Energy Brief
Citizens Gas

Climate-Change Proposals Stall Amid Hurdles, Disagreement

When they swept into the U.S. Congress in January, leading Democrats promised to use their party's new dominance to quickly pass climate-change legislation.

A steady string of congressional hearings and growing bipartisan momentum on Capitol Hill seemed to bolster the Democrats' pledge.

But opponents of mandatory limits on greenhouse-gas emissions are still putting up a tough fight. And even lawmakers who support policies that would force companies to cut their greenhouse-gas emissions disagree on how it should be implemented. Overcoming the hurdles, reaching consensus and gathering the votes needed to pass a climate-change bill could take two years or more.

"I'd be a little surprised if we saw a big, sweeping global-warming bill enacted into law before the next elections" in 2008, said Clean Air Watch President Frank O'Donnell. "The science is showing we need to get moving now. At the same time, people are counting heads."

The drive is there, with a growing number of lawmakers agreeing on the need to curb global warming.

That momentum has been buoyed by companies like General Electric Co. (GE), Duke Energy Corp. (DUK) and BP PLC (BP), which have joined environmental advocates in urging the federal government to pass mandatory climate-change policies. Investors also have been calling for the U.S. to cut its carbon emissions, and military experts are seeking action as well this week, saying climate change threatens national security.

It seems that the most divisive issue is no longer whether to limit carbon emissions, but how such limits should be done.

Aggressive Vs Too Aggressive

U.S. Rep. Henry Waxman, D-Calif., and other key lawmakers are pushing for bills that, like California's, cut greenhouse gas emissions to 80% below 1990 levels by 2050. Opponents argue that the targets are too aggressive and could translate into economic distress, sending jobs to countries that don't regulate greenhouse gases.

Sens. John McCain, R-Ariz., and Joe Lieberman, I-Conn., have proposed more moderate targets, with a bill that would reduce emissions to 67% below 2006 levels by 2050.

Some policymakers believe the U.S. should start a mandatory climate-change program by focusing first on the electric power sector. Power-plant emissions account for about 40% of total U.S. energy-related carbon emissions, according to the U.S. Energy Information Administration.

Others argue that an economy-wide program for regulating greenhouse-gas emissions would be the most fair and most effective approach.

Another point of disagreement is how to best implement a so-called cap-and-trade system. Under the program, regulated companies that emit more pollution than allowed under the law would need to buy credits from companies that pollute less. There is disagreement over whether emission allowances should be given away for free to historical polluters or whether they should be auctioned, which could generate funds for additional clean-energy programs, or whether a portion should be given away and a portion auctioned.

There are also differing opinions on whether cap-and-trade programs should include measures that would limit the economic cost of the program.

Reaching consensus on the large issues could take time.

"Really big bills have to spin around in orbit for a while before they break the escape velocity," said Kevin Book, a senior analyst at Friedman Billings Ramsey Inc. "They (lawmakers) are meddling with the hard part right now. It's a tough exercise and frankly, it's probably a three-year story."

Hunting For Votes

Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment and Public Works Committee, has pledged to move an anti-global warming bill as soon as she has the votes.

"The minute I have the votes for a good, strong bill...it will be out of that committee as fast as you can say 'good morning,'" Boxer said. "My job as the chairman of this committee is to get bills to the floor, out of this committee. That's my focus."

But the task will be difficult. Boxer must craft a bill that a majority of her 19-member committee will support.

The nine Republican members of the committee, like President George W. Bush, have opposed economy-wide carbon caps. And none of them represent states that have committed to cutting greenhouse-gas emissions.

Even among Democrats, support isn't guaranteed, as energy issues are by nature more regional than partisan. Boxer may be able to rely on several Democrats like Bernie Sanders, I-Vt. Vermont is one of 10 Northeastern states that plan to cut their carbon emissions as members of the Regional Greenhouse Gas Initiative.

But recruiting committee member Max Baucus, D-Mont., for instance, could be difficult depending on the bill's provisions. Montana is a primary coal-producing state that would likely be affected by an aggressive climate-change bill. Baucus has spoken in support of an economy-wide cap-and-trade program, but also says that a vital coal industry is essential to U.S. energy security.

Senate environment committee member Lamar Alexander, R-Tenn., has expressed support for limiting carbon emissions in the electric utility sector, as have Sanders and Sen. Tom Carper, D-Del. All three are pushing different power sector-focused climate bills.

Even if the committee passes a climate bill, it faces an uncertain fate on the Senate floor, where opponents could attempt to block the bill with a filibuster. The bill would need 60 votes to overcome that threat - a number that could be difficult to reach.

It's also unclear whether lawmakers could override a presidential veto.

September At The Earliest

In the House, Rick Boucher, D-Va., chairman of the House Energy and Commerce Committee subcommittee on air quality, is working on his own bill, with committee chairman John Dingell, D-Mich. They say their bill will be fair and economy-wide.

Still, the bill isn't likely to be considered on the House floor until at least September, and a final House-Senate compromise is unlikely to emerge until 2008, Boucher said.

"(Boucher)has definitely put the issue of global warming on a very slow track, and I suppose it's related to campaign contributions," O'Donnell said.

"It's pretty clear there's a great attempt (by the coal industry) to influence his judgment," he said.