Climate Bills and a Green Economy

EPA to Soften CO2 Requirements on Industry

February 23, 2010

Reuters - The U.S. Environmental Protection Agency said on Monday it would slow a phase-in of new limits on carbon dioxide from coal and other heavy industry plants to ease concerns about the impact on the economy.

The Obama administration has pushed the EPA to begin regulating gases blamed for warming the planet in an effort to force polluters to support a climate change bill that is stalled in Congress.

Slowing down the rules could give Congress more time to develop a legislative answer to reducing carbon pollution and avoid a lengthy legal battle over whether the agency has the authority to regulate the emissions.

In September, the EPA said it would require coal plants and refineries and other heavy industry facilities emitting more than 25,000 tons a year of greenhouse gases to obtain permits demonstrating they were using the best technology available to reduce emissions blamed for warming the planet.

The agency expects to issue the new rules at the end of next month.

"EPA is considering raising that threshold substantially to reflect input provided during the public comment process," the agency said in a statement.

The EPA was responding to a letter sent last week by Senator Jay Rockefeller, a Democrat from coal-rich West Virginia, and senators from other energy states that expressed concerns about the impact on U.S. workers and businesses owners of EPA rules that would cut output of the gases from the heavy industry plants.

On Monday, Rockefeller said EPA's overture was "good progress." Nonetheless, he said he would craft legislation to "provide Congress the space it needs" to consider a "workable" climate policy that "will protect jobs and stimulate the economy."

Sources on Capitol Hill were anticipating Rockefeller could introduce a bill imposing a temporary pause, possibly two or three years, for EPA to issue carbon emission-reduction regulations.

"EPA actions in this area would have enormous implications on clean coal state economies and these issues need to be handled carefully and appropriately dealt with by the Congress, not in isolation by a federal environmental agency," Rockefeller said in a statement.

Senator Lisa Murkowski, an Alaska Republican, wants to permanently bar the EPA from regulating greenhouse gas emissions. An aide said she could demand a vote on her bill in mid-March.

EPA administrator Lisa Jackson did not say how much the threshold might be raised. But she expected that EPA would not put any of the new carbon reduction rules in place before 2011.

The agency does not intend to subject smaller plants to permitting any sooner than 2016, she said.

Several states had been concerned EPA was moving too fast. Last month California, the most populous U.S. state, urged the EPA to slow down implementation of the rules, saying they could hurt a plans to transform its energy system to run more on renewable energy like solar power.

Other states had complained moving quickly could overwhelm their permit offices.

Several environmental groups said the EPA move would create a reasonable timeline to cut emissions.

"Just as it has with other pollutants for 40 years, EPA has now made crystal clear that it will address global warming pollution in a way that benefits both our economy and our environment," said Carl Pope, the head of the Sierra Club.

Senate Weighs Final Push to Move Climate Bill

* Time runs short for 2010 passage of bill
* Senators to receive option paper

February 22, 2010

Reuters - A last-ditch attempt at passing a climate change bill begins in the U.S. Senate this week with lawmakers mindful that time is running short and that approaches to the legislation still vary widely, according to sources.

"We will present senators with a number of options when they get back from recess," said one Senate aide knowledgeable of the compromise legislation that is being developed.

The goal is to reduce U.S. emissions of carbon dioxide and other greenhouse gases that scientists say threaten Earth.

The options will be presented to three senators -- Democrat John Kerry, independent Joseph Lieberman and Republican Lindsey Graham -- who are leading the fight for a bill to battle global warming domestically.

The aide said the Senate's drive for a bill got a boost last week with President Barack Obama's announcement of an $8.3 billion government loan guarantee to help start expanding the U.S. nuclear power industry, a top Republican priority.

"The administration is really putting their money where their mouth is," the aide said.

The Senate trio's success or failure likely will have a profound impact on international efforts to reduce carbon emissions and prevent Earth's temperature from exceeding a possibly dangerous 2 degree Celsius (3.6 Fahrenheit) increase from pre-industrial times.

For Wall Street, the Senate has the power to make or break the start-up of what eventually could be a $1 trillion market for power plant, oil refinery and factory pollution permits traded on a regulated exchange.

U.S. congressional elections will be held on Nov. 2 and there is wide agreement that if the Senate cannot pass a climate bill by mid-year, already hard-edged political partisanship will become hyperactive, making it nearly impossible for Congress to move on much of anything.

"We're getting to the point where I think we need to start seeing senators coalesce around an approach," said Eileen Claussen, president of the Pew Center on Global Climate Change, which wants comprehensive greenhouse gas emissions control.

SKEPTICISM ABOUNDS

There is plenty of skepticism about whether Kerry, who is spearheading the effort, can pull off passage of such a difficult bill in an election year since the bill would increase future energy prices. But supporters are not giving up as they draw parallels to the last major environmental fight.

"In 1990, we had a midterm president, a Mideast war, a banking crisis following a real estate bubble and a recession, yet Congress still passed updates to the Clean Air Act by overwhelming margins," said Representative Edward Markey, the co-author of the Waxman-Markey climate bill that narrowly passed the House of Representatives last June.

Tested over 20 years, those Clean Air Act updates are credited with effectively cutting "acid rain" air pollution through a cap-and-trade system that some now want to employ to reduce the carbon emissions blamed for global warming.

Under cap and trade, companies need government permits to emit an ever-dwindling amount of pollution. Fuel-efficient firms that end up holding more permits than they need can sell them to companies that are bigger polluters.

For carbon dioxide, cap and trade would eventually make the cost of using coal and other dirty-burning fossil fuels so high that cleaner, more expensive energy sources such as wind and solar power would emerge.

In recent months, many conservatives who do not want the federal government to mandate pollution reductions, have seized upon newly discovered errors in scientific reports underpinning the link between human activity and climate problems such as drought, flooding and rising sea levels.

Republican Senator James Inhofe, a leading critic, said the U.N. Intergovernmental Panel on Climate Change had fallen victim to "outright fraud" and deceit. It is further evidence Congress should not rush legislation, he has argued.

SIDE ISSUES

Meanwhile, "so much political juice" is now being expended by U.S. environmental groups on a side-issue to the climate bill, said Frank O'Donnell, president of Clean Air Watch. He was referring to green groups' attempts to stop Republican Senator Lisa Murkowski from advancing her bill blocking the Environmental Protection Agency from regulating carbon emissions, starting with vehicles.

The Obama administration would prefer to let Congress set climate change policy. But if it is unable to, the White House wants the EPA as a fallback.

Graham has talked about cobbling together a "hybrid system" for reducing carbon emissions. Such an approach could gain the support of Midwestern senators who fear U.S. factories could be put at a competitive disadvantage against foreign manufacturers under a cap-and-trade program.

But it also has risks, others say, underscoring splits among Washington interest groups, politicians and others who want a climate change bill.

Robert Shapiro, chairman of the Climate Task Force and an advocate of a carbon tax, said a dual system would not make economic sense and could make for more volatile energy prices.

Factbox: Key 2010 Dates for Climate Debate

February 21, 2010

Reuters - The U.S. Senate is struggling to find a compromise measure to require industry reductions of carbon dioxide emissions blamed for climate change.

A wide-ranging, complex bill likely would require a long debate in the Senate and anything that passes there would have to be reconciled with a much different bill approved last year by the House of Representatives.

There's no guarantee Congress will be able to finish legislation this year, especially with time dwindling before November elections and other bills taking a higher priority.

Following are some key dates to watch for:

SOMETIME IN MARCH

The U.S. Environmental Protection Agency could set forth regulations mandating reductions in vehicles' carbon dioxide emissions. It would mark the first time the federal government would regulate carbon and open the way for broader controls on the 6.4 billion metric tons of pollution. Some states and business groups are already challenging EPA's authority to expand its mandate. If a regulation goes ahead, it could put more pressure on Congress to pass legislation that contains lawmakers' preferences.

MARCH OR APRIL

Senator Lisa Murkowski could try to pass legislation stopping EPA from regulating carbon. She has not yet indicated she has enough votes for passage in the Senate, and the White House says it would work hard to defeat it.

MAY OR JUNE

Senator John Kerry, who is leading the Senate drive for a climate control bill, says he wants a measure debated and passed by the full Senate this spring. If he can't pull it off by then, the initiative could be doomed this year. By midyear, lawmakers running for re-election will be in full campaign mode, with partisanship even worse than usual and it will be harder for lawmakers to cut deals.

NOVEMBER 2

Election Day. All 435 seats in the House and 38 of the 100 Senate seats are up for grabs in an election that will determine whether Democrats or Republicans hold majority power in each chamber in 2011-2012. Even if Democrats hold on, their majorities could be much smaller, making it even more difficult to pass a comprehensive climate bill.