CLIMATE:

Focus on stimulus, energy bill leaves cap and trade on the sidelines for now

Advocates for climate cap-and-trade legislation couldn't get it any better than this, what with stronger Democratic majorities on both ends of Capitol Hill and President-elect Barack Obama a week away from taking office.

But the economic downturn, coupled with the sheer complexity of the global warming issue, appears likely to push the cap-and-trade debate onto a separate track this year with an indeterminate finish line.

"I don't know what the timetable will be," said House Speaker Nancy Pelosi (D-Calif.) last week when asked about cap-and-trade legislation. "A lot of that will relate to how quickly we get through the recovery, whatever else we're doing, and when the bill will be ready. I don't think it's ready."

For now, lawmakers intent on moving climate and energy issues are putting their focus on lower-hanging fruit, starting with the roughly $800 billion economic stimulus bill that is expected to include an extension of tax credits for wind and solar power and other environmentally friendly items designed to create new "green" jobs.

Democratic leaders also envision taking up an energy bill later this year with items left on the cutting room floor from previous legislative debates, including a nationwide standard for renewable energy.

The early focus on energy and environmental issues has some concerned that Obama and the Democrats will not be able to keep up the momentum when it comes time to write and pass cap-and-trade legislation.

"That is one of my nightmares," Eileen Claussen, president of the Pew Center on Global Climate Change, said last November during a post-election forum on global warming policies.

Environmentalists insist that Obama will keep his sights on a cap-and-trade bill, citing the president-elect's own words from a Nov. 18, 2008, speech where he repeated a campaign pledge to curb heat-trapping emissions 80 percent by midcentury, with a 2020 goal of returning greenhouse gases to 1990 levels.

"It was about as clear a direction as anyone could put forth from the administration about what the priorities are," said Tony Kreindler, a spokesman at the Environmental Defense Fund.

For the Democratic-controlled Congress, the current leadership team for two key committees suggests the push for climate legislation will not be forgotten. Sen. Barbara Boxer (D-Calif.), chairwoman of the Environment and Public Works Committee, and Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), leaders of the House Energy and Commerce Committee, have championed some of the most aggressive cap-and-trade proposals.

"It is literally harder to imagine a better scenario from a progressive perspective," said Frank O'Donnell, head of the advocacy group Clean Air Watch.

But O'Donnell also warned that the economic crisis and Obama's first stimulus package "could still become temporary distractions. I only hope the distractions don't last too long."

Remembering the 2007 energy bill

This would not be the first time that cap-and-trade supporters have seen their issues lose out to other priorities.

Democrats took control of Congress in January 2007 promising action on global warming. Reps. John Dingell (D-Mich.) and Rick Boucher (D-Va.), then the leaders of the House Energy and Commerce Committee, promised a cap-and-trade bill that they even said could get signed into law before President Bush left office.

By July 4 of that year, however, Pelosi was demanding action on an energy bill with lower-hanging fruit. Dingell and Boucher responded by shifting their committee staff's attention over to a package of energy efficiency mandates.

Bush ultimately signed that legislation into law, including a first-in-three-decades increase in the corporate average fuel economy standard. Boucher said it was Pelosi who forced him to shift his focus away from cap and trade. "I didn't move it, it got moved on me," he recalled in an interview last fall.

This time around, several key Democratic lawmakers maintain that they can work on the low hanging fruit and still get to a cap-and-trade bill during Obama's first two years in office.

"My assumption is the new president and the new administration will be key to keeping that momentum going," Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) told reporters in November. "They'll be lining up the initiatives they want to see pursued through the Congress and then be in the business of working through that agenda over the next couple of years."

For now, Bingaman sees several pieces of energy legislation moving along after work is finished on the economic stimulus package, including the renewable portfolio standard and other items dropped during the 2005 and 2007 congressional debates. "Once that's done, I think our prospects for moving ahead and seriously considering and enacting cap-and-trade legislation will be improved," he said.

A senior aide to Markey, chairman of the new House Energy and Environment Subcommittee, explained that other energy-related legislative successes can only help when it comes to the bigger prize of cap and trade. "It makes a cap-and-trade bill cheaper to implement," the Markey staffer said.

"Every watt saved is a watt not burned, is a coal-fired power plant not run. Those are all policy downpayments on global warming," the aide added.

The Environmental Defense Fund's Kreindler said he would welcome the prospect of a federal renewable portfolio standard -- so long as it comes with an intense focus at the same time on cap and trade.

"A lot of the heavy lifting has been done," Kreindler said, referring to last summer's Senate floor debate on a cap-and-trade bill and subsequent talks led by moderate and conservative Democrats. "We're much further along than we were at the start of 2008."

Going for it all

Opponents of cap-and-trade legislation argue that the adoption of the 2007 energy law should serve as a stop sign before pushing for any additional climate measures.

"When it comes to the issue of cap-and-trade legislation, a critical reconciliation is going to have to occur, because most of the carbon cap-and-trade proposals predated by many years all of the new federal and state mandates," said Jim Connaughton, the chairman of the White House Council on Environmental Quality, in an interview last month on the sidelines of U.N. climate negotiations in Poznan, Poland.

Connaughton cited the CAFE standards and improvements in the energy efficiency of home appliances. "The cap-and-trade proposals have been overtaken by quite substantial legislative mandates," he said. "And so some much more careful thought is going to have to be given to the benefit and scope of cap-and-trade legislation going forward."

It is hard to say how much traction the outgoing Bush team's view will have once Obama takes office.

Eric Ueland, former chief of staff to Senate Majority Leader Bill Frist (R-Tenn.), said he can envision climate and energy issues tucked into the economic stimulus bill, followed by a concerted effort in Congress to pass either cap and trade or a carbon tax. "I don't know that you can rule out both," he said.

"After all, you still have the driver of Copenhagen and an expressed commitment to come up with a policy that fits with where the world community is going on carbon," he said, referring to the U.N. conference this December in the Denmark capital, where diplomats hope to reach agreement on the outlines of a new international global warming treaty.

Obama also will have obligations to control greenhouse gases through the Clean Air Act under Supreme Court precedent in Massachusetts v. EPA, a case that ordered the federal government to study anew whether the public health or welfare was threatened by a changing climate.

Former Bush administration Energy Department official David Conover said cap-and-trade legislation has a good chance of moving this year if sponsors opt to slice the issue up among different industrial sectors, perhaps starting with power plants and a carbon-focused standard for vehicle fuels.

"That seems to me to be a path forward that gets you a little away from the big potholes that we were on the last go around with an economywide, $7 trillion bill," Conover said, referring to the Senate measure from Boxer, Sen. Joe Lieberman (I-Conn.) and former Sen. John Warner (R-Va.). "The path forward on economywide is, I think, pretty clearly not one that leads to a bill on the president's desk this year."

Others question the wisdom in sizing up a cap-and-trade bill's prospects so soon, especially given Obama's emphasis on the issue during the presidential campaign. "Let's see what we can do with that," said Kevin Knobloch, president of the Union of Concerned Scientists, regarding the incoming administration's interest in the cap-and-trade issue. "It's perplexing to me that we'd start at this point, even before the inauguration, to discount the possibilities of action on cap and trade."

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