May 08, 2009
Pending climate legislation could transform the nation's energy sector, prompting an assortment of special interests to line Capitol Hill. Industry and environmentalists are constitutionally permitted to petition their government, meaning that any final bill will represent an amalgam of concerns and likely reflect a measured response.
Lobbyists are traipsing to Washington as U.S. lawmakers debate how the nation sets about to reduce carbon emissions by 20 percent by 2020 and 80 percent by 2050, all from 1990 levels. The turn of events is fascinating, given that five years ago neither the House nor the Senate could muster the votes. Today, however, the issue has consumed key committees and is clearly on the minds of American business.
Indeed, the amount of money and the number of troops bombarding members of Congress is mind-blowing. A report by the Center for Public Integrity says that such lobbyists have increased by 300 percent between 2003, when climate change legislation was first introduced, and 2008. In the past year alone, nearly 800 companies have hired about 2,340 folks and spent an estimated $90 million trying to shape public policy. More than four climate lobbyists are now in place for every member of Congress.
The American Coalition for Clean Coal Electricity, which represents 48 companies, just pumped in about $10 million. Its stated goal is to ensure that coal continues to have a strong presence in the American economy, vowing to incorporate the technologies necessary to ensure that carbon -- one day -- can be captured and buried. To placate the coal industry, which has been given vocal support from President Obama, the pending bill provides $1 billion annually for clean coal research.
Environmental groups, meanwhile, oppose such largess and add that even the best forecasts for any carbon sequestration technologies are 20 years away. But their voice may be squelched by that of industry, whose lobbyists outnumber theirs by eight to one.
Alternative energy groups also have foot soldiers marching on Capitol Hill. They want to see a national renewable portfolio standard set at 15 percent of all utility offerings. That would boost their stock and trade while at the same time set the nation on a trajectory to meeting its carbon reduction limits, they say.
Meantime, the financial industry is keenly interested. Bankers and insurance firms want to see a cap-and-trade provision enacted that sets limits on carbon emissions. Companies could then buy and sell "credits" as a way to conform to the law, all of which would be spearheaded by the investment houses -- a proposition that sits well with many environmentalists who say that it would set strict caps on carbon emissions and one that some businesses say at least provides certainty.
"The danger is that special interests will dilute and torque government policies, causing the climate to pass tipping points, with grave consequences for all life on the planet," says NASA's James Hansen, in a letter to President Obama.
Showing Flexibility
Climate change initiatives have come a long way since 1997, when the U.S. Senate first unanimously rejected the Kyoto Protocol. In the intervening years, many leading scientists have called on the country to join the global community in the fight against global warming. And while their backers were rebuffed by a filibuster in 2003, proponents declared it a victory as a majority of the chamber backed the effort.
Last year, the Senate tried again. But this time, it proposed modest carbon reductions accompanied by cost-containment measures. And once more the bill's supporters ran head first into delay tactics by those who said it would cause energy prices to escalate and American businesses to lose their competitive edge. However, as the 2008 presidential hopefuls narrowed down to Obama and Senator McCain, both of whom favor such caps, the whole paradigm changed.
Now the question seems to be not whether any bill will pass but what type of measure will be enacted. The debate this time is controlled by progressive committee chairs and floor leaders who vow a final bill by year's end. With the exception of the National Association of Manufacturers and the Chamber of Commerce, industry is now of the view that it must come to the bargaining table.
The U.S. Climate Action Partnership, a mix of industry and environmentalists, has Congress' attention. It is working with lawmakers to set standards to reduce greenhouse gas emissions in a gradual and cost-effective manner. The most viable legislation now resembles what this group has proffered -- a consortium that stretches across a wide spectrum of the economy and one that includes several utilities.
For its part, the electric utility sector collectively shelled out about $157 million to lobby Congress in 2008, placing it second to the health industry, according to Opensecrets.org. The biggest contributors include American Electric Power, Duke Energy and Exelon Corp., spending $11 million, $5 million and $4.5 million, respectively.
"Campaign committees and leadership political action committees are two of the deepest pockets in a politician's coat," says Sheila Krumholz, executive director of the Center for Responsive Politics. "So it's important to watch them together to see who's potentially building the most influence with a lawmaker."
It may seem unsightly. But it is how democracy functions. And while money talks, lawmakers must also listen to all concerns. Positions are evolving and, as such, climate change activists now have the upper hand. Congress is therefore turning to those who are willing to cooperate and offer feasible solutions.
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Ken Silverstein EnergyBiz Insider Editor-in-Chief
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