Source: FT
Three senior US lawmakers are piecing together a sweeping bipartisan energy and climate bill, which looks set to include sweeteners to galvanise support among Republicans and industry groups.
The proposed legislation, encouraged by President Barack Obama, dilutes a climate bill that stalled last year in the Senate. The senators have hosted meetings with industry groups over the past two weeks, revealing details about their plan that would cap carbon emissions while expanding offshore oil drilling and nuclear power generation.
Nearly six months have passed since the Senate’s last climate bill failed to win over conservatives and moderates, a political stalemate that cast a shadow on America’s presence at the Copenhagen climate summit. But some Democrats say the passage of healthcare reform has opened the door for climate change legislation, while acknowledging tradeoffs will be needed to secure 60 Senate votes. “They know that to pass a comprehensive bill they will have to ease concerns of some special interests and mid-western senators whose states have manufacturing-oriented economies,” said Daniel J. Weiss, senior fellow at the Center for American Progress Action Fund, a liberal think-tank.
Environmental groups are divided over the bill, with some decrying the push to pre-empt existing state and federal greenhouse gas regulations. But many moderate groups are withholding judgment until the bill is introduced, saying concessions to industry bodies will be necessary. According to people briefed by the senators, the bill aims to cut carbon emissions from 2005 levels by 17 per cent by 2020 and 80 per cent by 2050, largely by implementing separate caps on utilities and manufacturers. The federal government would sell separate pollution permits to each sector, using a “hard price collar” to limit greenhouse gas allowances to between $10 (£6.70) and $30 per ton, and committing to flood the market with credits if the price ceiling is exceeded.
The bill’s sponsors – John Kerry, the Massachusetts Democrat, Joseph Lieberman, the Independent from Connecticut, and Lindsay Graham, the South Carolina Republican – said the new sectoral approach would begin imposing carbon caps on utilities in 2012 and manufacturers in 2016.
The bill includes a new petrol tax, which would be passed on to consumers, though this could be vulnerable in the efforts to reach a compromise. By mentioning investment in conventional energy, the senators have elicited favourable responses from industry leaders, including BP executives and lobbyists from the US Chamber of Commerce, who opposed the Waxman-Markey cap-and-trade bill passed by the House of Representatives last spring. After meeting the senators, Bruce Josten, the chamber’s top lobbyist, said their efforts were “largely in sync” with industry targets.
Mr Graham, distinguishing his legislation from last year’s bill, told reporters this month “the cap-and-trade bills in the House and Senate are dead” and would be replaced.
He hopes his sector-by-sector approach to regulation, unlike Waxman-Markey’s economy-wide cap, will help him save face among conservatives. His role in the bill’s formulation was itself in doubt after he said the Democrats’ handling of healthcare reform “poisoned the well” for bipartisan co-operation.
The senators hope to send details of the bill to the Environmental Protection Agency this week. The bill is likely to be introduced by late April. Despite bipartisan sponsors, its passage is not guaranteed. Last week, 10 Democratic senators said they would not support unlimited offshore oil exploration. Meanwhile some environmentalists said the bill would curb the EPA’s authority to regulate greenhouse gases.
