Senate Democrats to offer climate bill

WASHINGTON Tue Sep 29, 2009 7:09pm EDT

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WASHINGTON (Reuters) - A climate change bill circulating in the Senate on Tuesday is slightly more ambitious than one passed in the House of Representatives, but still has many details to be worked out on how to encourage companies to reduce their emissions of greenhouse gases.

The legislation by Senators Barbara Boxer and John Kerry to be formally unveiled on Wednesday aims to reduce smokestack emissions of carbon dioxide by 20 percent by 2020 and 83 percent by 2050 -- from 2005 levels.

A controversial bill that narrowly passed the House in June calls for a 17 percent cut by 2020 in the pollution from utilities, manufacturers and oil refineries -- industries being blamed for global warming.

The 800-page draft was quickly denounced by Senate Republicans, setting up a divisive fight over environmental legislation, similar to the bitter struggle now being waged over healthcare reform. Their opposition underscored the uncertainty over the bill's fate this year.

"Of course not. Never, never, never," said Senator John McCain, when asked by Reuters if he could support the Democrats' bill.

McCain complained that the Democratic bill only paid lip-service to the nuclear power industry. Republicans want to encourage the building of new nuclear generating facilities with additional government aid in the climate bill. They argue it is a necessary tool in expanding "clean energy."

But the Republican criticism also came as an increasing number of U.S. companies were distancing themselves from lobbyists, such as the U.S. Chamber of Commerce, which is opposing legislative action on climate change.

Boxer's Environment and Public Works Committee is expected to continue working behind closed doors to fill in other details before trying to sign off on the bill by the end of October.

FIXED NUMBER OF PERMITS

A central component of the "cap and trade" initiative still undetermined, Republicans complained, will identify which industry sectors are to get a fixed number of free government permits to emit declining amounts of carbon dioxide in coming years.

The "Waxman-Markey" bill passed by the House laid out how many free permits would initially be granted to coal-fired utilities, oil refineries, and certain factories.

According to Republican staffers on the Environment and Public Works Committee, the Boxer-Kerry bill would set a "price collar" on only 1 percent of carbon emissions. They said the floor would be set at around $12 per ton of carbon emissions, with a ceiling of $28.

They complained that the legislation would do nothing to stop the Environmental Protection Agency from also getting involved in regulating carbon emissions for the first time under the Clean Air Act.

Senator James Inhofe, the senior Republican on the Environment and Public Works Committee and an outspoken opponent of climate change legislation, told reporters that he "can't imagine" the bill being debated and passed by the full Senate this year.

He noted that Democrats already were embroiled in a difficult fight over healthcare reform and were not likely to engage in battle on a second front, especially with time running short this year.

A senior Senate Republican aide said that as of now he knew of no Republican senators who would initially support the bill. But as more details are filled in during coming weeks, the aide said some Republicans could join the Boxer-Kerry effort.

Aides to Boxer and Kerry refused to comment on Tuesday on their legislation.

Under "cap and trade," fewer and fewer carbon pollution permits would be issued to companies. The permits that are issued could be traded, or sold, between companies on an as-needed basis.

The Senate Democrats' bill also aims to encourage more "clean vehicles" and to improve airliners' fuel efficiency. It also would help those who suffer job losses from climate control efforts with a "worker adjustment assistance" program.

Like the House-passed bill, the Senate measure aims to protect consumers, especially low-income families, from higher energy prices related to switching from fossil fuels to solar, wind and other more expensive energies.

President Barack Obama is hoping for as much legislative progress as possible this year, before an international meeting in Copenhagen in December to work out new global emission reductions.

(Additional reporting by Tom Doggett, Editing by Russell Blinch and Chris Wilson)

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