Baucus, Tester prepare to take up legislation to cap greenhouse gases

The Missoulian | By Mike Dennison

Montana’s U.S. senators are preparing to dive in on another big national issue – climate change and energy legislation – but it appears they’re facing a divided state electorate on the subject.

The flash point is “cap and trade” legislation before the U.S. Senate, an approach that will cap and reduce greenhouse gases over time in the United States and increase the cost of fossil fuels, such as coal and oil.

Cap-and-trade bills also are designed to raise money that pays consumers, to offset higher energy costs, and helps fund renewable power production. The goal is to push America toward an economy that produces more green energy and is less reliant on foreign oil.

Sens. Jon Tester and Max Baucus, both Democrats, say they generally support the idea of capping greenhouse gases, which are seen as a primary cause of global warming and climate change. President Barack Obama is behind the idea, as well.

Tester and Baucus say Congress should act sooner rather than later on this thorny subject, not only because they believe climate change is harming the state, but also because they don’t want the U.S. Environmental Protection Agency to trump Congress by creating EPA’s own rules this year for regulating greenhouse gases.

“I don’t think anybody wants EPA to be making all the rules,” Tester said in an interview last week. “That’s why I think Congress needs to act.”

Yet in Montana, opinion is far from settled on whether cap and trade – or any attempt to limit greenhouse gases – should go forward.

Many traditional business and industry lobbies are lining up against it, including the Montana Chamber of Commerce, National Federal of Independent Business, farm and ranch groups and the oil industry.

They say higher prices for fossil-based energy, such as gasoline and coal-fired power, will harm those industries and the state’s economy. They also question whether renewable power, like wind, solar and geothermal, can realistically replace oil, gas and coal.

“I haven’t seen any credible models that say in the next couple of decades that we can replace fossil-fuel technology with green technology,” says Jon Bennion, director of government affairs for the Montana Chamber of Commerce. “We’d like to see both (types of energy) developed. I think that is where most Montanans are right now.”

On the other side is a broad coalition of conservation and environmental groups, as well as some businesses, that believe boosting green energy and combating climate change help the state economy.

“We need a clean energy bill to fix our economy, to address issues of national security (related to over-reliance on foreign oil), and to address climate change, which if we don’t solve is going to cost us far, far more in the long term,” says Chuck Magraw, a Helena attorney representing the Natural Resources Defense Council.

Tom France, regional director for the National Wildlife Federation in Missoula, notes that cap-and-trade legislation has broad corporate support on the national level: “They recognize that climate change is a threat not only to their corporations but to their families.”

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Baucus, like many Democrats in the Senate, hasn’t spelled out exactly what approach he’ll support, although he says he wants to make sure it works for Montana business, including agriculture, while limiting greenhouse gas emissions.

Tester also is noncommittal on cap and trade, although he said he’s intrigued by another approach called “cap and dividend,” which still limits greenhouse gases but rebates directly to the public most of the money raised by the sale of pollution permits.

Cap and dividend also eliminates Wall Street “trading” of pollution credits among various parties – another plus, as far as Tester is concerned.

“I’d rather approach it as a cap and revert (the money) back to the people than turn it over to Wall Street,” he said.

Yet regardless of how the greenhouse gas cap is designed, some still say it’s a bad idea, because of the cost to fossil-fuel users – or because they doubt the link between climate change and greenhouse gases.

Last week, the Montana Policy Institute, a Bozeman-based conservative think tank, released a study that said the higher energy prices and phase-down of fossil fuel industries brought on by cap-and-trade legislation will hammer the state’s economy.

The study predicted big drop-offs in coal production, oil production, industrial output, tax collections and jobs.

“I would like to see a true cost-benefit analysis of any proposals that are out there, rather than just saying, ‘Reducing greenhouse gas is worth any cost to jobs, to society, to our future,’ ” said Carl Graham, president of the institute.

John Youngberg, vice president of government affairs for the Montana Farm Bureau Federation, said the group’s farm and ranch members are urging opposition to cap and trade, because of the costs to agriculture from higher fuel prices, and because many doubt the warnings about climate change.

“I’m not sure people are buying into (it) anymore,” he says. “All of a sudden, it starts to smell like this might be a scam, and a big one. They’re starting to question if this is really happening.”

Yet there are farmers and ranchers who support cap-and-trade legislation, saying they’re convinced the global climate is changing, to the long-term detriment of agriculture and the environment.

“Springs and summers are coming earlier and are more intense,” says Chuck Merja, a Great Falls area grain farmer and former president of the Montana Grain Growers Association. “I think climate change is real, and to ignore it, we do it at our peril.

“I think energy costs are going to go up with or without cap and trade. We need to find ways to move us away from a petroleum, fossil-fuel-dependent environment and to something else.”