- The Washington Times - Wednesday, April 1, 2009

House Democrats sidestepped one of the thorniest cap-and-trade issues Tuesday when outlining their proposal to reduce carbon-dioxide emissions, choosing a more moderate path for what is likely to be one of their hardest political battles.

The details of the first tangible climate plan issued by Democrats sets a slightly faster pace to reducing the emissions than President Obama, but the draft skirts the question at the heart of the cap-and-trade debate: whether companies will have to buy all of their carbon permits or a portion.

Mr. Obama has said he wants all of the carbon permits auctioned, citing Europe’s bumpy experience giving away the licenses when it started its cap-and-trade program. But utilities, power companies and moderate Democrats from energy-producing states have bristled at that proposition.

House Energy and Commerce Committee Chairman Henry A. Waxman, California Democrat, said that question will best be answered by lawmakers debating the Clean Energy and Security Act of 2009.

At the same time, House Republicans fired a warning shot at 54 moderate and freshman Democrats, saying they would be targeted in upcoming elections if they side with their party’s leadership and vote for an “energy tax.”

“It is so proudly ignorant of the daily economic reality faced by working people that I do not believe it could survive a vote in either the House or Senate just now,” said Rep. Joe L. Barton, Texas Republican and ranking member on the House Energy and Commerce Committee.

Mr. Barton said House Republicans expect to introduce an alternative climate plan.

The draft plan offered by Mr. Waxman and Rep. Edward J. Markey, chairman of the energy and environment subcommittee, calls for a reduction of carbon-dioxide emissions of 20 percent by 2020 using carbon trading system and requires utilities to purchase 25 percent of their energy from renewable fuel sources by 2025.

The plan would apply to industries that emit about 85 percent of the nation’s carbon dioxide, which would have to buy permits for each ton of greenhouse gases emitted. Entities that emit less than 25,000 tons of carbon dioxide per year would not be covered by the reduction program. Instead, the Environmental Protection Agency would set emissions standards for these entities.

It also allows companies to buy extra carbon permits and “bank them” and establishes a reserve of 2.5 billion permits which the EPA will sell in case carbon prices spike.

A veteran of Senate climate debates was more pointed Tuesday, saying that selling all of the carbon permits would doom the measure’s chances of success.

“There’s no question that a bill that has a 100 percent auction at the beginning is not going to pass in the Senate, so we’re going to have to have allowances,” said Sen. Joe Lieberman, Connecticut independent who has co-authored two bipartisan cap-and-trade plans over the last decade.

While Democratic leaders in the House and Senate have said a cap-and-trade plan, in some fashion, will be approved as the cornerstone of climate-change policy, rank-and-file lawmakers have not been as optimistic.

To that end Mr. Waxman is relying on Rep. Rick Boucher, a Democrat representing coal-producing areas of Virginia, to rally support for his proposal.

“He’s looking to me to offer some recommendations, and that if recommendations satisfactory to me are adopted, he would hope that would bring a large measure of support to the bill,” said Mr. Boucher, who co-authored a previous cap-and-trade plan.

The current proposal is based largely on a more cautious House plan crafted last year by moderate Democrats Rep. John D. Dingell of Michigan and Mr. Boucher.

• Edward Felker and Amanda DeBard contributed to this report.

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