Senate Majority Leader Harry Reid’s announcement that Democrats were abandoning comprehensive energy reform legislation tackling climate change left just about everyone close to the issue dismayed. With Republicans, who opposed the bill, expected to make gains in November, the prospect of the Senate gaining enough votes to pass legislation aimed at reducing greenhouse gasses now seems a distant prospect.
“We’re gravely disappointed in what happened last week,” Beth Berlin, the Montana director of Climate Solutions, a coalition that has been campaigning in support of federal legislation to reduce greenhouse gases, said. “It’s really too soon to tell what’s going to happen.”
Yet concern is also growing on the part of organizations, businesses and trade groups that, in the absence of Congress taking action to deal with climate change, the Environmental Protection Agency could move to regulate greenhouse gases through the Clean Air Act.
“We think it’s the wrong tool for regulating greenhouse gases,” said Don Allen, executive director of the Western Environmental Trade Association, which represents a number of industries opposed to the climate bill that passed the House and the various bills that were circulating in the Senate. “Why have unelected bureaucrats set climate policy?”
As for the reasons why the legislation failed, like anything else in politics, the answer depends on whom you ask. For Kyla Wiens, the Montana Environmental Information Center’s energy policy advocate, the climate bill that passed the House and the bill in the Senate were too unwieldy for the general public to understand and, potentially, support – particularly following the passage of legislation overhauling healthcare and the financial regulatory system.
“Putting climate and energy last, you had to have something that was more simple,” Wiens said.
“They weren’t starting with the right framework,” she added. “It’s just something that has proven unworkable.”
The MEIC has long supported a “cap-and-dividend” system that caps CO2 emissions and where revenues generated by the carbon market are returned to consumers to offset any increase they may see on their power bills, as opposed to a cap-and-trade system, which was contained in what passed the House.
Ken Toole, a Democrat and District 5 public service commissioner running for reelection, also supports a cap-and-dividend approach, but places blame for the failure of the climate bill on President Barack Obama’s unwillingness to campaign hard and clearly spell out what he wanted to see in such a bill.
“I think the administration didn’t provide any leadership and the opponents had all the time in the world to mobilize and organize and that’s why this legislation failed,” Toole said. “I’m beginning to wonder if our national government can deal with anything.”
Berlin, acknowledging that opposition to the bill from oil and coal interests was formidable, also chalked its failure up to bad timing due to the economy, with much of the public wary of any further big changes that could derail an increasingly fragile recovery.
“People start to shut down when they think something’s going to affect their bottom line,” Berlin said. “We’re asking them to take a risk.”
But Gary Wiens, assistant general manager of the Montana Electric Cooperatives Association (and Kyla Wiens’ father), said, at least in the Senate, climate legislation did not get far enough to warrant involvement or input from electric cooperatives. Sen. John Kerry, D-Mass., the sponsor of the main Senate climate bill, had recently contacted the National Rural Electric Cooperative Association, according to Wiens, “to see if we could work something out,” but Reid precluded his overture shortly afterward by announcing he lacked 60 votes for the bill.
“It wasn’t us that stopped it,” Gary Wiens said, adding that rural cooperatives pushed provisions into the House bill that protect co-ops reliant on coal. “We weren’t satisfied with that bill but we did not oppose it.”
The question now becomes what the impacts of the Senate’s decision not to make a decision will be.
For the PSC, responsible for permitting and regulating new energy projects, Toole believes the ongoing uncertainty over CO2 pricing will cause developers to back off of large-scale power plants that require decades of planning in favor of smaller, decentralized projects.
“Because of the uncertainty on carbon and because of the economic collapse, the capital markets are really hard to determine,” Toole said. “Big central state projects that are the tradition of our power system scare the hell out of everybody.”
Gov. Brian Schweitzer made similar comments to the Associated Press, saying he believed the uncertainty could slow investment in coal-fired power plants, but won’t impede coal mining in Montana.
Utilities, industries and associations that opposed the climate bills in Congress now face the prospect of the EPA regulating CO2 as air pollution, a power upheld by a 2007 Supreme Court decision.
“Right now, nobody is very hopeful that we’re going to be able to stop them from moving forward with the regulation of greenhouse gases using the Clean Air Act,” Gary Wiens said, adding that complying with new regulations would inevitably result in higher power bills for consumers.
“It would definitely impact our rates eventually,” he added. “Assuming there are no successful efforts to defy them in court, at some point it would cause significant rate increases for co-ops whose generation is based in coal.”
Gary Wiens noted, however, that those rate increases would likely hit co-ops in eastern Montana that derive much of their power from coal harder than Flathead Electric Co-op, which is less reliant on fossil fuels.
Should the EPA move to regulate CO2, Allen anticipates the agency impacting businesses of every scale.
“It’s going to really end up being bad for the entire economy,” Allen said. “It’s not just going to hit the big businesses, it’s going to hit everybody before it’s over.”
Industries are pinning their hopes on proposed bills, several of which are offered by Democrats with coal and oil industries in their states, to delay EPA action on CO2, which is scheduled to take effect next year.
The debate over EPA regulation is shaping up as the next front in the fight over limiting CO2 emissions, with groups that pushed for a comprehensive climate bill favoring EPA regulation if Congress takes no action.
“It would really be irresponsible of the administration not to do that,” Berlin said. “If there isn’t going to be federal climate legislation then this needs to happen.”
In the meantime, Climate Solutions and other coalitions campaigning for a climate bill will continue to do so, both before and after an election that could change the makeup of Congress incrementally or drastically.
“The one message that doesn’t change is the risk of inaction right now,” Berlin said. “Really coalescing around that, the risks, is an important thing to do and we need to keep pressing that message.”