The Heat Is Online

US Senate Scraps Emissions Cap

Senate Approves Weaker, Voluntary Climate Change Plan
Reuters News Service, June 22, 2005
 
WASHINGTON  An ambitious bipartisan plan to slow U.S. greenhouse gases with an emissions trading program collapsed in the Senate Tuesday after a key Republican threw his support behind a weaker, voluntary plan.

The Senate approved, 66-to-29, a plan by Nebraska Republican Chuck Hagel to offer generous tax breaks to U.S. utilities, refiners and manufacturing plants that develop technology to limit emissions of carbon dioxide. It would not cap U.S. emissions of carbon, which are linked to the global warming blamed for melting polar ice caps and rising oceans.

The Bush administration opposes mandatory cuts in emissions as too costly for U.S. industry. Climate change issues arose as part of the Senate's debate of a broad energy bill to boost production of domestic oil, natural gas, coal, nuclear and alternative energy sources.

Pete Domenici of New Mexico, Republican chairman of the Senate Energy Committee, said last week he might co-sponsor Democrat Jeff Bingaman's more stringent plan to slow the growth of U.S. greenhouse gases with an emissions trading program beginning in 2010 tied to U.S. economic growth.

But after talking to the White House and other Republicans, Domenici said he would not support the Bingaman measure.

"This is just too tough to do quickly," Domenici said. "I expect we will have a series of hearings and I hope we can reach some sort of accommodation on all aspects of a climate proposal. But that will take time."

The Bingaman plan was based on the results of a bipartisan energy study commission. Environmental groups expressed lukewarm support for it, saying it did not go far enough. After losing Domenici's support, Bingaman said he would not offer his approach as an amendment to the energy bill.

TAX CREDITS APPROVED

Instead, the Senate approved a weaker alternative offered by Hagel and Mark Pryor, an Arkansas Democrat.

The Hagel plan would offer tax credits and guaranteed government repayment of loans for projects such as coal gasification, carbon sequestration and energy efficiency improvements that reduce heat-trapping emissions. It would also order more federal research into global warming issues.

"It is meant to serve as a catalyst," Pryor said, adding that the program could cost about $2 billion. "It does not dump all the responsibility on industry."

"I want the country to know that this is a significant shift of direction (for the Senate)," said Lamar Alexander, a Tennessee Republican, who supported the Hagel plan.

It was not immediately clear if the Hagel amendment approved by the Senate would raise the cost of the overall legislation, which now stands at $16 billion over 10 years.

Republicans hoped the Senate action would help President George W. Bush, when he attends a Group of Eight meeting early next month. British Prime Minister Tony Blair, who will lead the meeting, said he wants to launch an action plan for rich nations to fight global warming.

The White House has endorsed more study of global warming and voluntary efforts by companies to limit emissions, rather than any government requirements.

After approving the Hagel plan, the Senate began debating the strictest option, which would require a cut in U.S. carbon output to 2000 levels by 2010. It was offered by Republican John McCain and Democrat Joseph Lieberman, and was said to have little chance of passage when a vote is held on Wednesday.

OFFSHORE OIL SURVEY

Also on Tuesday the Senate refused to strip from the bill language calling for a federal inventory of oil and natural gas in waters off states where drilling is now banned. An attempt by Florida's Bill Nelson and Mel Martinez to drop the measure failed on a vote of 44-52.

Critics said the survey could eventually lead to opening those waters to energy exploration, hurting tourism, which is a crucial part of Florida's economy. Survey supporters said the government must know how much oil and gas lies within 200 miles of the U.S. shoreline.

The Senate is on track to to approve a broad energy package this week with some $14 billion in tax incentives over 10 years to encourage more domestic production of oil, natural gas, coal, nuclear and alternative energy.

The Senate measure would have to be reconciled with a much different energy bill approved by the U.S. House in April.