Bloc of Senate Democrats demands changes to climate change legislation

A bloc of Senate Democrats wrote colleagues on Friday, warning them that climate legislation in Congress would hurt their states disproportionately.

Fourteen senators, from Iowa, Minnesota, Illinois, Wisconsin, North Dakota, Colorado, West Virginia, Ohio and Michigan, wrote leaders in charge of climate legislation to say that proposed cap-and-trade legislation would be inequitable to their home states.

The senators praised the cap-and-trade system, but said that the proposed emissions allowances in the bill would shortchange their home-state industries.

"To be fair and effective, any legislation must equitably allocate these allowances to individuals and across states and regions and economic sectors," the senators said in their letter to Senate Majority Leader Harry Reid (D-Nev.), Senate Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.), Senate Foreign Relations Committee Chairman John Kerry (D-Mass.) and Senate Finance Committee Chairman Max Baucus (D-Mont.).

The letter lamented the Senate climate bill's reliance on a system of allotting carbon credits to companies based 50 percent on emissions and 50 percent on sales.

"Under the proposed 50/50 formula, utilities that are more coal dependent will need to purchase even more allowances than they would have if all allowances were allocated based on emissions, and those higher costs will be passed on to their customers," wrote the group of 14, led by Sen. Tom Harkin (D-Iowa).

The House bill also relies on the 50/50 formula, but the bloc urged the Senate to approve legislation that relies entirely on emissions.

"We urge you to ensure that emission allowances allocated to the electricity sector — and thus, electricity consumers — be fully based on emissions as the appropriate and equitable way to provide transition assistance in a greenhouse gas-regulated economy," they said.

The potentially disparate impact of climate legislation on states has been seen as a key stumbling block within the Senate Democratic Conference over the cap-and-trade bill. Senators have demanded this formula change, along with measures to balance out the impact of competition from foreign manufacturers facing less environmental regulation, as part of a climate deal.

The signatories to the letter are: Sens. Tom Harkin (D-Iowa), Al Franken (D-Minn.), Roland Burris (D-Ill.), Byron Dorgan (D-N.D.), Herb Kohl (D-Wis.), Russ Feingold (D-Wis.), Kent Conrad (D-N.D.), Michael Bennet (D-Colo.), Amy Klobuchar (D-Minn.), Mark Udall (D-Colo.), Robert Byrd (D-W.Va.), Carl Levin (D-Mich.), Debbie Stabenow (D-Mich.) and Sherrod Brown (D-Ohio).