11/09/2007 10:07 am ET | Updated May 25, 2011

Climate Change Politics

President Bush is willing to sign climate change legislation, if Congress passes a bill that meets with his approval. That, at least, is what U.S. Rep. Rick Boucher, a Virginia Democrat and a key player on Capitol Hill, is now saying.

Boucher spoke this morning to the Business Roundtable. The business lobby held an all-day long workshop on climate change, giving its members an inside look at the state of play in Congress, an analysis of the economics of carbon regulation and advice on how to do greenhouse gas emissions accounting. This is one more sign that corporate America expects carbon regulation, perhaps as early as next year.

As chairman of the House Subcommittee on Energy and Air Quality, Boucher will have as much impact as anyone on the legislation that comes out of Congress. He's a recent convert to the cause of curbing global warming, saying he came around because of the mounting scientific evidence that climate change is principally caused by man-made emissions and poses a serious threat to the planet. He also said that last spring's U.S. Supreme Court decision, finding the CO2 is a pollutant, all but required Congress to step in or leave regulation to the EPA.

"Historically, I've been a skeptic," Boucher said. "My view has changed."

The same, he indicated, is true of the White House. Publicly, the Bush administration still says carbon regulation is unnecessary. "Private conversations have had a different tenor," Boucher said. The administration, he said, will seriously consider legislation that has industry support, bipartisan backing and mechanisms to protect the U.S. economy from dislocation.

Boucher is trying to craft a bill that clears all those hurdles. He's working closely with John Dingell, the Michigan Democrat, and Dennis Hastert, an Illinois Republican and former House speaker, to draft a cap-and-trade bill that covers the entire economy. Their goal is to drive down carbon emissions in those sectors of the economy that can do it most efficiently. "Car manufacturers will be able to trade with coal-fired plants," Boucher said. The EU cap-and-trade scheme covers power plants, but not transporation fuels.

Dingell's a car guy, and Boucher and Hastert represent coal-mining districts. The fact that they all want to pass carbon regulation tells you how dramatically the debate about global warming has shifted in the last 12 to 18 months. It's remarkable. Then again, when you have the Big Three automakers, BP and Conoco Phillips, big utilities, GE and Wal-Mart all supporting carbon regulation, it's hard to see why even pro-business legislators would be against it.

The question is, what kind of legislation will Boucher, Dingell and Hastert support? Here the news is not so encouraging. Citing concerns over both the coal industry in his district and, more importantly, the broader U.S. economy, Boucher wants to see a "gentle introduction" of emissions reductions. He intends to write a bill that will delay steep reductions until after 2025 because that's when, in his judgment, technology will become available to allow for the capture and storage of carbon dioxide emissions from coal plants.

"The U.S. is going to have to continue to rely on coal consumption for a very long time," he says. "Coal is the fuel we have. And we don't have readily available alternatives."

If a cap-and-trade bill puts too high a price on coal in the short run, he worries, utilities that now burn coal will switch to cleaner natural gas. That would drive natural gas prices higher. People who heat their homes with natural gas would suffer, as would the chemical industry, farmers and aluminum smelters, all of which rely on natural gas. "We would have deep economic pain across America," he said.

Boucher is thoughtful and widely-respected, and he has done his homework on the climate change issue. He spent 10 days earlier this year in Europe, studying the carbon trading system there, and says such a system can work. He has ideas about how to incent India and China to reduce carbon, essentially by imposing a carbon tax on imported goods. All this means he deserves to be taken seriously.

But while business is likely to applaud the Boucher-Dingell-Hastert approach, environmental groups are not. The House legislation won't be as strong as the bill introduced by Senators Joe Lieberman and John Warner that could soon reach the Senate floor. Whether Bush would sign the Lieberman-Warner bill, which requires more rapid reductions in emissions, is an open question.

The bottom line is that the politics around climate change are growing more complicated. Businesses may want a bill before Bush leaves office, rather than risk having to deal with, possibly, a Democrat in the White House in 2009. Environmentalists, ironically, may prefer to wait. Imagine if companies pushed for a bill and enviros counseled delay!

One thing's for sure. As John Castellani, president of the Business Roundtable, put it: "The stakes for the economy -- and for the planet -- could not be higher."