Heat grows on US Congress over climate

By Andrew Ward and Sarah O’Connor in Washington
Published: April 13 2009 00:07

President Barack Obama’s administration is preparing to ratchet up pressure on Congress to pass climate change legislation this year by declaring its authority to regulate greenhouse gas emissions through the Environmental Protection Agency.
The EPA has been considering its approach to global warming since a Supreme Court ruling in 2007 found it was entitled to regulate carbon dioxide emissions under existing air pollution laws.

George W. Bush’s administration declined to take up the authority but Mr Obama has given the EPA the green light to declare CO2 emissions a danger to public health and welfare.
An announcement could be made this week, according to several environmental groups briefed about the plans. The EPA did not respond to calls.
Regulations would not come into force at once but the declaration would intensify pressure on Congress to pre-empt EPA action by passing its own legislation to curb industrial emissions.
The Obama administration is pressing Congress to set up a cap-and-trade system to regulate emissions and wants progress before United Nations climate change talks in Copenhagen in December to signal US commitment and encourage other countries, particularly China and India, to make concessions.
Draft legislation was unveiled in the House of Representatives this month but the proposals face intensifying resistance from Republicans and some Democrats, amid concern about the economic cost of fighting climate change when the US is haemorrhaging jobs.
The White House originally wanted to push legislation through the fast-track budget process – action that would have made the bill easier to pass – but the Senate voted to block that avenue this month.
As a result, any climate change legislation will need at least 60 votes – including some Republican support – to clear the Senate, rather than the simple 51-vote majority required for budget measures.
Perhaps most alarming for green activists was the sight of 26 Senate Democrats joining Republicans in opposition to the budget route. John Boehner, Republican House leader, said the proposed cap-and-trade system was the “wrong thing to do and the worst possible time to do it”.
Critics have described the plan as a “light-switch tax” that would undermine economic recovery by increasing energy costs for businesses and consumers.
Cap-and-trade, which imposes a monetary cost on carbon dioxide emissions for industrial polluters, is central to Mr Obama’s plan to reduce dependence on fossil fuels and to promote “green technology”.
With projected revenues of $629bn (€477bn, £429bn) during the next decade, cap-and-trade was also important to the president’s $3,600bn budget plan.
Peter Orszag, White House budget director, acknowledges the budget route is now shut off, forcing the administration to seek alternative funding for its signature middle-class tax cuts. But he insists cap-and-trade is “nowhere near dead”.
Democratic leaders in Congress say they remain committed to push for legislation this year, with the House energy committee planning to pass its final blueprint by June, clearing the way for a full House debate during the summer.
The draft bill aims to cut US carbon emissions by 20 per cent from 2005 levels during the next decade – exceeding Mr Obama’s target for a 14 per cent cut – and would require utilities to produce a quarter of energy from renewable sources by 2025.
But Democrats are split between east and west coast liberals, who view climate change as a priority, and those from the blue-collar Midwest who fear cap-and-trade would further weaken the struggling manufacturing sector.
Some recent opinion polls show public sentiment shifting against “green” policies as economic fears mount. For the first time in 25 years of asking the question, a Gallup survey last week found a majority of Americans believe economic growth should be given priority over the environment.
Against this backdrop, political analysts are increasingly sceptical about the chances of legislation this year. “I think, frankly, you can only pass so many large pieces of legislation in any Congress, and when you get too ambitious you start turning away the public,” says Brandon Arnold, director of government affairs at the Cato Institute, a free-market think-tank. “In terms of the politics, it’s probably easier to get a healthcare bill across the finishing line than a cap-and-trade bill.”
Copyright The Financial Times Limited 2009