Emissions bill fuels fight in Congress

Democrats are already wrangling over how to spend the windfall — potentially hundreds of billions of dollars — raised by the new system. The bill would create a cap-and-trade system, with a cap on industrial emissions of greenhouse gases and a market for companies to trade their pollution allowances. The way that the government distributes the allowances will have a significant impact on companies forced to buy, sell and collect the permits starting in 2012. The draft bill was purposely vague on the issue, but the sponsors — House Energy and Commerce Committee Chairman Henry A. Waxman (D-Calif.) and Energy and Environment Subcommittee Chairman Ed Markey (D-Mass.) — support giving away some free allowances to industries that are most vulnerable to international competition, such as steel, glass and paper. That type of approach is favored by lawmakers from manufacturing states, who fear that costly compliance with a cap-and-trade system could force fossil-fuel burning industries to buy overseas from cheaper, less-regulated countries like China and India. Their votes, particularly in the Senate, are critical to passing any significant climate change legislation. But members of the House Ways and Means Committee, which has jurisdiction over all revenue provisions, have voiced support for the “cap and dividend” approach to tackling carbon emissions and climate change. Cap and dividend, popularized by California entrepreneur Peter Barnes, regulates the first sellers of fossil fuels, such as the producers of coal, crude oil and natural gas. That’s a shift from cap and trade, which targets electrical utilities, factories and other “downstream” consumers...Politico