Hope Seems to Dim for Cap and Trade

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Other than maybe Jason in Friday the 13th, nothing has supposedly died and come back to life more often than climate legislation and carbon cap-and-trade. A year ago, thanks in part to fierce opposition from business interests led by the Chamber of Commerce, the cap-and-trade bill cosponsored by Henry Waxman and Edward Markey just barely passed the House of Representatives, 219 to 212. As Eric Pooley writes in his great new book The Climate War, House Speaker Nancy Pelosi had to wield a mean whip to get her members in line for the vote. (Just eight Republicans voted for Waxman-Markey, and 44 Democrats opposed it.)

And in the Senate this year, the path has only been tougher for cap-and-trade. Democrat John Kerry, independent Joe Lieberman and Republican Lindsay Graham worked together for months to build a Senate version of cap-and-trade, despite the daunting need to get at least 60 votes to beat a filibuster—only to see Graham drop out in late April out of anger that Democratic Majority Leader Harry Reid had indicated he might want to move first on immigration reform. Kerry and Lieberman still managed to bring cap-and-trade back from the dead, coming forward with a draft bill in mid-May. But since then, Graham himself has come out against the bill that he helped build, and senator after senator—including Democrats—has said that cap-and-trade simply doesn’t have the votes to pass.

Kerry and Lieberman kept plugging, and many greens hoped that the Gulf oil spill—showcasing just how dirty America’s energy supply really is—would change the underlying politics of climate policy. But a meeting at the White House today between a group of bipartisan senators and President Barack Obama might finally be the last nail in a broad cap-and-trade bill. Senate Democrats at the meeting offered to further scale back their plans to cap greenhouse gases across the entire economy—even though the Kerry-Lieberman bill itself is a less ambitious version of the Waxman-Markey bill that was passed a year ago. Though Obama reiterated his support for putting some kind of price on carbon, senators in the meeting told reporters that he would agree to an even more limited climate and energy bill. “We believe we have compromised significantly, and we’re prepared to compromise further,” said Kerry, in a statement that quickly reverberated around the Twittersphere. (Someone compared him to Neville Chamberlain. OK, it was me.)

As the White House itself said in its statement on the meeting, the President no longer seems to be purely focused on a nationwide carbon cap—the policy environmentalists have long believed is the best way to deal with climate change:

The President told the Senators that he still believes the best way for us to transition to a clean energy economy is with a bill that makes clean energy the profitable kind of energy for America’s businesses by putting a price on pollution – because when companies pollute, they should be responsible for the costs to the environment and their contribution to climate change. Not all of the Senators agreed with this approach, and the President welcomed other approaches and ideas that would take real steps to reduce our dependence on oil, create jobs, strengthen our national security and reduce the pollution in our atmosphere.

What would those other approaches be? Some have raised the possibility of a much more limited cap-and-trade bill that would only cover power utilities, rather than the entire economy as Waxman-Markey did. (In a recent blog post, Michael Levi of the Council on Foreign Relations points out that while a utility-only bill might have some advantages, it faces significant challenges as well.) But even that would be uphill challenge in the Senate—Republicans have made the very term “cap-and-trade” synonymous with “national energy tax,” which is going to make any carbon cap a hard sell while the economy remains in the doldrums. (Of course there was a distant time—like 2008—when many Republicans supported cap-and-trade, but, well, never mind.) It doesn’t help that the political calendar is only going to get more crowded in the runup to November’s midterm elections—the President has already scheduled a major speech for Thursday on immigration reform, a subject that is surely about as hot button as you can get. And in the meantime there are major oil spills, Russian spies, the federal deficit, the collapse of state finances, a new general in Afghanistan and scoring tickets to Stephen Strasburg’s next start for the Washington Nationals. It’s a busy agenda.

Would a weak climate bill even be worth passing? At this point, the likelihood of a Republican resurgence in November—which could put climate and energy legislation out of reach for at least two years—would make many environmentalists take whatever they can get. Indeed, mainstream green groups like the Environmental Defense Fund—which has led the way on cap-and-trade—released statements praising the President for his strong leadership on climate and energy, which frankly seems a little strong. But a weak bill could provide even less revenue to fund the research and development needed to innovate tomorrow’s energy solutions. As Andrew Revkin points out over at Dot Earth, lowering the price of renewable energy and energy efficiency is the other part of the carbon equation—and that’s being left behind by concerns over the deficit and simple lack of political will. Nothing that happened today in the West Wing seems likely to change that.

Update: Senator Olympia Snowe, the Republican from Maine who has occasionally teased greens with the idea that she might support climate legislation, released a statement this afternoon saying…she might support climate legislation. Specifically carbon limits on power plants:

I believe that one possibility is to more narrowly target a carbon pricing program through a uniform nationwide system solely on the power sector which is the sector with the most to lose from the EPA regulations and it’s also the sector in which businesses actually make decisions today based on prices 20 to 30 years in the future.