President Barack Obama loves to talk about the great promise of energy reform, but all it takes is one glance down Pennsylvania Avenue to get a sense of the pitfalls of such ambitious designs. That was especially clear on Tuesday, as Congress ran both hot and cold on legislation to fight global warming.
The House produced a long-awaited bill to regulate 85% of U.S. greenhouse-gas emissions, anteing up for what promises to be long, high-stakes negotiations with the Senate and business groups alarmed at the $1 trillion price tag that some estimate such an effort could entail. The effects of the already intense lobbying were felt across the Capitol, where the Senate the same afternoon passed by an overwhelming margin an amendment resolving that any energy legislation should not increase electricity or gas prices. As it stands now, energy-price hikes are unavoidable under most of the climate-change plans swirling around Congress, including the draft introduced Tuesday by House Committee on Energy and Commerce Chairman Henry Waxman and Representative Ed Markey, chairman of the Subcommittee on Energy and Environment. (See the top 10 green stories of 2008.)
The sweep of the Waxman-Markey bill, known as the American Clean Energy and Security Act, is massive. It includes provisions to require that a quarter of U.S. power production be based on renewable energy by the year 2025; investments to facilitate mounting those new energy sources onto the grid; incentives for green buildings, appliances and vehicles; and an ambitious schedule to reduce greenhouse gases 20% below 2005 levels by the year 2020. The goals are even more ambitious than those in Obama's plan, which calls for only a 14% reduction in the same period — and that may well be the point. While it's hard to envision such a unabashedly liberal climate-change proposal passing Congress in the current climate, it could provide some much needed cover for the Administration by making its goals seem modest (and moderate) by comparison. (See a graphic on the global effects of climate change by 2020.)
"I don't think what [Waxman] is proposing will get 60 votes in the Senate," said Senator Joe Lieberman, a Connecticut Independent who has championed global-warming legislation for years. "The early targets are high — higher than the Senate will accept and higher than what we can do, because they impose too much of a burden, particularly on people in states that burn a lot of coal or produce a lot of electricity."
Recognizing that their bill was just an opening gambit, the two House Democrats notably left open one of the most controversial questions: whether, under a carbon cap-and-trade system, to auction off pollution credits to companies, as Obama's plan would do with 100% of them, or to give away some or all at no cost. If even a portion of the credits are auctioned off, the scheme could produce hundreds of billions of dollars in revenues, since almost every big company in America would need to buy the credits to initially comply with the more stringent standards. But most Republicans and many Democrats are demanding those potential funds be returned directly to consumers to help offset higher energy bills as utilities pass along to them the cost of modernizing. The Obama plan, however, envisions using 20% of these funds to pay for investments in green technologies and green jobs. "My first priority is that the money goes back to help those who will see their costs increased, whether it's consumers or manufacturers," said Senator Debbie Stabenow, a Michigan Democrat who voted for the amendment Tuesday.
At the same time, the Senate is also expected this week to consider other energy amendments to the budget resolution being crafted. The House version of the budget, which is just a rough, nonbinding blueprint for Congress' spending priorities in the coming fiscal year, includes a provision that would allow health-care legislation to pass the Senate with a simple majority of 51 votes. Democrats have uniformly said they have no intention of piggybacking an energy bill in the same way, though the provision is sufficiently vague to allow for such a move. Just in case Democrats change their minds, an amendment being offered this week by Nebraska Republican Mike Johanns would bar the inclusion of climate-change legislation in the final budget.
The jockeying around these amendments in the Senate — which are nonbinding, like the overall budget plan — speaks to how intense the energy-reform maneuvering is already. The fact that the amendments — several more of which are in the pipeline — are coming through the Senate shows the impatience of members of the upper chamber, since the Senate will most likely wait for the House to act rather than draft its own bill. And there remain many holes to be filled in the House bill. The Waxman-Markey bill, for instance, doesn't tackle nuclear power, a key issue for Republicans. And it doesn't set specific timetables for greenhouse-gas reductions or address international concerns about how the U.S. would handle climate change across borders.
"I think the process here will be informed to some extent by what happens in the House, and we'll learn from what they're trying to get done," said Senator Tom Carper, a Delaware Democrat and longtime sponsor of climate-change legislation in the Senate. "My hope and belief is, by the time we break for August recess, we'll have had the opportunity to bring the bill to the [Senate] floor and hopefully start debating it."