On Friday, Senators Maria Cantwell and Susan Collins introduced the Carbon Limits and Energy for American Renewal (CLEAR) Act that is shaking up the debate on climate change legislation.  The main contributions of the bill are simplicity -- it weighs in at fewer than 40 pages of legislative text -- and the "cap-and-dividend" approach, which auctions carbon allowances and returns the vast majority of the revenue right back to the American public.

From the perspective of the Copenhagen talks, the two big issues are the overall commitment, and financing for international projects.  In terms of carbon reductions, modeling by Senator Cantwell's office shows that, once spending from a reserve fund for "offset-like projects" are taken into account, that the CLEAR Act outperforms Waxman-Markey by 2050.  In terms of international commitments, the CLEAR Act sets aside 25% of total auction revenue for a range of projects, including:  (1) efforts to reduce non-C02 GHG emissions; (2) reduction in non-GHG substances linked to climate change -- i.e. black carbon; (3) and projects in land-use, agriculture, and forestry to reduce or sequester emissions.  Assuming a significant amount of this revenue is directed to international projects, that could be a substantial commitment to carbon financing in developing countries.