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Senate Democrats to W.H.: Drop Cap-and-Trade

Lisa Lerer

Bruised by the health care debate and worried about what 2010 will bring, moderate Senate Democrats are urging the White House to give up now on any effort to pass a cap-and-trade bill next year.

“I am communicating that in every way I know how,” says Sen. Mary Landrieu (D-La.), one of at least half a dozen Democrats who've told the White House or their own leaders that it's time to jettison the centerpiece of their party's plan to curb global warming.

The creation of an economy-wide market for greenhouse gas emissions is as the heart of the climate bill that cleared the House earlier this year. But with the health care fight still raging and the economy still hurting, moderate Democrats have little appetite for another sweeping initiative — especially another one likely to pass with little or no Republican support.

“We need to deal with the phenomena of global warming, but I think it’s very difficult in the kind of economic circumstances we have right now,” said Indiana Democratic Sen. Evan Bayh, who called passage of any economy-wide cap and trade “unlikely.”

At a meeting about health care last month, moderates pushed to table climate legislation in favor of a jobs bill that would be an easier sell during the 2010 elections, according to Senate Democratic aides.

“I’d just as soon see that set aside until we work through the economy,” said Sen. Ben Nelson (D-Neb.). “What we don’t want to do is have anything get in the way of working to resolve the problems with the economy.”

“Climate change in an election year has very poor prospects,” added Sen. Kent Conrad (D-N.D.). “I’ve told that to the leadership.”

At least some in the Democratic leadership appear to be listening.

Asked about cap-and-trade last week, Senate Majority Whip Dick Durbin (D-Ill.) said: “At this point I’d like to see a complete bill but we have to be realistic."

Moderate House Democrats who voted in favor of the cap-and-trade bill just before the July 4th recess came under fire back home, and Republicans have vowed to make the issue a key line of attack during next year’s elections.

Some Democrats would prefer to deny them that target.

“I’d prefer to do energy, because I think you could get a really broad consensus on a lot of energy legislation,” said Sen. Mark Pryor (D-Ark.) .

But supporters of the climate bill say that cap-and-trade is an inextricable part of any energy package for next year.

“We’ve got to keep them together because they go together,” said Connecticut Independent Sen. Joe Lieberman, who infuriated liberals with his opposition to the public option in the health care bill but who's trying to keep cap-and-trade alive in a bipartisan climate bill he's drafting with Sens. John Kerry (D-Mass.) and Lindsey Graham (R-S.C.).

The White House remains firmly behind an economy-wide cap-and-trade system, which would curb greenhouse gas emissions and create a market for polluters to buy and sell carbon allowances.

“We think that a cap-and-trade mechanism is the best way to achieve the most cost-effective reductions," a senior administration official told reporters last week.

But Kerry raised eyebrows last week when he seemed to hint at some flexibility over the issue.

"I can't tell you the method or the means or amount by which we might price carbon," he told reporters in Copenhagen. "We haven't resolved that issue yet.”

A move away from cap-and-trade would bitterly disappoint the environmental community and many powerful utility companies, who’ve lobbied hard for the system.

Many utilities, investors, and even some consumer companies like Starbucks and Nike believe cap-and-trade will unleash a flood of investments in energy efficiency and renewable fuels like wind, solar, and nuclear power But passage will be a heavy lift -- with few signs of Republican support and mounting concern from the moderate Democrats.

Earlier this month, Sen. Susan Collins (R-Maine) and Sen. Maria Cantwell (D-Wash.) introduced a bill that would replace cap and trade with a system that would set a price on carbon dioxide emissions and return all the revenue to consumers, instead of industry.

And Republican Sens. George Voinovich of Ohio and Richard Lugar of Indiana are examining proposals to cap greenhouse gas emissions only on power plants, coupled with energy efficiency programs for buildings and transportation.

After the tough health care fight, Democratic leadership believes a climate bill must pass with significant bipartisan support or risk leaving the party open to attack during the midterm elections.

“Any bill dealing with energy and climate change will have to be bipartisan to pass,” said Durbin. “Sen. Kerry assures me that there are other (Republicans) that he may have.”

But even among Republicans who believe global warming is a problem, few -- if any -- other than Graham support an economy-wide cap and trade system.

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