Energy Measures May Go to Jobs Bill as Brown Win Saps Cap-Trade

By Jim Efstathiou Jr. and Kim Chipman

Jan. 21 (Bloomberg) — Measures to spur green-energy jobs may end up in a new economic-stimulus bill after Republican Scott Brown’s Senate victory in Massachusetts dimmed prospects for legislation to curb carbon-dioxide emissions.

Provisions to help homeowners reduce power use and make industry more energy-efficient may be shifted out of cap-and- trade legislation that’s stalled in the Senate, said Robert Stavins, director of the Harvard Environmental Economics Program in Cambridge, Massachusetts.

“Those Democrats who may have already been nervous about a vote on climate policy are even more nervous now,” he said.

Brown, who on Jan. 19 won the Senate seat held by the late Senator Edward M. Kennedy for almost 50 years, opposes the emissions-trading program that President Barack Obama says is needed to fight global climate change. Opponents say the cap- and-trade legislation would boost costs and cut jobs in an economy that already has a 10 percent unemployment rate.

Putting energy provisions into a bill to stimulate job creation instead “makes sense” because that’s the Senate’s next priority after health-care legislation, Senator Sherrod Brown, a Democrat from Ohio, said before Brown’s win.

“Everybody who’s got a job-creation idea is going to try to get on this train,” Brown said in a Jan. 15 interview, referring to a new jobs bill. “Anything that we’re thinking of doing in any energy related area that can produce jobs short- term, mid-term, long-term will be considered in this.”

House Jobs Bill

The House passed a $154 billion jobs bill before the Christmas break. The Senate was planning to take up a bigger package this year.

“A large cap-and-trade bill isn’t going to go ahead at this time,” Senator Dianne Feinstein, a California Democrat, told reporters in Washington yesterday.

Some Republicans may support moves to help manufacturers make the transition to clean-energy production if the provisions aren’t too costly, said John Feehery, a Republican strategist who advised former House Speaker Dennis Hastert. The loss in Massachusetts should prompt Democrats to seek smaller-scale legislative victories.

“What Democrats are going to want to do more is get some discrete, easily understandable accomplishments that they can take back to the voters,” Feehery said in an interview. “They’re going to have to ditch climate change and push on more targeted agenda items, like energy independence and green jobs.”

The U.S. lost 85,000 jobs in December, and unemployment remains close to a 26-year high. Republicans have successfully cast the cap-and-trade bill as “as a job-killer and a tax- raiser,” Feehery said.

‘Cash for Caulkers’

The new Senate version of the jobs bill may include funding for a “cash for caulkers” program providing grants to make homes more energy efficient, said Lowell Ungar, policy director for the Washington-based Alliance to Save Energy.

“The money will run out from the recovery act and if there’s not further legislation to push these retrofits, there’s a real risk that the infrastructure we’re creating right now will wither,” Ungar said in an interview. “The people who are being trained right now to do these retrofits will no longer have jobs.”

The Obama administration credits last year’s economic stimulus bill with helping to stabilize the economy and creating 640,000 jobs, including 52,000 in clean energy.

The cap-and-trade measure that the House of Representatives passed in June would limit emissions and establish a market in pollution allowances. Senate Majority Leader Harry Reid, a Nevada Democrat, said yesterday that Democrats “will tackle our daunting energy and climate challenges” with legislation that creates “good-paying, clean-energy jobs.” He provided no specifics.

‘Feeling Very Cautious’

“The election itself means the loss of one vote,” Nikki Roy, who monitors Congress for the Pew Center on Global Climate Change in Arlington, Virginia, said of Brown’s victory. “Obviously the bigger unknown is how it affects thinking by moderates. Most moderate members of the Senate were already feeling very cautious on this issue.”

Some lawmakers were describing passage of the cap-and-trade measure as unlikely this year even before Brown’s win, which gave Republicans 41 votes in the Senate and deprived Democrats of the 60-vote supermajority generally needed to pass legislation.

There won’t be enough political will left to undertake such a disputed measure after the fight over health-care legislation, Senator Byron Dorgan, a Democrat from North Dakota who recently announced his retirement, said Jan. 19 on a conference call with reporters.

‘Climate-Friendly’ Measure

“It’s my assessment that we will not do a climate bill, but that we will do an energy bill instead.” Dorgan said. “The energy bill will be climate-friendly.”

The Senate Energy Committee approved a measure last year that would require utilities to get as much as 15 percent of their power from renewable sources. That bill, which wouldn’t place a cap on greenhouse-gas emissions, hasn’t been taken up by the full Senate.

Carol Browner, Obama’s top adviser on energy and the environment, said last week that an energy and climate bill limiting emissions from power plants, factories and refineries remains a priority of the White House.

Kerry, Graham, Lieberman

Senator John Kerry, a Massachusetts Democrat who co- sponsored a climate-change bill last year, said he is beginning daily meetings with colleagues Lindsey Graham, a South Carolina Republican, and Joseph Lieberman, a Connecticut independent, to draft a compromise bill.

“The political atmosphere doesn’t reduce the urgency of dealing with pollution and energy,” Kerry said in an e-mail. “This is the single best opportunity to create jobs, reduce pollution, and stop sending billions overseas for foreign oil from countries that would do us harm.”

The strongest message to date from the Senate on global climate policy remains a 1998 resolution rejecting the existing Kyoto Protocol because it requires industrialized nations to cut emissions, not developing countries such as China and India. Last month, China and India, the largest and fourth-largest producer of emissions from burning fossil fuels, promised to curb the growth of greenhouse gases in a political accord that includes the U.S., the European Union and 26 other countries.

Last Updated: January 21, 2010 00:00 EST

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