Video: Green gamble

msnbc.com staff and news service reports
updated 6/24/2009 4:58:43 PM ET 2009-06-24T20:58:43

Concessions to farmers and lawmakers from rural areas erased a major obstacle facing a massive climate bill before the House but divided environmentalists, some of whom now oppose the legislation.

And with some Democrats still worried about the bill's impact on energy costs, especially in regions that rely heavily on coal for power, Democratic leaders on Wednesday were looking for broader support for the bill ahead of a vote scheduled for Friday.

The leader of the House of Representatives, Speaker Nancy Pelosi, a Democrat, has vowed to take up the bill, which would set limits on greenhouse gases including carbon dioxide from burning fossil fuels, before lawmakers adjourn at week's end for their July 4 Independence Day holiday recess.

Most — if not all — Republicans are expected to oppose the legislation. Pelosi and the measure's key sponsors have been scrambling to draw in reluctant Democrats with a string of concessions. Among the last holdouts were farm-state legislators concerned that farmers would suffer from high energy costs.

Rep. Collin Peterson, a Democrat and chairman of the House Agriculture Committee, urged support for the bill after he won a number of concessions that he said would benefit agriculture and ease the impact of higher energy costs on people living in rural parts of the U.S.

"We think we have something here that can work with agriculture," Peterson told reporters. "I think we'll be able to get the votes to pass this."

Not all activists on board
Some environmental groups are supporting the bill, but not all.

"These changes will not help the cause of making real reductions in greenhouse gases," said Frank O'Donnell of Clean Air Watch, citing one change that lets the Department of Agriculture, and not the Environmental Protection Agency, decide how farms will have to curb their emissions. "That's like putting the proverbial fox in charge of the hen house," he said.

Many who had backed the bill "are now holding their noses, as if on the perimeter of a hog farm," he added.

Even before the farm concessions, some activists were upset with the bill. Friends of the Earth said it was "based on a blueprint written in part by polluting corporations like Shell Oil and Duke Energy, which has undermined the ability of the bill to solve the problems it is intended to address."

The House bill, covering more than 1,100 pages, would require a 17 percent reduction of greenhouse gases — mainly carbon dioxide from burning fossil fuels such as coal — by 2020 from 2005 levels and about an 80 percent reduction by mid-century. While it would cap climate-changing pollution it also would allow polluters to buy and sell emission allowances within the economy as a way to ease the cost of compliance.

President Barack Obama, who will go to a G8 economic summit next month where climate will be a leading topic of discussions, on Tuesday urged lawmakers to pass the bill which, he said, will "spark a clean-energy transformation ... and confront the carbon pollution that threatens our planet."

The bill's emission limits would have their greatest impact on electric utilities, oil refineries and energy-intensive industrial plants as a new cost on carbon releases forces them to find ways to cut emissions, shift to less-polluting fuels or purchase emissions allowances.

To ease costs in the early years, the government would provide free pollution allowances to those most affected — and that has become a key complaint of environmentalists.

Republican outrage
The so-called "cap-and-trade" system has been attacked by Republicans who say it amounts to a massive energy tax that would ripple across the entire economy.

It "will destroy American jobs, raise prices for gasoline, electricity and other sources of energy, and devastate middle-class families and small businesses," House Republican leader John Boehner wrote in a memo to fellow lawmakers, calling the upcoming vote "one of the defining debates" of the congressional session.

Democratic leaders, meanwhile, pointed to two new reports released this week analyzing the House bill that acknowledged limits on greenhouse gases would increase the cost of energy production, but that most of those costs would be mitigated by other provisions in the bill.

The bipartisan Congressional Budget Office said while households on average would spend $770 more a year on energy in 2020, their annual net cost is likely to be as little as $175 because of energy efficiency or money flowing back in form of direct relief or indirect allowances to businesses and local governments. It said poor households would, in fact, save $40 a year.

A separate analysis by the Environmental Protection Agency said consumer utility bills would be 7 percent lower by 2020 because less energy will be used as a result of efficiency and other provisions in the bill. It estimated the bill's impact on household energy costs at between $80 and $111 a year.

The Associated Press contributed to this report.

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