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by Darren Goode, June 3, 2005
A less aggressive Democratic amendment on global warming is emerging as a possible alternative to a longstanding bipartisan proposal as the Senate prepares to debate comprehensive energy legislation. Sponsors of the plans — and a third GOP-backed proposal — aim to attract moderates through incentives to stimulate production of energy that emits low or no greenhouse gas. Two of the proposals have mandatory limits on greenhouse gasses while also allowing emission credits to be traded. The third proposal, offered by Sen. Chuck Hagel, R-Neb., would be voluntary.
Senate Energy and Natural Resources ranking member Jeff Bingaman, D-N.M., will offer an amendment closely following recommendations of the National Commission on Energy Policy that, starting in 2010, companies that emit more than their allotment would pay up to $7 per ton to businesses that pollute less. The commission estimates that this would slow, not stop, the growth of greenhouse gas emissions by 2.4 percent a year.
The commission also recommended a 36 percent increase in the average fuel economy standard for cars and light trucks between 2010 and 2013, doubling federal energy research and development to $3 billion a year and offering tax incentives for nuclear energy and coal gasification.
The Energy Information Administration, the research arm of the Energy Department, projected the commission’s plan would decrease the gross domestic product by 0.4 percent by 2025. But the White House contends that mandatory limits on greenhouse gases would be more damaging to the economy, costing 101,000 jobs by 2025. The National Mining Association and the American Petroleum Institute also are lobbying against the plan, while the United Mine Workers of America support the recommendations, which would increase coal use by 16 percent above 2003 levels by 2020. Bingaman might announce the support of at least one Republican cosponsor next week.
Bingaman’s plan would not limit greenhouse gasses as strongly as the proposal championed by Sens. John McCain, R-Ariz., and Joseph Lieberman, D-Conn., which would require a reduction in carbon dioxide emissions to 2000 levels by 2010 while allowing companies to trade pollution credits. McCain and Lieberman last month introduced a new version that adds an incentive package aimed at boosting support for their measure by targeting popular alternatives to conventional fossil fuel power — including nuclear, solar, coal gasification — as well as incentives for more efficient products and vehicles. By adding incentives for nuclear, McCain and Lieberman have lost support from some environmental activists and others on the liberal end of the global warming debate. EIA estimates that McCain-Lieberman would raise electricity prices by 19 percent over forecasted 2020 levels, compared to a 3 percent increase if the commission’s recommendations are established.
Hagel’s plan would authorize $2 billion in direct loans, loan guarantees and other incentives over five years for the adoption of technologies that reduce greenhouse gas intensity while directing a federal effort to implement a national climate change strategy. It is likely to attract Republicans looking to support the Bush administration’s philosophy of voluntary and incentive-based approaches to curbing global warming. Hagel has also won the support of two Democrats — Sens. Mary Landrieu of Louisiana and Mark Pryor of Arkansas. But his proposal, unlike the other two plans, does not have a revenue-raising component that would help offset the cost of the incentives.