Sen. Lugar to propose climate bill alternative

WASHINGTON (Reuters) - A senior Republican in the Senate next week will propose energy and climate legislation that aims to cut emissions of planet-warming gases, but with far lower goals than President Barack Obama seeks.

Senator Richard Lugar, whose home state of Indiana relies heavily on dirty-burning coal to power electric utilities, is crafting legislation he says would achieve about half of the 17 percent cut from 2005 levels in carbon emissions by 2020 proposed by Obama.

At international negotiations on tackling global warming, many countries already are criticizing the United States, saying the 17 percent goal is too meek to be effective.

The U.S. Energy Information Administration has said the country's carbon dioxide emissions, which represent about 80 percent of overall greenhouse gases, have already fallen more than 9 percent since 2005. The recession has played a role, along with heavier reliance on natural gas and more efficient use of fuels.

Lugar's legislation would cut U.S. greenhouse gas emissions through a mix of better fuel efficiency for vehicles, using more renewable fuels for those cars, making new homes and commercial buildings more energy efficient and expanding nuclear power generation.

For heavy-polluting coal-fired power plants, they would be excused from investing in expensive scrubbers over the next few years and in return would voluntarily retire the plants in 2020.

Absent from Lugar's bill will be any new "cap and trade" system for carbon pollution permits, an idea that anchors climate change legislation passed nearly a year ago by the House of Representatives and included in a draft bill presented by senators John Kerry and Joseph Lieberman on May 12.

The pollution permits to be traded would put a price on carbon dioxide emissions. That price would rise over the next four decades so that utilities, factories and car companies would have incentives to switch to cleaner-burning fuels.

"Lugar's bill is a main alternative to the divisive cap-and-trade approach," said a press release announcing next week's bill introduction.

NEW URGENCY

Republicans and some Democrats fear that such a mandatory program for cutting carbon emissions would significantly raise consumer prices and result in job losses -- a conclusion challenged by some economic analyses.

In a speech at Carnegie Mellon University in Pittsburgh on Wednesday, Obama placed new urgency on the need for Congress to pass an energy and climate bill.

More specifically, Obama said "putting a price on carbon pollution" was necessary. "The votes may not be there right now, but I intend to find them in the coming months," he said about legislation that has been stuck in the Senate.

The BP oil spill plaguing the Gulf of Mexico has brought new calls from Obama and Kerry to pass legislation promptly.

But the spill, which has gone uncontrolled since April 20, also has hurt Senate prospects. While some Republicans want the climate bill to also expand offshore oil drilling, they know that the timing of such an initiative could not be worse.

As the senior Republican on the Senate Foreign Relations Committee, Lugar has voiced fears that global warming could present a national security threat to the United States as drought in poor countries destabilizes governments.

Also next week, the Senate is set to vote June 10 on a move to prohibit the Environmental Protection Agency from regulating greenhouse gas pollution. The outcome of that vote could have a bearing on how the Senate approaches climate change legislation.

(Editing by Cynthia Osterman)