Taking Climate Bill Straight to Senate Floor Could Open Window for 'Cap-and-Dividend'

The possibility that Senate Majority Leader Harry Reid might send climate legislation straight to the Senate floor, bypassing part of the usual committee process, could boost the chances for a cap-and-dividend approach winning out, Sen. Susan Collins suggested today.

During a National Journal forum, Collins (R-Maine), who has introduced a bipartisan carbon cap-and-dividend bill with Sen. Maria Cantwell (D-Wash.), was asked how national climate legislation should proceed.

Collins said that the best approach might be to start with the bill that has the most support — the energy-only bill approved last summer by the Energy and Natural Resources Committee — and then add in other elements during debate on the Senate floor.

“It’s a bipartisan bill that’s supported by both the committee chairman [Sen. Jeff Bingaman (D-N.M)] and the ranking member [Sen. Lisa Murkowski (R-Alaska)]. If that were brought to the floor, it could be a platform to debate a clean energy bill, such as the one Maria Cantwell and I have introduced," Collins said.

"There’s a lot to be said for having free and open debate on the Senate floor with ample opportunity to offer amendments. I think that’s the best approach.”

The Senate is anticipating the release on Monday of a comprehensive climate and energy plan that Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joseph Lieberman (I-Conn.) have been working on for months.

Details of the Kerry-Graham plan are still under wraps, but it is expected to embrace the Republicans’ all-of-the-above approach to energy, with incentives for nuclear power and expanded offshore drilling for oil and gas. At the same time, it would still have some elements of cap-and-trade, but only for electric power at first, while the oil industry would instead face a fuel tax linked to the carbon price in the utility sector.

Lieberman explained last week that Reid could have the Kerry-Graham plan bypass the traditional committee process. The trio plans to unveil a draft but not formally introduce legislation, he said, because

“If we introduce it, it’ll get referred to committees. We want him to be able to work with it and bring it out onto the floor as a leader whenever he’s ready.”

Collins sees that approach as a way to bring her CLEAR Act into the energy picture instead.

The Allure of Cap-and-Dividend

One major problem that Republicans have with cap-and-trade-based plans, such as the House-passed American Clean Energy and Security (ACES) bill, is that they would rake in trillions of dollars in revenue from carbon auctions and send that money to Washington to divvy up, Collins said.

Consumers and businesses have to be protected she said. For example, the Kerry-Graham bill is expected to include a gas tax — “that will not be well received by the American people,” Collins said. She declared the House bill flat-out dead, calling it “a monstrosity of a bill that’s replete with special interests.” The House bill’s core is an economy-wide cap-and-trade system for carbon emissions, but months of cajoling committee members and coal and industrial state Democrats to support the measure led to major concessions for fossil fuels, particularly the coal industry. The bill counts on utilities to keep their prices reasonable.

Collins said her Republican colleagues might be more amenable to a cap-and-dividend — or “cap-and-cash” plan, as she likes to call it — that sends most of the proceeds of auctioning off carbon permits directly to consumers instead.