US legislators continue push for domestic cap and trade legislation

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The US airline industry has the same concerns about cap and trade legislation introduced today by US Senators as it does about the House climate change bill that passed earlier this year.

The Clean Energy Jobs and American Power Act "sad to say does not improve upon the [House] bill at all", Air Transport Association of America (ATA) VPof environmental affairs Nancy Young said today at the general meeting of the Commercial Aviation Alternative Fuels Initiative (CAAFI) in Washington.

Both pieces of legislation require regulated entities such as oil companies and manufacturers to hold allowances to emit greenhouse gases (GHG).

That results in fuel providers being responsible for emissions from both refining and attributable emissions, which results when an end user burns the fuel. As a consequence airlines would expect a fuel surcharge to be added to their fuel bill, Young explains.

While Young doesnot have a cost projection specific to the Senate plan, ATA has said the House bill would cost US airlines roughly $5 billion in 2012 and $10 billion in 2020.

The legisation sponsord by Senators John Kerry and Barbara Boxeralso sets reduction targets for carbon dioxide (CO2) emissions, as does the House bill.

Both versions seek to trim emissions by 3% in 2012 from 2005 levels. For 2030 and 2050, legislation offered by both chambers seeks to cut emissions from 2005 levels by 42% and 83% respectively.

However, the Senate version outlines a 20% reduction in 2020 from 2005 levels compared to a 17% reduction for the same period in the House version.

Another difference between the two pieces of legislation is unlike the Senate version, the House bill requiresthe US to promote, via ICAO, the creation of a "global framework" to regulate civil aircraft GHGs. Also absent from the Senate version but included in the bill narrowly approved by the House is language that directs the US to work with foreign governments toward an agreement that "reconciles foreign carbon emissions reduction programs to minimize duplicative requirements".

The Senate and House have taken up domestic cap and trade legislation as the European Union prepares to fold aviation into its emissions trading scheme (ETS) from 2012. But the European Commission has indicated there will be no emissions double jeopardy for non-European airlines if their homeland adopts an ETS.

While the Obama administration has advocated for a domestic cap and trade system, it remains to be seen if this legislation will survive the Senate this year as the Senate has rejected cap and trade legislation in past years

Young of ATA says she "seriously questions" the Senate's ability to pass energy reform this year given the focus by Congress on health care reform.

Both the House and Senate versions of climate change legislation also uphold the US Environmental Protection Agency's (EPA) freedom to create emissions standards for new aircraft and new engines should the agency director deem such standards "appropriate".