Global-warming laws: What may be ahead

WASHINGTON (CNNMoney.com) -- With the Democrats back in control of Congress next month, mandatory restrictions to combat global warming are again on the table.

"With the [election] in November, the little ice age in U.S. global warming policy is coming to an end," said David Doniger, climate director at the Natural Resources Defense Council, at an oil industry event Tuesday. "I don't feel the need to debate whether we are moving toward a mandatory program, it's a question of how much and how soon."

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The event, sponsored by the American Petroleum Institute, was titled "What the oil and gas industry is doing to address global climate change."

Not everyone there was so certain that mandatory restrictions on emissions of carbon dioxide, the main greenhouse gas, are inevitable.

"I respectfully believe you have it wrong," said John Shanahan, a Republican staffer on the Senate environment and public works committee. "There's too much opposition in the Senate; I don't believe mandatory controls is a possibility that can happen."

Certainly, when the Democrats take the reins in the Senate next year, they will push for some type of carbon-emissions controls, said Jonathan Black, an aide to Sen. Jeff Bingaman (D-N.M.), who's slated to take over as chair of the Senate Energy Committee.

"Mandatory cap-and-trade is going to be one of his priorities," said Black.

Indeed, the "cap-and-trade" system, where industry is given (or buys) a set number of pollution credits, seems to be the most popular option on the table. With this method, cleaner plants can sell their excess credits to dirtier plants, much the same way the U.S. currently regulates acid rain-causing sulfur dioxide.

Another option, a carbon tax, would be more transparent, drive responsibility toward the end user, and be more easily adjustable, but is politically unfeasible because no one likes a tax, said Ken Green, a fellow at the American Enterprise Institute, a conservative think tank.

Meanwhile, the Bush administration has pushed a program centered around voluntary efforts by industry to cut carbon output. President Bush took no action at the beginning of his presidency on signing the Kyoto treaty, which would have imposed mandatory restrictions on emitting carbon dioxide.

Carbon dioxide comes from, among other sources, the burning of fossil fuels, like from coal-fired electricity plants and vehicles that run on gasoline or diesel.

Although most Democrats also opposed the limits set forth in the Kyoto accord, now that they have taken control of the House and Senate, several bills have been introduced that move away from the voluntary approach and would force industry to reduce emissions.

With the resurgence of talk about restricting carbon emissions, much of the opposition that ultimately killed Kyoto's chances in the U.S. is also making a comeback.

At Tuesday's discussion, opponents of mandatory carbon laws said that, since other big carbon emitters like China and India have not yet signed up, the laws would do little to fight global warming while costing great deal.

"Even if we curb emissions and lose jobs, it's not going to make a dent," said Margo Thorning, chief economist at the American Council for Capital Formation, a conservative think tank. "Is the benefit worth the cost?"

George Banks, from the administration's Council on Environmental Quality, said China and India might be more tempted to sign a carbon reduction agreement if it came bundled with other incentives like guaranteeing energy security, improving local air quality and energy efficiency.

"We have a lot of opportunities there," said Banks. "We can achieve a lot of different objectives at the same time."

The United States is currently the world's largest emitter of carbon dioxide, although China is set to take over the No. 1 spot in the next few years.

Others said many European nations, which are using a cap-and-trade system, were not on track to meet the goals set forth under Kyoto, and took that as evidence that a different approach should be tried in the U.S.

But supporters of mandatory emission caps said it was unfair to criticize the Europeans for not meeting their targets.

"It's like we're not rowing, and [we're] sitting back complaining that the boat isn't moving fast enough," said Jason Grumet, executive director of the National Commission on Energy Policy, a group working on energy security and environmental issues that supports mandatory carbon caps.

Grumet also noted that while there would be costs associated with reducing carbon output, they would be relatively small and well worth the price.

Doniger said it wasn't necessary for China, India and other developing nations to agree on carbon caps for the U.S. to take action.

"The position of the administration is that they want everyone to be lined up before we take steps, and that's not a recipe for success," he said.

Although the American Petroleum Institute, whose members include the big American oil companies ExxonMobil (Charts), Chevron (Charts) and ConocoPhillips (Charts), organized the event, its panel member, climate director Russell Jones, did not weigh in heavily on one side or another.

At the end of the discussion, participants were asked the chances on whether some type of climate legislation would be signed into law in the next two years.

On a scale of 1 to 10, ten being a certainty, Jones placed his bet with a 3 - which he said was the average of all the panelists' replies.

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