The climate change legislation being debated now in the Senate is the Super Bowl for lobbyists, roping in everyone from Alaskan Inupiaqs to venture capitalists.
“We’re only this far because of the array of citizen groups, business, labor, environmentalists, religious communities, hunters, anglers, you could go on,” Sen. Joseph I. Lieberman (I-Conn.) told reporters on Capitol Hill. “It’s this mighty force rising out from the American public.”
Scores of niche organizations such as Amazon Watch, which works to defend indigenous Amazonian people from deforestation, and the Military Advisory Board, consisting of 11 retired admirals and generals concerned about the impact of global warming on national security, are lobbying for the bill.
The sweeping legislation would impact nearly every aspect of the complicated energy industry, and its effects would reverberate through a huge swath of the American economy.
The first test of the legislation came Monday, when the Senate voted 74-14 to open debate.
Few lobbyists expect climate change legislation to pass this year. In its current form, it faces an uphill battle in the Senate, as well as a veto threat from the White House.
The impassioned debate, however, will pressure many industries to take a stand on some difficult questions likely to be in the political spotlight for years to come.
Depending on how Congress eventually deals with global warming, the outcome will inevitably hurt some companies while creating significant new markets for others.
Sponsored by Lieberman and Sen. John Warner (R-Va.), the measure would cut greenhouse gas emissions by nearly 70 percent by 2050. It mandates a trading system, known as cap and trade, that would allow companies to purchase carbon credits through an auction process. The bill also provides billions of dollars in subsidies for conservation and environmentally clean technologies.
Business is pushing for various carve-outs. Real estate groups, for example, are backing an amendment allowing a portion of the carbon credits to be given to building owners who improve the efficiency of their properties.
Last month, a group of 50 state treasurers, institutional investors, asset managers and venture capitalists signed a letter supporting the legislation as a way to help investors better determine the level of climate risk and opportunity in their portfolios.
“I am the primary fiduciary for investing the commonwealth’s funds, and I am most interested in terms of long-term sustainable investments,” said Pennsylvania state Treasurer Robin Wiessmann. “It is important for us to invest in companies where they have reasonable behavior as it relates to the environment, and also as an investing fiduciary, I think there is a great opportunity in the market.”
While a broad range of interests is pushing for action, the specifics of the bill have split some industries, unions and advocates.
The environmental community is divided over whether the bill is tough enough on capping emissions. Friends of the Earth and Greenpeace have aligned with a diverse coalition urging senators to “fix or ditch” the bill. Lobbyists say the groups are wagering that tougher mandates (such as an emissions reduction of more than 70 percent) can be enacted in the next administration.
“We believe the first global warming bill passed in the U.S. will set the foundation for all carbon reduction efforts in the future; there is no time for half-measures,” said Friends of the Earth Action President Brent Blackwelder.
But the Natural Resources Defense Council and a slew of others believe that some action is better than no action. Environmental Defense Fund recently launched a pro-legislation television ad campaign.
Some individual financial services companies are lobbying to make sure any cabon market that’s created is open to all traders, even if they are not actual polluters. But the Financial Services Forum and the Financial Services Roundtable have yet to take an official stand on the legislation.
Monday’s vote was a blow to business groups — particularly the behemoths, the U.S. Chamber of Commerce and the National Association of Manufacturers — that argue the proposal could take another swing at an already struggling economy and cut into American’s ability to compete globally.
A March study by the NAM predicted that the United States would take a $269 billion hit to the economy by 2014 and lose 1.8 million jobs by 2020 if the proposal becomes law.
The legislation is particularly burdensome for energy-intensive industries such as cement, steel and aluminum and airlines. Jet fuel prices would skyrocket even more, trampling an already damaged airline industry and raising fares still higher, the Air Transport Association warns.
The American Coalition for Clean Coal Electricity and the National Mining Association worry that a cap-and-trade bill would cause energy prices to rise by forcing companies to cut their greenhouse gas emissions before cleaner technologies are fully developed.
Energy companies also object to the number of carbon credits they are granted under the legislation. The natural gas industry is awarded no credits, and oil companies receive just 3 percent of the total available, a number that would force both industries to buy additional allowances. The additional costs would mean higher fuel prices for business and consumers, predicts the American Petroleum Institute.
“The bill is very imbalanced and artificially chooses winners and losers,” said API policy analyst Lou Hayden.
An API report in May showed the U.S. oil and natural gas industries invested about $42 billion in greenhouse gas emissions mitigation technologies from 2000 to 2006, roughly 45 percent of an estimated $94 billion spent by all U.S. industries and the federal government.
If they are forced to spend money on credits, oil and gas would no longer make the same level of investment in more renewable energy sources, the oil industry argues.
But even the most vocal opponents welcomed the debate as an opportunity to highlight their concerns, which they say have been largely overlooked so far in the Democratic-controlled Congress.
“We have not had a particularly enlightening discussion of cost containment, the state of technology or international competition,” said coal lobbyist Scott Segal, who also leads a coalition of opposing power companies, including Duke Energy Corp. “Floor debate could be one of those teachable moments.”