Global warming legislation must include measures to contain compliance costs and ensure that foreign competitors do not gain an unfair trade advantage, industry leaders told a U.S. Senate panel July 24. At the same time, industry witnesses urged federal lawmakers to reject any cap-and-trade legislation that includes cost-containing price controls. They warned controls could undermine both environmental goals and market forces. The final hearing of the Senate Subcommittee on Private Sector and Consumer Solutions to Global Warming and Wildlife Protection focused on economic and international issues of global warming policy. Senators Joseph Lieberman (I-CT) and John Warner (R-VA), the chair and ranking Republican member, are endeavoring to hammer out a bipartisan cap-and-trade climate bill before Congress returns from its summer recess in August. \u201cWe want to come up with a national response with consensus,\u201d Lieberman said. Warner and three other senators introduced legislation July 24 to create an independent Carbon Market Efficiency Board modeled after the Federal Reserve Board of Governors. It would oversee a U.S. market for trading carbon credits and provide for economic adjustments. The bipartisan amendment by Warner, Senators Mary Landrieu (D-LA), Lindsey Graham (R-SC), and Blanche Lincoln (D-AK) seeks to ensure a transparent and efficient carbon trading market and provide safeguards against economic instability. To prevent severe price spikes and economic shocks from a cap-and-trade carbon market the board would be empowered to adopt what Warner dubbed emergency \u201cofframps\u201d or cost controls. These temporary measures include: -\tincreasing the allowances industries could borrow from their future carbon allocations; -\tgiving borrowers more time to repay their allowances; -\tlowering the interest rate for borrowing allowances; and -\tincreasing the total amount of allowances allocated in a given year by borrowing from allowances in future years. However, industry leaders criticized the concept of a legislative \u201csafety valve\u201d allowing companies to pay in lieu of reducing their greenhouse gas emissions to avoid economic harm. A safety valve aimed at containing compliance costs would amount to a price control that could undermine both market forces and the environmental integrity of a cap-and-trade program, warned Blythe Masters, managing director of global commodities for JP Morgan Securities. A safety valve would reduce liquidity, decrease available investment money for developing new technology, and prevent a U.S. market from linking to European Union and other carbon dioxide markets, she said. \u201cCarbon markets are no different from other commodity markets. They exist to expand.\u201d Emissions markets drive capital to the most efficient emissions reductions, said Garth Edward, trading manager for environmental products for Shell International Trading and Shipping Company. Shell will use its capital to find the most efficient way to reduce its emissions, whether by reducing its own emissions or purchasing carbon credits, he said. Shell believes that in the future the most efficient greenhouse gas emission reductions will involve geologically sequestering CO2 emissions, Edward said. \u201cCarbon sequestration has to be our Manhattan Project. There\u2019s no way this country with its large coal reserves can manage this transition if we don\u2019t master this technology,\u201d agreed Tim Profeta, Duke University Nicholas Institute for Environmental Policy director.