A group of mostly moderate senators has rallied around a bill to cap carbon emissions, raising the still-long odds that Congress could act on global warming in 2008.
The bill, co-authored by Sen. Joe Lieberman, I-Conn., and Sen. John Warner, R-Va., would combine a market-based system for trading emissions permits with a mandated 15% reduction in greenhouse gas emissions by 2020 from 2005 levels.
By 2050, emissions would be capped at 63% of 2005 levels.
Lieberman's previous climate change bill, written with Sen. John McCain, R-Ariz., never came close to passage. But some political opposition appears to have melted away.
"We've begun to reach that political tipping point," Lieberman said in introducing the bill on the Senate floor this month.
Shifting Positions
Warner has opposed previous efforts to cap emissions. Still, he and at least four other senators who voted against McCain-Lieberman have signed on to the new bill.
Other converts include Elizabeth Dole, R-N.C., Norm Coleman, R-Minn., Tom Harkin, D-Iowa, and Max Baucus, D-Mont.
Baucus threw his weight behind the bill last week. He cited its provisions to "help Montana's coal industry transition into cleaner practices and give farmers a chance to be part of the climate change solution."
Steven Shimberg, an environmental lawyer and former staff director for the Senate Committee on Environment and Public Works, said momentum for climate legislation is growing as its "inevitability becomes more and more apparent."
Many top U.S. CEOs, including GE's Jeffrey Immelt, have endorsed a cap-and-trade system.
But the makeup of the Senate makes it unlikely that there will be 60 votes to override a filibuster next year, Shimberg says.
High energy prices "certainly make it harder" and give opponents another arrow in their quiver, he said.
'Overly Aggressive'
Sen. George Voinovich, R-Ohio, also cast doubt on the Lieberman-Warner bill's viability.
Speaking at the National Press Club last week, Voinovich said that "the bill presents an overly aggressive first phase of emissions reductions that will hit well before we can reasonably expect commercially available technologies to deal with the problem."
The bill's first test could come this week. With Baucus on board, Lieberman and Warner need one more vote for the bill to advance out of their seven-member global warming subcommittee. But even clearing that low hurdle isn't a done deal.
Sen. Bernie Sanders of Vermont, an independent socialist, and Sen. Frank Lautenberg, D-N.J., are both raising concerns that Lieberman-Warner doesn't go far enough.
But Senate Environment and Public Works Committee Chairman Barbara Boxer, D-Calif., has signaled that she wants to get something done, even if it falls short of her ideal.
She has said that Lieberman-Warner -- not Boxer-Sanders -- will be her committee's legislative vehicle on global warming.
One issue central to the debate is the distribution of emissions allowances. While Boxer's bill would auction off most allowances, Lieberman-Warner would initially auction off just 24%, giving out the rest for free.
Some businesses supporting a cap-and-trade system "see economic opportunities" in the awarding of emissions credits, said Ben Lieberman, an energy and environment analyst at the conservative Heritage Foundation.
"They essentially want to be rewarded for efficiency improvements they've already made," he said.
But some business groups remain fierce opponents of mandatory emissions caps.
Paul Cicio, president of Industrial Energy Consumers of America, warned in testimony last week that industrial production would move offshore to places where it is more economical to do business.
"Cap-and-trade climate policy rations energy use and, without an existing abundant supply of low carbon-intensive energy, will significantly impact energy costs and the economy in ways that are impossible to predict," he said.
The New Fed?
Lieberman-Warner tries to address the risk that the economy will be damaged by a cap-and-trade system. Their bill would create a Federal Reserve-style Carbon Market Efficiency Board that could step in and adjust prices if necessary.
The bill also seeks to address the effective tax hike on lower-income families by steering some of the auction proceeds to lower earners.
The Congressional Budget Office estimated that a 15% cut in carbon emissions would "cost the average household in the lowest one-fifth (quintile) of the income distribution about 3.3% of its average income."
Source: Investor's Business Daily
