Word from Washington DC this week that Democrats Sen. John Kerry and Sen. Joe Lieberman and Republican Lindsey Graham are working on a compromise climate bill that they hope can be less controversial than the cap and trade bill passed in the US House last summer and which can gain more support from business.
As often note here on thegreensupplychain.com, whether or not some form of carbon emissions regulation and/or cost is created as law is one of the most important issues facing supply chain professionals and their businesses. If and when concern over CO2 emissions moves from the current voluntary efforts by business (or not) to one governed by actual law and as yet to be determined real costs, the Green landscape and decision-making might change dramatically.
Importantly, Kerry is trying to change the frame of the debate away from a direct focus on climate change, which is still controversial and suffered something of a “public relations” challenge given the cold and snowy winter in many parts of the US and the globe, to one with a broader and more universally appealing agenda.
“What we are talking about is a jobs bill. It is not a climate bill. It is a jobs bill, and it is a clean air bill. It is a national security, energy independence bill,” Kerry told reporters in Washington this week.
Most viewed the chances of a Senate bill on “cap and trade” this year to be remote at best, but Kerry, Graham and Lieberman may be having some success reviving climate discussions by shifting the focus from an “economy-wide” cap-and-trade approach to something that appears less burdensome to the economy – but as yet there is no draft bill to evaluate against that goal.
At a high level, Kerry said that Utilities would be required to hold allowances to cover their emissions and could trade the allowances on an open market as needed. But oil refiners would face a fee based on the carbon content of their fuels instead of a cap, a policy that oil companies themselves have said they favor.
This would appear to mean other types of companies – manufacturers and transportation companies, for example - would not for now need to participate in the whole cap and trade program directly at all, as they would under the House bill.
Additionally, the bill the three senators are developing is expected to include new incentives for nuclear power, “clean” coal, and natural gas, and could open new areas offshore to oil drilling.
As a result of this plan, the senators hope this approach brings more support from business, especially Tom Donohue, CEO of the U.S. Chamber of Commerce, who has been a staunch opponent of most cap and trade legislation.
Business support for cap and trade has been mixed, though publicly few will say they are outright opposed to it conceptually. Late last year, a few high profile companies, such as Apple and Nike, left the Chamber of Commerce in opposition to its stance on cap and trade.
Last month, however, ConocoPhillips, BP America and Caterpillar left the US Climate Action Partnership (USCAP), an organization of US businesses generally supportive of some action on CO2 emissions. The three companies said their own interests and the actions of USCAP were increasingly at odds. A key issue, all three said, was that USCAP was not emphasizing the role of natural gas in US energy plans aggressively enough.
Potential bills that might be supported by USCAP "have disadvantaged the transportation sector and its consumers, left domestic refineries unfairly penalized versus international competition, and ignored the critical role that natural gas can play in reducing greenhouse gas emissions," said Jim Mulva, ConocoPhilips chairman and CEO, said at the time.
The new idea for the Senate seems a path that could certainly diffuse many concerns over the impact of a cap and trade type law, and enjoy more broad public support.
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