US climate bill goes to Senate committee – what can the world expect before Copenhagen?

Publish date: October 26, 2009

Written by: Charles Digges

WASHINGTON – As the US Senate Committee on Environment and Public Works finally kicks off three days of extensive hearings to flesh out the energy and climate bill that squeaked through the House of Representatives in June, climate observers in America are anticipating the shape of the debates to come.

“Bellona wants the Senate to pass legislation that contains deep cuts in greenhouse gas emissions, and to do so soon,” said Jonathan Temple, director of Bellona USA. 

“It is important that the vital issue of climate change is not squeezed off the  Senate’s agenda.”

How the debates progress from putting the US climate bill though committee hearings in the Senate, to how the bill will be watered down or compromised – or even improved – before it is even sent for debate before the entire Senate over the next month will offer the rest of the world a look at how the US legislative process works.

There will doubtless be scowls from European Union leaders, who have by and large rallied to agree to deep emissions cuts – in some cases up to 30 to 40 percent by 2030 – below 1990 levels in Copenhagen in December. The US has so far only backed cuts of some 17 percent in the same time frame.

But in many ways, the EU will be offered a public education in the bureaucracy of reconciling US presidential wishes with legislative, business and private sector possibilities – and this reconciliation process will have an impact on the future of world generations. It will also offer the rest of the world, whose eyes have been on America since Obama’s campaign trail, a look at the kind of deal brokering and system of concessions that attend American politics that many leader nations in the global climate fight do not have to deal with, regardless of Barack Obama’s historic ascent to power.

The hearings
The first day of hearings before the Senate Committee will include testimony from the Obama administration lead speakers on taking up arms against climate change, like Energy Secretary Steven Chu, US Environmental Protection Agency (EPA) head Lisa Jackson, and Interior Secretary Ken Salazar.

Coming days are slated to spotlight utility executives, military representatives, environmentalists, and representatives of think tanks. All have a stake in attempting to shape the bill that will essentially change the way the United States produces and uses energy.

Within the next week, it is likely that Senators John Kerry (D- Massachusetts) and Majority Leader Harry Reid (D- Nevada) will try to bring together all six of the Senate Committee leaders to discuss the legislative agenda for the rest of 2009 and 2010.

But several top Democrats including Agriculture Chairman Blanche Lincoln (D-Arkansas) and Commerce Chairman Jay Rockefeller (D- West Virginia) have rejected Kerry’s strategy. Senator Dick Durbin, the majority whip, said that Senators have not discussed where they stand on the path to 60 votes – the magic number needed to ensure passage of Senate legislation. “It’s way too early for that,” Durbin said.

At the outset, the bill, according to Congress watchers, US media and environmental groups will likely hinge on two large issues that deserve some explanation to Europeans who are grumbling over announcements from the United States that passing comprehensive climate change legislation domestically prior to Copenhagen in December is nearly impossible.

Firstly, US legislators want to know how much climate legislation is going to cost – the main sticking point between earlier congressional efforts at this summer’s climate legislation and the White House.

Issues of cost still unclear
The answers come from three different factions in the Senate: Those who believe climate legislation will strengthen the US economy, a position shared by Bellona; Those who think it will carry a significant but manageable price tag; and those who are certain that passing the legislation will burden an economy already bowing under the weight of economic recession.  And Senators, both Republicans and Democrats want to know who will pay the bill.

The question of cost actually consists of three components, opined the Wall Street Journal. There’s the overall impact on US economic growth – the most recent analysis by the Congressional Budget Office estimated the legislation would lower the US gross domestic product (GDP) by up to 0.7 percent by 2020, the paper reported.

Many university researchers, on the other hand – most notably in a report from the University of California, Berkeley (download PDF at right) say the climate bill’s passage will bring a boost to the ailing economy. Other groups, led by the US Chamber of Commerce – a powerful business lobby against the bill – insist the legislation is poison bringing huge job losses.

Will the climate bill hurt the average family?
Others are concerned how much the bill will affect the average family. Democrats from coal dependent states and those that have other resources are split on this question, which could lead to some defections among Obama’s party. The main concern is for Midwestern US states were coal generates the bulk of electricity – and these consumers and their representatives in the Senate don’t want to see their energy prices spike.

Yet the latest analysis by the US EPA says the House and Senate legislation would not cost the average American household more than about $100 a year (download PDF to right).

Also concerns are specific industrial sectors, noted the Wall Street Journal. Oil refineries are quaking at expected expenses for CO2 emissions. But coal and energy intensive manufacturing are trying to wheedle free emissions permits to soften the economic impact of regulation.

Industry worries and compromises
Then there’s the impact on certain sectors. Refiners, for instance, are worried they’ll face a huge bill. Other industries, such as coal and energy-intensive manufacturing, have been angling to get free emissions permits to limit the economic fallout of the regulation. The Congressional Budget Office, noted the Wall Street Journal, predicts short term job losses in energy intensive energy should the bill pass. But the office also predicts job gains in the clean energy sector, the paper said.

The fight over the costs to industry also includes concerns over tariffs and offsets. Those Senators from manufacturing states say the bill must include protective carbon tariffs on imports from countries that aren’t doing enough to deal with their own emissions – such as China – so American industry can maintain its competitive edge.

Likewise, industries across the board are anxious to make use of the offsets foreseen in the climate bill as offsets are a cheaper than changing the way a given company does business. Environmentalists challenge this point of view, saying offsets are too hard to monitor.

What kind of energy economy does the climate bill foresee?
What kind of energy future the bill entails is as yet unclear, as the bill’s goal introduces confusion over its central purpose – cleaning up the environment or promoting US energy security.

Democrats loyal to Obama are pushing for more renewable energy. The revised Senate and House bill include more support for clean coal – meaning carbon capture and storage (CCS), a notion met with approval by Bellona. But the Wall Street Journal reported that the bill’s clean coal provisions are still a “far cry from the levels of support international experts say is needed to make clean coal a reality.”

The Republican side of the aisle in the Senate is pushing for more nuclear power to cut greenhouse gas emitting energy. But ever since the Obama Administration killed funding for Yucca Mountain, which was to be America’s spent nuclear fuel repository, the economic and safety questions surrounding nuclear have become more complicated.

More nuclear is also an option that Bellona is opposed to. For the time being, the US Energy Department and Bellona agree that the best option is to store nuclear waste on site until a tried and true geologic repository – recognised as the safest long term method of storing nuclear waste – is developed.

Likewise, the nuclear ambitions of the Republicans fall short of their ability to realise them. On average, new nuclear power plants have a starting cost of around $10 billion, and projected dates for their completion routinely come years after their projected launches – all of which makes them ineffective in the current dialogue about developing clean energy strategies quickly.

These are the issues that will need to be resolved if the Senate is to secure the needed 60 votes – both Democrat and Republican – to pass the bill, and this will involve many compromises, many of which are liable to anger Europe.

“In the end, the final version of the Senate energy and climate bill promises to be a very different beast than what’s been unveiled so far,”wrote Keith Johnson, the Wall Street Journal’s environmental blogger.