Jan. 15 (Bloomberg) -- House Energy and Commerce Committee Chairman Henry Waxman vowed to pass a pollution-reduction plan backed by environmentalists and the chief executives of General Electric Co. and Duke Energy Corp. Republicans promised a fight.

Waxman said he would seek a committee vote on legislation to limit carbon emissions before the Memorial Day recess in late May.

“That’s an ambitious schedule, but an achievable one,” said Waxman, a California Democrat, at a hearing today on the plan backed by 26 corporations and five environmental groups. Uncertainty about what pollution controls will be imposed is preventing companies from investing in facilities, he said. “Our job is to end this regulatory limbo.”

Republicans vowed to fight the cap-and-trade system for carbon emissions endorsed today by GE’s Jeffrey Immelt and Jim Rogers of Duke Energy, who appeared at the hearing.

“Be prepared for a battle,” Illinois Republican John Shimkus told Democrats on the panel. Shimkus called the plan “a shell game to hide the cost from the ultimate person who is going to pay.”

“Let’s develop a trading floor for U.S. emissions, and let’s let the big-money folks at Goldman Sachs control it,” Shimkus said. “Is that a good idea?”

Waxman held the hearing to coincide with the release of the pollution plan by the U.S. Climate Action Partnership, a coalition of energy companies, manufacturers, and environmental groups that want to limit greenhouse-gas emissions and establish a carbon-trading system. The partnership proposed slashing emissions of carbon dioxide and other heat-trapping gases 42 percent from 2005 levels by 2030.

A Fight

Today’s hearing sets the stage for a fight between lawmakers such as Waxman, who want to establish a trading system for carbon, and others, including many Republicans, who say a carbon tax would better reflect the costs of controlling greenhouse gases.

Representative Joe Barton of Texas, the committee’s top Republican, said a law limiting carbon emissions would add to the nation’s economic woes. He listed the year-over-year decline in the share prices of companies whose CEOs are testifying today.

Rio Tinto PLC, the world’s second-largest uranium producer, has declined more than 70 percent. GE fell 60 percent.

Executives said regulatory uncertainty over climate change was contributing to the drop in share prices.

“Our one fear is that many in Congress will look for reasons to postpone action on climate change this year,” said Duke Energy’s Rogers.

Better Chance

“By starting now, we have a better chance to smooth out and minimize the inevitable cost increases that will be imposed on American consumers,” Rogers told the committee.

Immelt said the plan would help the U.S. economy while reducing pollution.

“Cap-and-trade legislation is a crucial component in fueling the bold clean-energy investments necessary to catapult the U.S. again to preeminence in global energy and environmental policy, strengthen the country’s international competitiveness, and create millions of rewarding new American jobs,” he said at a press conference before the committee hearing.

GE and other companies have said they expect to profit by developing technologies that will help curb emissions. GE is the world’s biggest maker of power-plant turbines and the second- largest maker of wind turbines.

Trap Radiation

Greenhouse gases trap radiation within the atmosphere, causing the Earth to warm. More damaging floods, killer storms and extreme weather are expected as global temperatures increase, the United Nations Intergovernmental Panel on Climate Change said in a report last year.

Under the coalition’s plan, emissions from power plants, manufacturers and oil refiners would be capped, and polluters would have to obtain a permit for every ton of greenhouse gases pumped into the atmosphere. Those that exceed their caps will have to buy permits from emitters who reduce their output of such gases, the cap-and-trade program.

New power plants that burn coal or natural gas would have to buy all credits required to meet emissions caps. That would raise their production costs compared with existing facilities, which would get “a significant portion” of credits for free at the start of the program.

To spur investment in pollution-cutting technology, a floor for the price of carbon permits should be set at $10 for a ton of emissions at the start of the program, the group proposed.

To contact the reporters on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net; Jim Efstathiou Jr. in New York at efstathiou@bloomberg.net

Last Updated: January 15, 2009 13:00 EST