Why Climate-Change Legislation Won't Pass Senate

President Obama sparked a flurry of "climate-change legislation is dead" speculation earlier this month when he mused that the Senate might try to remove a carbon pricing regime (cap-and-trade, for example) from legislation promoting cleaner energy. "It's conceivable that that's where the Senate ends up," Obama told his audience at a town-hall meeting in Nashua, N.H.

That's not the administration's preferred approach. Obama has long advocated for comprehensive legislation that would put a price on carbon to encourage polluters to invest in cleaner resources and practices. But he's probably right that the Senate won't choose that path. The most likely outcome is not a climate-change bill but energy legislation that doesn't cap greenhouse-gas emissions or penalize polluters. Why? Because Republican Sen. Scott Brown's filibuster-reinforcing election in Massachusetts means Democrats need GOP votes more than ever. But with the exception of Lindsey Graham (S.C.), Senate Republicans don't seem motivated by global warming.

When Congress started debating health-care reform in the early days of the Obama administration, both parties shared a conviction that the system needed a comprehensive overhaul. No such common ground exists on climate change, making it an even more difficult task. "They're not on board with the fundamental concept that we need to reduce greenhouse gases," says a Democratic Hill aide, who didn't want to be named while negotiations are underway. "That sounds obvious, but it's critical to understanding how passing comprehensive legislation is difficult to impossible right now."

Republicans haven't always been so averse to green policy: President George H.W. Bush supported and signed the Clean Air Act Amendments in 1990. But right now Republicans feel little political pressure to act on climate change. That's not just because many party activists are skeptical about the entire concept. Most GOP senators will support reducing pollution, in theory. Many have bought into buzzwords that poll well, touting their commitment to "clean energy" and "energy security." But that doesn't mean they want to regulate carbon emissions. In fact, the opposite is true. They're happy to support reduced carbon emissions, as long as it doesn't cost energy producers or consumers a penny.

Republicans have changed their ideas on energy very little in recent years; they're focused on securing access to a cheap energy supply. Since 9/11, they've moved domestic production higher up their wish list, using "energy security" as a way to justify government incentives for conventional domestic energy production, the expansion of nuclear power, and offshore drilling. Who could forget the thundering "Drill, baby, drill" chant at the Republican National Convention in 2008? Curbing greenhouse-gas emissions (again, with the exception of Senator Graham) just isn't a priority for them.

Democrats and Republicans alike support investment in clean energy, because, as one Democratic source put it, opposing clean energy is about as popular as boiling babies. That means both parties will support production and investment tax credits for renewable sources, as well as loan guarantees (as long as nuclear is in the mix). Yet, without a mechanism to price carbon and raise the cost of dirty energy, producers aren't motivated to shift over to renewable sources such as solar, wind, or geothermal. Renewables also need to secure access to electricity grids and investment in grid upgrades. Without all these things, renewables will remain at a disadvantage.

Republicans will support subsidies and other market interventions if they lower voters' energy bills. But in the GOP pecking order, cheap domestic energy outweighs clean energy. Cheap energy tends to come from dirty resources like coal, but that's OK when your priority isn't greenhouse-gas reduction. "Democrats want to get to alternative resources by punishing domestic production," says a Republican staffer on the Senate Environment and Public Works Committee. "With a cap-and-trade bill, the aim is to make your domestic conventional energy more expensive and force dollars into other forms of energy."

Both parties support research and development of clean energy, but without a price on carbon, Democrats don't see the private sector investing enough to make a difference. There's little incentive for energy companies to spend a lot to change their practices. Democrats argue that without cap-and-trade or a carbon tax, the responsibility to innovate is borne largely by the federal government. If there's a price on carbon, energy companies are motivated to explore new avenues, and they bring with them massive amounts of private cash, venture capital, and brainpower.

Democrats argue that they've tried to reach across the aisle, offering enticements for Republicans to support their cause. The House climate-change bill devoted $60 billion to investment in clean coal technology, including carbon capture and sequestration, which is a Republican pet issue that most liberal Democrats think is a fantasy. With these enticements, only eight Republicans ultimately voted for the bill, while left-leaning Democrats like Reps. Dennis Kucinich (Ohio) and Peter DeFazio (Ore.) walked away, believing that the bill contained too many giveaways to coal companies.

Last week President Obama announced government loan guarantees for two new nuclear facilities—the first in decades . Obama also indicated in his State of the Union address that he's open to offshore drilling. But, according to one White House source, many Democrats are disgruntled that they got nothing from Republicans in return.

"Republicans believe the path forward should be to increase production of America's domestic resources," said Sen. James Inhofe, the environment committee's ranking member, in an e-mailed statement to NEWSWEEK. "Developing and expanding domestic energy will bring greater energy security, ensure a stable source of supply, and create thousands of well-paying jobs for Americans."

Inhofe, an influential voice on energy policy in the GOP caucus, is one of Congress's most ardent global-warming skeptics. He's called it the "greatest hoax ever perpetrated on the American people." This week he stepped up his campaign to throw out the Environmental Protection Agency's finding that global warming is dangerous to public health. With Inhofe as ranking member on a critical committee, it shouldn't come as a surprise that the outlook for climate-change legislation is grim.