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Democrats Prepared to Scale Back Climate Legislation, Senator Kerry Says

Democrats would be willing to “scale back” a climate proposal that would cap greenhouse gases across the economy, Senator John Kerry said after a meeting with President Barack Obama.

Obama told a bipartisan group of 23 senators at the White House yesterday he wants energy legislation to make companies pay a price for releasing carbon dioxide and other greenhouse gases into the atmosphere, said Kerry, the lead author of a plan to curb the pollution that scientists have linked to climate change.

Still, the bill is likely to be significantly more limited than an earlier proposal, which imposed an economy-wide cap on greenhouse-gas emissions, according to some Senate Democrats.

“All of us have to compromise,” said Kerry, a Massachusetts Democrat. “We are prepared to scale back the reach of our legislation.”

Democrats don’t hold enough seats to pass an energy bill without some Republican support and remain split over the scope of the legislation. Party leaders have been looking for Obama’s help to mend the rift within their party and secure a handful of Republican votes.

After the meeting, White House officials released a statement reaffirming Obama’s support for “putting a price on pollution.” Still, the president wants to “get something done this year” and is open to “other ideas” as long as they curb oil use, create jobs, cut pollution and make the U.S. less reliant on foreign sources of energy, the statement said.

House Measure

Obama supported legislation narrowly passed by the U.S. House last year that would create a cap-and-trade system in which power plants, oil refineries and factories buy and sell a declining number of carbon dioxide allowances.

The bill stalled in the Senate amid criticism from Republicans and some Democrats that the added cost of these pollution rights would drive up energy prices and hurt the economy. Kerry and Senator Joseph Lieberman, a Connecticut independent, unveiled a revamped cap-and-trade bill last month and are pushing for Congress to pass it this year.

Senator Tom Carper, a Delaware Democrat who supports an economy-wide cap on greenhouse-gas emissions, said plans for cutting pollution must be scaled back to become law this year.

The “sweet spot” would be legislation that is focused on pollution from the electricity sector instead of the entire U.S. economy, Carper said.

Senator Jeff Bingaman, chairman of the chamber’s energy committee, is drafting legislation for a so-called utility-only bill that would cap greenhouse-gas emissions from companies that produce electricity without imposing pollution limits on other industries, according to spokesman Bill Wicker.

Bingaman, a New Mexico Democrat, hasn’t decided whether to introduce a power-sector climate-change bill and is still reviewing other plans to cut carbon pollution, Wicker said.

Reid’s Decision

Bingaman told reporters yesterday that Senate Majority Leader Harry Reid will have to decide whether his approach has the votes to pass the Senate.

“I frankly don’t know whether the support would be there to do that or not,” he said on a conference call with reporters. “That’s a subjective decision Senator Reid’s going to have to make in July.”

Reid plans to introduce energy legislation in mid-July and has yet to decide on the parameters of the bill, spokesman Jim Manley said. Democrats would consider the legislation before voting in August to confirm Elena Kagan to the Supreme Court, said Manley.

The Senate has little time to get energy legislation passed into law this year, Republicans said.

“Our enemy when it comes to advancing an energy policy right now is the calendar and the timing,” Senator Lisa Murkowski, an Alaska Republican, told reporters.

Election-Year Push

Obama is making an election-year push for the Senate to pass legislation that aims to wean the U.S. from fossil fuels such as coal and oil and provide incentives for alternatives such as wind and solar power.

The president “wants the most he can get and that’s going to be hard,” Senator Jay Rockefeller, a West Virginia Democrat, told reporters after the White House meeting.

Democrats from rural and Rust Belt states favor legislation that doesn’t cap emissions and instead focuses on boosting efficiency and encouraging greater development of energy from renewable sources like solar and wind.

“I have a lot of concerns about the utility-only approach,” Arkansas Democratic Senator Blanche Lincoln said after the meeting.

‘Will Not Sell’

Republicans urged Senate Democrats to drop Kerry and Lieberman’s measure.

“A cap-and-trade proposal, a national energy tax, will not sell in this country at this time,” Murkowski told reporters.

Companies that plan to invest in pollution-cutting technologies urged lawmakers yesterday to agree on an energy bill and get it through Congress this year.

The growth of wind turbines and solar panels will be limited “without a strong federal standard,” Ed Lowe, general manager of renewable market development for General Electric Co., said in a telephone interview.

To contact the reporter on this story: Lisa Lerer in Washington at llerer@bloomberg.net; Simon Lomax in Washington at slomax@bloomberg.net.

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