Senate energy bill is at the mercy of political climate change

The tradeoffs and loopholes for industry in the Senate energy bill may create the very uncertainty on energy prices that the industry wants to end.

A climate-change bill with the best chance of passing Congress was unveiled Wednesday – all 987 pages of it.

Despite being riddled with troublesome compromises, the proposed America Power Act is as close to providing certainty about America’s energy future as is politically possible these days.

Introduced by Sens. John Kerry (D) and Joe Lieberman (I), the bill sets long-range targets for the United States to reduce its greenhouse-gas emissions, timetables for industry to comply, and specific subsidies for clean energies, among other things.

On paper, at least, these measures would raise the cost for energy derived from coal and oil in order to achieve the kind of price certainty that businesses crave after nearly a quarter century of hot debate about how to curb climate change. Without higher fossil-fuel prices, cleaner energy technologies with little or no carbon emissions would not make attractive investments.

Even among those with doubts about global warming, Washington’s dithering over energy policy, combined with a threat by the Environmental Protection Agency to take bold regulatory action without Congress, has helped create momentum behind the Kerry-Leiberman measure.

To win passage, the bill throws bones to powerful interests, such as unions, electric utilities, and coal states. It invests in still-unknown technology to capture coal emissions, for example. It also delays emissions enforcement for many parts of the economy.

In one difficult trade-off, it tries to find a balance between the interests of pro- and anti-drilling coastal states in allowing offshore drilling. That measure alone, if passed, might be politically unstable over time – as the reaction to the oil spill tragedy in the Gulf of Mexico is revealing now.

Such compromises could have the effect of creating a new kind of uncertainty for businesses and consumers. As the world’s greatest emitter of carbon per person, for instance, America might fail in reaching the bill’s targets because of the many political trade-offs it contains, forcing Congress toward stiffer measures in coming years as more evidence of global warming builds up.

As it is, the bill doesn’t even pretend to aim for the goal of reversing global warming by reducing Earth’s atmospheric carbon dioxide to 350 parts per million from the current level of nearly 400 p.p.m. And by one expert measure, the bill would reduce CO2 emissions in the US by only 3 percent by 2020 from last year’s level.

Another uncertainty is a measure that would raise US trade barriers against countries that are not making similar attempts to cut emissions. Such barriers could easily end up being temporary as they could be deemed illegal or touch off trade wars that spell their demise.

Another possible uncertainty lies in the appetite in Congress to maintain subsidies for clean energy over time, especially given the high federal debt that lawmakers must solve in a few years. Businesses in solar and wind energy have recently suffered from fickleness on Capitol Hill in tax policy toward the industry.

Carbon-spewing industries that want market certainty for energy prices but also seek loopholes in energy bills cannot have it both ways. In case global warming is all too real, the stakes are too high to play the kind of risky political games normally played in Washington. If anything, the Kerry-Lieberman bill needs stiffer, more certain measures.

Climate-change laws cannot be at the mercy of changes in Washington’s political climate.

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