CQ GREEN SHEETS
July 23, 2007 – 6:55 a.m.
Senate Environment Presses Ahead on Federal, State Climate Action

The Senate panel charged with producing climate change legislation winds up months of informational hearings this week, with plans to deliver a major bill in the coming month. That would set the stage for this fall, when lawmakers in both chambers say they want to get down to the details of hammering out global warming legislation.

Sens. Joseph I. Lieberman, I-Conn., and John W. Warner, R-Va., the chairman and ranking minority member of the Senate Environment Subcommittee on Private Sector and Consumer Solutions to Global Warming and Wildlife Protection, are working on an economy-wide bill that would set a cap for carbon dioxide emissions and establish a carbon trading program.

Later in the week, the full committee holds a hearing on California’s request for a waiver to allow it to implement its greenhouse gas emission rules for vehicles.

The global warming subcommittee hearing Tuesday focuses on ways climate change legislation could contain energy costs and encourage emissions reductions overseas.

Critics of an economy-wide carbon constraint measure fear that without robust engagement with developing nations, such an effort could send U.S. industry — and emissions — offshore.

The Senate Environment Committee is already considering several climate change proposals, and Lieberman and Warner have said they are likely to include elements of some of those bills in their legislation.

Lieberman and Warner said earlier this month that they hoped to introduce the bill before the August recess, but some committee staff involved say working out the details has proven so complex that language may not be ready until after the recess.

“They are working long days on this, as hard as they can,” said a Democratic staffer. The pair and their staff have been meeting with a host of stakeholders who would be affected by any carbon-cutting measure. Some of them will testify to the panel on Tuesday.

Among those are Garth Edward, trading manager for Shell International Trading and Shipping Company, who is expected to talk about the company’s experience operating in the European carbon trading market, and ways to avoid pitfalls it has experienced.

Also on the witness list is Robert Baugh, executive director of the AFL-CIO’s Industrial Union Council. The AFL-CIO has already endorsed a climate change bill (S 1766) sponsored by Senate Energy Chairman Jeff Bingaman, D-N.M. On Tuesday, Baugh will tell lawmakers about provisions labor needs to see before it supports any other climate change measure. Baugh says that among the key provisions are a “safety-valve” for emissions costs that could be used to limit economic uncertainty and price volatility, and funding for research into carbon sequestration technology that analysts have said will be essential to the survival of the coal industry in a carbon-constrained world.

Lawmakers are expected to heed Baugh, as his group’s support is viewed as essential to passing any climate change bill. Labor could be powerfully affected by any carbon constraint measures — especially workers in carbon-intense industries like coal mining and auto manufacturing.

“If you don’t have organized labor, you can’t get something through,” said Jason Grumet, director of the National Commission on Energy Policy, a nonpartisan think tank.

Also set to testify on Tuesday are Timothy Profeta, director of the Nicholas Institute for Environmental Policy Solutions at Duke University; Blythe Masters, managing director at JP Morgan Securities; and Margo Thorning, chief economist at the conservative American Council for Capital Formation.

On Thursday, Senate Environment Chairwoman Barbara Boxer, D-Calif., hauls Environmental Protection Agency Administrator Stephen L. Johnson back to the hot seat to press him on granting a waiver for California to regulate greenhouse gas emissions for vehicles.

California filed the request for a waiver in 2005, but the EPA delayed considering the request until this April, when the Supreme Court ruled that the agency has the authority to regulate emissions that contribute to global warming.

When Johnson was last in front of the committee to address the issue, he told lawmakers that a decision couldn’t be made until a public comment period was over, in June. More recently, the agency has said it will make a decision by the end of the year.

“The focus is to talk to him about granting the California waiver. Johnson has talked about having additional time. I don’t think that view is shared here,” said a top committee staffer. “This is holding states back from taking the action they want to take. We want a decision sooner rather than later. This is at a level where he needs to move this ball forward,” the staffer said.

Twelve other states have signed on to the California emissions standards, and as soon as the California waiver was granted, their more stringent standards would go into effect. Most recently, Florida joined that group, and earlier this month, Florida Sen. Bill Nelson, D, introduced a bill (S 1785) that would force the EPA to issue a decision on the waiver by Sept. 30. In the House, Rep. Jay Inslee, D-Wash., has introduced a similar measure (HR 3083).

“They’ve been sitting on this for two years, and there have been mixed messages coming out of EPA,” said Bryan Gulley, a spokesman for Nelson. “Because they’ve said they’ll have a decision by the end of the year, you don’t know when that will be,” he said.

Florida’s governor, Republican Charlie Crist, has declared that should the waiver decision not be issued by then, he would join forces with California Republican Gov. Arnold Schwarzenegger to sue the agency.

Source: CQ Green Sheets
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