ESA Policy News, Oct. 23: Kerry-Graham Op-Ed

policy-news-logo_sESA’s Policy News for Oct. 23, written by ESA’s Policy Analyst Piper Corp, gives an in-depth look at the New York Times opinion piece written by John Kerry and Lindsey Graham meant to aid in the passage of a bipartisan climate bill in the Senate.  Read more below, and read the Policy News in its entirety here.

A joint New York Times op-ed from Senators John Kerry (D-MA) and Lindsey Graham (R-SC) may pave the way for a bipartisan climate bill in the Senate. The senators use their military service as common ground, focusing on the impact that climate change and energy could have on national security and the economy. The op-ed, which was welcomed by climate legislation advocates and undecided moderates alike, outlines a broad bipartisan agreement aimed at securing the 60 votes necessary for the bill to pass.

Graham has not committed his support to the draft bill (S 1733) released by Kerry and Senator Barbara Boxer (D-CA) earlier this month, but has pledged to play a major role in working out a compromise. Observers speculate that the senator’s move could help win the support of three other undecided Republicans: Senators John McCain (AZ), Olympia Snowe (ME) and Susan Collins (ME), all past supporters of cap-and-trade legislation.

The Kerry-Graham op-ed suggests a number of key compromises:

Nuclear power: The senators propose measures to increase investment in nuclear waste management research and to streamline the permit system, maintaining “vigorous safeguards while allowing utilities to secure financing for more plants.” Several Republicans have indicated that a strong nuclear title could help win their support, although this would likely entail provisions beyond those discussed in the op-ed (many want nuclear projects to receive the same treatment as wind and solar power, including comparable tax cuts and inclusion in a national renewable electricity standard.)

Offshore drilling: Graham is pushing for a drilling deal similar to the one proposed by last year’s “Gang of 10.” The bipartisan coalition of senators wanted to allow drilling within 50 miles of the coasts of Virginia, Georgia, the Carolinas, as well as the gulf coast of Florida. Under the proposal, states would have final say in whether to permit drilling, but would receive a cut of the revenue from any projects they did allow. The op-ed maintained that “any exploration must be conducted in an environmentally sensitive manner.”

Many wonder if expanded drilling could drive current supporters away. Several senators, including longtime drilling opponents Dianne Feinstein (D-CA) and Frank Lautenberg (D-NJ), have reiterated their opposition to drilling, although no one has said it would be a deal breaker.

Border taxes: The senators said they would consider a border tax on items produced in countries that avoid high environmental standards. Heavy emitting industries in the US have pushed for such a provision, arguing that they would need them to remain competitive with countries not facing emissions regulation. Kerry and Graham also say this will encourage countries to institute emissions restrictions of their own. A border tax will be favored by lawmakers from manufacturing states, where international competition would take the greatest economic toll. The tax could strain diplomacy efforts, however, which is particularly critical in the midst of the UN climate talks. And one key swing vote, Senator John McCain (R-AZ), is adamantly opposed to the strategy, stating “I know that I’d never agree to tariffs on the borders for countries that don’t comply with our requirements.”

Clean Coal: The op-ed urges the US to be “the Saudi Arabia of clean coal” and to create incentives for carbon capture and sequestration research and development.

Cost control: The letter also offers some possible adjustments to the Kerry-Boxer bill, placing particular importance on a price floor and ceiling for emission allowances. The senators stressed the importance of protecting businesses and consumers from rising energy costs. Boxer, however, plans to stick with the existing cost-containment language, which takes a “soft collar” approach, wherein EPA would release allowances into the carbon market via auction if permit prices exceed a certain level.