This legislation is more about climate change than about peak oil. It is possible that peak oil hits just when we also want to limit our CO2 emissions but the two are unrelated. (Some non-libertarians would probably add that peak oil is also a good reason for legislation, they will say that without it the transition will be very rough, too rough to be handled only by the market. But that’s only non-libertarians.)
There are no incentives for individuals or companies to change their behavior because of climate change. It’s a good old tragedy of the commons. The incentives have to be created outside of the market and a typical way to do that is through legislation.
Here are the three assumptions that might lead even a libertarian to support such legislation:
1. Climate change is an example of the tragedy of the commons and doesn’t create (enough) incentives for individuals or companies to change their behavior.
2. It is possible to create such incentives through legislation and the proposed legislation is a good way to do that.
3. The costs of climate change are lower than the costs of preventing or slowing down climate change.
Those are also the three assumptions (and there might be more but I think the list is pretty complete) you have to argue against if you do not support this legislation.