Obama and Dem leaders will push next week to firm up a climate strategy; but will a price on carbon be part of it?

Will there be a price on carbon? That seems to be the most important question, but it's certainly not the only one about upcoming climate legislation in the Senate.

As Obama invites a bi-partisan group of Senators to share ideas at the White House next week, and Majority Leader Harry Reid (D-Nev.) reconvenes the Democratic caucus to discuss proposals presented in a one-hour closed-door meeting last week, cap and trade (or some other price on carbon) seems the most controversial piece of the puzzle.

How to get to 60
Republicans voted in lockstep for the Murkowski resolution to block EPA regulation of greenhouse gases (and were joined by 6 Democrats).

So it seems likely they will hold together to vote “no” on cap and trade, or any legislation that’s tough on fossil fuels. With elections close at hand they may just say “no” to block Obama.

Lindsey Graham (R-S.C.), who worked for months with Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) has deserted his friends in the enemy camp and is now backing fellow Republican Richard Lugar’s (Ind.) bill. So that might have a chance to get to the 60 votes needed. But it’s very weak, focusing on energy efficiency, nuclear power and retiring a few of the oldest, dirtiest coal-powered plants.

Another possibility for Republican support is the Cantwell-Collins “cap and dividend bill.” GOP Sen. Susan Collins (Me.) is one of the sponsors and might bring along a couple of fellow New Englanders. It would return 75% of revenues from allowances to the people. But anything with “cap” seems to be politically toxic.

And we certainly can’t depend on oil-patch Democrats, who we’ve seen are still clamoring for increased offshore drilling. In fact, without immediate state revenue-sharing of offshore drilling, Mary Landieu (D-La.) says she’ll work to stop a bill. And then there are coal-state Dems like Jay Rockefeller (D-W.Va.). He's unlikely to vote for anything that hurts his state’s economy.

The benefits of Kerry-Lieberman
Although it’s not all we might wish, Kerry-Lieberman’s American Power Act, which is built on cap-and-trade (17% below 2005 levels by 2020), seems by far the best Senate bill out there. It would actually DO something and aims for an 83% cut in GHG by 2050. An EPA analysis puts the cost per family at less than a postage stamp a day. A Peterson Institute study says it will unleash 200,000 new jobs a year 2011-2020. And a ClimateWorks Foundation study ups the jobs to half a million a year until 2030.

Rationally, this is the best bill hands down. And it has the support of many big businesses, like GE, Honeywell and Dow Chemical. But who’s rational? Certainly not the Senate a few months before midterm elections.

So conventional wisdom is that Jeff Bingaman’s (D-N.M.) bill that passed the Energy Committee last year and would establish a renewable electricity standard, will be the platform to which other items would be attached. Kerry-Lieberman could be introduced as an amendment (though they are still fighting to take the lead) -- and will probably fail to get 60 votes.

Possible health reform redux
Meanwhile the idea is out there that the strategy might be to pass the best bill possible, then go to reconciliation with the House, which you may have forgotten passed a comprehensive cap-and-trade bill last year. And they could work cap-and-trade into the final result. The votes might be there for passage of such a final bill in the lame-duck session. Especially if majority rules.

That would be cool. But we’ll have to see how it plays out.

Getting anything through the Senate will be hard because this bill will also contain response to the oil spill, like greatly increasing the oil tax for the Spill Response Trust Fund, eliminating the liability cap of $75 million and tightening safety regulations. While most of the country will be all for that, some oil-state Senators will no doubt tout the industry line.

Senators everywhere need to hear from the public, which is way ahead of them on this one.

Call the Congressional Switchboard at 202-224-3121 and tell your Senators you want a comprehensive climate bill with a price on carbon passed this year.

(Sources: E&E Daily, E&ENewsPM, ClimateWire, The Hill)

EPA backs down on rules for large power-plant GHG emissions -- under pressure from Congress

(Photo of Utah coal-fired power plant from Flickr and photographer Arbyreed )


Reactinging to pressure from some members of Congress, the EPA has backpedaled on its plan to begin regulating greenhouse gas emissions from large power plants and factories under the Clean Air Act this year.

EPA Administrator Lisa Jackson said that in order to allow time for Congress to pass a climate bill she would:
• Not require permitting in 2010 for large sources of greenhouse gases.
• Raise the limit for permitting next year to those emitting more than 75,000 tons, not the 25,000 planned. That amount might be lowered to 50,000 tons in 2012.
• Give small sources of emissions a reprieve until 2016.

The EPA and Department of Transportation would, however, proceed with plans to issue rules next month for autos and light trucks, to reach the Obama Administration’s goal of 35.5 mpg by 2016.

Why the change?
Easing the plans for restricting emissions from large coal-powered plants and other industrial sources came in response to a series of threats to the EPA’s ability to regulate GHG.

• Sen. Lisa Murkowski (R-AK) has prepared a resolution to veto the “endangerment” finding that greenhouse gases should be regulated under the Clean Air Act, a finding that followed a Supreme Court decision. Murkowski has 41 co-sponsors, including Dems Ben Nelson (Neb.), Blanche Lincoln (Ark.) and Mary Landrieu (La.) Murkowski needs 51 votes to pass the resolution and apparently doesn’t have them or would have introduced it by now. A companion resolution in the House, would be spearheaded by two Democrats, Ike Skelton (Mo.) and Collin Peterson (Minn.)

• Coal-state Sen. Jay Rockefeller (D-W.Va.) has introduced a bill to delay EPA regulation of large power plants for two years. There is no indication, however, that Senate leadership will bring it up for hearing. W. Va. Reps. Nick Rahall and Alan Molihan, both Dems, as well as Rick Boucher (D-Va.), have a similar bill in the House but there’s no sign that is going anywhere either. But Rockefeller’s bill may have done its job to get concessions from the EPA and head off Murkowski’s more dangerous resolution.

Rockefeller’s bill would not challenge the EPA’s right to consider climate change under the Clean Air Act, as Murkowski’s resolution would. It would just postpone it for stationary sources (not vehicles).

Who’s lining up with whom
Murkowski’s supporters include the National Automobile Dealers Assn. and the American Public Power Assn.

She, by the way, has collected $800,000 in gas, oil and utility contributions, according to climateprogress.org.

Among those opposing her resolution are the American Lung Assn. and 12 public health organizations, including the American Pediatrics Assn., as well as 569 scientists from the Union of Concerned Scientists.

The head of construction trades for the AFL-CIO has written the White House and asked it to reconsider taking such strong action quickly against stationary sources because it would hurt jobs.

Lawsuit
Alabama and Texas have filed suit to stop the EPA. But 16 other states, mostly on the West Coast and in the Northeast, have asked to intervene on behalf of the EPA. Among them are some you might not expect – Arizona and Iowa.

EPA’s Jackson told Congress she, like the president, would like to see Congress pass climate legislation as a better way to curb greenhouse gases. The House climate bill passed in June blocked EPA regulation, while the Senate bill that came out of the Environment Committee did not.

Now 13 Senators, led by Robert Menendez (D-N.J.), and including Barbara Boxer (D-Calif.), Kirsten Gillibrand (D-N.Y.) and Al Franken (D-Minn.), have sent a letter to Majority Leader Harry Reid (D-Nev.), as well and the bi-partisan trio crafting a new Senate bill (Kerry, Lieberman and Graham), asking them not to take away the EPA’s ability to regulate GHG from coal plants under the Clean Air Act.


(Sources: Greenwire, E&E Daily, ClimateWire, E&ENewsPM, climateprogress.org)

Carbon tax more acceptable than cap-and-trade?

(Photo of coal-burning plant near Kenosha, Wisc., from Flickr and photographer James Jordan )


Who'da thunk it? Cap-and-trade was the way to go the past few years because a carbon tax was politically impossible. Now, suddenly, that's turned on its head. A carbon tax -- or at least "a price on carbon" -- seems to have the best chance.

Climate legislation may not be dead after all, but cap-and-trade is. The odd triad – Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) – are preparing to release the main points of their “compromise” legislation to the Senate sometime this week or next -- and it doesn't include cap-and-trade.

They don’t have the 60 votes yet, haven’t even drafted the language yet, but are ready to work the crowd of uncertain senators and interested lobbyists to see if they can reach consensus.

President Obama says he’s willing to be flexible as long as the plan puts a price on greenhouse gas emissions and cuts them about 17% (below 2005 levels) by 2020, as he promised the rest of the world.

The three say their plan can do that.

Other important points:
• Three different mechanisms will be used for three different sectors.
• Power plants will go first and their emissions will be priced and capped and made more stringent over time.
• Industries, such as chemicals, cement and paper, will be able to wait several years, but will eventually be included.
• Motor fuel will have a price attached to carbon (that's right, a carbon tax) with at least some of the revenue going to transportation projects and helping auto companies becom more fuel-efficient.
• Nuclear power will be supported – Obama already took a step in that direction, announcing $8.3 billion in loan guarantees for two reactors in Georgia.
• R & D for carbon capture and sequestration will get support too.
• With emphasis on reducing dependence on foreign oil, plans for offshore drilling for oil and gas here are included.

Cap-and-trade a non-starter
The GOP has tagged cap-and-trade as “cap-and-tax” and has scared people into thinking energy costs will rise. The term is now political poison. Not to mention distrust of Wall Street and any trading mechanism.

What seems to be taking its place is “cap-and-dividend,” in which proceeds from a “price” on carbon (whatever form it takes) would go back to consumers to help them pay higher utility costs. The advantages are two:
• Voters won’t blame their Senators for sticking them with higher costs in a bum economy,
• Utilities will be able to raise prices to pay for the changes they have to make.

Can it pass?
It’s impossible to satisfy every politician, voter and interest group, but the triad is sure trying. Graham said even climate change skeptics can support this bill, which will provide jobs and reduce dependence on oil from unstable parts of the world. It's also a way for the GOP to appeal to young voters, he told Tom Friedman of the New York Times.

The three are running up against a serious time crunch in a Senate still preoccupied with health reform and jobs -- and an election that has incumbents very nervous. (Note that John McCain is very much absent from this effort by his two amigos.) And Graham suggested if the Dems pass health reform by reconciliation, all bets are off.

Once the bill's details are worked out, the EPA would need about a month to do its analysis, and other departments would have to weigh in. If it is in fact possible to get 60 votes, we still have a problem – similar to the one in health care.

The House has already passed a bill, HR 2454 (last June – did you forget about that?) and it is based on cap-and-trade. So, will the two chambers be able to reconcile their differences before election season heats up?

It seems like a tall order.

(Sources: Reuters, E&E Daily, PlanetArk , New York Times)

Senate climate bill going nowhere soon, if ever; will Obama, EPA and states be the back-up

(Photo of Capitol engulfed in emissions from Flickr and Capitol Climate Action.)

Don’t hold your breath for the Senate to act on climate change. It won’t happen until next spring –- at least.

Sen. John Kerry (D-Mass.), lead sponsor of the strongest bill in the Senate, told reporters Monday that Dem leadership won’t start climate debate until after both health reform and financial regulatory reform are disposed of – likely around March.

Meanwhile Kerry is working with Sens. Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) in an effort to craft a bipartisan bill that can garner 60 votes. (Why am I not thrilled about that?) They plan to have an outline ready within three weeks, before the international conference in Copenhagen.

A lot of moderate Democrats and most Republicans in the Senate are finding reasons to oppose climate legislation.

Two of them, Sens. James Webb (D-Va.) and Lamar Alexander (R-Tenn.) have offered an alternative that would emphasize new technology. It would provide $750 million each of the next 10 years for R&D on carbon capture, advanced biofuels, solar power, advanced batteries and recycling of used nuclear fuel. It would also give $1 billion to the Nuclear Regulatory Commission to review advanced and small nuclear designs. The two said they did not support the Kerry-Boxer bill because it relies on cap-and-trade. (What they didn’t say is it will hurt coal.)

If climate action doesn’t happen by spring, conventional wisdom is that it will be stalled until after the 2010 elections. That doesn’t bode well. If Democrats lose one Senate seat, power will switch to the GOP, and climate change denier Sen. James Inhofe (D-Okla.) will replace Sen. Barbara Boxer (D-Calif.) as Environment Committee chair. We’ll be back to “drill, baby, drill.”

Many Dems in the House, who voted for the climate bill that passed their chamber in June, are now under fire from more conservative Republicans in their districts. It’s unsure how that will play out in the voting booth.

If we can’t get something passed by early spring, it may be left to the president, the EPA and the states to provide the impetus for change. Obama made a pact with China this week for cooperation on renewable energy, the EPA is working on rules to regulate large CO2 emitters, and states in the East, West Coast and Midwest are likely to merge the cap-and-trade markets they have been working on regionally.

(Souces: E&E Daily, E&E News PM)

How do enviro groups and clean tech stack up against oil and gas for lobbying money?

(Photo of oil rig from Flickr and photographer crashworks/Elan Ruskin.)

In Washington, D.C., it was raining lobbying dollars this summer. Both sides were trying to influence all-important climate legislation.

The oil and gas industry spent $38.4 million in Q3 (July-September), while environmental groups spent a fraction of that -- $6.1M and renewable energy just 6.6M. Exxon alone matched each of the latter and then some with it $7.2M.

Electric utilities spent almost as much as oil and gas -- $37.4M. And they're doing it with our rate money. Their argument is they don't want our rates to go up. So concerned about the consumer are they. Lesser amounts fueled lobbying from coal mining ($3.6M), natural gas ($3.1M) and forestry/forest products ($2.9.)

Industry groups were largely trying to get more allowances in a cap-and-trade system, but some were trying to block a climate bill entirely.

The summer quarter roughly matched the time between when the House bill was passed at the end of June and the Kerry-Boxer Senate bill was released in the fall.

Environmental groups went all out with spending to keep the momentum going for a bill they wanted to see passed by the Senate before the December international meeting in Copenhagen.

The World Wildlife Fund spent $1 million, way up from $45,000 last summer. They ran ads targeted senators from the swing states of Alaska, Arkansas, Indiana, Maine, Montana and North Dakota.

Environmental Defense was second with $430,000, nearly double what it spent last year. Overall, enviro group lobbying money was up 33% from $4.6M last summer.

Their money, of course, came from concerned citizens like you. Keep the donations flowing.

(Source: Greenwire. E&E analysis based on data from the Center from Responsive Politics.)

Cost of climate bill will be slight, CBO reports

(Photo of California wildfire from Flickr and photographer slworking2)

The cost of the House-passed climate bill would be mild, the Congressional Budget Office said Friday. The American Climate and Energy and Security Act (ACES) would reduce GDP by ¼ to ¾ of a percent by 2020 and 1 to 3.5% by 2050, the CBO said in a new report.

The impact on household purchasing power would be less than 1% in 2020 and 1.2% in 2050.

CBO said it did not consider the benefits of averting climate change.

And therein lies one problem with predicting the costs connected with any climate bill or plan. The costs of doing nothing are even higher. In some countries GDP could be cut by as much as 20% by 2030, according the UN-backed Economics of Climate Adaptation Working Group, which sees Florida losing as much as 10% of GDP.

The other problem in making predictions is that most groups figuring the costs have an ax to grind – they’re either for or against greenhouse gas restrictions and that colors the way they make their estimate.

Hard to figure
The Congressional Research Service (part of the Library of Congress), in a second report released Friday, said any estimate should be “viewed with attentive skepticism.” They examined predictions from such diverse sources as the EPA, MIT, National Black Chamber of Commerce, Heritage Foundation, and National Association of Manufacturers. (The last three oppose the climate bill.)

An EPA study earlier this year said household costs would go up $54 a year, for example, while the Energy Information Administration said $83. An older CBO estimate was $175. The estimates are all over the map.

Efficiency a key
Energy-efficiency programs are important to reducing costs, several organizations have pointed out, so a lot depends on how much efficiency is part of the package. Energy savings could outweigh energy price increases.

The American Council for an Energy-Efficient Society and Center for American Progress estimated household savings could be $215 years with proper energy efficiency.

Cost of doing nothing
But the cost of climate change that continues unabated will be billions more than the cost of curbing it, a new Union of Concerned Scientists study says. Hurricane damage in Florida could be $33 billion by 2030, the report says.

It’s easy to point to the cost of doing something. But that’s not the whole story.

I used to have a poster in the '60s that said, “Not to decide is to decide.” Those who oppose climate legislation or cap-and-trade as too expensive – or want to put it off – are turning a blind eye to what happens if they fail to act.

We need to consider the costs of flooding, hurricanes, heatwaves, droughts, wildfires, rising seas and all the other weather calamities that will hurt agriculture, businesses and real estate. Remember New Orleans? And there’s also the cost of adaptation – the rush to throw up sea barriers and the like when the results of global warming become more evident. Experts are already recommending expensive adaptation measures like dams, barriers and improved drainage.

(Sources: Congressional Budget Office,ClimateWire, Reuters)

Senators try to stop EPA plan to regulate GHG

(Photo of power plant from Flickr and photographer bass_nroll)

Some senators are trying to block the EPA's newfound power to regulate greenhouse gases. They intend to tack an amendment on the EPA funding bill coming up this week. (To object, go to http://tinyurl.com/ntmom).

This effort comes at a time when EPA regulation may be our best hope for curbing greenhouse gases, as the Senate – embroiled in health care – seems more and more likely to punt climate legislation into next year. Majority Leader Harry Reid (D-Nevada) said as much this week.

And if climate change doesn’t get resolved early in 2010, it will likely be delayed past mid-term elections to 2011 and a new Congress.

In the meantime, EPA regulation would get the country moving and give the president some achievement to take to the international climate treaty talks in Copenhagen in December. (That treaty is likely to face delay too – it’s very unlikely to be finalized this year. Meanwhile, the planet isn’t waiting for us humans to get our act together.)

Rules for autos ... and more
The EPA, along with the National Highway Traffic Safety Administration, announced this week new fuel economy and greenhouse gas rules to bring the fleet average of new cars and light trucks in 2016 up to 35.5 mpg, as well as GHG emissions down to 250 grams/mile.

Not only does this put fuel economy 5 years ahead of where the Congress mandated it in 2007, but more important: It’s the first time the EPA will regulate greenhouse gases under the Clean Air Act. The agency is entitled, even required, to do so under the 2007 Supreme Court decision in Massachusetts vs. EPA, but the Bush Administration let it slide.

This has ramifications for all sources of GHG, including large industrial facilities and power plants. In addition to the automobile rules, the agency is finishing up work on its endangerment findings – showing GHG as pollution that endangers people’s health. The EPA is also finalizing regulations to make greenhouse gases part of the permitting process for facilities emitting more than 25,000 metric tons of GHG a year. EPA head Lisa Jackson may sign the endangerment finding as soon as late this month.

Plan B
Some suggest the Senate may leave controversial and complex cap-and-trade on the shelf and just take action on energy – efficiency and renewable sources. They may “defer to the regulatory agency and duck tough political choices,” James Connaughton, former Bush environmental advisor, told ClimateWire.

But “energy-only is worse than no bill at all,” said Fred Krupp, president of the Environmental Defense Fund.

Problems with EPA rules
EPA restrictions alone may not do the job, though, with time running out to stop the growth of greenhouse gases. With EPA regulation only, “you can’t get enough of the job done fast enough,” warned the Natural Resources Defense Council’s David Hawkins.

Furthermore, lawsuits could delay progress for years. Already the National Automobile Dealers Association and U.S. Chamber of Commerce have filed suit to prevent regulation of motor vehicles at the federal or state level.

The best answer is to have both – EPA regulations and climate change legislation, which is what most environmental groups want.

We need to protect the right of the EPA to regulate and they need to get started because once they do so it will be more difficult for opponents to have legislation pre-empt them. At the same time a cap-and-trade system will help put a cap on emissions and move the country toward its desired goal. And a new administration wouldn't be able to stop progress in its tracks by changing the rules.

Sens. Barbara Boxer (D-Calif.) and John Kerry (D-Mass.), chairs of the Environment and Foreign Relations committees, have been crafting a Senate climate bill they will release later this month. They seem committed to moving ahead with it. Urge your Senators to keep climate and energy on their urgent agenda for this fall at the EDF website.

(Sources: Greenwire, ClimateWire, Environmental Defense Fund, Sierra Club, dailygreen.com)

Duke vs. Newt: frantic lobbying as House climate bill vote draws near

Duke Energy wants it, Newt Gingrich doesn't. With the House climate bill heading to the floor for debate Friday, lobbying is fast and furious.
In the past two days:
• A group of 22 environmental groups sent a letter to all House members urging them to vote for the bill – the American Energy and Climate Security Act (H.R.2454). Groups included the Natural Resources Defense Council, Sierra Club and League of Conservation Voters. LCV said it would not endorse anyone who votes against it.
• 20 companies and electric utilities took out full-page ads in Washington papers calling for passage because they want the clarity of rules it would bring (and likely because most allowances for cap-and-trade will be given -- not sold -- to polluters at the start). Those signing on included Duke, NRG Energy and PSEG Inc.
• 20 climate scientists sent a letter to Congress saying that to avert a "rapidly developing global climate crisis” they should pass a strengthened version of the bill as a basis for stronger federal policies. Well-known NASA scientist James Hansen, who is convinced CO2 emissions must be cut back to 350 parts per million (from the current 385) rather than the early target of 450 ppm, did not sign.
• President Obama urged passage during his news conference Tuesday, saying it would spark a clean-energy transformation.
• The Cooler Heads Coalition, a new group of science skeptics and other legislative opponents began lobbying Congressmen.
• Newt Gingrich’s American Solutions for a Winning Future planned to run a TV ad, starting Wednesday, opposing the bill and saying it would hurt the economy.

Are the votes there to pass it?
On Tuesday there were 170 reliable votes and 108 on the fence, according to an analysis by E&E Daily. 218 votes are need to pass the bill. If the votes aren’t there, House Majority Leader Steny Hoyer (D-Md.) said he may push it back until after the Fourth of July.

In years past the Senate took the lead on climate legislation, and the House has never passed a cap-and-trade bill. But this year the Senate is lagging behind, with a weak energy bill out of the Energy Committee and Barbara Boxer still crafting a cap-and-trade bill in her Environment Committee. So even if the House manages to pass this bill, Senate agreement is not by any means secure.

A few other points
* The EPA said Tuesday the bill would cost the average household between $80 and $111 a year. Congressional Budget Office figures released Friday said an average of $175 a year, with a range of $40 to $245 depending on income level.

* The bill has been changed somewhat in recent days to accommodate the eight committees with some jurisdiction. A concern of Agriculture Chair Collin Peterson (D-Minn.) has apparently been met by giving rural electric cooperatives one-half a percent of the free allowances. But agriculture is still concerned about who will oversee farm offsets, the Agriculture Department or the EPA. And moderate Democratic representatives from farm states are needed on this vote.

* States would now be permitted to spend 10% of their allotment (which in turn is 10% of free allowances) on public transportation.

* Because of the powerful farm interests, methane emissions from cows have been exempted from the bill. They called it a “cow tax.” Methane is a much more potent greenhouse gas than carbon dioxide, and cows produce about 25% of the emissions so that’s a significant exemption.
(Sources: E&E Daily, E&E News PM)