This paper outlines the main features of this major US bill, which would create an emissions trading scheme and other clean energy and energy efficiency initiatives, and compares its main features with the Australian government’s proposed Carbon Pollution Reduction Scheme.
Addressing climate change is one of President Obama's major areas of focus. In his 2010 Budget Proposal, he called for Congress to develop an economy-wide emissions trading scheme to reduce emissions by approximately 14 per cent below 2005 levels by 2020, and 83 per cent below 2005 levels by 2050.
Various bills addressing climate change have been put before Congress in the past, but have received little support. The bill most recently introduced and currently under consideration by the US Congress is known as the ‘Waxman bill’ or ‘Waxman–Markey bill’ because it was introduced by Congressmen Henry Waxman (Democrat of California and Chairman of the Energy and Commerce Committee) and Edward Markey (Democrat of Massachusetts and Chairman of the Energy and Environment Subcommittee). The legislation was approved by the Energy and Commerce Committee on 21 May 2009, a significant step in the passage of the bill through Congress, and this, combined with the support of the Obama administration, suggest that this bill may well succeed where others failed.
The bill’s centrepiece is an emissions trading scheme (ETS). It also includes other major complementary and reinforcing initiatives on clean energy and energy efficiency. An overview of each of these three major components is given in this background note, with particular focus on the ETS. Following this, the current status and next steps for the bill are briefly outlined. Finally, a comparison of the main features of the bill with the Australian Government’s proposed Carbon Pollution Reduction Scheme (CPRS) is provided.