Business Times - 26 Feb 2010
US climate change legislation loses puff
By LEON HADAR
EVEN before the electoral loss that the Democrats suffered in the Massachusetts special Senate race, depriving them of their filibuster-proof majority of 60 seats, most political analysts seemed to agree that the climate change legislation mandating industry reductions in greenhouse gas emissions was facing serious obstacles on Capitol Hill.
Although the legislation was promoted by the White House for most of the year, public opinion polls suggested that many Americans, pained by the economic recession, were concerned that it would lead to a rise in energy prices. Moreover, the same polls also indicated that less than 30 per cent of American voters regarded global warming as a top policy priority now.
Thus, while the Democrats in the House of Representatives were able to win a narrow approval for an energy bill that included a cap-and-trade mechanism in it - requiring companies to reduce their emissions of greenhouse gases and to obtain trade permits for carbon dioxide emission - the prospects for a passage of similar legislation in the more conservative and pro-business Senate seemed dim. If the odds were that the Senate was not going to pass this legislation before the Massachusetts Republican victory, it is certainly not going to get approved after it.
As Congress and the White House prepare for the critical mid-term Congressional election, Republican and several Democratic lawmakers have made it clear that they were not going to support any comprehensive energy legislation along the lines proposed by the Obama administration and its Congressional allies.
This is not to say that President Barack Obama is giving up on his climate change agenda altogether. During his recent State of the Union Address, he attempted to reframe the debate on the energy legislation by insisting that it would accelerate the momentum towards economic recovery by helping to create new jobs in green industries and strengthen US competitive advantage in the global markets. He also pointed out that China was making significant progress in developing its own clean-energy industrial sector.
Mr Obama and his aides are now preparing a last- minute effort to win enough votes in the Senate in order to pass a modest version of the energy bill before the November election. The administration is arguing that the legislation would not only lead to a reduction in greenhouse gas emissions, but that it would also respond to the needs of US businesses.
Mr Obama is trying to reassure senators representing coal-producing states that creating incentives for companies to shift to efficient technology and clean fuel such as natural gas would not damage the economy in their states.
As well, Mr Obama has proposed to provide loan guarantees for nuclear power and for the use of clean fuel, ideas that have won some support among leading Republican Senators.
The White House seems to be hoping that it would gain bipartisan backing in the Senate for this energy legislation that would set less ambitious goals than the Bill approved by the House.
It would not include a cap on all industrial emissions, but instead limit electric utility emissions while setting basic clean energy standards. And it would promote nuclear energy and clean energy technologies such as solar and wind power.
One good reason that the Republicans could support such a bill would be their concern that the US Environmental Protection Agency (EPA) would move ahead to regulate carbon emissions if Congress does not pass legislation to do that. During George W Bush's term in 2007, the US Supreme Court ruled that the EPA had the authority to regulate greenhouse gases under the existing Clean Air Act.
(Of course, lawmakers could block the EPA acting under the existing Clean Air Act by denying money for such an effort as the two chambers have to authorise the spending legislation that funds federal agencies.)
In any event, a failure by Congress to include mandatory reductions in carbon dioxide emissions across the economy could be perceived as a major blow to international efforts to deal with climate change. And it could also ignite opposition from some business sectors.
But from the White House's perspective, a modest energy bill would be better than no bill at all. It seems Mr Obama is no longer as ambitious as when he took office just over a year ago.
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