Kate Sheppard, political reporter at the online magazine, Grist, has a pretty straight-forward piece on what is currently in the Waxman-Markey climate and energy bill or ACES (American Clean Energy and Security Act).  The bill is due to be voted on tomorrow in the House and can go to the Senate anytime in the next year and a half.  Since the bill is likely to be harder to get through the Senate, it will apparently be timed for discussion at whatever point Obama's numbers are highest and gas prices are up.  The goal of the bill is to cut greenhouse gas (GHG) emissions by 3% by 2012, 17% by 2020, 42% by 2030 and more than 80% by 2050.

To do this, the bill would put a cap on GHG emissions starting in 2012 and the full cap-and-trade program would be completely phased in by 2016.  The bill covers 85% of the economy, including electricity producers, oil refineries, natural gas suppliers, and those industries that use a lot of energy like iron, steel, cement, and paper.  (Notice no agriculture limitations.  Not for nothing that the folks on the House Agriculture Committee rake in money from big agribusiness.) 

More from the Grist article:

"The bill creates a renewable electricity standard (RES) that would require large utilities in each state to produce an increasing percentage of their electricity from renewable sources. Qualifying renewable sources are wind, solar, geothermal, biomass, marine and hydrokinetic energy, biogas and biofuels derived exclusively from eligible biomass, landfill gas, wastewater-treatment gas, coal-mine methane, hydropower projects built after 1992, and some waste-to-energy projects."  Utilities will need to produce 6% of their electricity from renewables by 2012 and 20% by 2020.  Up to 5% of that can come from efficiency improvements.

The Give-Aways

About 85% of the emission permits would be given away to energy-intensive industries, coal generators, oil refineries, electrical utilities, local electrical distribution companies, state governments (to support renewable energy, energy efficiency, transportation planning and transmission projects), local natural-gas distribution companies, and the automobile industry (to be used for the development of clean car technologies).  If you had any question as to how this bill had managed to get passed at all, this is your answer. 

Carbon Credits

Regulated industries will need to acquire permits for the emissions they pull into the atmosphere.  "If a company cuts its emissions so much that it has more permits than it needs, it can sell excess permits to other companies or bank them for future use.  If a company doesn’t have enough permits, it can buy more or borrow its future credits and pay interest on them.  Non-regulated entities (banks, nonprofits, people like you) can also buy and sell permits. (This is the “trade” part of the “cap-and-trade” program.)  If a company’s emissions exceed its permits, it would be fined two times the fair market value of the permits it should have purchased."

These carbon credits (or emission permits) will be auctioned off.  The initial 15% will increase over time as the credits given away decrease.  A permit to emit 1 ton of carbon dioxide is likely to be worth $11 - $15 in 2012 in 2005 dollars according to EPA estimates and $22 - $28 in 2025, again in 2005 dollars. 

How the Money Will be Spent

The value of all the permits sold is estimated to be $60 billion in 2012 and $113 billion in 2025.   Fifteen percent of that money will be used to offset increased energy costs for low- and moderate-income households.  The remainder will be used to:

• Prevent international deforestation
• Help the US adapt to the negative effects of climate change, including wildlife, natural resources and public health
• Support research and development of advanced clean-energy and energy-efficiency technologies
• Help other nations adapt to climate change
• International clean-technology deployment
• Help US workers transition away from fossil fuel-dependent industries

Grist has more detail.