GRAHAM

KERRY

Sen. Lindsey Graham’s sudden April 24 departure from talks to develop a compromise climate-change measure has left some observers wondering whether a bill will pass this year. But John Kerry (D-Mass.), who for months had been negotiating the shape of the proposal with Graham (R-S.C.) and Joe Lieberman (I-Conn.), insists the bill is not dead. Kerry says, “We’re still pushing, we’re still talking, we’re still fighting—it’s very much alive.”

The three lawmakers had not unveiled their proposal, but it was expected to spur nuclear development by tripling to $54 billion Dept. of Energy funds for nuclear-project loan guarantees.

In addition, the senators had discussed tailoring penalties and emissions caps for specific industrial sectors, such as manufacturing.

Also to industry’s liking is a potential provision calling for federal preemption of state climate laws and language directing the U.S. Environmental Protection Agency to regulate greenhouse-gas emissions. Environmental groups generally oppose the idea of federal preemption, saying it would block states’ ability to develop innovative ways to combat air pollution.

Doug Scott, director of the Illinois EPA, says, “To have a robust federal climate policy, we will need the involvement of the states in the vast number of areas where they are responsible for policy, including transportation, land-use planning and building codes, to name a few.”

Construction groups such as the Associated General Contractors, American Society of Civil Engineers and Laborers’ International Union of North America are concerned about a provision the senators were discussing that would impose a new fee on transportation fuels. Those organizations contend the fee’s cost would be passed on to consumers.

Karen Lapsevic, AGC’s director of tax, fiscal affairs and infrastructure finance, says, “We would be concerned that not enough money would go toward road transportation and that raising the price of gasoline would impact our ability to get a multiyear transportation bill enacted [at a time when] we do need an increase in revenue.”

Kerry has said the fee would not take the form of a gas tax but would use a different revenue-generating mechanism, although he has not disclosed exactly how it would work.

Lapsevic says that with a busy legislative calendar and elections in November, it will be difficult to pass a climate bill this year. But Diane Shea, the American Council of Engineering Companies’ director of environment and energy programs, says, “Even if the [Kerry-Graham-Lieberman] climate bill falls apart, there is still a good chance that Congress will not go home without a bill before the elections.”

Shea suggests a bill that cleared the Senate Energy and Natural Resources Committee in June 2009 could become that chamber’s main climate-change vehicle. But, she adds, the challenge then would be to reconcile that Senate measure with the climate bill the House passed last June.