Copenhagen's nabbing all the headlines, but there's been some big climate news in the Senate this week. Yesterday, John Kerry, Lindsey Graham, and Joe Lieberman unveiled an outline of their "tri-partisan" climate legislation. You can see the rough framework here. As expected, it's similar to the House climate bill, only with more subsidies for coal, nuclear, and offshore drilling. Given that Graham, a conservative Republican, seems fairly committed to hammering out a deal, most of the Senate momentum is behind this bill right now. At a press conference, Lieberman said "there are well over 60 votes in play in the Senate—not that we have 60 votes yet."
But it's also not the only bipartisan bill in town anymore: This morning, Washington Democrat Maria Cantwell and Maine Republican Susan Collins introduced their own legislation, a concept known as "cap-and-dividend." In this system, pollution permits would be auctioned off to upstream fuel producers (oil wells, gas fields) and the proceeds would be largely rebated back to consumers (families would receive monthly checks that would average about $1,100 per year). You can read a fuller explanation of that bill here. It doesn't have the support that Kerry-Graham-Lieberman has, but it does have some interesting backers, including ExxonMobil and lefty green groups like Friends of the Earth. The decisive question, though, is what coal-state senators think of the dividend approach—they've long pushed for permit giveaways in cap-and-trade because they're worried that their states will be disproportionately affected; if they won't stand for a full auction, it's hard to see this bill getting very far.
Also, one of the notable differences between the two bills is the role of carbon markets. The cap-and-trade approach would involve a very active carbon-trading market, and the financial industry would play a major role in brokering deals, selling derivatives, and so forth. Understandably, that makes some people nervous—especially given Wall Street's skill in fending off regulations. Cantwell's been extremely critical of this aspect of cap-and-trade, and her bill would leave far less room for trading. I took a more detailed look at this dispute—and asked whether it was really a concern that companies like Goldman Sachs are enthusiastic about cap-and-trade—in a piece for TNR this week.
(Flickr photo credit: wallyg)