
persons must
fossil fuel inputs
$15/ton, and
emissions from al
$10/tonb and
$15/ton and
entities
purchase an
from covered
increasing by
covered entities
increasing by
increasing by
emission permit
entities
approximately
$10/ton each
$10/ton each
when a GHG
6.5% each year to
year
year; annual
emission substance
reach $100/ton
rate increase
is produced or
by 2040; tax rate
is $15/ton
enters the United
to be further
during years
States; permits may
increased per
in which
not be sold or
cost-of-living
specified
exchanged; Treasury
adjustments
emissions
determines (with
target is not
consultation with
met
EPA and DOE) the
(annual) price for
emission permits
based on achieving
annual emission
al ocations (caps)
identified in bill;
price schedules are
published every 5
years, but may be
modified (to a
limited extent)
within the 5-year
periods; if permits
sold exceed annual
allocations,
subsequent year
allocations are
reduced
CRS-5

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

H.R. 2454
H.R. 594
H.R. 1337
H.R. 1666
H.R. 1683
H.R. 1862
H.R. 2380
(Waxman-
Topic

(Stark)

(Larson)

(Doggett)

(McDermott)

(Van Hollen)

(Inglis)

Markey)a
Specific
NA; tax rate
NA; EPA is to In 2012, cap is
In 2011, al ocation of In
2012,
CO2
NA
In
2012,
3%
below
emissions
freeze if CO2
establish (five
set at 6.153
emission permits
emission permits
2005 emissions
limits
emissions do
years after
billion, declining
equal to
equal to 2005
from covered
not exceed
enactment)
steadily to 0.253
approximately 4%
CO2 emissions; in
sources; in 2020,
20% of U.S.
annual CO2
billion in 2050. If
below 2005 GHG
2020, permits
17% below 2005
1990 CO2
emission
2012-2019
emissions; in 2020,
equal to 25%
emissions from
emissions
targets in
cumulative
al ocation equal to
below 2005
covered sources; in
order to
emissions
25% below 2005
emissions; in
2030, 42% below
reach goal of
exceed
GHG emissions; in
2030, permits
2005 emissions
80% below
expectations by
2050, al ocation
equal to 45%
from covered
2005 carbonc
more than 10%,
equal to 81% below
below 2005
sources; in 2050,
emissions by
the excess shal
2005 GHG
emissions; in
83% below 2005
2050
be made up
emissions
2040, permits
emissions from
through
equal to 65%
covered sources
additional
below 2005
reductions in
emissions; in
EPA may adjust cap
2020. The
2050, permits
if underlying
remaining excess
equal to 85%
assumptions (e.g.,
between 2012-
below 2005
percentage of
2020 emissions
emissions
covered sources
shal be made up
GHG emissions
with reductions
compared to
between 2021-
national total)
2030
found to be
incorrect
Covered
Manufacturer, Manufacturer, Not
explicitly
Coal
producers,
Person
who
Manufacturer,
Electricity
entities
producer, or
producer, or
defined.
petroleum refineries;
makes the first
producer, or
generators, various
importer who
importer who
Definition would
producers of other
sale in United
importer who
fuel producers and
sel s a taxable
sel s a taxable
be provided in
GHG emission
States of a
sel s a taxable
importers,
fuel, which
carbon
separate
substances (including
covered fuel,
carbon
fluorinated gas
includes: coal,
substance,
legislation
natural gas, among
which includes
substance, which
producers and
petroleum and
which
others); importers of
coal, oil, natural
includes: coal,
importers,
petroleum
includes: coal,
GHG emission
gas, and any
petroleum and
geological
products, and
petroleum
substances
product derived
petroleum
sequestration sites,
natural gas
and
therefrom for use
products, and
various industrial
petroleum
Coverage generally
as a combustible
natural gas
sources, and local
products, and
applies at the point
fuel
distribution
natural gas
of sale
companies (LDCs)
GHG emission
that deliver natural
substances used for
gas; covered entity
CRS-7

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

H.R. 2454
H.R. 594
H.R. 1337
H.R. 1666
H.R. 1683
H.R. 1862
H.R. 2380
(Waxman-
Topic

(Stark)

(Larson)

(Doggett)

(McDermott)

(Van Hollen)

(Inglis)

Markey)a
non-combustion
coverage is phased-
agricultural purposes
in by category, so
exempted
that al of the
above are under
the cap in 2016
Auction of
NA
NA
100%
of
All emission permits
100%
of
NA
In
2016
(the
allowances
allowances sold
must be purchased,
allowances sold
conclusion of the
through
but trading is not
through auctions
emissions coverage
quarterly
allowed
(to be held at
phase-in),d
auctions. From
least quarterly)
approximately 18%
2012 through
of the allowances
2019, the
Only covered
are auctioned; this
CPOCB
entities can
percentage
determines the
participate in
increases to 72%
necessary
auction
by 2030 and 75%
quantities to be
by 2050
auctioned to
maintain a
Auction has a
forecasted price
reserve price of
path
$10/allowancee that
increases by 5%
plus inflation each
year
Emission
No
specific
Establishes
a Establishes
an
Establishes
trust
fund 100% of auction
Tax revenue used Emission
allowance
allowance
provision
trust fund to
Auction Revenue
(within the IRS code,
proceeds (minus
to offset a
value (which can
value or
distribute tax
Trust Fund at
26 USC Chapter 98)
no more than
corresponding
include auction
revenue
revenues to
Treasury to
that would receive
0.5% for
reduction in
revenue or free
distribution
support (1) a
receive auction
appropriations equal
administrative
payrol tax rates
allowances) is
strategy
payroll tax
revenues.
to revenue received
purposes) are to
(employee,
distributed in the
rebate; (2)
Precise use of
by Treasury from
be used to fund
employer, and
following manner
affected
trust fund is not
selling emission
consumer
self-employed)
in 2016:f
industry
specified
permits
dividend
transition
payments; each
35% to electricity
assistance;
Precise use of the
month, every
suppliers (the vast
and (3) clean
revenue is not
person with a
majority to
energy
specified, except
social security
electricity load
technology.
stating that revenue
number would
distribution
The vast
must be recycled to
receive an equal
companies); 9% to
majority of
“facilitate economic
payment
local distribution
the revenue
growth and clean
companies of
CRS-8

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

H.R. 2454
H.R. 594
H.R. 1337
H.R. 1666
H.R. 1683
H.R. 1862
H.R. 2380
(Waxman-
Topic

(Stark)

(Larson)

(Doggett)

(McDermott)

(Van Hollen)

(Inglis)

Markey)a
requirement or
life-cycle fuel
standards;
However, states
may implement
more stringent
standards for GHG
emissions at
stationary sources
Other key
Directs
Directs
EPA The
CPOCB
is Directs Treasury to
Directs
Treasury In
2010,
social
Supplemental
provisions
Department
to submit
to review the
submit annual report
to report to
security
reductions from
of Treasury (in
annual report
managed price
describing
Congress if (after
recipients are to
avoided
consultation
to Congress
program by
performance of
consultation with
receive a
deforestation
with
on total
October 1,
program and
EPA) it
payment increase
activities in other
Department
carbon
2017, and make
providing estimates
determines
that reflects the
countries; projects
of Energy) to
emissions
recommendation
(or range of
emission targets
average costs
supported through
prepare—
from
s to Congress on
estimates) for permit
need to be
(energy price
set-aside
every five
previous year
any adjustments
prices for 10-year
revised to avoid
increases)
allowances (5% in
years—a study
for 2020 and
period following the
catastrophic
imposed by the
early years); goal is
on the
beyond
current 5-year
climate impacts
carbon tax;i
to generate a
environmental,
period
cumulative
economic, and
Requires a
reduction of 6
revenue
supermajority
billion tons by 2025
impacts of the
(two-thirds) vote
tax
in either the
Establishes
House or Senate
mandatory GHG
to pass legislation
emission reporting
that would alter
program, run by
the “revenue
EPA; first data
neutrality”—tax
submission is in
revenues from
2011
the carbon tax
offsetting the
National Academy
payroll tax
of Sciences
reductions—
provides a periodic
created by this
review of science,
proposal
technology, and
mitigation efforts,
and makes
recommendations
CRS-15

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

H.R. 2454
H.R. 594
H.R. 1337
H.R. 1666
H.R. 1683
H.R. 1862
H.R. 2380
(Waxman-
Topic

(Stark)

(Larson)

(Doggett)

(McDermott)

(Van Hollen)

(Inglis)

Markey)a
Establishes a
separate cap-and-
trade program that
controls hydro-
fluorocarbons

a. The provisions identified in the table reflect the “Manager’s Amendment” (made available May 18, 2009) and subsequent amendments made during the bill’s markup.
b. For H.R. 594, H.R. 1337, and H.R. 2380, a ton refers to a short ton (2,000 pounds), rather than a metric ton (or tonne), which is approximately 2,205 pounds.
c. It is unclear whether “carbon emissions” refers to CO2 emissions or GHG emissions that contain carbon atoms, which would include methane. It is likely the former,
because the annual targets set by EPA are specified as CO2 emission targets.
d. The emissions cap coverage is phased-in by entity category. By 2016, al of the covered entity categories are subject to the emissions cap. For this reason, 2016 is
arguably the most appropriate year to include in the table for comparison purposes. A greater percentage of allowances are auctioned in 2012 (approximately 30%)
than in 2016, when the phase-in is complete. From 2012 to 2016, the auction percentage declines to 20%, because newly covered entities (e.g., natural gas local
distribution companies) begin to receive allowances at no cost.
e. In 2009 dol ars.
f.
As mentioned above, 2016 is the first year in which al covered entity categories are subject to the cap. Thus, for comparison purposes, this is the first year described
in the table.
g. Representative Larson’s carbon tax proposal in the 110th Congress (H.R. 3416) would have al owed offset projects to generate tax credits.
h. In 2009 dol ars.
i.
The title of this particular subsection—“Increase in Payments to Social Security Recipients for 2010 to Offset Cost of Carbon Tax before Tax Reflected in Cost-of-
Living Adjustments”—suggests that the bill drafters expect that after 2010, social security payments would (per adjustments made under pre-existing processes)
increase to account for tax-related price increases.

CRS-16

Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress

Author Contact Information

Jonathan L. Ramseur
Brent D. Yacobucci
Analyst in Environmental Policy
Specialist in Energy and Environmental Policy
jramseur@crs.loc.gov, 7-7919
byacobucci@crs.loc.gov, 7-9662
Larry Parker

Specialist in Energy and Environmental Policy
lparker@crs.loc.gov, 7-7238

Congressional Research Service
17