Friday, June 26, 2009

The Democrat-led House pressed Thursday for enough votes to pass landmark legislation that would combat global warming by forcing U.S. companies to reduce their carbon-dioxide emissions, expanding expensive renewable-energy sources and trimming consumers’ choices on new light bulbs and hot tubs.

Publicly, President Obama urged passage of the legislation — one of his top priorities — even though it faces near-unanimous opposition from Republicans. Behind the scenes, his top aides and environmental allies lobbied wavering Democrats to vote yes as early as Friday. The chamber is trying to wrap up work this week before it breaks for the Fourth of July holiday.

House Speaker Nancy Pelosi, California Democrat, signaled her confidence that the bill would be approved by canceling a visit to Washington by former Vice President Al Gore, a major proponent of cutting so-called greenhouse-gas emissions.

The bill, if passed as expected, would go on to an uncertain future in the Senate. Senate Majority Leader Harry Reid, Nevada Democrat, has asked committee chairmen to have a climate-change bill ready for Senate consideration in September.

But resistance there remained high among both Democrats and Republicans to key components of the bill, including its complicated pollution-permit market system called cap-and-trade. In addition, Senate Democrats are divided over regional disparities in the impact of the bill.

Democratic Sen. Richard J. Durbin of Illinois, the Senate’s majority whip, said Thursday that if legislation passes in the House, support for it will grow in the Senate.

“We’re kind of catching the wind that they create when it comes to cap-and-trade,” he said.

The House bill would cut U.S. greenhouse-gas emissions — primarily carbon dioxide — 17 percent below 2005 levels by 2020 and 83 percent by 2050. It would also establish a new Renewable Electricity Standard (RES), which would force utilities to supply a minimum amount of their electricity from renewable energy sources.

The bill would reach carbon-dioxide emission targets by establishing a cap-and-trade system, which would require heavy emitters of carbon dioxide, and the oil and gas industry, to buy annual emissions permits from the government or through a secondary market.

The plan, as written by the House Energy and Commerce Committee, would auction a small percentage of the available permits, or allowances, directly to companies. The rest, more than 85 percent, would be given away to selected industries, local utility companies, states and Indian tribes.

Democrats contended the legislation would help reduce U.S. reliance on foreign oil, increase the use of renewable energy such as solar and wind power and increase employment in clean energy industries.

“This is a jobs bill,” Mr. Obama said Thursday, in his second public endorsement of the bill this week.

Republicans, dismissing official congressional estimates that showed an average cost to American families of $175 a year, argued that the measure would significantly increase energy costs on individuals and companies. They said the bill is really a thinly disguised energy tax that would impose excessive government intervention and reduce economic growth.

House Republican Leader John A. Boehner, Ohio Republican, said the bill will cost the economy up to 2.7 million jobs.

“When it comes to energy, Washington Democrats, I think, are poised to make matters worse by imposing a job-killing energy tax, courtesy of Speaker Pelosi. This is going to force small businesses and their workers and families to pay more for electricity, gasoline, and other products that are made in America that have a high energy content,” he said.

The basic idea behind cap-and-trade is simple: Experts assess how much pollution can be safely put into the environment, then shares (sometimes called permits or allowances) equaling that amount are given or auctioned by the government to those who have historically emitted the pollutant.

Polluters then must return to the government enough permits to cover their emissions every year. If they fall short of permits, emitters can buy them from those who have a surplus. The number of permits available decreases annually until a “safe” level of emissions level is reached.

The bill would direct 2 billion free allowances to domestic and international conservation, known as “offsets,” which would allow companies to buy emissions permits by effectively paying farmers here and abroad to preserve trees and employ environmental planting practices.

The legislation would require utilities that provide more than 4 million megawatt hours of electricity a year to buy a certain amount of electricity from renewable sources.

The amount starts at just 6 percent in 2012 and gradually increases to 20 percent in 2020, although utilities could meet up to 8 percent of the mandate through reduced energy usage by their customers.

Renewable energy accounts for about 8.5 percent of domestic electricity generation, but the House bill’s renewable mandate would not recognize all of that as renewable. Hydropower, for example, which makes up a large chunk of current electricity generation, is not all counted as renewable toward the new mandate.

The last major issue holding up the bill was resolved Thursday when Mrs. Pelosi agreed to an amendment that would require the president to impose trade tariffs on trade partners that do not limit their carbon-dioxide emissions by 2020. Earlier, House leaders compromised with farm-state lawmakers by, among other things, easing rules on corn-based ethanol production and putting the permit program under the Agriculture Department rather than the Environmental Protection Agency.

The bill would have far reaching effects on energy users at all levels of the economy, from giant manufacturers to utilities to individuals.

For instance, the government would impose new buildings standards and require some household items to use less energy than they do now. These items include backyard spas, lamps located above art work, drinking-water dispensers and light bulbs in outdoor light fixtures.

The bill would, in effect, force companies to phase out inefficient products of these kinds and replace them with more efficient - and more expensive - versions. Light bulbs, now sometimes less than a dollar, would in the future cost much more.

The bill would also make changes to the government’s Energy Star program, which recognizes dishwashers, refrigerators and other appliances that save energy. The tougher standards would mean these “energy saving” products would cost more than regular products and it would take longer for consumers to recoup the extra costs through savings on their energy bill, critics say.

“It doesn’t do any good to have high-price, energy-efficient products if people will just pay to have their old appliances fixed,” said Kevin Messner, vice president of government relations for the Association of Home Appliance Manufacturers.

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