The New York Times - Obama Stresses Need for Price on Carbon as Dems Look to Compromise

By Josh Voorhees and Robin Bravender

Key Senate Democrats offered today to scale back their ambitious efforts to cap greenhouse gas emissions but stressed that they and President Obama remain committed to putting a price on carbon this year.

Obama told a bipartisan group of senators he is unwilling to give up on his goal of pricing carbon as a way to curb emissions.

"He was very strong about the need to put a price on carbon pollution and make polluters pay," Sen. Joe Lieberman (I-Conn.) told reporters.

"The president told the senators that he still believes the best way for us to transition to a clean energy economy is with a bill that makes clean energy the profitable kind of energy for American businesses by putting a price on pollution -- because when companies pollute, they should be responsible for the costs to the environment and their contribution to climate change," the White House said in a statement.

But the White House cautioned that "not all of the senators agreed with this approach" and noted that Obama "welcomed other approaches and ideas that would take real steps to reduce our dependence on oil, create jobs, strengthen our national security and reduce the pollution in our atmosphere."

Lieberman and his cap-and-trade co-sponsor, Sen. John Kerry (D-Mass.), said they are prepared to make concessions to move a climate and energy package.

"All of us have to compromise," Kerry said. "We believe we have compromised significantly, but we're prepared to compromise further."

There was a strong sentiment at the White House meeting that most senators and the president are in favor of bringing to the floor "the strongest bill we could," said Sen. Jeff Bingaman (D-N.M.). Whether or not that legislation will include climate provisions will be up to Majority Leader Harry Reid (D-Nev.), he added.

Kerry and Lieberman have so far been unable to convince skeptical Republicans and moderate Democrats to touch cap-and-trade legislation that would price carbon on an economywide basis, and in recent days, the pair have signaled their openness to a smaller carbon cap that would be placed only on the utility sector.

During the roughly 90-minute meeting, Obama refrained from advocating for any of the legislative proposals already on the table, according to Sen. Sherrod Brown (D-Ohio.)

"He went around the table and expressed a sort of admiration for [specific] provisions in the different bills," Brown told reporters. "He's not saying, 'Here's what I want you to do.' He probably needs to say that and push one approach at some point."

A handful of Republicans who attended today's White House climate talks suggested they would be open to discussing the smaller carbon-pricing plan, Kerry and Lieberman said.

"Some of our colleagues, who up until this time have been at least publicly reluctant about the 'polluter pays' putting a price on carbon pollution, said that they'd be willing to discuss limited forms of doing that in this bill," Lieberman said. "And to me, that's a breakthrough that Senator Kerry and I want to begin to take advantage of by sitting and talking to those colleagues across party lines as quickly as we can."

One such GOP senator is Olympia Snowe (R-Maine), who indicated a utility-only bill could work for her. Snowe said that while an economywide approach to carbon reduction would be too expensive, the prospect of U.S. EPA climate regulations would threaten businesses if Congress fails to act.

"Which is why I believe that one possibility is to more narrowly target a carbon pricing program through a uniform nationwide system solely on the power sector, which is the sector with the most to lose from the EPA regulations and it's also the sector in which businesses actually make decisions today based on prices 20 to 30 years in the future," Snowe said in a statement.

Speaking to reporters after the meeting, Sen. Lamar Alexander (R-Tenn.) said that Republicans remained united in their opposition to Democratic efforts to directly curb emissions.

"As long as we take a national energy tax off the table, there's no reason we can't have clean energy legislation," said Alexander, the chairman of the Senate Republican Conference.

"A cap-and-trade proposal, a national energy tax, will not sell," added Sen. Lisa Murkowski (R-Alaska).

Democratic leaders have previously suggested that they plan to combine legislation responding to the ongoing Gulf of Mexico oil spill with their climate bill in an effort to bully Republicans into voting for the package.

But both parties focused most of their public post-meeting comments on the idea of pricing carbon.

"My suggestion was that if you want a clean energy bill, take the national energy tax off the table in the middle of a recession while we clean up the oil spill," Alexander said.

Brown said senators talked about legislative efforts to respond to the ongoing BP PLC oil leak during the meeting, but that there was little talk of expanding offshore drilling.

"There was talk of nuclear, wind and solar, and biomass and clean coal," Brown said. "There was talk of the drilling [safety] issue, but no real support that I saw for expanding offshore drilling."

Majority Leader Reid has said that he hopes to bring a climate bill to the floor this summer.

"Our caucus is energized on this issue and our resolve to act on energy legislation this summer remains strong," Reid said in a statement.

Kerry said Obama was clear that he wanted the chamber to work "as fast as possible," but Brown said that the president stopped short of setting a firm deadline.

"But he knows there's not a lot of floor time left," Brown said.

Utilities-only option gaining steam?

Kerry said that a scaled-back carbon plan could serve as an important first step in the United States' efforts to curb greenhouse gas emissions.

"We believe, and I think the president believes very strongly, what is important is for America to get started," he said.

One such approach on the table today was legislation to cap emissions from just the electric utility sector. Bingaman has drafted such a measure, although he says he is unsure whether he will introduce it or whether it will get the needed 60 votes (E&E Daily, June 29).

"We have a draft proposal, but we have not introduced anything; I don't have any immediate plans to do so," Bingaman said on a conference call after the meeting.

Bingaman said he thinks there are ways to design Kerry-Lieberman or a "cap and dividend" bill from Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine) to have them focus solely on the power sector if that decision is made.

"There was some discussion about it during our meeting with the president, but it was somewhat inconclusive," Bingaman said, adding that Reid will have to decide whether or not to bring such a measure to the floor for consideration. "I frankly don't know whether the support would be there to do it or not," he added.

Sen. Tom Carper (D-Del.), who also attended the meeting today, said that approach might be more politically feasible than an economywide approach this year.

"I sensed a willingness to address a carbon dioxide with respect to utilities," Carper said. "The question is, do we get started, or do we wait until next year to do something? I think there is a real eagerness, a real appetite to get started, to focus on the utility sector to send a price signal and to not only address CO2 but SOx [sulfur oxides], NOx [nitrogen oxides] and mercury." Carper is the author of pending Senate legislation aimed at slashing smokestack emissions of those pollutants.

Kerry said today that a utility-only cap is among the scaled-back approaches that he would consider. "That would certainly be one of them," he said. "But there are some other possibilities."

Sen. Lindsey Graham (R-S.C.), who helped draft the Kerry-Lieberman bill and subsequently dropped out as a co-sponsor, has said he would consider backing a utility-only approach, but not this year. "We're not going to have an economywide pricing on carbon, probably utility-only," Graham said, "and that can't be done until the oil spill is dealt with."

Graham did not attend the meeting at the White House today, citing a scheduling conflict with the Armed Services Committee confirmation hearing for Gen. David Petraeus, who was nominated to take over the top U.S. military post in Afghanistan.

Some Republicans, meanwhile, advocated an energy-only approach as the best way to reach a compromise.

"I think most, not most, but many of us made it very clear that we think if we're going to do anything in the area that we ought to do the bill coming out of the Energy Committee that's rather bipartisan," said Sen. George Voinovich (R-Ohio). "But I made it clear this cap and trade, cap and tax ... that there aren't 60 votes for it in the Senate."

An energy-only bill would not go far enough, Kerry said, because it would not slash emissions at the same levels and would create fewer jobs. "I think we feel very very strongly that we have to find a place of compromise that's real," he said. "That's not a compromise."

Bingaman, the Energy and Natural Resources Committee chairman, has stated the Senate should take up an energy bill if Democrats cannot get 60 votes for pricing carbon. "I'm saying what I've been saying for months, and that is, let's do all we can do, but let's not leave undone those things that we can clearly do if it turns out we don't have 60 votes to do everything," he said yesterday. Bingaman is the lead sponsor of a bipartisan bill that includes a renewable electricity standard and expands offshore oil drilling.