By Ayesha Rascoe and Tom Doggett
WASHINGTON (Reuters) - Democratic lawmakers on U.S. the House of Representatives Energy and Commerce Committee hope to finalize late on Tuesday the terms for legislation to cut emissions of climate-warming greenhouse gases.
Committee chairman Henry Waxman, a California Democrat, is racing to put together a bill capping greenhouse gas emissions that will meet a major policy objective of the Obama administration and pass the House committee before members of Congress leave for the Memorial Day holiday recess on May 22.
To win over more committee Democrats, Waxman has agreed to scale back the targets for reducing emissions and give away some of the permits that polluting companies would normally have to buy to spew their greenhouse gases.
President Barack Obama wants to cut U.S. emissions of carbon dioxide and other greenhouse gases by about 14 percent below 2005 levels by 2020 and more than 80 percent by 2050.
So far, congressional negotiations have lowered the cap of U.S. greenhouse gas emissions to about 17 percent below 2009 levels and 14 percent below 2005 levels, according to sources familiar with the discussions.
Waxman and Representative Edward Markey's original climate change bill sought to cut emissions 20 percent by 2020 and 83 percent by 2050 -- using 2005 as a base year.
The bill was silent on the extremely contentious issue of how permits allowing companies to release emissions would be distributed. The Obama administration had called for a 100 percent auction of these permits, but has indicated a willingness to compromise on this issue.
Lawmakers are nearing an agreement that about $40 billion a year in permits would be free each year, with about one-third of the total permits going to local distribution companies that deliver natural gas to customers in specific areas, sources said.
Another 15 percent of the permits would go to industries that use a lot of energy in the manufacturing process, like steel, cement and glass makers.
Small oil refineries would also receive 4 to 5 percent of their permits free.
To help meet the emissions-cutting targets, the legislation still would require utilities to generate a portion of their electricity from renewable sources, like wind or solar power.
However, that amount has now been lowered to the 12 to 15 percent range from the initial goal of 25 percent by 2025, sources said.
Beyond the U.S. legislative timetable, the Obama administration also faces an December deadline to come up with a plan to curb emissions. That's when international climate change talks take place in Copenhagen to craft a follow-up agreement to the carbon-capping Kyoto Protocol.
(Reporting by Ayesha Rascoe; Editing by Marguerita Choy)
