Democrats launch push for climate change bill

WASHINGTON Tue Mar 31, 2009 6:31pm EDT

Southern Company's Plant Bowen in Cartersville, Georgia is seen in this aerial photograph in Cartersville in this file photo taken September 4, 2007. Leading Democrats in the U.S. House of Representatives on Tuesday offered a climate change and energy efficiency bill that would give industry up to 2 billion tons in ''offsets'' to help them meet requirements for cutting greenhouse gas emissions. REUTERS/Chris Baltimore

Southern Company's Plant Bowen in Cartersville, Georgia is seen in this aerial photograph in Cartersville in this file photo taken September 4, 2007. Leading Democrats in the U.S. House of Representatives on Tuesday offered a climate change and energy efficiency bill that would give industry up to 2 billion tons in ''offsets'' to help them meet requirements for cutting greenhouse gas emissions.

Credit: Reuters/Chris Baltimore

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WASHINGTON (Reuters) - Democrats in the U.S. House of Representatives launched a sweeping effort on Tuesday to control greenhouse gas emissions and at the same time help industries that will struggle to meet the proposed environmental requirements.

The draft legislation, which will be considered by the House Energy and Commerce Committee in coming weeks along with other panels, marks the latest attempt by Congress to bring the United States into a global effort to curtail emissions of carbon dioxide and other pollutants.

Many scientists think the growing amounts of pollutants are contributing to extreme weather, melting polar ice and threats to humans, animals and plant species.

"This legislation will create millions of clean energy jobs, put America on the path to energy independence, and cut global warming pollution," said House Energy and Commerce Committee Chairman Henry Waxman.

Chances for a climate change bill being enacted have improved with the election of Barack Obama as president and Democrats' growing majorities in Congress. But it is still likely to be a tough fight, especially in the Senate.

In February, Obama proposed his own climate change initiative and just last week his administration declared that climate-warming emissions are a danger to human health -- a move toward regulating the pollutants under the Clean Air Act.

But the proposal circulated on Capitol Hill by Waxman and Representative Edward Markey would establish a new "cap and trade" regime for reducing emissions of carbon dioxide and other harmful greenhouse gases separately from the Clean Air Act. Proponents think it would be a more targeted way of limiting emissions.

In a cap and trade system, owners of power plants and other industries that emit carbon dioxide would need permits for every ton they emit. Unused permits could be sold to other companies, but overall emissions would gradually drop.

83 PERCENT REDUCTION BY 2050

Under the Waxman-Markey proposal that uses 2005 as a base year, U.S. carbon emissions would have to be reduced by 20 percent by 2020, 42 percent by 2030 and 83 percent by 2050. Those goals are somewhat more aggressive than timetables Obama proposed.

The deep economic recession the United States is going through makes enacting a climate control bill all the harder.

Republicans, who will oppose the legislation in the House, have been eager to point out that at least in the short term, energy prices will rise, hitting consumers and resulting in more domestic job losses.

"Tuesday's cap and trade bill marks a triumph of fear over good sense and science and it couldn't come at a worse time because it proposes to save the planet by sacrificing the economy," said Representative Joe Barton, the senior Republican on the energy and commerce panel.

But Markey, who chairs a special committee to deal with global warming problems, countered: "We will create jobs by the millions, save money by the billions, and unleash energy investment by the trillions."

REBATES AND OFFSETS

Among the proposals aimed at protecting domestic industries are "rebates" to help them compete with overseas companies and up to 2 billion metric tons annually in "offsets" they could claim along with buying permits that push them to emit fewer greenhouse gases. The provision could be particularly important to heavy industry, such as steel, cement and glass.

Total U.S. emissions of carbon dioxide are now around 6 billion metric tons a year.

Such offsets could include an array of activities, such as installing energy-efficient measures, buying forests, investing in a farmer's commitment to non-polluting practices, or even closing a plant.

The legislation, according to the committee, would give the president the power to establish a "border adjustment" program if industry rebates prove insufficient. "Under that program, foreign manufacturers and importers would be required to pay for and hold special allowances to 'cover' the carbon contained in U.S.-bound products," the committee said.

It was unclear whether the proposal would be in line with U.S. commitments in global trade pacts.

Other initiatives in the House proposal are requirements on utilities to produce 25 percent of their electricity from renewable sources, like solar and wind, by 2025 and to take steps to reduce their energy consumption.

Waxman and Markey leave up to the committee the potentially controversial decision of how to allocate permits for industries' carbon emissions under the cap and trade program.

While opposition to the Waxman-Markey bill could ramp up as it moves through the House and more details are filled in, diverse groups gave their early support.

"The discussion draft provides a solid foundation to create a climate strategy that both protects our economy and achieves the nation's environmental goals," said the United States Climate Action Partnership, a coalition of industry and environmental groups ranging from Alcoa and Caterpillar to the Nature Conservancy and the Natural Resources Defense Council.

However, Lou Hayden, a senior policy analyst with the American Petroleum Institute, warned that lawmakers must be realistic with their goals, especially concerning the use of cleaner transportation fuels.

"We worry that if the timelines aren't practical, if they aren't reasonable, you may end up passing along a cost (to consumers) without achieving emissions reductions," Hayden told Reuters.

(Additional reporting by Timothy Gardner in New York; editing by Mohammad Zargham)

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