Global Warming Heats Up Capitol Hill

Lawmakers may finally be crawling closer to a consensus -- with business at the table

In the Summer of 2005, Senator Jeff Bingaman (D-N.M.) proposed a bill calling for modest mandatory limits on emissions of the greenhouse gases that cause climate change. The utility industry and its Washington-based trade group, the Edison Electric Institute, publicly opposed such curbs. Yet even as the bill failed to win support, some executives at EEI's annual meeting privately voiced a heretical idea. The next President will be more aggressive in taking action against global warming than George W. Bush, one CEO argued, so "this may be the best deal we'll ever get."

Now this heresy is gaining momentum. "The time has come to do something on climate change, and it is better to act sooner rather than later," says Jeffry E. Sterba, CEO of PNM Resources Inc. (PNM ), a New Mexico and Texas utility, who will be chairman of the EEI next June.

Washington is trying. Congress is awash in carbon-capping bills and proposals from Senators John McCain (R-Ariz.), Jim Jeffords (I-Vt.), Tom Carper (D-Del.), John Kerry (D-Mass.), and others. Senator Dianne Feinstein (D-Calif.) plans to introduce legislation on the first day of the next session of Congress, and Bingaman is preparing a more detailed version of his original 2005 bill.

Companion measures are floating in the House. And as Senator Carper makes personal appeals to fellow lawmakers, he's finding increasing support even among Republicans. "They are hearing a growing awareness that global warming is happening, and a growing awareness that people in the utility industry want [regulatory] certainty," he says.

In addition, "energy efficiency, biofuels, and climate change are starting to converge in one grand design," says John Stowell, head of environmental policy at Duke Energy Corp. National security hawks are pushing high-mileage cars and biofuels to reduce oil dependency and the flow of oil-buying dollars to the unstable Middle East, while farm states see revenues in growing crops for fuel.

With California's landmark plan to cut emissions, companies are also increasingly worried about an onerous patchwork of differing state rules. "The California action is a great spur to industry to push for a coherent national policy," explains Bob Simon, Democratic staff director of the Senate Energy & Natural Resources Committee. Add in the list of Presidential hopefuls who are talking about climate and energy, from Hillary Clinton and John McCain to Mitt Romney and George Pataki, and "a tidal shift is occurring," says Philip Clapp, president of the National Environmental Trust. As Congress begins to look ahead to the post-Bush era, no matter who wins in November, "the legislation that the U.S. will put in place by 2009 or 2010 is taking shape now -- and the number of members of Congress abandoning George Bush's position against mandatory caps is just extraordinary," Clapp says.

All of this is eerily similar to the final two years of the Reagan Administration when lawmakers bucked the Gipper's opposition to environmental regulation by shaping what George Bush I would sign as the Clean Air Act of 1990. Now, "if we can get modest mandatory bills passed in one or both houses, we are laying down the likely bill for whoever is the next President," says Paul Bledsoe, strategy director at the bipartisan National Commission on Energy Policy.

It won't be as easy as it was in 1990 when lawmakers were able to focus solely on pollution from power plants. Now they have to deal with bigger issues. Should greenhouse gas legislation start with utilities only, as in the Carper bill, or rope in the entire economy, as in McCain's? Should Uncle Sam first fund development of new technologies to help companies meet the rules? And should the U.S. act alone, without pushing for limits in China, India, and elsewhere?

Despite the complexity, Washington is beginning to inch toward a possible consensus, with business at the table. "Getting something by 2008 that phases in gradually and is able to bring in some of the developing countries could make a lot of sense," says PNM's Sterba.

By John Carey

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE