Cap-and-trade expectations grow on Capitol Hill
Posted on July 3rd, 2007By Darren Samuelsohn
Greenwire: Six months into their majority, congressional Democrats have made it clear global warming belongs among their top-tier legislative items.
On both ends of the Capitol, Democratic leaders promise to reassert the United States’ authority in international negotiations to curb heat-trapping pollution. And advocates brag of their success in committees and on the floor, pointing to votes on automobile fuel efficiency standards and measures that require climate change to be factored in U.S. national security and intelligence planning.
Now, Democrats want the biggest prize of all: a cap-and-trade bill that reduces emissions across the U.S. economy.
As Senate Environment and Public Works Committee members discussed details of a cap-and-trade policy at a hearing last week, David Hawkins, who heads the Natural Resources Defense Council’s climate center, said, “It’s gratifying that the committee is meeting to discuss how to develop protective climate legislation, not whether.”
The chairman of the House Energy and Commerce Committee, Rep. John Dingell (D-Mich.), floated a proposal two weeks ago that would have been unthinkable a few months earlier. The lawmaker said he would consider establishing a “carbon emissions fee” — which some see as a carbon tax.
Dingell answered critics on his left last week when he said he would aim to move legislation this fall calling for between 60 percent and 80 percent cuts in U.S. emissions.
And bridging the partisan divide, Sen. Joe Lieberman (I-Conn.) opened up negotiations on a global warming bill with Sen. John Warner (R-Va.) that could be ready by the fall.
Even Sen. James Inhofe (R-Okla.), Capitol Hill’s biggest climate-science skeptic, has gotten into the act. Spoiling for a fight, Inhofe dared the Democrats last week to start moving a cap-and-trade bill “because time is not your friend.”
Tipping points?
Many are asking whether the House or Senate will act first on cap-and-trade, and whether lawmakers will finish before U.S. EPA releases its own climate regulations in the wake of a recent Supreme Court ruling that says the Clean Air Act empowers the agency to act on greenhouse gas emissions.
“The sooner we start, the better off we are,” Tom Kuhn, president of the Edison Electric Institute, said in an interview last week.
Some are optimistic that even President Bush would accept a cap-and-trade bill if Democrats can muster enough votes to pass a bill.
“I have unbridled confidence that President Bush will sign any legislation on climate change that can pass the U.S. Congress,” said Jason Grumet, executive director of the National Commission on Energy Policy, a bipartisan commission tasked four years ago with finding solutions to the nation’s energy and climate problems.
That is not to say arrangements are being made for a bill-signing ceremony at the White House.
Alliances such as the one Lieberman and Warner formed last week have been known to falter. Senate Democrats ran aground trying to pass legislation on the floor last month mandating a certain percent of the nation’s energy supplies come from renewable sources.
And several sources cautioned not to get too far ahead given the inevitable partisan and regional disputes over such a major piece of energy and environmental legislation that would establish a market system with credits potentially worth some $300 billion a year.
“I’ll believe it when I see it,” said Mary Kankel, a longtime utility lobbyist now working for Duke Energy Corp.
“It’s not something you can craft in a month,” Kankel said. “The momentum is great, but I think they need to recognize they’ve got a lot of complex issues and they shouldn’t just do it overnight. They need to really buckle down.”
Stumbling blocks
Grumet sees three critical hurdles for Congress on cap-and-trade. A bill must deal with international competition, including the long-standing concern that trade partners like China and India won’t set up their own emission limits no matter what the United States does.
The legislation should also set a price cap that assures minimized costs to the U.S. economy, he said. And lawmakers must navigate the treacherous terrain associated with distributing the credits for a cap-and-trade system.
“When it comes to the actual economic effects of the legislation, auctions and allocations are most important,” Grumet said. “When it comes to the broad political consensus, international linkage is probably most important. When it comes to the actual functioning of the program, and the promotion of technology, the caps and costs are probably most important.”
NRDC’s Hawkins is more optimistic about Congress clearing the hurdles. International trade and cost controls are “issues of perception more than reality.”
Asked what Lieberman, Warner and others must do to pass a bill, Hawkins said, “Basically convincing their colleagues that the time has come for them to settle on this and get it done. That it won’t get easier later and it’s better to do it now.”
That lobbying won’t be easy. Sen. George Voinovich (R-Ohio), for example, rejects the premise of cap-and-trade, and he does not expect the Warner-Lieberman team will bear fruit. “I don’t think it will go anywhere unless there’s some real effort to harmonize the environment, energy and the economy,” he said in an interview last week.
Warner factor
Cap-and-trade backers are starting to count their votes.
In the House, 274 members last week rejected an amendment that would have stripped from EPA’s annual budget a nonbinding Sense of Congress resolution linking human activity to climate change. The EPA spending legislation also says Congress vows to take “mandatory steps” to slow or stop the rise in U.S. pollution. Forty-four Republicans joined 230 Democrats on the vote, a signal that the House could be within reach of a 290-member veto-proof majority.
Across the Capitol, an informal Greenwire analysis shows Democrats have a shot at the all-important 60 vote threshold needed to overcome a filibuster.
At least 55 senators have said at some point in their career they would support legislation capping U.S. emissions from one or multiple sectors of the economy. Several more members are considered within striking distance, especially given political pressures building over the 2008 presidential and midterm elections.
This brings the debate back to Warner.
Boxer appeared jubilant last week when she heard of the Lieberman-Warner team. While she would not begin to discuss her long-term legislative strategy, Boxer acknowledged the five-term Virginian carries extra gravitas with his Republican colleagues. “It matters what Senator Warner thinks,” she said.
Some even think Warner — a middleman in recent years on everything from the Iraq war to Bush’s judicial nominees — may be best positioned to lobby the president on climate change. “Warner is a guy who is solid, credible and wears extraordinarily expensive suits,” said Frank O’Donnell, executive director of Clean Air Watch. “If there’s anybody the White House would listen to, it’d be a John Warner.”