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Environmentalists savored a long-awaited victory on Thursday when the carbon cap-and-trade bill fashioned by Democratic Representatives Henry Waxman and Edward Markey passed out of the House Energy and Commerce Committee, putting it on the road to becoming a law. Supporters had to withstand more than 400 amendments filed by Republicans during the markup of the bill this week, but it's now possible the U.S. could see climate legislation go into effect by the end of the year. "The bill represents a crucial step forward in addressing the global climate crisis, the need for millions of new green jobs to end the recession and the national-security threats that have long been linked to our growing dependence on foreign oil and other fossil fuels," said former Vice President Al Gore after the bill was passed.

But the environmental movement isn't one big green happy family, and there are those who are unhappy with the Waxman-Markey bill — and quietly, with the general direction the Obama White House has taken on environmental issues. Though mainstream groups like the Natural Resources Defense Council and the Environmental Defense Fund have lined up behind Waxman-Markey, Greenpeace and other dark green groups claim that the bill — which aims to reduce carbon emissions 4% below 1990 levels by 2020 — is too weak. They argue that climate scientists are telling us, with greater confidence, that developed countries like the U.S. need to bring down carbon emissions far more rapidly — at least 25% to 40% below 1990 levels by 2020 — to avert severe warming in the not-so-distant future. "Legislation needs to be based on the science, not based on which lobbyists paid the most," says Phil Radford, executive director of Greenpeace USA. "We haven't taken a single step." (See the top 10 green stories of 2008.)

Groups like Greenpeace may be the aggressive conscience of the environmental movement, but Congress isn't universally green, either — far from it. Waxman, the new chairman of the powerful House Energy and Commerce Committee, faced virtually unified opposition of Republicans and skepticism of many Democrats, especially those who hail from the coal-dependent Southeast and Midwest. And there's the minor fact of the recession, which makes any bill that would raise prices for businesses — as cap-and-trade would for energy, albeit nowhere near as high as its opponents claim — a tough sell in this climate. Even Radford says that Waxman is a "real champion who has done great work for this legislation." (Watch an interview with Energy Secretary Steven Chu.)

Still, there's a nagging worry among more moderate groups as well that what has made the Waxman-Markey bill politically passable may have rendered it all but toothless. To calm the fears of the fossil-fuel industry, Waxman reduced the amount of carbon allowances that would be auctioned off to companies, and would give more of them away for free. (In cap and trade, companies are given the right to emit a certain amount of carbon — called allowances — and must reduce emissions below that level by the target date, or purchase offsets to compensate.) The revenue from auctions could have been used to fund alternative-energy research and development — in fact, Obama's 2010 budget dedicated $15 billion a year from a carbon auction to energy research. But an analysis by the Breakthrough Institute indicates that Waxman and Markey would generate as little as one-twentieth of that amount for R&D — just 5% above the current energy research budget. "We should be spending billions on R&D for new technologies," says Michael Shellenberger, president of the Breakthrough Institute. "We're not."

There's also the possibility that Waxman-Markey's carbon cap may not be as tight as it appears. The bill includes provisions that allow capped polluters to purchase carbon offsets — usually through funding projects elsewhere that reduce carbon, like reforestation. Up to 1 billion tons worth of those offsets can be done by U.S. companies in international projects each year, a limit that the Environmental Protection Agency (EPA) can raise to 1.5 billion tons if needed. Offsets are good in theory — CO₂ is a universal pollutant, so a ton of carbon reduced anywhere in the world is as good as a ton reduced in the U.S. — but in practice many have proven to be little more than hot air.

Another analysis by the Breakthrough Institute found that if all those offsets were used — and if buying offsets is cheaper for U.S. companies than paying to reduce their own emissions — actual carbon emissions in the U.S. might not fall for years, even though the country will be operating under the Waxman-Markey cap. The benefits could be largely illusory, and the climate would keep warming. Actual emissions out of the U.S. might not dip below the levels they would be without the cap until 2030. "Let's be clear — it's not a binding cap," says Shellenberger. "Maybe people will want to believe in it so badly that they will ignore the fact that it does not require real emission reductions in the U.S. until 2030."

The fact that the Waxman-Markey bill passed out of the energy committee and seems likely to pass in the House (the 60 required votes in the Senate will be a higher hurdle) is still a victory for environmentalists and the climate. At the very least, it will give the U.S. a bargaining chip at the upcoming U.N. climate summit in Copenhagen this December, and some of those international offsets could go to slow the frightening rate of tropical deforestation in developing countries — definitely a worthy cause.

The political reality is that the U.S. — and the ruling Democratic Party — includes more than just the green coasts, and any bill that can satisfy California and Kentucky will need to be a compromise. "The House Energy and Commerce Committee achieved something extraordinary — passage of a bill that sets us on a path to tackle climate change, drive our economic recovery and advance our energy independence," said Eileen Claussen, president of the Pew Center on Global Climate Change, after the bill passed.

But the very reason that Waxman and Markey made it through the energy committee could be that, in the end, it will be too weak to make much difference. Rich Boucher, a Democratic Representative from West Virginia who pushed hard to water down the bill, reassured his local paper that the act wouldn't slow down the state's vital coal industry. The offsets "would enable electric utilities like American Electric Power to invest in forestry, agriculture and projects like tropical-rain preservation in order to meet with their CO₂ requirements," Boucher told the Bluefield Daily Telegraph on May 16. "They can comply with the law while continuing to burn coal." If Waxman-Markey can't slow down the coal industry — the single biggest source of greenhouse-gas emissions in the world — today's green celebrations will be just as unsustainable as the legislation itself.

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• Bryan Walsh
• Environmentalists got a long-awaited victory on Thursday when a carbon cap-and-trade bill took a step toward becoming law, but some worry it won't have a meaningful impact on U.S. emissions