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Weinberg: Consensus Is Hard to Achieve

Short of a dramatic repetition of then-Vice President Al Gore’s 1997 resuscitation of the Kyoto Protocol, after an overnight flight from Washington, D.C., the Copenhagen Conference will not produce a new international consensus on the response to climate change. And the already dim prospects for a conference rescue will be extinguished if, as appears increasingly likely, no legislation emerges from the Senate this month.

So where will that leave us? With a House-approved bill, but a Senate bill that will only have a chance to reach the floor in 2009 if Congress is kept in session until Christmas to resolve budget and health care matters. Far more likely, there will be no Senate action until sometime in 2010. And then a conference committee, headed toward a bill perhaps by April’s Earth Day.

The fate of the most widely publicized portions of that legislation — the sections that deal with cap-and-trade emissions limitations — may well be controlled by the speed of recovery from the recession. If late 2009 or early 2010 brings the second dip in a “double dip” recession, those concerned with costs and skeptical about the value of any new program will see their hands immeasurably strengthened.

But many people have missed that much of the House bill, and the chairman’s mark of S. 1733 probably could be passed quite quickly if controversies over cap-and-trade were resolved or set aside. And these provisions — a hodgepodge of efficiency standards programs, subsidies, renewable energy standards, procurement preferences and the like — will directly affect the operations of a far broader range of stakeholders than will the cap-and-trade elements. The mechanics of cap-and-trade are of concern only to utilities, refineries, traders and a relatively small subset of the nation’s manufacturing economy. For everyone else, the issue is how to soften the cost blow. But the efficiency and related portions of the legislation offer opportunities and challenges to a far broader array of interests.

Moreover, the boundaries of this debate are now set. While of course there always is the opportunity for further mischief, they essentially are defined by provisions of the House and Senate bills. And, generally and quite intentionally, those provisions are quite similar.

This means that lobbying attention will increasingly focus on influencing implementation of the legislative language on these non-cap-and-trade provisions (while still attending to the wording, of course). And despite Justice Antonin Scalia’s often-quoted observation that looking at legislative history is like going to a cocktail party — you scan the room for your friends — this attention will mean efforts to influence the conference report, floor debate and colloquies, with an eye on future agency action and judicial review.

Consideration of a few of the more obscure provisions in S. 1733 helps make this point. Take Section 154, “State Recycling Programs.” It authorizes the Environmental Protection Agency to establish a program to support both governmental and private-sector recycling efforts. This makes sense because recycling is generally far more efficient than “virgin” production.

Under this provision, local governments are to be eligible for funding if they are making “reasonable progress” toward achieving a 30 percent “collection rate goal.” Manufacturing facilities will qualify if they “can report on a verifiable carbon baseline that is consistent with applicable reporting requirements.” But neither of these standards is defined and, unlike some other provisions of the bill, this section does not require that the program be implemented by notice-and-comment rulemaking. Lobbyists with clients potentially eligible to benefit from these funds will be focusing on documenting, in the legislative history, favorable instructions to the agency.

Similarly, both the House and Senate bills have provisions that mandate government support and promotion of products of various kinds that are “more efficient” than their competitors. Moreover, unlike the recycling section, these provisions will become effective even if there are no cap-and-trade funds to distribute.

In the chairman’s mark of the Senate bill, for example, Title I, Subtitle D goes to “water efficiency.” It requires the EPA to establish a “WaterSense” label to identify more efficient products, the criteria for which are to be established after solicitation of comments from “interested parties and the public.” Those comments presumably will help define how the “preferred technologies and services” reduce water use and are “ensuring product and service performance,” so that the Department of Energy can then meet its new statutory obligation to identify the “highest 25 percent of equivalent products.” This select group will, in turn, be eligible for a federal procurement preference.

These and similar provisions dealing with electrical and electronic products, stoves and all kinds of transportation modalities, to name only a few, cry out for clarification. To date, attention to development of helpful instructions in legislative reports and floor debates has rested primarily with the interests of who promoted each provision. But as the framework for the endgame comes into place, many others should — and almost certainly will — begin thinking about how to position themselves to take advantage of these opportunities.

Ultimately, we probably won’t see report language saying that one of the criteria for water efficiency is whether the equipment at issue bears a blue label of a specified size with a particular design or was produced in a factory at a particular longitude and latitude. But something close is inevitable. And I can’t wait to hear the colloquy between two Senators, when the final conference bill comes to the floor, in which one makes it clear he is only voting for this legislation because it will provide support for manufacturers of left-handed monkey wrenches from metal recovered using a pyrolytic process installed within the past 7.3 years in an economically depressed area.

David B. Weinberg is chairman of the Environment & Safety Practice Group at Wiley Rein. He has been deeply involved in environmental and energy policy, rule-making and litigation matters for more than 30 years.

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