Climate Pollution Standard and Community Investment Act of 2025
Sponsored By: Representative Rep. Tonko, Paul [D-NY-20]
Introduced
Summary
This bill would create a national, economy-wide _cap-and-auction system_ that sets annual greenhouse gas allowance limits and aims for net‑zero emissions by 2050. It pairs enforceable emissions limits and auctions with dedicated funds for rebates, worker transition, community health, and clean energy innovation.
Show full summary
- Families and low‑income households: A Clean Energy Rebate Program would use 15% of auction proceeds to provide rebates to households with income up to 200% of the poverty level, including Supplemental Security Income recipients. Rebates would be delivered electronically and excluded from gross income for tax purposes.
- Workers and communities: The bill creates an Office of Energy and Economic Transition and a Worker and Community Assistance Fund seeded by 5% of allowances to support grants, technical assistance, and a wage‑adjustment program that can pay eligible displaced workers for up to 36 months.
- Regulated sources and markets: Large power plants and industrial facilities meeting set thresholds would need allowances, report to a federal greenhouse gas registry, and comply in the first compliance period starting 2027. Auctions begin in 2027 with a $15 minimum price and enforceable penalties tied to auction prices.
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Bill Overview
Analyzed Economic Effects
7 provisions identified: 3 benefits, 1 costs, 3 mixed.
Help for workers and communities
This bill would create an Office of Energy and Economic Transition in the White House and a Task Force to coordinate help for workers and places hurt by the energy transition. It would fund wage adjustment assistance that pays up to 36 months a monthly amount equal to your prior 12‑month average pay minus wages earned and federal benefits; the Secretary must act on petitions within 60 days. The bill would also fund community grants, a Community‑Based Transition Hub program (grants capped at $12 million per entity), temporary local revenue replacement on a 90% → 75% → 50% → 25% schedule over years, up to 36 months of health insurance continuation at 80% of premiums, prevailing‑wage rules for assisted projects, and education and training support.
How auction money is split
If enacted, the bill would reserve and auction parts of annual allowances and use the money for many programs. A scheduled share would go to States and Tribes (30% in early periods, phasing down to 0% after period 10) and those proceeds must benefit electricity and residential/commercial fuel users. The law would also fund Cleaner Air Communities (10%), Energy Innovation (2.5%), negative emissions payments (ramping from 2.5% up to 20%), payments to energy‑intensive trade‑exposed industries on a phasedown schedule, and a 0.5% share for jurisdictions hosting nuclear repositories. State distributions from a 10% auction share would follow a 25% equal share, 50% population, and 25% energy‑use split and must send at least half to disadvantaged or rural communities.
New staged surrender rules for emitters
This bill would require covered emitters to surrender emission allowances on a fixed, phased schedule starting Jan. 1, 2027. By 12:01 a.m. on April 1 of the second year of a compliance period they would need to surrender at least 50% of first‑year emissions. By 12:01 a.m. on April 1 of the third year they would need to have surrendered at least 50% of emissions for the first two years combined. By 12:01 a.m. on April 1 after the compliance period they would need allowances equal to 100% of emissions for the full compliance period. Any fractional ton under 1 would count as 1 ton. The EPA Administrator could set a later deadline by rule but not later than June 1, and surrendered allowances would be retired as soon as practicable.
Allowance auctions, price floor rules
This bill would require quarterly sealed-bid, uniform-price allowance auctions starting by March 31, 2027. The initial auction floor price would be $15 in 2027 and would rise each year by last year's floor times (5% plus that year's CPI‑U change). No buyer may buy more than 5% of an auction. The bill would create a Cost Containment Reserve (CCR) and an Emissions Containment Reserve (ECR) with price triggers and limits on releases to manage costs and supply. Holders could consign allocated allowances to auctions and must receive proceeds within 90 days. Auction rules and market limits aim to shape supply, prices, and market transparency.
Border carbon rules for imports
This bill would make importers of covered goods buy international reserve allowances for imports entering customs territory on or after January 1, 2028. The import allowance price would be the average of the previous four domestic auction clearing prices. Importers would need third-party verified emissions data for production stages or face an agency emissions estimate. Some imports would be exempt (if they meet output-based benchmarks or come from certain least-developed or very low-emitting countries). Half of proceeds from international allowance sales would go to the Clean Energy Rebate Program, up to 10% could pay administration, and the remainder would be split among specified funds.
New national cap-and-trade program
This bill would add a nationwide Climate Pollution Reduction Program to the Clean Air Act. Covered sources would start compliance on January 1, 2027 and include many power plants, industrial sources, fuel producers, and large local gas distributors that meet thresholds (for example, 25 MW nameplate, 25,000 tons CO2e, or 460,000,000 cubic feet delivered in 2025). The EPA would set enforceable annual targets (2027 at least 5% below the 2023–2025 average; 2030 ≤50% of 2005; 2040 ≤30% of 2005; 2050 ≤10% of 2005) and must set annual allowance quantities starting 2027. If a covered entity misses a compliance deadline it would owe a monetary penalty (missed tons × 3 × a recent auction clearing price) and must make up allowances the next year. The EPA would also create a federal GHG registry, online allowance tracking, and public implementation reviews; final Title regulations would be due within 24 months of enactment.
Payments to farmers for carbon
This bill would create a Negative Emissions Activities Fund and pay producers for verified carbon removal or sequestration practices. Auction shares deposited to the Fund would increase over time (starting 2.5% and rising up to 20% under a schedule). The EPA would run a contracts program with 5–20 year terms, annual payments, third‑party verification, and rules to prioritize beginning and disadvantaged producers and eligible carbon removal technologies placed in service after January 1, 2025. Rules to run the program must be issued within two years and payments are limited to available Fund balances.
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Sponsors & CoSponsors
Sponsor
Rep. Tonko, Paul [D-NY-20]
NY • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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