Office of Senator Maria Cantwell
The CLEAR Act
Carbon Limits and Energy for
America’s Renewal
December 2009
Office of Senator Maria Cantwell
The CLEAR Act
What is the CLEAR Act?
• A simple, market-based way to reduce CO2 emissions
while protecting household incomes.
• An innovative policy that limits fossil carbon as it enters
commerce, sends consistent, economy-wide price signals
on fossil fuels, and recycles most of the revenues to
households.
• A source of funding for new clean energy investments,
mitigation of a broad suite of greenhouse gases, climate
change adaptation, and other climate-related priorities.
• A policy that safeguards the climate by cutting
greenhouse gases in keeping with state-of-the-art
science.
Office of Senator Maria Cantwell
The CLEAR Act
Policy Overview
• Upstream cap on fossil carbon achieves broad, economy-wide coverage of
fossil carbon.
• Carbon cap in conjunction with additional measures to reduce non-CO2
greenhouse gases meet global warming emissions reduction standards:
– 20% emissions reduction (from 2005 level) by 2020;
– 30% emissions reduction (from 2005 level) by 2025;
– 42% emissions reduction (from 2005 level) by 2030;
– 83% emissions reduction (from 2005 level) by 2050.
• 100% auction establishes accurate price signal and protects consumers
from industry windfalls.
• Equal monthly dividends to all individuals residing legally in the U.S. from
75% of auction revenues -- keeps all but the wealthiest 20% (who use the
most energy) whole.
• Dedicated energy and climate fund from 25% of auction revenues pays for
key climate programs.
• Price safeguards act as insurance against price volatility and excessive
costs. Policy does not add to federal deficit
Office of Senator Maria Cantwell
The CLEAR Act
Upstream Cap on Fossil Carbon
Upstream cap covers
all fossil carbon
entering the
economy, completely
and equitably
Price signal passed
downstream, leaving
all midstream user
revenue neutral
Price signal passed
through to end
consumers who are
reimburs