LOBBYING:

Some see U.N. 'buzz' fueling renewed Hill climate push

Talk about climate policy at the U.N. General Assembly yesterday gave lobbyists new ammunition and fresh concerns as they try to sway senators crafting climate legislation and those likely to cast swing votes.

Lobbyists for coal and utility company interests, as well as those working for renewable energy and environmental concerns, said parts of what was said at the United Nations bolstered arguments they are making to lawmakers.

After a period of seemingly exclusive interest in health care policy in the Senate, lobbyists said they see the spotlight returning to climate with the U.N. Summit on Climate Change yesterday, the Major Economies Forum this week and the G-20 summit in Pittsburgh tomorrow and Friday.

"The buzz is very helpful," said Ruth Smith, vice president of government affairs for Alstom, a France-based company involved in U.S. carbon-capture projects. "It's what people are talking about. It's refocused everybody's attention that this is an issue that needs to be addressed."

Lobbyists paying attention to the U.N. climate summit listened for statements that underscored points they are making with lawmakers. There were messages beneficial even to interests that want conflicting elements in climate legislation. For example, while China said it would reduce emissions, it did not commit to mandatory cutbacks, a point one coal lobbyist said he was making on Capitol Hill. Meanwhile, those wanting Congress to enact policies that drive renewable power development said their arguments have renewed resonance.

"The engagement of the world leaders in talking about climate change ... is helpful in raising the profile of the issues and making members of Congress aware of the significant role they can play in helping establish the United States' position as a leader," said David Gardiner, senior adviser to the Energy Future Coalition, whose members are business, labor and environmental groups promoting a transition to a greener energy economy. "For the U.S., it raises the question, what role do we want to have in the world?"

Because lawmakers will act, at least partly, based on what they think their constituents want, international gatherings this week also put the issue back in front of voters, Gardiner said.

"This event at the U.N. helps raise the awareness of the American public," he said.

Eyes on China

China played a major role at the United Nations, and it also is at least a partial focus of some lobbyists.

Issues raised by China and others at the international level have the potential to affect how legislation treats domestic utilities, said Mark Menezes, partner at Hunton & Williams, which represents American Electric Power Co. Inc., Duke Energy Corp., Southern Co., the National Association of Manufacturers and other utilities and trade groups.

There could be heightened concern about carbon caps for U.S. manufacturers that have to compete internationally, particularly if China and other developing countries do not pass mandatory pollution targets, Menezes said. Senate lawmakers might want to craft policies to help those industries, he said, but that might hurt utilities.

The House-passed climate bill set up a program that caps carbon and lets businesses buy and sell pollution allowances. The House measure also would give away a large portion of those allowances in the early years of the program, and 35 percent of the free allowances would go to utilities. If the Senate decides to reallocate free carbon emissions credits, that could hurt utilities, Menezes said.

"When you introduce and call attention to the interaction with the international community" on trade, Menezes said, "that sets the stage" for giving those industries more allowances.

"Where will the 'more' come from?" Menezes said. "They may come from domestic energy. They've got to come from somewhere."

Members of the Senate Finance Committee, which has jurisdiction over trade, likely were "listening very keenly" to what was said at the United Nations, Menezes said.

"I'm going to be reminding folks that while we need to certainly have a robust manufacturing base, the function of the allocation formula [in the House bill] is to offset increased costs" for electricity users, he said.

Menezes, who worked as chief counsel to the House Energy and Commerce Committee from 2003 to 2006, said he is also talking with lawmakers about the risks in passing a bill quickly just to have something to show at the U.N. climate conference in Copenhagen this December. That bill could lock the United States into policies other countries dislike, such as help for manufacturers that export. That could be seen as a tariff, he said.

"I tell people there's no value in rushing to judgment, especially if the end product is going to create more problems than solutions," Menezes said.

But Annie Petsonk, international counsel for the Environmental Defense Fund, said she tells lawmakers they need to have something to show in order to have negotiating power.

Petsonk, who was at the U.N. General Assembly, said industry representatives also at the event want Congress to pass a "climate change framework" that will give them guidance for the future.

The statement by Chinese President Hu Jintao that his country would cut carbon dioxide emissions relative to economic growth helps those pushing Congress for climate legislation, Petsonk said.

"China's starting to act," Petsonk said. "We are shortly going to be in a scramble to catch up."

As well, she said, other countries at the United Nations said they were interested in stopping destruction of forests and in restoring forests. That buffers the platform of the U.S. Climate Action Partnership, an alliance of business and environmentalists that calls for allowing businesses to invest in international reforestation projects in place of paying for carbon emissions.

While some coal lobbyists are arguing that China's lack of mandates means the United States should use caution on any requirements, other lobbyists will be making opposite points.

"We shouldn't be worried about where China is coming from," said Gardiner, adviser to the Energy Future Coalition. "These other countries will be interested in moving quickly once they see us move, because they'll want to catch up."

Gardiner's firm, David Gardiner & Associates, also lobbies for the Pacific Forest Trust and for Ceres and Recycled Energy Development, both of which are companies working on renewable energy. As he talks to lawmakers, he is pushing for energy efficiency measures, including a mandate that utilities increase their efficiency. Sens. Chuck Schumer (D-N.Y.) and Bob Menendez (D-N.J.) want to add that to climate legislation, possibly through an amendment, Gardiner said.

Gardiner is also talking to senators and aides about offering incentives for energy efficiency in a program that caps carbon and lets businesses buy and sell pollution credits. The House bill gives away a large portion of allowance credits in the early years, and he wants some of those allowances to be given to utilities that deliver energy efficiency gains.

Other lobbyists said they did not think the U.N. gathering would affect what happens with climate legislation, because "all politics is local."

"The decision members make about climate change will be driven by how they and their constituents perceive the threat of climate change," said Jim Slattery, an associate with Wiley Rein and a lobbyist for the American Natural Gas Alliance, a trade group.

"The other driving concern will be the cost of the solution in their state," Slattery said. "In certain areas, the cost will be very high and the perceived threat [of climate change] is not significant."

While Gardiner said the United Nations put climate back in front of the American people, Slattery doubted it would have much effect.

"Some people, but not anywhere near the majority, care what the U.N. has to say about the environment," Slattery said. "After years of ridicule, the U.N. is trying to restore its reputation, but it has a long way to go. I do not believe American policymakers look to the U.N. for expertise on the environment. Certainly, they will not rely on the U.N. as a main source of information on environmental issues."

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