NVCA Today

Despite the fact that their republican colleague walked away from the negotiating table, Senators John Kerry (D-MA) and Joe Lieberman (I-CT) unveiled their long-awaited climate change legislation on May 12th. The absence of Lindsey Graham (R-SC), who had been the lone republican working on the bill, makes it even more difficult to see how to reach the necessary 60 votes needed for passage. Nonetheless, Kerry and Lieberman will press ahead. NVCA members were on Capitol Hill last week to push for an energy bill and to stress the importance of putting a price on carbon.

Senator Graham had been working with his colleagues for over six months to draft a compromise that could garner republican support. Provisions in the bill, such as a nuclear title and incentives for off-shore drilling were seen as “sweetners” for republicans, but that all fell apart when Graham expressed his displeasure with democratic reports that immigration legislation was going to be given priority on the Senate schedule over consideration of energy legislation. Graham felt that was an election year ploy to help the re-election Majority Leader Reid (D-NV) and that immigration is a lightening rod issue and would never be able to pass the Congress in a partisan atmosphere of an election year.

The Kerry-Lieberman (KL) bill, the American Power Act, is being promoted as a way to create jobs, increase revenues to pay down the deficit and make America more competitive while limiting carbon pollution. It has a coalition of supporters that heretofore have never come together in favor of climate change legislation, groups as diverse as the Chamber of Commerce, environmental organizations and religious organizations, as well as members of the VC industry spoke out in favor of the bill as a “good start” and a “work in progress.”

The bill would enact, for the first time ever, a cap on greenhouse gas emissions and would cut emissions by 17% by 2020 and 80% by 2050. Unlike the bill that was being pushed by Senator Boxer earlier this year, KL does not include a market wide cap and trade system where companies would buy and sell pollution credits in an open market.

There is a lot for utilities and oil companies to support in the bill such as significant boosts nuclear power and offshore drilling, which Sen. Kerry characterized as a painful concession that had to be made in order to get something that would benefit business and taxpayers. The oil spill in the Gulf of Mexico has made off-off-shore drilling even less popular, so the bill was changed to restrict oil drilling from within 75 miles from the coastline, with neighboring states getting 37.5% of the royalties.

Senate Majority Leader Reid (D-NV) has stated that he won’t allow any energy bill to be voted on unless he is assured that it can reach 60 votes. The Senate won’t act on the energy bill until after the Memorial Day recess, when financial regulatory reform and the tax extenders package are both complete.