Graham says shape of Senate carbon controls is up in the air

Sen. Lindsey Graham (R-S.C.) said Wednesday that the mechanism for reducing carbon emissions in the climate and energy bill he’s trying to craft with Sen. John Kerry (D-Mass.) remains an open question.

The House approved an economy-wide cap-and-trade system in June. But Graham said that in the Senate, several means for putting a price on carbon emissions are in play.

“I am open-minded. Some people want the sectoral approach, where you leave manufacturing off the table and just do utilities,” Graham said in the Capitol. “You have Maria Cantwell and Senator Collins with a cap-and-dividend system. Some people are advocating a carbon tax. I am open-minded, but it has to be a meaningful control on pollution.”

 
Creating a cost for producing greenhouse gases is considered essential for many advocates of cutting emissions, because it would give companies motivation to reduce carbon dioxide output and put a premium on development of green energy sources.

Graham’s comments come after Kerry raised some eyebrows when he made similar remarks at the Copenhagen climate talks.

“I can’t tell you the method or the means, amount, by which we might price carbon. I can’t tell you that. We have not resolved that issue yet,” Kerry said Dec. 16, later clarifying that “I think it's going to include some kind of trading mechanism.”

The comments, taken together, show that senators are mulling an array of options and may not simply use the House-approved system as a template.

Some lawmakers have discussed limiting the cap-and-trade system to electric power plants, and using some other mechanism to address emissions from cars and trucks and other economic sectors.

And Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine) are pushing, as Graham noted, a “cap-and-dividend” plan that greatly limits trading of emissions permits and regulates a smaller number of carbon dioxide sources than the House-approved bill.

A bill imposing mandatory curbs on emissions faces significant opposition in the Senate. Graham wants to blend greenhouse gas limits with expansion of U.S. offshore drilling and increased federal financial support for nuclear power.

I’ll have a broader look at what’s happening in the Senate soon.