THE CLIMATE STEWARDSHIP ACT

Background:  In October 2003, for the first time in history, the U.S. Senate voted on legislation to fight global warming. The bipartisan bill, called "The Climate Stewardship Act," was sponsored by Senator John McCain (R-AZ) and Senator Joe Lieberman (D-CT) and nearly passed the Senate with a 43 to 55 vote. Building on the momentum in the Senate, in March 2004 Representatives Wayne Gilchrest (R-MD) and John Olver (D-MA) introduced the equivalent bill in the House of Representatives. The Climate Stewardship Act was jointly reintroduced in the Senate and House of Representatives in February 2005 (S. 342 and H.R. 759).

The act would create a comprehensive market-based emissions cap and trading program to cut global warming pollution from the biggest U.S. sources at the lowest possible cost. An MIT economic analysis of the bill finds that meeting the bill's emission limits would affect household purchasing power by less than one-tenth of one percent. This translates to a cost per household of only $19 per year by 2020.
Patterned after the highly successful acid rain program of the 1990 Clean Air Act, the CSA: 

• Includes emissions of six global warming pollutants (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride) by electric utilities, major industrial and commercial entities, and refiners of transportation fuels.
• Requires companies in those sectors that emit at least 10,000 tons of CO2 (or an equivalent amount of other global warming pollutants) to report annual emissions and reduce emissions to 2000 levels by 2010. 
• Gives covered companies many options to reduce costs through emissions trading. The opportunity for trading between covered companies and across all six pollutants dramatically reduces cost.
• Cuts cost further through credits from forest and farm carbon sequestration, credits from pollution reductions by smaller firms, and credits from other nations’ carbon programs. 
• Creates incentives for firms to reduce emissions early or to take on more stringent emissions limits.  Allows more flexibility through emissions banking and borrowing.
• Gives some carbon allowances to companies without charge. Dedicates other allowances to promote new clean energy technologies and to protect consumers, workers, and communities.
• Establishes a national greenhouse gas database and an efficient, computerized system for tracking the allocation, trading, and retirement of carbon allowances and credits based on the successful acid rain program.

Fact sheet courtesy of National Resources Defense Council