Senate climate bill may drop cap and trade

"Any approach that looks only at a couple of sectors, even though large sectors, would fall well short of an economy-wide approach," said Jim Owen, a spokesman for the Edison Electric Institute, a trade association representing investor-owned utilities. "We have been strongly supportive of a well-designed, economy-wide approach. That's still our position."

Environmental groups have been split over the Waxman-Markey bill that emerged from the House of Representatives last spring. Some viewed it as a good first step that could be strengthened. Others saw it as a fatal compromise.

Something similar may play out over the Kerry, Lieberman, Graham climate-energy proposal, or KLG, as some now call it.

"We are encouraged by the important work being done by Senators Graham, Kerry, and Lieberman, and we look forward to working closely with them ... to pass a strong climate, jobs, and clean energy bill," David Hawkins, director of climate programs at the Natural Resources Defense Council, said in a statement.

The NRDC's support was qualified, however, by concerns about the bill becoming a "Christmas tree" for industry, including "mature technology" such as nuclear power plants, as well as oil and gas industry incentives.

Friends of the Earth has staked out a strong position against taxpayer subsidies for nuclear power and had opposed the Waxman-Markey bill.

"We're open to anything that moves us away from the Waxman-Markey bill," says Nick Berning, a Friends spokesman. "That said, we've been hearing a lot of talk about supporting oil drilling, nuclear reactors, and keeping business interests happy with this bill, too. So I think there's concern that what they produce might not be a solution either."

However, some groups say that the KLG approach does seem likely to put a price on carbon for several key sectors of the economy, perhaps using an approach the federal government already uses to regulate sulfur dioxide emissions.

"Both Senators Kerry and Graham have been clear that putting a price on carbon is essential to making a market-based system work for these new renewable-energy technologies," says Reid Detchon, executive director of the Energy Future Coalition of labor, business, and environmental groups. "We believe a bill can be put together and passed by the Senate that emphasizes those elements."

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