Law and the Environment : Environmental Lawyer & Attorney : Foley Hoag Law Firm : Boston, Washington D.C.

Since I did a post earlier today indicating the cap-and-trade legislation is unlikely to become law in the near term, it’s only fair that I also do a post on efforts by Senators Kerry, Graham, and Lieberman to resuscitate the legislation. The bill's prospects are too uncertain to spend too much time on the details. In short, it would include a phased-in approach to regulation, starting with the biggest emitters, such as utilities, combined with a carbon tax on transportation fuels that has been supported by several major oil companies.

To me, the most notable statements come from Senator Graham, the only Republican in the gang of three. Senator Graham has turned out to be one of the more intriguing and less predictable members of Congress in recent years. This may have its pluses and minuses and I have no idea whether he can bring any GOP support along, but you have to sit up and take notice when a Republican says

Cap and trade as we know it is dead, but the issue of cleaning up the air and energy independence should not die -- and you will never have energy independence without pricing carbon.

Of course, he’s right. The sad thing is that the rest of his party has so demonized any and all taxes that no Democrat could possibly say something like this – and many of the distortions in the various bills we’ve seen to date have resulted from strenuous efforts to avoid having consumers see any price signals about the cost of carbon emissions.

Keep sayin’ it, Brother Graham.

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Apparently in an effort to demonstrate to Congress that coal states also support greenhouse gas regulation, the Midwestern Greenhouse Gas Reduction Accord last week released draft design recommendations for a GHG program. Several facets of this announcement are interesting:

1.                   The Waxman-Markey bill would basically preclude the MGGRA from implementing its program.

2.                   If the point of the effort is to demonstrate to Congress that coal states indeed do support GHG regulation, they might be more successful if they had managed to bring Indiana and Ohio into the fold.

3.                   The program as tentatively proposed would include a cap-and-tax approach, in which, like other cap-and-trade models, GHG emitters would need allowances for each ton of CO_2e that they emit. However, they would also have to pay a fee, suggested to be in the range of $2-$4/ton of CO_2e, for each allowance.

It’s difficult to imagine the MGGRA approach going anywhere at this point, but I don’t want to be too dismissive. Like potential EPA regulation under existing CAA authority, the threat of yet another regional program has to add to the weight of issues pushing fence-sitting members of Congress towards a willingness to support a federal program.

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