09-05-08 A new draft of the leading US climate change bill would allow for greater use of carbon offsets from the developing world in the form of new energy projects and forest preservation, a former Senate aide said.
Speaking at the Carbon Expo meeting in Cologne, Germany, Kenneth Connolly, vice president of government relations with the Washington-based lobbying firm ML Strategies and a former chief of staff to the US Senate Environment and Public Works Committee, said a modified version of the bill by US Senators Joseph Lieberman, Independent-Connecticut, and John Warner, Republican-Virginia, has been developed.

The new draft of S. 2191 makes changes to the provisions for the use of offsets to meet emissions caps, he said, including "a direct 5 % connection to the Clean Development Mechanism... and they have added a 10 % requirement for forestry [credits] too."
Connolly said he has yet to see a copy of the revised measure and could not provide any more details. Sources close to the issue said that the revised bill will be made public soon.

The current version of the bill does not allow the use of credits from the CDM and instead would allow only US domestic offsets to meet up to 15 % of individual compliance targets. In addition, the current version proposes allowing companies to use international carbon allowances from non-US greenhouse gas cap-and-trade schemes, such as the EU Emissions Trading Scheme, to meet up to 15 % of their caps.
According to Joel Bluestein of consultants ICF International, the offset limits contained in the original bill would allow around 800 mm to 1 bn tons of offsets and international allowances to be imported into the US.

Connolly said he does not expect a climate-change bill to pass Congress this year and described the Senate floor debate scheduled to begin in June on the Lieberman-Warner bill as a "practice session." The real game, he added, will come in the next Congress, with a new president in office.
Connolly said he believes that under the most optimistic timeline, the earliest date for passing a bill would be 2010, though 2011 is more likely. As a result, a US cap-and-trade program would likely only be implemented some time after 2012, and most likely 2014, he added.