WASHINGTON -- It's showtime for global warming in Congress, and a number of Minnesota lawmakers are starting to feel the heat.
Congress is readying for what energy lobbyists call "the mother" of all climate debates, with a target of Memorial Day to pass major legislation in the House.
"We are at a crossroads," said Kevin Knobloch, president of the Union of Concerned Scientists, one of the leading voices in the push to combat global warming by creating a "cap-and-trade" law that would slash emissions of carbon dioxide and other greenhouse gases.
The ambitious energy legislation, one of the cornerstones of President Obama's agenda, has the potential to put a few Minnesotans in a dicey spot. Already, Republican Rep. Michele Bachmann has emerged as one of the GOP's loudest global warming skeptics, making her a lightning rod for attacks from the left. In a speech to the House last month, Bachmann called carbon dioxide a "harmless gas."
But Republicans hope to put a few Minnesota Democrats on the spot as well. Among them are Reps. Collin Peterson and Tim Walz, who represent rural districts where farmers worry about rising energy costs. There's also Iron Range stalwart Jim Oberstar, whose district's taconite mines are tied to the fortunes of heavy industry and manufacturing, particularly steel, which could be hit by new fees on carbon emissions.
In a debate that splits along regional as well as party lines, all three outstate Democrats say they are awaiting details before they commit to a cap-and-trade plan being written in the House.
"All three of them see the probability of serious economic costs in their districts, and 'all politics is local,'" said Carleton College political scientist Steven Schier. "It's pretty complex legislation, and the devil's in the details."
With Obama touting renewable energy in Iowa recently on Earth Day, business groups are trotting out studies showing how large Midwestern states like Iowa, Wisconsin and Minnesota still get more than half their electricity generation from coal, making them particularly vulnerable to legislation that would attach a cost to carbon emissions.
One report, by the free enterprise Heritage Foundation, argues that alternative energy technologies are years from being viable, and that in the meantime, proposed caps on carbon emissions will drive up conventional fuel costs. Heritage calls it a "massive energy tax," with economic losses of more than $500 billion a year.
At the same time, environmental groups promote their own studies touting the economic benefits of cap-and-trade and other proposals designed to move away from fossil fuels. "At the end of the day, because our vehicles, our houses and our appliances are more efficient, our energy bills go down, because we're using less energy," said David Friedman, one of the study's authors.
Changing the rules
Obama's watershed proposal would require up to 25 percent of the nation's electricity to come from renewable sources such as wind and solar by 2025, while cutting carbon emissions by up to 80 percent by 2050 with a national cap-and-trade law. Those standards are already law in Minnesota.
J. Drake Hamilton, science policy director for Fresh Energy, a Twin Cities group that promotes a post-carbon economy, said a price on carbon dioxide emissions would spur utilities and entrepreneurs to develop new technologies to reduce emissions, because not doing so would add to their production costs. "It's changing the rules of the economy," she said.
Charlie Weaver, executive director of the Minnesota Business Partnership, said the increased energy costs from any cap-and-trade program, regional or national, would present a heavy burden for homeowners and businesses. For that reason, all three Minnesota Republicans in the U.S. House oppose the current cap-and-trade legislation.
A study last year for the Partners for Affordable Energy and a group of Minnesota trade associations and utilities found that Minnesota households would pay 17 percent more for electricity by 2015 under a regional cap-and-trade program, and 28 percent more by 2030.
"It might as well be called the Move Jobs Overseas Bill," Weaver said.
Impacts of cap-and-trade programs have been hotly debated in part because until recently there has never been a price attached to carbon dioxide emissions. The Regional Greenhouse Gas Initiative (RGGI), involving electric utilities in 10 Eastern states, has taken the first steps with three auctions since last year. Per-ton emissions prices have run from $3.07 to $3.51. But some think RGGI's CO2 cap is too high, thus keeping the emissions price low.
Northern States Power Co. Minnesota spokeswoman Mary Sandok said most studies have indicated that the cap-and-trade markets will settle on a price closer to $20 per ton, which CEO David Sparby indicated could mean a 16 percent increase in utility bills.
Political climate change
Given the current economic crisis, some analysts question the political climate for cap-and-trade legislation this year.
The uncertain economy has fueled a fierce battle over how much a cap-and-trade system would cost the average family.
Some Republicans, including Bachmann, say the estimated $366 billion in annual revenue from cap-and-trade between 2015 and 2050 translates into a cost of $3,128 for each American household. They base that figure on a Massachusetts Institute of Technology analysis. But the author of the MIT study, John Reilly, says his data were misinterpreted and the real average is about one-sixth of the GOP's calculation.
In addition, environmentalists argue that the new cap-and-trade revenue would be "recycled" through the economy and invested in new cost-saving energy technologies, such as wind and solar.
"It's not lost on the steel workers union that every one of those wind turbines that goes up in western Minnesota has 250 tons of steel in the tower," said former Iron Range union organizer David Foster, now executive director of the Blue Green Alliance.
The Obama administration has also suggested putting much of the money into rebates for low- and moderate-income families.
At bottom, many environmentalists acknowledge that the proposed cap-and-trade plan is not free of costs. The real debate is whether they would be offset by energy savings and environmental benefits.
Weighing on rural farm interests in Minnesota is the prospect of having to pass higher energy costs to consumers. "For those lucky enough to do so, the higher costs will be passed along in higher prices for milk, hamburgers and bacon," said Bob Stallman, president of the American Farm Bureau Federation.
Rep. Mike Pence of Indiana, who is working on a GOP alternative, called the Democrats' cap-and-trade bill "a declaration of economic war on the Midwest by liberals on Capitol Hill."
But Sen. Amy Klobuchar, D-Minn., said she expects her party to fashion a system that provides credits or other safeguards for farmers and industries such as steel that face foreign competition. She also said ratepayers will be protected under the Democrats' legislation.
"[The Republicans] know that this bill is going to have protections for ratepayers, so they shouldn't be using scare tactics," she said.