Congress’s impending climate bill: What’s in it?

Elana Schor Contributor
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After weeks of speculation and a game-changing Gulf Coast oil spill, Sens. John Kerry, Massachusetts Democrat, and Joseph Lieberman, Connecticut Independent, plan to unveil their climate and energy legislation on Wednesday. Its political fate, meanwhile, remains inextricably linked to a question that few besides Kerry, Lieberman, and their erstwhile GOP co-sponsor, Lindsey Graham of South Carolina, can answer: What’s actually in the bill?

Offshore Drilling

Washington’s expectations about the climate bill were upended by two unforeseen recent events. First, Democratic leaders’ pledge to take up immigration legislation this year after passage of a stringent new law in Arizona enflamed Graham, who accused them of using him as a political pawn. Soon afterward, the Gulf Coast oil spill prompted several Democratic senators to blast the climate bill’s expansion of offshore drilling, further imperiling the plan’s chances of winning 60 votes.

Graham urged Kerry and Lieberman on Friday to “pause the process” in the wake of the controversies over immigration and drilling, but his colleagues refused to back down. “[W]e all understand Lindsey has been busy with the immigration issue and we understand his feelings on that issue,” Kerry and Lieberman responded in a joint statement, “but during this period we’ve continued working.”

Lieberman has indicated that the climate bill’s core drilling provisions, including increased revenue-sharing for states that approve drilling along their coasts, remain unchanged after the oil spill. But more than 50 environmental groups have signed onto a letter that calls any new drilling incentives “simply not acceptable” in light of the safety risks highlighted by the Gulf disaster.

Obama’s senior energy adviser, Carol Browner, predicted on Friday that the oil spill would increase the chances of signing a climate bill into law this year as voters become more attuned to the benefits of “a different energy plan.” But that rosy view was shot down by Graham, who said “the climb has gotten steeper” for his bill in light of new Democratic resistance to drilling.

Cap-and-Trade: ‘Dead’ … But Alive

The broad outlines of the energy measure have made it into the open, despite the Senate trio’s efforts to keep specific legislative language under wraps. Like the House climate bill that passed in June, the upper-chamber plan would aim to decrease U.S. greenhouse gas emissions by 17 percent relative to 2005 levels over the next 10 years.

That goal matches the framework President Obama agreed to in December at the United Nations climate conference in Copenhagen. To meet its emissions target, the Senate bill would start by reining in pollution from electric utilities before bringing other manufacturers under what’s known as the overall emissions “cap” – the first half of the “cap-and-trade” label that plagued the House version.

The Senate bill is also believed to include the “trade” portion of that moniker, despite Graham’s public declaration that “cap-and-trade is dead.” Utilities would be allowed to conduct limited trading of emissions permits, Graham told reporters last month.

Handcuffs on states and EPA

Kerry and Lieberman’s bill is also said to feature “pre-emption,” a wonkish term with a vivid impact. Pre-emption would effectively bar states and the Environmental Protection Agency (EPA) from acting on their own to limit emissions, whether through regional cap-and-trade programs (already happening in northeastern states) or new regulations for businesses (in the works at the EPA).

The House climate bill struck a compromise by pre-empting EPA authority and giving states a five-year timeout. With the Senate bill likely to go even further, some environmental groups have already yanked their support – even in the absence of legislative details, they say they know weak tea when they see it.

“Any efforts to block the EPA from undertaking its basic, court-ordered mandate to regulate greenhouse gases is something that needs to be opposed vigorously,” Greenpeace spokesman Joe Smyth said in an interview.

No gas tax – they swear

Perhaps the biggest sticking point in the bill is its strategy for cutting transportation emissions, which initially centered on a “linked fee” levied on motor fuels. That concept was shaped in part by oil industry executive, who anticipated passing on the fee to consumers in the form of higher prices.

When the linked fee became tagged as a “gas tax,” however, it quickly became more contentious than any expansion of nuclear power – also said to be in Kerry and Lieberman’s bill – or the still-undetermined question of whether to slap tariffs on imports from nations that do not regulate emissions.

Environmental Defense Fund (EDF) spokesman Tony Kreindler, whose group did not sign onto the critical offshore drilling letter, said in an interview that Senate climate measure no longer features a linked fee.

Still, the White House’s lightning-fast disavowal of the very idea of a fuel fee is a touchy subject for Graham. “I will not let this get blamed on me,” he told Washington Post blogger Ezra Klein. “It would be the worst thing in the world to take the one Republican working with you and make him own the one thing you don’t like.”

And there’s the rub for the climate bill – without one or two more Republican endorsements, Graham’s support from the sidelines is not going to be enough to put Kerry and Lieberman’s bill over the top.

“There’s plenty of time out there to do it this year and plenty of folks out there who want to do it,” Kreindler asserted. But Senate Majority Leader Harry Reid’s, Nevada Democrat, chief energy aide shared a much less optimistic view with reporters last week, warning that the climate bill is unlikely to come up for a floor vote unless 60 supporters are within reach and that the chances of passing any legislation on the issue could wane sharply after this year.