Climate bill proponents agree to concessions

Published 12:04 pm Wednesday, June 24, 2009

WASHINGTON — An agreement on a string of demands sought by farmers and lawmakers from rural areas erased a major obstacle facing a massive climate bill that for the first time would limit the pollution linked to global warming and redirect the nation toward greater use of clean energy.

With some Democrats still worried about the bill’s impact on energy costs, especially in regions that rely heavily on coal for power, Democratic leaders today were looking for broader support for the bill ahead of a vote scheduled for Friday.

House Speaker Nancy Pelosi, D-Calif., has vowed to take up the bill, which would set limits on greenhouse gases including carbon dioxide from burning fossil fuels, before lawmakers adjourn at week’s end for their July 4 holiday recess.

Most — if not all — Republicans are expected to oppose the legislation. Pelosi and the measure’s key sponsors have been scrambling to draw in reluctant Democrats with a string of concessions. Among the last holdouts were farm-state legislators concerned that farmers would suffer from high energy costs.

Rep. Collin Peterson, D-Minn., chairman of the House Agriculture Committee, urged support for the bill after he won a number of concessions that he said would benefit agriculture and ease the impact of higher energy costs on people living in rural parts of the country.

“We think we have something here that can work with agriculture,” Peterson told reporters. “I think we’ll be able to get the votes to pass this.”

The House bill, covering more than 1,100 pages, would require a 17 percent reduction of greenhouse gases — mainly carbon dioxide from burning fossil fuels such as coal — by 2020 from 2005 levels and about an 80 percent reduction by mid-century. While it would cap climate-changing pollution it also would allow polluters to buy and sell emission allowances within the economy as a way to ease the cost of compliance.

President Barack Obama, who will go to a G8 economic summit next month where climate will be a leading topic of discussions, on Tuesday urged lawmakers to pass the bill which, he said, will “spark a clean-energy transformation … and confront the carbon pollution that threatens our planet.”

The bill’s emission limits would have their greatest impact on electric utilities, oil refineries and energy-intensive industrial plants as a new cost on carbon releases forces them to find ways to cut emissions, shift to less-polluting fuels or purchase emissions allowances. To ease costs in the early years, the government would provide free pollution allowances to those most affected.

The so-called “cap-and-trade” system has been attacked by Republicans who say it amounts to a massive energy tax that would ripple across the entire economy.

It “will destroy American jobs, raise prices for gasoline, electricity and other sources of energy, and devastate middle-class families and small businesses,” House Republican leader John Boehner of Ohio wrote in a memo to fellow GOP lawmakers, calling the upcoming vote “one of the defining debates” of the congressional session.

Democratic leaders, meanwhile, pointed to two new reports released this week analyzing the House bill that acknowledged limits on greenhouse gases would increase the cost of energy production, but that most of those costs would be mitigated by other provisions in the bill.

The bipartisan Congressional Budget Office said while households on average would spend $770 more a year on energy in 2020, their annual net cost is likely to be as little as $175 because of energy efficiency or money flowing back in form of direct relief or indirect allowances to businesses and local governments. It said poor households would, in fact, save $40 a year.

A separate analysis by the Environmental Protection Agency said consumer utility bills would be 7 percent lower by 2020 because less energy will be used as a result of efficiency and other provisions in the bill. It estimated the bill’s impact on household energy costs at between $80 and $111 a year.

Under the bill, at least 85 percent of the allowances would be given away, especially to energy intensive sectors of the economy.

The competition for pollution allowances, which are key to containing energy costs, produced intense lobbying in recent weeks and has been at the heart of the negotiations among Democratic lawmakers.

An agreement to increase emission allowances for rural electricity providers erased some concerns among a number of lawmakers concerned about the bill’s impact on rural areas and on farmers. Earlier, hefty amounts of allowances were promised to large electric utilities and energy-intensive industries, hoping to get the support of Democrats from coal states and the industrial belt.

Peterson won other concessions that he said were essential for farmers, including a provision that prevents the Environmental Protection Agency from considering international land-use changes when it determine if ethanol produces more or less greenhouse gases than gasoline. And the Agriculture Department — not the EPA — will run a program that allow farmers to obtain credits for tree planting and agricultural practices that would sequester carbon.