INSIGHT: Bush gives push to climate legislation

17 April 2008 15:24 [Source: ICIS news]

Industry may have to ride climate wave or end up under it By Joe Kamalick

WASHINGTON (ICIS news)--President George Bush this week launched a new emissions control initiative that is unlikely to sway the Democrat majority in Congress but probably will help build momentum for a climate change bill this year or next.

On Wednesday Bush outlined a new administration goal to halt growth of US greenhouse gas (GHG) emissions by 2025, chiefly by reducing pollution from electric utilities through technology but without inhibiting broader industry.

Bush said that “to reach our 2025 goal, we will need to more rapidly slow the growth of power sector greenhouse gas emissions so that they peak within 10-15 years and decline thereafter” to cap electric utilities’ emissions at a level below their 2002 output.

Although the president made no specific legislative proposals, he outlined what he termed core principals based on technology advances rather than punitive taxes and restrictions that would undermine US economic and energy security.

“The wrong way is to raise taxes, duplicate mandates or demand sudden and drastic emissions cuts that have no chance of being realised and every chance of hurting our economy,” Bush said.

“The right way is to set realistic goals for reducing emissions consistent with advances in technology, while increasing our energy security and ensuring our economy can continue to prosper and grow.”

“The wrong way is to jeopardise our energy and economic security by abandoning nuclear power and our nation’s huge reserves of coal,” he said.

“The right way is to promote more emission-free nuclear power and encourage the investments necessary to produce electricity from coal without releasing carbon into the air.

“The wrong way is to unilaterally impose regulatory costs that put American businesses at a disadvantage with their competitors abroad, which would drive American jobs overseas and increase emissions there,” he added.

Many US chemical industry leaders have warned that draconian emissions reduction legislation could drive more utilities from coal to natural gas as a power fuel, sending gas prices higher and forcing more US chemical and other gas-dependent manufacturing offshore.

The principal emissions control legislation now pending in Congress, Senate bill S-2191, would impose a cap and trade system on US manufacturing, transportation and power sectors to reduce overall US emissions to a level 63% below 2005 levels by 2050.

White House spokeswoman Dana Perino said Bush could not support that or other emissions control bills pending in Congress, arguing that congressional climate change plans would be a “regulatory train wreck”.

Despite his opposition to bills now pending, in his new climate control initiative Bush is signalling the Democrat-controlled Congress that he is willing to co-operate to bring about a federal emissions plan, perhaps even this year.

There are several factors driving the new White House warming for global warming.

First, the president and many others in both parties - along with a legion of business and industry - are worried that unless Congress and the administration can agree a plan to exert some federal control over GHG emissions, numerous federal and state agencies, courts and local governments will create a bedlam of multiple and conflicting requirements, rulings and regulations that will drag US industry to a standstill.

Chief among these concerns is the likelihood that the federal Environmental Protection Agency (EPA) will be forced by environmental groups under a Supreme Court ruling to regulate carbon dioxide (CO2) emissions from every conceivable stationary and mobile source in the nation.

Even Congressman John Dingell (Democrat-Michigan), chairman of the House Energy and Commerce Committee, worries that climate control regulations generated by the EPA could create mayhem.

“In last year’s Supreme Court decision in Massachusetts vs EPA, the Court stated that greenhouse gases are ‘air pollutants’ under the Clean Air Act… and that EPA can regulate greenhouse gases from both stationary and mobile sources,” he said in a hearing earlier this month.

“Even if the next administration did not want to issue such regulations,” Dingell said, alluding to the possibility that a Democrat may well be president in January 2009, “environmental groups would undoubtedly go to court to force EPA to act.”

Such court-forced actions by the EPA, he warned, “are likely to impose greater hardship on US industry than would carefully crafted legislation that achieves the same or greater greenhouse gas reductions”.

In announcing his climate control initiative this week, Bush was pretty much on the same page as Dingell.

“Decisions with such far-reaching impact,” he said, referring to probable GHG regulations by EPA or other federal agencies, “should not be left to unelected regulators and judges”.

“Such decisions should be debated openly; such decisions should be made by the elected representatives of the people they affect,” Bush said.

In addition to concerns that federal and state regulators might run amok with multiple approaches to emissions control, more in industry are worried that - in terms of the well-worn Washington lobbyist cliché - “if you’re not at the table, then you’re going to be on the menu”.

In other words, if industry does not actively participate as a stakeholder in the legislative process, it ultimately will have to accept a climate mandate crafted without its input.

It is for this reason that a year ago many prominent US energy and chemical companies - including BP America, ConocoPhillips, Shell, Dow Chemical and DuPont - joined with other companies and environmental groups to form the US Climate Action Partnership (US-CAP) to advocate for a mandatory federal emissions control programme.

Their support for a mandatory plan is heavily qualified - it must be global in reach, environmentally effective, stimulate innovation and apply fairly across the economy - but it essentially assumes that climate control legislation is going to happen.

Lastly, an increasing number of business and industry leaders believe that a more-or-less reasonable climate action bill should be forged under the Bush administration and with the current Congress.

This is because they fear they almost certainly will face far more draconian and onerous emissions legislation in 2009 when Democrats are likely to have an even larger majority in both the House and Senate with the strong possibility that a Democrat will be in the White House.

David Parker, president of the American Gas Association (AGA), outlined this way of thinking at an industry gathering earlier this year.

“Many of us expect that there will be more Democrats in the Senate next year,” where Democrats hold only a one-vote majority now, “so it might be better for us to work with this Congress this year in hopes of getting a climate control bill we can live with,” he said.

In reacting to Bush’s new emissions initiative this week, the Environmental Defense Fund (EDF) said: “The White House sees the handwriting on the wall and knows that [emissions control] regulations are coming, one way or another.”

“The administration is now inching closer to the table,” the EDF added, “and that can help move a bill in 2008.”

By: Joe Kamalick
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