White House weighing new U.S. CO2 proposal: sources

WASHINGTON Mon Apr 14, 2008 5:07pm EDT

U.S. President George W. Bush walks through the colonnade to make a statement on ''No Child Left Behind'' reauthorization in the Rose Garden at the White House in Washington, October 9, 2007. REUTERS/Jim Young

U.S. President George W. Bush walks through the colonnade to make a statement on ''No Child Left Behind'' reauthorization in the Rose Garden at the White House in Washington, October 9, 2007.

Credit: Reuters/Jim Young

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WASHINGTON (Reuters) - The Bush administration is debating whether to embrace a mandatory system to control U.S. greenhouse gas emissions and could make an announcement as early as this week, industry sources said on Monday.

It was unclear what form the new plan could take, said the sources, who spoke on condition of anonymity due to the fluid nature of the deliberations.

"Clearly, the White House is weighing some new options for addressing climate policy beyond the approaches it has taken to date," one industry source said. "All signs suggest that something is in the works."

Whether the proposal, which could be made in the form of legislation submitted to Congress, would take a cap-and-trade approach to greenhouse gas emissions remained to be seen, sources said.

If President George W. Bush throws his support behind mandatory carbon dioxide regulations, it would be a major departure from his long-held insistence that placing binding caps on emissions would harm the U.S. economy.

White House spokeswoman Dana Perino declined on Monday to confirm rumors that White House action was imminent, though she steered clear of ruling actions out.

Bush is scheduled to speak on Thursday in the White House Rose Garden to recipients of the President's Environmental Youth Awards. Also, administration officials later this week will participate in international climate change negotiations in Paris.

The U.S. Senate is expected to take up mandatory climate change regulations in June.

The United States is the world's biggest greenhouse gas emitter, but the Bush administration to date has adamantly opposed mandatory regulations, citing inaction by other major emitters, like China and India.

Jeffrey Holmstead, an attorney with Bracewell and Giuliani LLP and a former Environmental Protection Agency official, said the White House was not "on the verge of a fundamental shift" in climate change policy.

"I don't think that anyone should be holding their breath waiting for a dramatic new cap-and-trade proposal from the administration," Holmstead said.

Last week, White House officials met with Republicans in Congress to weigh climate change options -- the first such meeting that Republicans have held on the issue.

Perino declined to rule out the possibility that Bush could support a cap-and-trade approach to controlling greenhouse gas emissions.

"We are not necessarily against cap-and-trade proposals," Perino said, noting the administration has supported such efforts as a way of controlling harmful air pollutants from coal-fired power plants, such as sulfur dioxide and nitrogen oxides, precursors to acid rain and smog.

However, Perino noted that cap-and-trade programs "can be very complicated" and said "what we have seen so far from Congress is not something that we can support."

Perino warned of an impending "regulatory train wreck," if the White House and Congress failed to clarify overlapping regulations in the Clean Air Act, Endangered Species Act and the National Environmental Policy Act.

"We're heading down a path that we believe is not reasonable nor sustainable, would hurt our economy and is not good public policy," Perino said.

Sources say Bush administration officials have been increasingly active in reaching out to Democrats and Republicans on Capitol Hill to weigh potential options.

Sen. Harry Reid, the Senate's top Democrat, has indicated he wants the chamber to debate climate change legislation in June.

(Editing by Walter Bagley)

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