EPA Comments on Kerry + Leiberman’s American Power Act

After guarding the details for months, on May 13, Senators John Kerry and Joe Lieberman introduced the American Power Act, the Senate’s version of a comprehensive energy bill. (Note that according to political insiders it is now passé to refer to anything as solely “cap and trade” in Washington).

Approximately a month later, on June 15, EPA released its economic analysis of the act, comparing and contrasting it to the American Clean Energy and Security Act of 2009 (“ACES”), the energy bill that passed the House in June 2009. That bill was still in consideration in the Senate when Sen. Kerry and Sen. Lieberman proposed the APA.

In its analysis, EPA concluded that “while there are important differences between the American Power Act (APA) and H.R. 2454 (the American Clean Energy and Security Act), the modeled impacts of the APA are very similar to those of H.R. 2454.”  In comparing the two bills, EPA found:

  • Estimated allowance prices under the two bills differ on the order of 0-1%.
  • The percentage reductions represented by the emissions caps are identical beginning in 2013.
  • Both bills allow for 2 billion tons of offsets in each year.
  • Both bills contain provisions to prevent emissions leakage and to address competitiveness concerns.
  • The Cost Containment Reserve provisions of the APA provide a greater level of price certainty than do provisions in H.R. 2454’s Strategic Reserve Allowance Program by, among other things, allocating a greater share of allowances to the reserve. This higher level of price certainty comes at a slightly higher cost to the APA over H.R. 2454.
  • The APA’s approach to cover GHGs from the transportation fuels and refined products sectors does not impact modeled allowance prices.

For a complete copy of the EPA’s analysis, please visit:

A complete copy of the APA is available here:, but if reading 987 pages isn’t in your time schedule, a summary is also available at

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