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A Big Thaw for Climate Change

Cap-and-Trade Moving Ahead

After Rep. Henry Waxman (D-Calif.) unseated Rep. John Dingell (D-Mich.) atop the Energy and Commerce Committee last year, conservative Democrats worried that Waxman and Speaker Nancy Pelosi (D-Calif.) would try to ram through a politically toxic climate change bill.

But this week, Waxman and Subcommittee on Energy and Environment Chairman Ed Markey (D-Mass.) showed a pragmatic streak that appears close to lining up support from nearly all the panel’s Democratic members.

The pair announced Tuesday night that they had compromised with party moderates to reach a breakthrough on the most difficult issues facing the bill and planned to unveil the text today.

Final details were still being negotiated Wednesday night, and Waxman and Markey met multiple times with Texas Democratic Reps. Gene Green and Charlie Gonzalez to try to cut a deal on limiting the effect on the oil refining industry.

“I’m feeling pretty good right now,” Markey said Wednesday afternoon. “It’s down on the 10-yard line.”

To be sure, the political calculus for the legislation remains dicey, with action in the Senate uncertain and Republicans unified in opposition.

But the deal appears to have substantially improved chances for quick House action that backers hope will prompt the Senate to act.

“Everybody thought health care was going to happen and energy was just going to sit there,” a Democratic leadership aide said. “I think they did what was necessary to earn the trust and respect of the Caucus, and that’s a major accomplishment considering the diversity and regional differences.”

Markey said the critics and doubters on the outside weren’t aware of the progress being made behind the scenes in recent months.

“Those who were predicting the demise of the bill never understood the dynamic inside our committee,” Markey said. “Every Democratic member of the committee is committed to bringing clean energy jobs to their district. ... All of the Members wanted to get to ‘yes.’”

Markey predicted that most, if not all, of the Democrats on the committee will sign onto the bill and ultimately be the ambassadors to the rest of the Democratic Caucus as they push to bring it to a House vote this summer.

Waxman and Markey had one thing going for them from the start — strong support from a large coalition of corporations that often oppose environmental legislation, including several major oil companies and utilities.

“When Edison Electric Institute’s CEO endorsed the bill, when three of the largest oil companies support the bill, when the second-largest coal company supports the bill, when [General Electric] and dozens of Fortune 100 companies endorse the bill, that will be the answer to the critics who say it will hurt the economy,” Markey said.

“The hardest thing was to convince people that we could do it, because that’s the beginning of real discussions,” Markey said. “There were so many people of the opinion that nothing was going to happen until they came into our process. ... We had to dispel conventional wisdom.”

Polling results presented to Democrats on Tuesday night showing strong public support for clean energy legislation that reduces dependence on imported oil also helps the bill’s chances, Markey said.

The compromises reached this week also are aimed at minimizing costs for consumers and protecting manufacturers facing the potential for costs not shared by their overseas competitors — two of the biggest criticisms of the scheme.

Instead of the 100 percent auctions that President Barack Obama proposed during his campaign, Waxman and Markey agreed to initially give away most of the carbon emission permits for free in an effort to prevent economic disruptions or a surge in electric rates.

And in negotiations with Rep. Rick Boucher (D-Va.), Waxman agreed to a 17 percent cut in carbon emissions in 2020, instead of the 20 percent that he had sought, which Boucher, who hails from coal country, had feared would outpace technologies like carbon capture from coal-fired power plants.

The renewable electricity standard was trimmed to 20 percent by 2020, although as much as 8 percent could come from efficiency improvements, Markey said.

Backers of nuclear power, including Science and Technology Chairman Bart Gordon (D-Tenn.), Majority Whip James Clyburn (D-S.C.) and Majority Leader Steny Hoyer (D-Md.), also got commitments for incentives for new nuclear plants as well, including an exemption from the renewable electricity requirements.

Members praised the apparent deal, while cautioning that they wanted to see it on paper before committing to it.

“I think they knew from the beginning that all of this would need to be addressed, and to the chairman’s credit, they sat down with us,” said Rep. Mike Doyle (D-Pa.), who has major steel interests in his district that would get free emissions credits.

“I have to give Mr. Markey a lot of credit,” said Gonzalez, who praised him in particular for being open to technologies like nuclear power.

Not everybody was wholly satisfied, of course.

Rep. G.K. Butterfield (D-N.C.) said he was still concerned that there wouldn’t be enough revenue raised to insulate lower-income residents from the higher costs the plan would impose.

“The cost of everything is going to go up — electricity, food, plastics, rubber, autos — the cost of everything is going to go up,” he said.

Rep. Bart Stupak (D-Mich.) said he wants language added to tightly regulate the trading of the credits to prevent speculation.

“I’m not for it unless we tighten this market,” Stupak said. “I just think there is a windfall for the speculators, and they can’t wait.”

Republicans, meanwhile, appear to be hardening their opposition. Energy and Commerce ranking member Joe Barton (R-Texas) promised a fight at next week’s markup, saying Republicans would “never surrender” on the issue of cap-and-trade, arguing that it is “unilateral economic disarmament.”

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