Democrats pose threat to President Obama’s cap-and-trade climate Bill

Giles Whittell in Washington

Less than ten days after claiming a breakthrough on climate change in Copenhagen President Obama is facing a mutiny from senior Democrats who are imploring him to postpone or even abandon his cap-and-trade Bill.
Democratic Senators, fearful of a drubbing in the mid-term elections next year, are lining up to argue for alternatives to the scheme that is the centrepiece of the carbon reduction proposals that Mr Obama hopes to sign into law. With the Congressional battles over Mr Obama’s healthcare reforms fresh in their memory senior Democrats are asking the Administration to postpone the next big climate change push until at least 2011.
Senators from Louisiana, Indiana, Nebraska and North Dakota, some with powerful energy companies among their constituents, are falling out of love with the idea of a large-scale cap-and-trade scheme — which seeks to allocate tradeable permits to major polluters — in favour of less ambitious proposals that put jobs and the economy first.
Each of their Senate votes is vital for any climate change Bill to have a chance of being passed, and a firm American commitment to cap and trade is essential for similar carbon reduction mechanisms to be effective on a global scale.

Asked if she has urged the White House to abandon cap and trade — at least until after the mid-terms — Senator Mary Landrieu of Louisiana told the Politico website yesterday: “I am communicating that in every way I know how.”
At least five other high-ranking Democrats have lobbied the Administration in similar terms. Senator Kent Conrad of North Dakota said that winning passage of climate change legislation in an election year had “very poor prospects”, and Senator Ben Nelson of Nebraska said that he would “just as soon see [climate change] set aside until we work through the economy”.
Even more significant — as indicators of the majority party’s resolve to pass climate change legislation in the face of almost unanimous Republican opposition — were remarks from Dick Durbin, the Senate Majority Whip, and John Kerry, the Massachusetts Senator who is in the process of drafting a climate change Bill favoured by the White House.
“At this point, I’d like to see a complete Bill but we have to be realistic,” Senator Durbin said. Senator Kerry, speaking at the Copenhagen climate conference this month, said: “I can’t tell you the method or the means by which we might price carbon. We haven’t resolved that issue yet.”
Proponents of cap and trade argue that allowing polluters to trade carbon permits gives them a powerful incentive to emit less than the maximum imposed by the cap — and ensures that these emission reductions are achieved by the most cost-effective means available, whether by investing in new, clean technology at home, or in offsetting schemes in developing economies where greater reductions can be achieved per dollar spent.
Critics of the system point to teething problems in the European pilot scheme, begun under the auspices of the Kyoto Protocol, when the price of carbon collapsed because of excessive free allocations of carbon permits to big, politically connected polluters such as the power generation industry.
Mr Obama has been a personal convert to cap and trade since witnessing the success of a scheme limited to the control of sulphur dioxide emissions in the 1990s. The creation of a market in tradeable sulphur dioxide permits cut emissions of the gas so swiftly that the acid rain it produces has disappeared from the Midwest as a serious environmental issue.
Congress will return from its winter break with healthcare reform unfinished, Democrats wary of any new proposals that can be presented as a further burden on the economy and Republicans eager to depict cap and trade as just such a burden.
The official position of the White House remains that “a cap-and-trade mechanism is the best way to achieve the most cost-effective reductions” — but it is not yet embedded firmly in the Senate Bill being drafted by Senators Kerry, Lindsey Graham and Joe Lieberman.
That Bill is one of nine competing proposals before the Senate and while most Democrats can be relied on to support it, a half-dozen defectors would leave the party short of the 60-vote majority that they need to overcome a Republican filibuster.
Senator Graham, a Republican, has said that he believes others from his party can be won over. If so, they have gone to ground.
Senator John McCain, once a vocal supporter of cap and trade, now wants huge federal backing for the nuclear industry in return for his vote. Senator Mike Johanns of Nebraska has called the scheme “a death sentence” for farming.
Mr Obama put his political prestige on the line in Copenhagen to reach agreement on a pact to curb carbon emissions while trying to shore up his domestic flank amid rising scepticism about a new climate Bill in the US.
He declined to offer new sweeteners to get a deal, rebuked China’s reluctance to allow outside scrutiny of action on greenhouse-gas emissions and warned developing states that they could forget aid that had no strings attached.
Lobbyists count the cost of power
Senator Mary Landrieu (Dem — Louisiana)
Louisiana is a large oil and gas state and Ms Landrieu has fought hard for energy interests during her 12 years in the Senate. She was listed as one of a “Dirty Dozen” legislators by the League of Conservation Voters and was described in a local newspaper as “the most fervent pro-drilling Democrat in the Senate”.
About 14 per cent of crude oil that is imported by the US comes through the Louisiana Offshore Oil Port, a deepwater facility off the state’s coast
Senator Kent Conrad (Dem — N Dakota)
North Dakota is a leading coal state, with coal-fired power stations providing about 93 per cent of its energy production. Large oil reserves were discovered in the state in the 1950s. Much of the state’s economy is also based on agricultural production — a sector that would be hit particularly hard by an increase in the price of fossil fuels. Mr Conrad has poor environmental credentials. He voted against the American Clean Energy and Security Act and called for an increase in oil and gas drilling
Senator Ben Nelson (Dem — Nebraska)
Nebraska has more than 47,000 farms, and is an important agriculture state. Mr Nelson sits on the Senate Agriculture Committee and has in the past vigorously defended the interests of farmers, arguing that climate change legislation would drive up the cost of electricity and damage the agriculture sector.
He said: “Every farm-state senator is aware of what the cap-and-trade proposals could do to their agriculture base.”
Sources: Grist; US Department of Agriculture