Global Warming Debate Shifts To Who Pays

An international report giving greater certainty to global warming will shift the debate in Congress from what's causing climate change to the economics of who will pay to confront it.

The outcome will sort out winners and losers.

As lawmakers squabble over the details in a half dozen approaches to reducing the flow of heat-trapping "greenhouse" gases from power plants, cars and factories, an overriding political worry hangs over the process: cost and who will foot the bill.

"The debate has clearly shifted from a battle over the science to fighting over the scope and design of the solution," says Jason Grumet, executive director of the National Commission on Energy Policy, a private bipartisan advocacy group on the country's future direction on energy.

The best climate scientists on the planet say it is clear the earth is getting warmer and greenhouse gases produced since the industrial revolution are to blame, reports CBS News correspondent Mark Phillips from Paris. The release Friday of a United Nations report affirming that industrial activities, mainly burning fossil fuels, are largely to blame for a dangerous warming of the earth, will likely spur the climate debate in Congress.

Democrats, joined by a few Republicans, believe mandatory limits on emissions are needed to make any headway toward stabilizing greenhouse gas concentrations in the atmosphere.

To blunt the economic cost of cutting these emissions — chiefly carbon dioxide from burning oil, coal or natural gas — the proposals allow for "loopholes" in the mandatory caps: the ability to buy pollution credits if emission reductions get too costly, to save credits for future use if early reductions are cheaper, or "bank" credits and use or sell them later.

One bill, offered by Sen. Jeff Bingaman, D-N.M., would allow a "safety valve" whereby companies could ignore the emission caps altogether if compliance gets too expensive.

"All of these programs are designed to minimize the cost," says John Larsen, an analyst at the World Resources Institute who has studied the various "cap-and-trade" mechanisms lawmakers are considering.

The Bush administration doesn't like any of them, arguing that arbitrary pollution limits would be too costly, threaten certain carbon-intensive industries and result in lost jobs as business shifts to other countries.

There's worry about "the unintended consequences," Energy Secretary Samuel Bodman said Friday as he made clear the new report by the international panel of scientists hasn't changed the administration's opposition to the "cap-and-trade" approach.

Such systems have not been tested on the scale they would be implemented to deal with climate change, suggested Bodman, adding: "The U.S. economy is not something to be experimented with, in my judgment."

Instead, the administration argues that a push for new technology will lead to a shift away from fossil fuels, more conservation and an eventual cut in greenhouse gases without hurting the economy.

But lawmakers including Sens. John McCain, R-Ariz. and Barack Obama, D-Ill., — both likely presidential contenders in 2008 — and Sen. Barbara Boxer, D-Calif., chair of the committee that will deal with climate legislation, are convinced mandatory emissions requirements are needed.

To do anything else, said Boxer, "is like saying the patient has a high fever, but you're going to leave the only real medicine on the shelf."

Bingaman said the latest report and other findings "compel us to act now." He called on the president "to show leadership and work with Congress to implement a mandatory market-based cap and trade program to address this challenge."

Boxer has offered one of the most aggressive approaches to dealing with climate change, envisioning an 80-percent cut in emissions by mid-century. McCain and Obama are co-sponsors of a bill aimed to cut emissions by two-thirds by that time.

No one has yet analyzed the cost of such emission cuts in higher gasoline prices, higher electricity bills and a shift in wealth among different industries, or on jobs as energy production moves away from fossil fuels to other energy sources and technologies aimed to cut energy use.

A less-stringent bill, which McCain offered three years ago, was estimated to raise gasoline prices by 20 percent, according to the Energy Department. The most modest climate change bill offered this year, by Bingaman, would raise gasoline and electricity costs about 4 percent in 2030, according to the department. But that bill also would have only modest impact on dealing with climate change as greenhouse gases would continue to increase, though at a slower rate.

A growing number of businesses — including executives of 10 large corporations — recently have embraced aggressive measures to cap carbon dioxide emissions, arguing that climate change must be addressed and the consequences will be economically severe if nothing is done.

There will be intense lobbying, however, from various industries and even segments within industries over the details. And the outcome — often in the legislation's fine print — could determine who actually becomes a winner or a loser.

Nowhere is that more apparent than in the electric power industry where some utilities are calling for stringent caps on greenhouse emissions, while others argue against government intervention.

When Sen. Dianne Feinstein, D-Calif., recently called for capping carbon emissions from power plants, an official of Entergy Corp., attended the news conference. Entergy is the second-largest user of nuclear power among U.S. utilities, and reactors emit no greenhouse gas.

At the same time, some other utilities that are heavily invested in coal plants oppose mandatory carbon limits — but have begun to lobby for favorable language that would reduce their costs.

For example, they say they should be given free emission permits on emissions from older coal plants until carbon capturing technology is developed.

"I think there is a narrowing of view in the industry. It's not a matter of doing it, but when and how," says Jeffry Sterba, chairman of PNM Resources, an energy holding company based in Albuquerque, N.M., who supports mandatory carbon limits.