Issue	What the Climate Bill Does	Assessment
CLEAN ENERGY AND ENERGY EFFICIENCY	By 2025, an estimated $190 billion will be allocated to energy technologies and efficiency measures Clean energy sources will rise to 38% of primary energy by 2050. Primary energy needs will be reduced by 12% in 2050 States have to generate 20% of electricity from renewable energy and efficiency improvements by 2020	The original bill sought to demand 40% of total energy of states to be met with renewable energy and efficiency improvements. Some states, like California, have stricter requirements than this for clean and efficient energy production. This superseding bill should not overturn such rules The shift to renewable energy sources must occur quicker in order to significantly improve the business-as-usual (BAU) projections
CAP-AND-TRADE Large-emitter companies will have a limit on the amount of greenhouse gases they can emit. Permits are needed for every ton of greenhouse gas released. If companies exceed their capped emission levels, they must buy permits from companies with unused permits. By limiting the number of permits available, a cap is established on the total amount of greenhouse gases than can be released in the country. The 1990 Clean Air Act established a successful cap-and-trade program for sulfur emissions.	85% of the economy is regulated by the bill The emissions cap is set at 17% below the 2005 levels by 2050. The cap on greenhouse gas emissions declines over time, thus reducing the permissible emissions 85% of permits are given for free in the beginning, with the percentage decreasing over time. By 2030, 70% of permits will be auctioned Many of the allowances given by the bill go towards helping consumers, workers, and businesses to transition to cleaner sources of energy	By creating a price for polluting, incentives to invest in clean technology emerge. Because of provisions such as offsets and the strategic reserve, the cap is flexible for at the least the first decade of implementation. By giving away many emissions permits instead of auctioning them, the total amount of greenhouse gas emissions are not increased. The number of allowances stays the same. However, auctioning the permits provides an important funding source for renewable energy and energy efficiency improvements. Hence, the number of free permits granted should be limited.
OFFSETS An offset is an instrument used to make compliance with energy laws that need emissions reductions easier and cheaper If a company cannot reduce as much emissions as is required, it can offset its excess emissions by reducing greenhouse gas emissions somewhere else. This provision may allow caps on domestic emissions to be exceeded, by reducing emissions elsewhere. Given that the effects of emissions are felt globally, moving the point of their mitigation to help transition to the new system is an acceptable compromise	About 2 billion tons of offsets are allowed each year Companies regulated by the bill would be able to buy carbon offsets to meet a portion of their required emission reductions; so they could fund clean-energy projects elsewhere instead of cutting their own emissions There is an adjustable limit on the use of international offsets	As this compromises the overall cap on emissions reductions in the U.S., the amount of offsets available should be limited. To preserve the legitimacy of the program, a credible supple of offsets must be available, i.e. there should be sufficient approved activities that reduce emissions. By creating more opportunities for organizations to undertake offset emissions within the U.S., the domestic cap on emissions can be maintained Such offset programs must also be additional, i.e. the activities would not have been undertaken on their own, without a company seeking to offset excess emissions
STRATEGIC RESERVE This allowance pool takes a certain percentage of emissions allowances reserved for the future, and makes it available for current purchase	This serves as a useful price buffer, as companies can buy permits from this reserve pool if allowance prices grow too much	Though this helps prevent price swings of pollution allowances, the amount of allowances available for sale must be carefully controlled to ensure that companies to not unduly delay their emissions reductions by buying allowances from the strategic reserve pool
LAND USE EXEMPTION FOR AGRICULTURE This applies to farmers who undertake land activities that release ethanol, which increases greenhouse gas emissions	Ethanol released from indirect land use is exempt from emissions caps. The Environmental Protection Agency will not be able to calculate indirect greenhouse gas emissions, like when corn is planted on marginal land to make more ethanol.	Because the bill values forests for the carbon they absorb, it provides incentives to grow trees. Hence, landowners may find it more beneficial to conserve and plant trees, rather than convert it to agricultural land for biofuels. This will mitigate any ill-effects that this concession to farmers might have