The formation of the U.S. Climate Action Partnership was a landmark moment in the long history of efforts to get the federal government to regulate greenhouse gases. But the alliance of big companies and NGOs has split over the Lieberman-Warner bill that is headed for the Senate floorâ€”without enough votes to pass. Thatâ€™s the topic of todayâ€™s Sustainability column at fortune.com and cnnmoney.com.
The issue dividing corporate America is how to auction or allocate the permits to emit greenhouse gases, and what to do with the funds raised at auction. As much as $150 billion could be raised in the program’s first year. I wrote a column about this called The $3 trillion climate change battle a few weeks ago.
Yesterday, I talked to Jim Rogers, the CEO of Duke Energy, who opposes Lieberman-Warner because it would require his company and others that burn coal to spend billions buying permits. That seems fair, on the face of it; these companies are the polluters, after all. But as he notes, regulators urged utilities to build coal plants in the 1970s and 1980s. Their higher costs will be passed on to customers. And the revenues generated by auctioning permits are designated for a long list of Senatorsâ€™ pet projects, some only tenuously related to climate change. Itâ€™s the ultimate in earmarks, he argues. Agree with him or not, it’s a potent political argument.
Iâ€™m coming around to the belief that writer and activist Peter Barnesâ€™ cap-and-dividend plan deserves serious consideration. He would auction all of the permits, and then rebate the monies to Americans on a per capita basis. This would help people offset higher energy costsâ€”which are inevitable, once a price is put on carbonâ€”and also reassure people that a climate-change bill is not a tax increase in disguise. It would also help build long-term political support for GHG regulations. And it has the benefit of simplicity. Republican Sen. Corker of Tennessee has an amendment to Lieberman-Warner that would accomplish most of these goals.
Here’s how the column begins:
An influential coalition of Fortune 500 companies and environmental groups that was formed to support climate-change legislation has splintered over the Lieberman-Warner bill that is headed next week to the Senate floor.
The U.S. Climate Action Partnership formed last year won’t take a position on the bill, although nine of its members – including General Electric (GE, Fortune 500), Alcoa (AA, Fortune 500) and four utility companies – signed a letter to senators backing the legislation.
The letter, also signed by big environmental groups and obtained by Fortune, says: “Prompt action on climate change is essential to protect America’s economy, security, quality of life and natural environment.”
But other members of the coalition known as U.S. Cap, most visibly Duke Energy (DUK, Fortune 500), a coal-burning utility, are strongly opposed. “It’s going to translate into significant electricity price increases,” says Jim Rogers, Duke’s CEO.
Without widespread corporate support, passage of the bill – already a long shot at best – becomes even more unlikely this year.
It’s disappointing, if not surprising, that the climate change bill won’t pass this year. But it’s encouraging that the argument is now mostly about the details–not about the question of whether we need to regulate greenhouse gases. And remember that presidential candidates Obama, Clinton and McCain all support the idea.