Energy rules not just hot air

Hailing the House, President Obama put pressure on senators Saturday to follow its lead and pass legislation to limit greenhouse gas emissions, helping usher the United States into a new age of energy efficiency.

"Now my call to every senator, as well as to every American, is this: We cannot be afraid of the future. And we must not be prisoners of the past," the president said in his weekly address. "Don't believe the misinformation out there that suggests there is somehow a contradiction between investing in clean energy and economic growth. It's just not true."

What exactly do the proposed rules mean and how would they work? Some questions and answers about the bill, a top legislative priority for Obama:

Q What's the purpose of this legislation?

A To reduce the gases linked to global warming and to force sources for power to shift away from fossil fuels, which when burned, release heat-trapping gases, and toward cleaner sources of energy such as wind, solar and geothermal.

Q How does the bill accomplish this?

A By placing the first national limits on emissions of heat-trapping gases from major sources like power plants, refineries and factories. This limit effectively puts a price on the pollution, raising the cost for companies to continue to use fuels and electricity sources that contribute to global warming. This gives them an incentive to seek cleaner alternatives.

A Yes. The first step in a cap-and-trade program sets a limit on the amount of gases that can be released into the atmosphere. That is the cap. Companies with facilities that are covered by the cap will then receive permits for their share of the pollution, an annual pollution allowance. Companies that do not get a big enough allowance to cover their pollution would either have to find ways to reduce it, which can be expensive, or buy additional permits from companies that have reduced pollution enough to have allowances left over. That is the trade. Companies typically would pick the cheaper option: reducing pollution or buying permits. They also have a third choice: They can invest in pollution reductions made elsewhere, such as farms that capture methane or plant trees. These are known as offsets.

Q So the idea is to try to reduce the overall level of pollution, regardless of whether, say, a particular factory reduces emissions?

A That is true in the beginning. But as the cap gets lower and lower, reaching an 83 percent reduction from 2005 levels by 2050, eventually all polluters will have to reduce.

Q Do most environmentalists support this approach?

A Most do, at least broadly. Other cap-and-trade programs have had success, such as the U.S. program for sulfur dioxide, the main culprit in acid rain. Democrats have had to make a lot of concessions to win votes for the current bill from lawmakers from coal, oil and farm states. Some liberal environmentalists think these concessions weaken the bill.

A Republicans, some farm groups, some environmentalists, the oil industry and some moderate Democrats. They all worry about the cost and the loss of jobs if industries move to countries that do not have controls on greenhouse gases. The bill has provisions to prevent this, but there are questions whether they will work.

Q Anything else big in the bill?

A There's a lot. The bill requires states to generate an increasing portion of their electricity from renewable sources -- most notably wind and solar energy -- topping out at a 20 percent requirement in 2020. States could account for some of that target through energy efficiency. Other portions would set strict efficiency requirements that the government projects would dramatically curb American energy use. There are billions of dollars for research into so-called "clean coal" -- as-yet-unproven technology to capture and store the carbon emissions from the power plants that are the leading source of global warming today. And there are scores of small but significant items, many added to bring certain constituencies or members of Congress on board. Those include tweaks to federal regulation of biofuels and coal power plants, incentives for plug-in hybrid cars and nuclear energy, upgrades to the electric grid, money for advanced energy research and, in a last-minute addition, rules to prevent homeowners' associations from banning their members' installation of rooftop solar panels.

Q How will this affect the economy?

A Depends on whom you believe. The White House and House Democratic leaders call this a "jobs bill" that will jump-start the "clean energy economy," creating jobs in the development, production and installation of things like wind turbines and solar panels. Republican opponents say the bill will kill "millions" of American jobs, by raising the price of energy and sending manufacturers to developing nations that use cheap coal.

A Again, big disagreement. The Environmental Protection Agency and the nonpartisan Congressional Budget Office project the bill would cost the average American household less than $200 a year through 2020, mainly because of higher energy prices. Some conservative think tanks predict a price tag more than 10 times that high -- up to some $3,000 per year per family -- when factoring in productivity losses from switching to more expensive energy sources.

Q What are the chances this bill will become law?

A Both the Obama administration and Democrats want this bill passed by the end of the year, when negotiations for a new international agreement to reduce greenhouse gases get under way in Copenhagen. Even as Democrats hold the majority in Congress, it will not be easy to get this enacted. Many moderate Democrats from rural states and conservative districts are worried about the costs and complexity of the legislation when the economy is already weak. Very few Republicans, if any, are expected to support the bill. Approval of a climate bill in the Senate has been viewed as a long shot and may require changes to the legislation.

Q Why is it so important to tackle global warming anyway?

A Left untended, scientists say, global warming will cause sea levels to rise, increase storms and worsen air pollution. And politically, without U.S. action, developing countries such as China probably will not agree to mandatory pollution limits.