A bill to provide for efficient containment and management of climate change costs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Containing and Managing Climate 
Change Costs Efficiently Act''.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to ensure that the imposition of limits on greenhouse 
        gas emissions will not significantly harm the economy of the 
        United States; and
            (2) to establish a Carbon Market Efficiency Board to ensure 
        the implementation and maintenance of a stable, functioning, 
        and efficient market in tradeable permits to emit greenhouse 
        gases.

SEC. 3. ESTABLISHMENT OF CARBON MARKET EFFICIENCY BOARD.

    (a) Establishment.--There is established a board, to be known as 
the ``Carbon Market Efficiency Board'' (referred to in this Act as the 
``Board'').
    (b) Purposes.--The purposes of the Board are--
            (1) to promote the achievement of the environmental 
        objectives (including any national mandatory greenhouse gas 
        emissions cap and reduction targets) of the United States;
            (2) to observe the national greenhouse gas emission market 
        and evaluate periods during which the cost of permits provided 
        under Federal law might pose significant harm to the economy;
            (3) to conduct observation during the 2-year period 
        following the establishment of a market program for permits 
        under Federal law, and to provide temporary, short-term relief 
        at any time at which the program is determined to pose a 
        significant harm to the economy using the cost relief measures 
        prescribed under section 5; and
            (4) to submit to the President and Congress quarterly 
        reports--
                    (A) describing the status of each greenhouse gas 
                emission market established under Federal law, the 
                economic effects of the markets, regional, industrial, 
                and consumer responses to the markets, any corrective 
                measures that should be carried out to relieve 
                excessive costs of the markets, and plans to compensate 
                for those measures;
                    (B) that are timely and succinct to ensure regular 
                monitoring of market trends; and
                    (C) that are prepared independently by the Board.
    (c) Membership.--
            (1) Composition.--The Board shall be composed of 7 members, 
        to be appointed by the President, by and with the advice and 
        consent of the Senate.
            (2) Requirements.--In appointing members of the Board under 
        paragraph (1), the President shall--
                    (A) ensure fair representation of the financial, 
                agricultural, industrial, and commercial sectors, and 
                the geographical regions, of the United States; and
                    (B) appoint not more than 1 member from each such 
                geographical region.
            (3) Compensation.--
                    (A) In general.--A member of the Board shall be 
                compensated at a rate equal to the daily equivalent of 
                the annual rate of basic pay prescribed for level II of 
                the Executive Schedule under section 5313 of title 5, 
                United States Code, for each day (including travel 
                time) during which the member is engaged in the 
                performance of the duties of the Board.
                    (B) Chairperson.--The Chairperson of the Board 
                shall be compensated at a rate equal to the daily 
                equivalent of the annual rate of basic pay prescribed 
                for level I of the Executive Schedule under section 
                5312 of title 5, United States Code, for each day 
                (including travel time) during which the member is 
                engaged in the performance of the duties of the Board.
            (4) Prohibitions.--
                    (A) Conflicts of interest.--An individual employed 
                by, or holding any official relationship (including any 
                shareholder) with, any entity engaged in the 
                generation, transmission, distribution, or sale of 
                energy, or an individual who has any pecuniary interest 
                in the generation, transmission, distribution, or sale 
                of energy, shall not be appointed to the Board under 
                this subsection.
                    (B) No other employment.--A member of the Board 
                shall not hold any other employment during the term of 
                service of the member.
    (d) Term; Vacancies.--
            (1) Term.--
                    (A) In general.--The term of a member of the Board 
                shall be 14 years, except that the members first 
                appointed to the Board shall be appointed for terms in 
                a manner that ensures that--
                            (i) the term of not more than 1 member 
                        shall expire during any 2-year period; and
                            (ii) no member serves a term of more than 
                        14 years.
                    (B) Oath of office.--A member shall take the oath 
                of office of the Board by not later than 15 days after 
                the date on which the member is appointed under 
                subsection (c)(1).
                    (C) Removal.--
                            (i) In general.--A member may be removed 
                        from the Board on determination of the 
                        President for cause.
                            (ii) Notification.--The President shall 
                        submit to Congress a notification of any 
                        determination by the President to remove a 
                        member of the Board for cause under clause (i).
            (2) Vacancies.--
                    (A) In general.--A vacancy on the Board--
                            (i) shall not affect the powers of the 
                        Board; and
                            (ii) shall be filled in the same manner as 
                        the original appointment was made.
                    (B) Service until new appointment.--A member of the 
                Board the term of whom has expired or otherwise been 
                terminated shall continue to serve until the date on 
                which a replacement is appointed under subparagraph 
                (A)(ii), as the President determines to be appropriate.
    (e) Chairperson and Vice-Chairperson.--Of members of the Board, the 
President shall appoint--
            (1) 1 member to serve as Chairperson of the Board for a 
        term of 4 years; and
            (2) 1 member to serve as Vice-Chairperson of the Board for 
        a term of 4 years.
    (f) Meetings.--
            (1) Initial meeting.--The Board shall hold the initial 
        meeting of the Board as soon as practicable after the date on 
        which all members have been appointed to the Board under 
        subsection (c)(1).
            (2) Presiding officer.--A meeting of the Board shall be 
        presided over by--
                    (A) the Chairperson;
                    (B) in any case in which the Chairperson is absent, 
                the Vice-Chairperson; or
                    (C) in any case in which the Chairperson and Vice-
                Chairperson are absent, a chairperson pro tempore, to 
                be elected by the members of the Board.

SEC. 4. DUTIES.

    (a) Information Gathering.--
            (1) Authority.--The Board shall collect and analyze 
        relevant market information to promote a full understanding of 
        the dynamics of each greenhouse gas emission market established 
        under Federal law.
            (2) Information.--The Board shall gather such information 
        as the Board determines to be appropriate regarding the status 
        of the markets, including information relating to--
                    (A) permit allocation and availability;
                    (B) the price of permits;
                    (C) macro- and micro- economic effects of the 
                markets; and
                    (D) the success of the markets in achieving the 
                environmental objectives of the markets.
    (b) Treatment as Primary Activity.--
            (1) In general.--During the initial 2-year period of 
        operation of the Board, information gathering under subsection 
        (a) shall be the primary activity of the Board.
            (2) Subsequent authority.--After the 2-year period 
        described in paragraph (1), the Board shall assume authority to 
        implement the cost-relief measures described in section 5(a).
    (c) Study.--During the 2-year period beginning on the date on which 
the initial greenhouse gas emission market established under Federal 
law begins operation, the Board shall--
            (1) conduct a study of other markets for tradeable permits 
        to emit covered greenhouse gases in the United States; and
            (2) not later than 180 days after that date, submit to 
        Congress a report describing the status of the initial market, 
        specifically with respect to volatility within the market and 
        the average price of greenhouse gas permits during that 180-day 
        period.
    (d) Employment of Cost Relief Measures.--
            (1) In general.--If the Board determines that a greenhouse 
        gas emission market established under Federal law poses a 
        significant harm to the economy of the United States, the Board 
        shall carry out such cost relief measures relating to that 
        market as the Board determines to be appropriate under section 
        5(a).
            (2) Initial period.--During the 2-year period beginning on 
        the date on which the initial greenhouse gas emission market 
        established under Federal law begins operation, if the Board 
        determines that the average daily closing price of greenhouse 
        gas permits during a 180-day period exceeds the upper range of 
        the estimate provided under section 6, the Board shall--
                    (A) increase the quantity of permits that covered 
                entities may borrow from the prescribed allocations of 
                the covered entities for future years; and
                    (B) take subsequent action as described in section 
                5(a)(2).
            (3) Requirements.--Any action carried out pursuant to this 
        subsection shall be subject to the requirements of section 
        5(a)(3)(B).
    (e) Reports.--The Board shall submit to the President and Congress 
quarterly reports--
            (1) describing the status of each greenhouse gas emission 
        market established under Federal law, the economic effects of 
        the markets, regional, industrial, and consumer responses to 
        the markets, any corrective measures that should be carried out 
        to relieve excessive costs of the markets, and plans to 
        compensate for those measures; and
            (2) that are prepared independently by the Board, and not 
        in partnership with Federal agencies.

SEC. 5. POWERS.

    (a) Cost Relief Measures.--
            (1) In general.--Beginning on the day after the date of 
        expiration of the 2-year period described in section 4(b), the 
        Board may carry out 1 or more of the following cost relief 
        measures to ensure functioning, stable, and efficient markets 
        for tradeable permits to emit greenhouse gases:
                    (A) Increase the quantity of permits that covered 
                entities may borrow from the prescribed allocations of 
                the covered entities for future years.
                    (B) Expand the period during which a covered entity 
                may repay the allocating agency for a permit borrowed 
                as described in subparagraph (A).
                    (C) Lower the interest rate at which a permit may 
                be borrowed as described in subparagraph (A).
                    (D) Expand the total quantity of permits made 
                available to all covered entities at any given time by 
                borrowing against the total allowable quantity of 
                permits to be provided for future years.
            (2) Subsequent actions.--On determination by the Board to 
        carry out a cost relief measure pursuant to paragraph (1), the 
        Board shall--
                    (A) allow the cost relief measure to be used only 
                during the applicable allocation year;
                    (B) exercise the cost relief measure incrementally, 
                and only as needed to avoid significant economic harm 
                during the applicable allocation year;
                    (C) specify the terms of the relief to be achieved 
                using the cost relief measure, including requirements 
                for entity-level or national market-level compensation 
                to be achieved by a specific date or within a specific 
                time period;
                    (D) in accordance with section 4(e), submit to the 
                President and Congress a report describing the actions 
                carried out by the Board and recommendations for the 
                terms under which the cost relief measure should be 
                authorized by Congress and carried out by Federal 
                entities; and
                    (E) evaluate, at the end of the applicable 
                allocation year, actions that need to be carried out 
                during subsequent years to compensate for any cost 
                relief measure carried out during the applicable 
                allocation year.
            (3) Action on expansion of borrowing.--
                    (A) In general.--If the Board carries out a cost 
                relief measure pursuant to paragraph (1) that results 
                in the expansion of borrowing of permits under Federal 
                law, and if the average daily closing price of permits 
                for the 180-day period beginning on the date on which 
                borrowing is so expanded exceeds the upper range of the 
                estimate provided under section 6, the Board shall 
                increase the quantity of permits available for the 
                applicable allocation year in accordance with this 
                paragraph.
                    (B) Requirements.--An increase in the quantity of 
                permits under subparagraph (A) shall--
                            (i) apply to all covered entities;
                            (ii) be allocated in accordance with the 
                        applicable formulas and procedures established 
                        under this Act;
                            (iii) be equal to not more than 5 percent 
                        of the total quantity of permits otherwise 
                        available for the applicable allocation year 
                        under this Act;
                            (iv) remain in effect only for the 
                        applicable allocation year;
                            (v) specify the date by which the increase 
                        shall be repaid by covered entities through a 
                        proportionate reduction of permits available 
                        for subsequent allocation years; and
                            (vi) require the repayment under clause (v) 
                        to be made by not later than the later of--
                                    (I) the date that is 15 years after 
                                the date on which the increase is 
                                provided; and
                                    (II) the date on which the 
                                subsequent applicable phase of 
                                greenhouse gas reductions takes effect 
                                under this Act.
    (b) Assessments.--Not more frequently than semiannually, the Board 
may levy on participants in any permit trading system established under 
Federal law, in proportion to the capital stock and surplus of the 
participants, an assessment sufficient to pay the estimated expenses of 
the Board and the salaries of members of and employees of the Board 
during the 180-day period beginning on the date on which the assessment 
is levied, taking into account any deficit carried forward from the 
preceding 180-day period.
    (c) Limitations.--Nothing in this section gives the Board the 
authority--
            (1) to consider or prescribe entity-level petitions for 
        relief from the costs of a permit allocation or trading program 
        established under Federal law;
            (2) to carry out any investigative or punitive process 
        under the jurisdiction of any Federal or State court;
            (3) to interfere with, modify, or adjust any permit 
        allocation scheme established under Federal law; or
            (4) to modify the goals of any limit on greenhouse gas 
        emissions.

SEC. 6. ESTIMATE OF COSTS TO ECONOMY OF LIMITING GREENHOUSE GAS 
              EMISSIONS.

    The Director of the Congressional Budget Office, using economic and 
scientific analyses, shall submit to Congress a report that describes 
the projected price range at which greenhouse gas permits are expected 
to trade during the initial 2-year period of the initial greenhouse gas 
emission market established under Federal law.

SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are necessary 
to carry out this Act.

Summary: Containing and Managing Climate Change Costs Efficiently Act - Establishes the Carbon Market Efficiency Board to: (1) analyze market information to promote understanding of the dynamics of each federal greenhouse gas (GHG) emission market; (2) gather information regarding the status of the markets; and (3) carry out cost relief measures if it determines that a federal GHG market poses significant harm to the U.S. economy.

Requires the Board, during the two-year period beginning on the date the initial federally established GHG market begins operation: (1) to study other markets for tradeable permits to emit covered GHGs; and (2) if it determines that the average daily closing price of GHG permits during a 180-day period exceeds the upper range of an estimate, to increase the quantity of permits that covered entities may borrow from their prescribed allocations for future years and take specified subsequent action.

Requires the Board to report to the President and Congress on the status of each federal GHG market, the economic effects of the markets, regional, industrial, and consumer responses to the markets, corrective measures that should be carried out to relieve excessive costs of the markets, and plans to compensate for those measures.

Authorizes the Board to carry out cost relief measures to ensure functioning, stable, and efficient markets for tradeable permits to emit GHGs beginning on the day after the expiration of the initial two-year period. Sets forth requirements for the Board to follow in carrying out the cost relief measures.

Limits the Board's authority, including prohibiting the Board from prescribing entity-level petitions for relief from the costs of a federal permit allocation or trading program.

Requires the Director of the Congressional Budget Office (CBO) to report to Congress on the projected price range at which GHG permits are expected to trade during the initial two-year period of the market.