Senate panel kicks off climate bill drive

WASHINGTON (Reuters) – A Senate committee on Tuesday launched three days of hearings on a Democratic climate bill aimed at reducing carbon pollution while making the United States a world leader in cleaner energy.

In an uphill battle to pass legislation, especially before an international summit convenes in Copenhagen in December, Senate Environment and Public Works Committee Chairman Barbara Boxer said the bill would only cost consumers about 30 cents a day and make the United States the "world's leader in clean energy technology."

The committee was set to hear testimony from heavy-hitters from President Barack Obama's Cabinet: the secretaries of energy, transportation and interior and the head of the Environmental Protection Agency. Joining them will be the chairman of the Federal Energy Regulatory Commission.

"The world now realizes that its current level of greenhouse gas emissions is unsustainable," Energy Secretary Steven Chu said in prepared testimony.

But the panel's senior Republican, Senator James Inhofe, who has long questioned whether there is a global warming problem, said the Democrats' bill to reduce carbon emissions 20 percent by 2020 from 2005 levels was "ambitious but costly."

Supporters got a boost on Tuesday, when a major U.S. corporation joined a coalition of industry and environmentalists clamoring for action. Honeywell International Inc, a manufacturer of aerospace products and energy-efficiency technologies for buildings, said it was joining the U.S. Climate Action Partnership.

The U.S. government estimates that the electric power sector contributes 39 percent of energy-related greenhouse gas emissions in the United States, while 34 percent comes from the transportation sector and 27 percent from the use of fossil fuels in homes, commercial buildings and industry.

Obama and Democrats in Congress want to create a "cap and trade" system requiring utilities and industries to reduce emissions of carbon dioxide and other gases associated with global warming over the next 40 years.

Companies would have to obtain dwindling numbers of pollution permits from the government and hundreds of billions dollars worth of permits could be traded on a new exchange.

Boxer hopes her committee finishes reviewing the legislation in coming weeks and votes to approve it.

That could be the last major action by the Senate on the issue this year, before countries from around the world meet in Copenhagen in December to chart tougher goals for reducing emissions to head off droughts, floods and melting polar ice.

U.S. LEADERSHIP 'ESSENTIAL'

U.S. leadership is considered essential to the global talks, since the United States is the leading carbon polluter among developed countries.

Most Senate Republicans oppose the cap and trade bill, saying it would force U.S. companies to move more manufacturing jobs abroad while also raising consumers' energy prices.

High-ranking Senator Lamar Alexander, one of few Republicans to declare that "climate change is real," said he and fellow committee Republicans will offer an alternative to cap and trade.

"Before we embark upon a scheme that would send jobs overseas and charge Americans hundreds of billions of dollars a year in new taxes ... we might look for another solution," Alexander told reporters on Monday.

He envisages a four-point plan to massively expand nuclear power, extend offshore drilling for natural gas, beef up research on alternative energies and convert half the nation's car and truck fleet to electric power.

Daniel Weiss, of the liberal Center for American Progress, called Alexander's proposal "a recipe for a much larger federal (budget) deficit" with government spending to fund alternative energy research and the potential for huge taxpayer exposure from government-backed loan guarantees for nuclear plants.

Weiss also noted that scientists argue that a 20 percent reduction in U.S. carbon emissions is needed by 2020 and it likely would take longer than that to get new nuclear power facilities on line.

(Additional reporting by Tom Doggett and Timothy Gardner, editing by Alan Elsner)