'Cap and Dividend' supporters plot strategy in D.C.

Environmental groups that support an alternative to Democratic "cap-and-trade" plans to cut greenhouse gas emissions are talking with each other and Capitol Hill staff in Washington on Tuesday and Wednesday.

They want Congress to back a so-called cap-and-dividend approach in which all emissions permits would be auctioned to polluters and the proceeds would be returned to taxpayers.

A focal point of the effort is legislation Sen. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine) introduced late last year.

Tyson Slocum of Public Citizen -- one of the groups taking part -- cautioned that all the participants are not endorsing that plan per se, but adds  "there are a lot of folks who understand that it is a superior starting point in terms of a legislative solution." Other groups taking part include Clean Air Watch, 350.org, the Chesapeake Climate Action Network, NYPIRG and other state groups.

Cantwell's plan covers "upstream" sources of carbon dioxide (think oil producers and mining companies but not factories and power plants), provides 75 percent of the emissions auction proceeds to consumers, and the balance would go into a new trust fund for clean energy, aid for affected workers and other areas.

The meetings come amid questions about what approach lawmakers will take if the Senate brings up climate change legislation this year, which Majority Leader Harry Reid (D-Nev.) insists is on the 2010 agenda.

Many major green groups -- including the Sierra Club, Environmental Defense and the Natural Resources Defense Council -- backed the sweeping cap-and-trade and energy bill the House approved in June.

The plan sets a declining nationwide cap on heat-trapping emissions and allows polluters to buy and sell emissions permits from one another and other parties. Unlike the Cantwell plan, the bill -- at least initially -- allocates the bulk of the valuable emissions permits for free to various industries and programs, such as state renewable energy initiatives.

The bill steers large amounts of free allowances to utilities with the requirement that  they be used to hold down consumers' power bills.

Sen. John Kerry (D-Mass.) co-sponsored a similar bill in September. But Kerry and Sen. Lindsey Graham (R-S.C.) -- who along with Joe Lieberman (I-Conn.) are trying to craft a compromise Senate bill -- have since said that the structure of the Senate emissions-capping measure is in flux.