The bill offers a new paradigm for global warming legislation: the Cap-and-Invest system. It caps pollution at 85 percent below 2005 levels by 2050. It uses an auction system that sets a price on carbon, and allows companies to compete for reductions, or buy or trade credits within the system. It then takes the $8 Trillion in revenues expected from polluters over the length of the bill, and reinvests that money back to American families and workers and into promoting a clean energy economy.
The “Investing in Climate Action and Protection Act” (iCAP Act) amends the Clean Air Act to establish an economy-wide cap-auction-and-trade system that adheres to five core principles:
- Reduce U.S. global warming pollution by 85 percent by 2050, the necessary U.S. contribution to stabilize atmospheric concentrations of heat-trapping gases and avoid dangerous global warming.
- Auction pollution allowances, instead of giving them free-of-charge to polluters, to avoid windfall profits for polluters, ensure fairness and effectiveness, and reduce social costs.
- Return over half of auction proceeds to low- and middle-income households to help compensate for any increase in energy costs as a result of climate legislation.
- Invest the remaining auction proceeds in programs that will further reduce the costs of climate policy, spur the development of advanced low-carbon technologies, grow the U.S. economy, and address unavoidable impacts of climate change.
- Include policies that will encourage major-emitting developing countries, like China and India, to take comparable action to reduce global warming pollution to protect the competitiveness of U.S. industry.
An executive summary of the legislation here, and a report from 1Sky is here.