Senator Kerry says EPA to start climate bill analysis

The U.S. Capitol is seen at twilight hours in this photo from January 27, 2010.

WASHINGTON (Reuters) - The U.S. Environmental Protection Agency will begin analyzing a compromise climate change bill Senator John Kerry hopes to move through the Senate this year, despite a significant setback his effort has suffered, Kerry said on Tuesday.

The EPA will examine the economic impact the bill would have from provisions aimed at reducing pollution blamed for global warming.

"We are sending the bill to be modeled now with Lindsey Graham's consent," the Democratic senator told reporters.

On Saturday, Republican Senator Graham announced that he was dropping out of the effort with Kerry and Independent Senator Joseph Lieberman to craft a climate change bill, which would also encourage U.S. production of nuclear energy and offshore oil.

Graham said he was angered by Senate Democratic leaders and the White House talking up the possibility of tackling immigration reform prematurely, complaining it could take away time for a climate debate in the Senate.

On Monday, Graham, speaking to reporters, seemed to go further by saying that any discussion of immigration reform this year, even if it is after passage of a climate bill, would be "breaking faith with me."

Senate Majority Leader Harry Reid on Tuesday showed no sign of acceding to Graham, when he told reporters he was committed to passing the climate change and immigration bills this year.

The EPA analysis is an important step in the legislative process. The Congressional Budget Office also is likely to conduct its own analysis, and the oil industry wants the Energy Department's Energy Information Administration to take an independent look.

Previously, the government has found the impact of climate change bills on consumers to be negligible. An EPA study of a bill passed last year by the House of Representatives estimated it could cost between $80 and $111 per year for households. But legislation also could include provisions to help consumers, especially low-income families.

The climate control initiative got a boost from President Barack Obama on Tuesday, when he told wind-power industry workers in Iowa: "I believe that we can come together around this issue and pass comprehensive energy and climate legislation that will ignite new industries, spark new jobs and ... make America more energy independent. Our security, our economy, and the future of our planet all depend on it."

JUNE OR JULY DEBATE IN THE SENATE?

Over the past six months, Kerry, Graham and Lieberman have been writing a bill aimed at reducing U.S. emissions of carbon dioxide and other greenhouse gases by 17 percent by 2020 from 2005 levels.

That goal is in line with commitments Obama made in Copenhagen last December during an international summit that attempted to set new global goals for tackling environmental problems associated with climate change.

Lieberman, asked by reporters whether he and Kerry might unveil their legislation without Graham, said, "We're not even thinking about that.

The EPA analysis of their bill could take more than a month to complete and legislation could not be queued up for a full Senate debate until the results are disseminated.

That would put the climate bill on the Senate floor in June at the earliest, but more likely in July. But that assumes that political divisions, of which there are many in addition to Graham's concerns, get resolved.

Last week, the National Research Council reported that the chemistry of the world's oceans was changing at "an unprecedented rate," rapidly becoming more acidic, because of carbon dioxide pollution.

That change threatens coral reefs and some fish species.

Kerry also has been casting the climate debate in national security tones. He joined veterans of the Iraq war to unveil a clock that counted U.S. revenues Iran would be deprived of as the United States lowers carbon emissions by burning less imported oil.

The clock, adorned with Iranian President Mahmoud Ahmadinejad's picture, is measuring $100 million a day in potential lost revenues to Iran, a major oil exporter that has been engaged in a war of words with Washington over its suspected nuclear weapons program and its alleged human rights violations.

While the United States does not import oil directly from Iran, any reduction in U.S. oil imports could result in more supplies being available on the market, putting downward pressure on prices for a commodity that is traded globally.

(Additional reporting by Timothy Gardner; editing by Mohammad Zargham)