Environmentalists, businesses unite on emissions

After fighting each other for decades, environmentalists and industrial businesses are working together in Congress to clear the air — literally — through a reduction of carbon dioxide emissions.

While hundreds of groups are lobbying Congress on proposed climate change legislation, the 2-year-old U.S. Climate Action Partnership (USCAP) — which has put rivals General Electric and the Natural Resources Defense Council (NRDC) on the same page — is having more influence than most.

Draft legislation that Democrats hope to advance next month is "modeled closely" on the recommendations of the group, according to a summary of the measure provided by its authors. USCAP was repeatedly touted by lawmakers in hearings on the legislation last week.

"It's a remarkable dynamic," said Rep. Jay Inslee, D-Wash., a member of the Subcommittee on Energy and the Environment. "It is not lost on members of Congress that you have this coalition that touches all points of the economy."

Thirty companies and non-profit organizations belong to the coalition, including Dow Chemical, Duke Energy, the Nature Conservancy and the Pew Center on Global Climate Change. Members say a united front by disparate groups will be key to approving energy policy — particularly in the Senate, where 60 votes likely will be needed to overcome a Republican filibuster and win passage.

"We have to construct a system that makes sense not just environmentally but economically," said Steve Cochran, director of the climate campaign for the Environmental Defense Fund, a USCAP member. "Doing it 'with these companies' rather than 'to these companies' makes some sense."

Under the bill, the government would impose a limit on emissions — the proposal calls for a 20% reduction from 2005 levels by 2020. Companies that exceed their pollution limit may purchase credits, or "allowances," from other companies that cut emissions by more than required.

Over time, the cap is reduced, and companies must decide whether to invest in technology to cut emissions, purchase more power from renewable sources or buy additional allowances. Both sides get something: environmentalists, a defined cap on emissions; companies, a smooth transition and more certainty.

"We are in that group shoulder-to-shoulder with several of the country's leading environmental groups," said Pacific Gas and Electric spokesman Brian Hertzog. "There's a lot of similarities between what we're looking to advance and what that community is looking for."

Significant questions remain, such as whether the government will initially distribute the allowances to companies for free, auction them off, or do a combination of both. Also unresolved is how revenue collected by the government for the allowances would be spent. Even so, a number of USCAP recommendations are now part of the draft bill:

• Companies could buy offsets by investing in reforestation or renewable energy that could be used to meet emission targets.

• Carbon polluters could "bank," or save allowances for use in future years.

• The Environmental Protection Agency would create a reserve of allowances that would be made available if the price of the permits rose to "unexpectedly high levels" under the system known as cap and trade.

USCAP members argue the proposal must not result in a sudden spike in costs. The EPA estimates that an average household would pay an extra $98 to $140 annually for energy under the cap-and-trade system, but some Republicans say the price tag could be significantly higher.

"Ultimately, it's the end user that is going to pay for this," said Rep. Michael Burgess, R-Texas, an energy subcommittee member who said the companies involved with USCAP have had a "mixed" impact on the debate. "Those companies will simply be passing along those higher costs."

USCAP may help sway moderate members of the House panel, said John Coequyt, a global warming legislative expert with the Sierra Club, which is not a coalition member. Coequyt, who described the environmentalists in USCAP as "taking one for the team," predicted the effort will be more difficult in the Senate.

The Sierra Club has not taken an official position on the draft bill. Though the group supports many of its provisions, including the timeline for cutting emissions, it would prefer stricter limitations on new coal plants, spokesman Josh Dorner said.

"They negotiated a reasonably tough deal with the other groups in USCAP, and they brought it forward at a pretty tough time," Coequyt said. "On the other hand, the environmental groups probably signed up for something that they might not have been willing to sign up for if they were saying what they really felt."