Call me Pollyanna, but I think the chances are better than even that at some point this year, President Obama will sign an energy bill that at least takes baby steps toward making carbon polluters pay to pollute. This is based on years (OK, decades) of Washington watching, and the vindication of my sometimes-lonely belief that Obama would ultimately sign a major health reform law.
Doomsday scenarios – legislation tied to the tracks, the train barreling ever closer, no hope of survival -- are always tempting when it comes to complex issues like health policy, climate change and energy. That's especially true when the time frame narrows to a few months before elections that could reverse the majority in one or both houses of Congress. Nor is there any guarantee that meetings like the energy confab Obama is planning with senators of both parties will go smoothly or produce bipartisan results. In fact we've seen the opposite.
Still, this meeting (initially scheduled for Wednesday, but now postponed as a result of the McChrystal flap) will include several Republican senators who have expressed interest in various aspects of energy policy, and who could help broker a compromise acceptable to others. And the BP oil spill has revived prospects for action on energy this year. "This has to be a wake-up call to the country," Obama said Tuesday. He urged the Senate to seize the opportunity to "move forward on something that could have enormous, positive consequences for generations to come."
1. The Senate does nothing. This is highly unlikely. Many lawmakers in both parties want to spur investment and jobs in the clean-energy sector. And many would like to use an energy bill to respond to the BP oil spill with provisions such as higher liability caps and stiffer drilling safety regulations.
2. The Senate passes the comprehensive energy and climate bill sponsored by Massachusetts Democrat John Kerry and Connecticut independent Joe Lieberman. The measure phases in a full-fledged cap-and-trade system that limits carbon emissions and allows industries to buy and sell pollution permits. Although many of those industries helped craft the bill, conflicting regional interests would likely drain support for this package. And that would be on top of a blockade of GOP opposition. Some evidence, such as an EPA analysis this month, points to a minor cost impact on families. But Republicans call the bill "cap-and-tax" and a job killer. Prognosis: Unlikely.
3. The Senate embraces the 39-page CLEAR Act introduced by Washington Democrat Maria Cantwell and Maine Republican Susan Collins. Fossil fuel producers and importers would buy "carbon shares" at monthly auctions. Three-quarters of the auction revenue would be refunded to U.S. residents and the rest, they write, would "finance clean-energy research and development; help reduce emissions in agriculture, forestry and manufacturing; and provide transition assistance for workers and communities in carbon-intensive regions."
One problem with Cantwell-Collins, according to some environmentalists, is that it would rebate the same amount of money to people regardless of how much they pay for power – and people in the Midwest pay more than people elsewhere. You could create a formula to make it more fair, but then the bill would no longer be a simple 39-page alternative to Kerry-Lieberman. Also, the main driver for reducing emissions is incentives financed by the 25 percent share of auction revenue. But there is no guarantee that Congress will use the money that way.
4. The Senate passes a limited bill that nudges the country toward energy conservation and clean energy, but doesn't put a price on carbon. One proposal from Indiana Republican Richard Lugar would require that new homes, businesses and appliances use less energy, and encourage states and utilities to phase out coal plants in favor of more nuclear and renewable power. Another bill, from North Dakota Democrat Byron Dorgan, Oregon Democrat Jeff Merkley and Tennessee Republican Lamar Alexander, would offer incentives to move toward plug-in electric cars and trucks. A third alternative was sponsored by New Mexico Democrat Jeff Bingaman and approved by his energy committee on a bipartisan 15-8 vote (two Democrats voted no, four Republicans voted yes). Among other things, utilities would have to produce 15 percent of their electricity from wind, solar and other renewable sources by 2021.
The energy policy consulting firm Garten Rothkopf says the Bingaman and Lugar bills will be the starting point of Senate debate. But will they be the end point? Daniel J. Weiss, climate strategy director for the liberal Center for American Progress Action Fund, says an energy-only package is fiscally unrealistic. "There's no mechanism to pay for the nuclear, renewable and clean-car programs that such a bill would create," Weiss said. Some revenue from putting a price on carbon pollution could fund clean energy programs, he said, "and still return the bulk of the money" to utility customers to offset any increase in power prices.
5. The Senate passes a package that includes some or all of the options in No. 4, plus a carbon emissions cap on utilities only. The White House floated that idea over the weekend and it is not thrilling to environmentalists. The World Wildlife Federation, for instance, has called for "a firm cap" on all carbon pollution. But a utilities-only cap could attract some moderate votes, and could be expanded to other industries later. Later could be as soon as this fall, in a House-Senate conference committee.
6. Negotiations between the Senate and the House produce a combined bill that's tougher on carbon than the Senate bill, and it passes in a lame-duck session after the midterm elections. The lame-duck aspect seems likely because the Senate will have to work fast just to pass its own bill before an August recess, and House-Senate negotiations could take months. As for eventual passage of a stronger bill, that's not out of the question. Candidates will be done eviscerating each other on the campaign trail. The ads will be off the air. Some senators and House members will be within weeks or even days of retirement, whether voluntary or forced. All of that gives people more flexibility in how they vote.
Even if Republicans sweep control of both chambers and are poised to take over in January, end-of-year energy action may not be dead. That's because out in America, people want to see changes. Republican strategist Frank Luntz has released research that shows broad bipartisan support for holding polluters accountable and for ending the U.S. addiction to foreign oil. Many polls show majorities across party lines think the government should regulate emissions to reduce global warming. It all comes down to politics: Whether cap-and-trade – a market-driven idea once supported by prominent Republicans – can be transformed into something smaller, simpler and more appealing to fence-sitters once the heat of the election season has cooled.
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