CLIMATE:

Senate global warming battle shifts onto new turf

The Senate climate debate shifts into a higher gear this week as advocates look beyond the partisan gridlock that engulfed the Environment and Public Works Committee and onto the broader quest of finding 60 votes for floor passage.

Tomorrow, the Finance and Energy and Natural Resources committees dive into the issue with a pair of simultaneous hearings on climate policy.

On Finance, Chairman Max Baucus (D-Mont.) will study the job implications of global warming legislation with testimony from a major labor union, economists, and the nuclear power and electric utility industry. Baucus has said he may hold a markup this year on the trade provisions of a climate bill and address how to distribute greenhouse gas emission allowances among regulated industries.

Up one floor in the Dirksen Senate Office Building, Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) will lead a wide-ranging discussion on legislation options for tackling climate change. Bingaman already passed a bipartisan energy bill (S. 1462) out of his committee earlier this year but remains a key player as lawmakers study whether to take an even broader pass at setting a first-ever mandatory limit on U.S. greenhouse gas emissions.

Both committees are moving forward just days after a bitter partisan battle concluded in the EPW Committee with Democrats voting 11-1 to pass a cap-and-trade bill (S. 1733) despite Republicans spending three days boycotting the markup (Greenwire, Nov. 5).

EPW Chairwoman Barbara Boxer (D-Calif.) did not back down from her decision to deny a GOP request for more U.S. EPA analysis on the bill, a move that prompted widespread complaints from moderate Republicans that sponsors will need if a climate measure is going to overcome an expected filibuster.

"We've been talking a lot about starting over with a blank piece of paper," Energy and Natural Resources Committee ranking member Lisa Murkowski (R-Alaska) said last week after the EPW Committee markup. "I think this might allow for that. If that's the case, that's a positive."

Several influential senators also have welcomed the end of an EPW panel process reflective of the committee's polarized membership, headed by Boxer and ranking member James Inhofe (R-Okla.), an outspoken skeptic on the science of global warming.

"That frees up the Senate, frankly," said Baucus, the lone Democrat on the EPW Committee to vote against the bill. "It frees up all members of the Senate who are interested in climate change, including those on the committee."

Commerce Chairman Jay Rockefeller (D-W.Va.) suggested last week that the climate debate enters a new and more deliberative phase that will be much different than the EPW panel, where Boxer pressed for rapid committee passage ahead of next month's U.N. climate negotiations in Copenhagen, Denmark.

"What they have to understand is that the Senate is not ready to travel at their rate," Rockefeller said. "And that the balance on this is among people like myself who come from coal state and manufacturing states who can't just sort of meet the Copenhagen deadline. We've got to be satisfied that it's a good bill and I'm not at this point."

Majority Leader Harry Reid (D-Nev.) said after the EPW Committee's vote that "there is much more work yet to do" to reach 60 votes on a bipartisan climate and energy bill, which he hopes can then pass through a conference with the House-passed bill, H.R. 2454.

In preparation for that effort, Reid is planning to meet in the next few weeks with the six committee leaders with jurisdiction over the issue: Baucus, Bingaman, Boxer, Rockefeller, Agriculture Chairwoman Blanche Lincoln (D-Ark.) and Foreign Relations Chairman John Kerry (D-Mass).

On a separate track, Kerry, Sen. Lindsey Graham (R-S.C.) and Sen. Joe Lieberman (I-Conn.) are also working on the climate measure via meetings with the Obama administration and senators who have no role on any of the relevant committees. The trio said last week that they had a particular eye on expansion of domestic energy sources like nuclear power and offshore oil and gas drilling.

"I appreciate the committee's work," Graham said of EPW. "Now it's time to find a bill that can make good policy. Environmental policy needs to be good business policy. If it's not, there will never be 60 votes."

Reid has not given any specifics about the timing for the climate legislation, though most acknowledge the debate is almost certain to take place behind the scenes through the end of the year, with a floor battle on hold until at least early 2010.

The Senate will only be in session today and tomorrow of this week. The House will not be in session all week.

Baucus' domain

In the Finance Committee, Baucus provides perhaps the best window into the Senate's chances of passing a climate bill. According to an E&E analysis of the Senate, sponsors remain about 15 to 20 votes shy of the 60 needed to break a filibuster. And some of the key senators who sit on the Finance panel are either on the fence or close to it, including Bingaman, Rockefeller, Lincoln, and Sens. Kent Conrad (D-N.D.), Debbie Stabenow (D-Mich.), Maria Cantwell (D-Wash.), Olympia Snowe (R-Maine.) and Mike Crapo (R-Idaho).

"You can't help but conclude that the Senate Finance Committee is purposely built to find a constructive center in the debate," an environmentalist tracking the climate debate said earlier this summer.

Perhaps the most contentious issue facing Finance involves the distribution of what many analysts say will be hundreds of billions of dollars in emission allocations. Power plant CEOs, hunters and fishers, renewable energy companies, public transit officials, religious groups and foreign aid workers are but a few of the competing interests trying to get a share of the allowances that are necessary for compliance with the new environmental program.

In the House debate, one of the biggest decisions for the Democratic authors involved sending 30 percent of the cap-and-trade program's emission allowances to state-regulated local electric-distribution companies, which are instructed to use any revenue to protect consumers from electricity price increases. All of the utility-sector allowances would be distributed 50-50 between companies based on their historic emission levels and retail sales.

But some Midwestern senators say the House formula is written unfairly to benefit electric utilities on the coasts, and they want it changed to reflect allocations based solely on emissions. "It's going to be changed," Sen. Tom Harkin (D-Iowa), the chairman of the Health Committee, said last week. "It can't stay at 50-50. It won't. It can't."

Baucus has not said exactly what he will do with the allowances, though he suggested last week that he does not plan to start from scratch. "I don't want to say we're going to do something totally different," he said. "I'm respectful of the House allocation."

Trade issues also remain a sensitive topic for the Finance Committee considering its membership represents states with major manufacturing industries that produce iron ore, cement, glass and other energy-intensive goods.

The House bill would order the president to impose an import tax on countries that do not meet U.S. standards of emission reduction, an approach that both President Obama and his 2008 rival, Sen. John McCain (R-Ariz.), have said they disagree with. Pushing in the other direction are at least 10 influential Democrats who want a "border adjustment mechanism," including Rockefeller, Stabenow and Sens. Evan Bayh of Indiana and Carl Levin of Michigan (E&ENews PM, Aug 6).

Kerry earlier this summer said the Finance Committee was looking to change the House language on trade, but he did not go into any specifics (E&E Daily, July 8). Baucus also left himself some wiggle room. "We've got to protect ourselves," he told E&E in July. "But anything I do, I want it to be WTO consistent."

Asked about the House's language, which also includes free emission allowances to trade-sensitive manufacturers, Baucus said, "We have to be sensitive to our own industries, as other countries are sensitive to theirs. I strongly believe that an open trading system benefits all countries. It'd be unwise to retrench."

Baucus last week said he does envision changing the emission targets of the EPW panel's climate bill, though that is something that would now need to happen in Reid's office and not in the Finance Committee.

During last week's EPW panel markup, Baucus floated an amendment that would have lowered the 2020 limit from 20 percent to 17 percent, albeit with a trigger that would allow for stronger emission cuts if developing countries set their own aggressive limits. Because of the Republican boycott, no amendments were formally offered.

Baucus acknowledged that his idea needed further refinement but may be able to serve as a bridge between the climate and trade debates. "That's something we can work out," he said. "Climate change is going to be with us, legislative efforts are going to be with us for a while. It's not going to happen tomorrow. Plenty of time to work on this."

Finance Committee schedule: The hearing is tomorrow at 10 a.m. in 215 Dirksen.

Witnesses: Abraham Breehey, legislative affairs director International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers; Carol Berrigan, industry infrastructure director, Nuclear Energy Institute; Kenneth Green, resident scholar, American Enterprise Institute for Public Policy Research; Margo Thorning, senior vice president and chief economist, American Council for Capital Formation; Van Ton-Quinlivan, director of work force development and strategic programs, Pacific Gas and Electric Co.

Energy and Natural Resources Committee schedule: The hearing is tomorrow at 10 a.m. in 366 Dirksen.

Witnesses: Ray Kopp, senior fellow and director, climate policy program, Resources for the Future; Ted Gayer, co-director of economic studies, the Brookings Institution; David Hawkins, director of climate programs, Natural Resources Defense Council; Jonathan Banks, climate policy coordinator, Clean Air Task Force; Daniel Sarewitz, professor of science & society, Arizona State University.