NEW YORK (Fortune) -- An influential coalition of Fortune 500 companies and environmental groups that was formed to support climate-change legislation has splintered over the Lieberman-Warner bill that is headed next week to the Senate floor.
The U.S. Climate Action Partnership formed last year won't take a position on the bill, although nine of its members - including General Electric (GE, Fortune 500), Alcoa (AA, Fortune 500) and four utility companies - signed a letter to senators backing the legislation.
The letter, also signed by big environmental groups and obtained by Fortune, says: "Prompt action on climate change is essential to protect America's economy, security, quality of life and natural environment."
But other members of the coalition known as U.S. Cap, most visibly Duke Energy (DUK, Fortune 500), a coal-burning utility, are strongly opposed. "It's going to translate into significant electricity price increases," says Jim Rogers, Duke's CEO.
Without widespread corporate support, passage of the bill - already a long shot at best - becomes even more unlikely this year. President Bush remains opposed. House Democrats have been slow to act.
Besides that, a backdrop of rising gasoline prices and the sluggish economy makes it difficult to win votes for a regulatory scheme that will raise the prices of electricity and gasoline. In fact, a key purpose of the bill is to put a price on the emissions of greenhouse gases, as a way to speed the transition to a clean-energy economy and slow down global warming.
With the Senate scheduled to begin debate Monday, lobbying and advertising around the bill are intensifying. (Here's a new TV commercial supporting the bill from Environmental Defense Fund, and a radio ad opposing the bill from the Club for Growth.) But even supporters concede that the debate will set the scene for action in 2009.
"This will put us in a position to have action next year," says David Doniger, director of the climate center at the Natural Resources Defense Council, a supporter of the bill. "We expect in the Senate that the 60-vote rule will be applied. That's a hard one to get over."
"It's a teachable moment," agreed Scott Segal, an advocate for coal-burning utilities that oppose Lieberman-Warner.
The Lieberman-Warner bill sets a cap on greenhouse gas emissions that would reduce them by 70% by 2050. Companies would need permits to emit pollutants that cause global warming. The government would allocate some permits to utilities and industrial companies, and auction others to generate revenues. The question of how to distribute permits and what to do with the money divides even supporters of greenhouse gas regulation.
As currently written, Lieberman-Warner might fall short of a 50-vote majority in the Senate, let alone the 60 votes required to close debate, insiders say. Presidential candidates (and Senators) Clinton, McCain and Obama all support climate-change legislation.
This is why I am not so terrified of an Obama administration as many of my conservative friends are. Congress is comprised of politicians who wish to be reelected. This need to take reelection into account is especially acute in the House of Representatives every member of which stands for election every two years.
House members are extremely reluctant to vote for legislation which will have a pronounced negative effect upon their constituents when those negative consequences will manifest in the short term. This is why Hillary Clinton's socialized medicine plan failed to gain even one vote when it was put before the House.
There are politicians out there who are stupid enough to be global warming true believers. John McCain and Joe Lieberman are two such idiots.
Interestingly enough Al Gore is apparently not a global warming true believer. Otherwise he would be willing to publicly debate the issue with a global warming skeptic. He consistently refuses to engage in such a debate and channels much of his energy into trying to convince the media to stop even acknowledging that there is an ongoing debate about the issue.
But that is a topic for another post so let us get back to the central issue. The next Congress will not hand the next president a blank check even if that president is Barack Hussein Obama. With a Democrat president and a Democrat congress the Democrat party will be extremely reluctant to see the enactment of any measure which will cause a near-term economic downturn.
They will also be extremely reluctant to snatch defeat out of the jaws of victory in Iraq, not when it becomes their war to win or lose.
Not that Obama and the congressional Democrats will suddenly start to act like conservatives. It is simply that they will have a strong incentive to govern in the Hubert Humphrey liberal tradition rather than in the left-wing moonbat Jimmy Carter tradition.
Of course congress will be very willing to do things with terrible results - as long as those terrible results will not manifest themselves in the near term. For example amnesty for the tens of millions of alien criminals who are infesting our nation. As long as they write the legislation so that the "path to citizenship" doesn't open up for 25 years most of the men and women who vote for it will either be retired or dead (FDR knew that Social Security would go bankrupt, but he also knew that he would be long dead when it happened).
The moral of the story is that we are going to have a hard four years ahead of us, but all is not lost. Everybody in Washington except for the few genuine conservatives who remain is at least pretending to be a global warming true believer but the global warming bill is going to go down in bright hot carbon-emitting flames. No politician is going to vote for something which will cause the price of gas to rise to $7.50 per gallon when the price rise is near term and undeniable.
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