The climate change lobby explosion

Will thousands of lobbyists imperil action on global warming?

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In his address to a joint session of Congress, President Barack Obama pledged nothing less than a transformation in the way America uses energy in order to “save our planet from the ravages of climate change” and reinvigorate a troubled economy.

Specifically, the president asked Congress to send him legislation “that places a market-placed cap on carbon pollution.” The new president has pledged to set annual targets that put the nation on course to an 80 percent reduction (from 1990 levels) in fossil fuel emissions by 2050. House Speaker Nancy Pelosi says she plans a floor vote on climate change before December, and Senate Majority Leader Harry Reid said late last week that he would attempt to bring a global warming bill to the Senate floor by summer’s end.

But while the Obama team readies to take on the global warming challenge, the special interests that seek to derail, blunt, or tailor any new climate policy to their narrow agendas have already gathered in staggering numbers. A Center for Public Integrity analysis of Senate lobbying disclosure forms shows that more than 770 companies and interest groups hired an estimated 2,340 lobbyists to influence federal policy on climate change in the past year, as the issue gathered momentum and came to a vote on Capitol Hill. That’s an increase of more than 300 percent in the number of lobbyists on climate change in just five years, and means that Washington can now boast more than four climate lobbyists for every member of Congress. It also means that 15 percent of all Washington lobbyists spent at least some of their time on global warming in 2008, based on a tally of the total number of influence-peddlers on Capitol Hill by the Center for Responsive Politics.

Based on the data, the Center estimates that lobbying expenditures on climate change last year topped $90 million. About 130 businesses and interest groups spent more than $23.5 million on lobbying teams solely focused on climate, but that vastly understates the money devoted to the effort. More than 95 percent of climate lobbyists work on other issues such as tax and health care for their clients as well, and they don’t have to report how much they’re being paid on global warming specifically. But even if just 10 percent of their time last year was spent on climate, that would add nearly $70 million to the grand total spent lobbying on climate in 2008 and push expenditures past $90 million.

A powerful roster

The ranks of the lobbyists include a who’s who of ex-members of Congress, from former House Majority Leader Richard Gephardt, a Missouri Democrat, to former House Appropriations Committee Chairman Robert Livingston, a Louisiana Republican. Among the former Capitol Hill staffers who are engaged on global warming are Drew Maloney, former top aide to then-House Majority Whip Tom DeLay, and Andrew Athy, a former counsel to Representative John Dingell, who later chaired the House Energy and Commerce Committee. Numbered among the executive branch veterans now in the climate fray are Jack Quinn, White House lawyer to President Clinton, and Wayne Berman, assistant commerce secretary under President George H.W. Bush.

The roster of interests seeking to influence the climate change issue is not just growing; its makeup is changing as well. Back in 2003, the first time the U.S. Senate voted on a comprehensive climate policy proposal, the 150 or so businesses and interest groups lobbying on the issue represented a narrow range of interests led by power companies. Seventy percent, in fact, were electricity, coal, and oil firms and the heavy industries like auto, cement, and steel that would be most directly affected by any effort to curb use of fossil fuel. Opposing them: nine environmental groups. But by 2008, when the Senate again considered, and rejected, a broad program to curb the carbon dioxide emissions caused by burning fossil fuels, virtually every segment of the economy was seeking to weigh in.

The nation’s largest and most powerful industry groups — the U.S. Chamber of Commerce and the National Association of Manufacturers — are now leading voices against climate action. Other industry coalitions, such as the U.S. Climate Action Partnership, want to see Congress act on greenhouse gases — as long as lawmakers take care to minimize their costs. Others, like the numerous alternative energy companies, are pursuing opportunities that would be available as a result of a new commitment to reduce reliance on fossil fuels. And then there are the Wall Street banks like Goldman Sachs and JP Morgan Chase, as well as private equity firms and new financial players, which would buy and sell emissions “permits” under a proposed “cap- and-trade” system favored by most pro-climate action politicians, including Obama. Finally, there are the cities, public transit agencies, universities, and others seeking a piece of the pie — the revenue that a climate program would generate when power plants, oil companies, and others have to buy federal permits to continue emitting carbon dioxide.

Good news, bad news

Many environmental advocates, including mainstream groups such as the Environmental Defense Fund and the Natural Resources Defense Council, have treated the proliferation of voices engaged on climate as a positive. When giants such as General Electric, Johnson & Johnson, Alcoa, and DuPont are on record favoring cap-and-trade legislation, “it moves the politics on this issue to a new place,” says Eileen Claussen, president of the nonprofit Pew Center on Global Climate Change, which has worked to forge business-environmentalist alliances.

Chelsea Maxwell, a key former Senate staffer who worked on last year’s climate legislation, believes the boost in lobbyists is simply a sign that climate has taken its place as a major issue on Capitol Hill. “Five years ago, people saw climate change as an environmental issue, and it really goes beyond that,” Maxwell says. “It’s an energy issue. It’s a national security issue. It’s a tax issue. It’s an immigration issue. It has so many facets that as those constituencies start seeing there’s likelihood of movement on the Hill, then, of course people want to make sure their interests are… represented.” Maxwell, who now works for a Washington, D.C., environmental consulting and lobbying firm, The Clark Group, is optimistic on the prospects for climate legislation — even amidst the lobbying blitz. “I don’t think it’s impossible,” she says. “What it’s going to take is a lot of deliberation.”

But the lobbying onslaught has also alarmed some influential voices in the climate debate, who fear that many compromises among the myriad interests will forestall the sort of aggressive action that’s really needed. In one of several open letters he penned in recent weeks to Obama, one of the nation’s most outspoken climate scientists, NASA’s James Hansen, warned, “The danger is that special interests will dilute and torque government policies, causing the climate to pass tipping points, with grave consequences for all life on the planet.”
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The leader of the Nobel Prize-winning Intergovernmental Panel on Climate Change, Rajendra Pachauri, feels that crucial moment may well be at hand. “If there’s no action before 2012, that’s too late,” he has said. “What we do in the next two to three years will determine our future.” If, indeed, the hour is growing short, pessimists say it’s just about the worst time for K Street to be out in force, milking the issue for all its worth and eroding the chances that agreement can be reached. “A lot of people are on a gravy train who won’t want it to go away,” says Frank O’Donnell, president of the environmental group Clean Air Watch.

A winding road

For Congress, support for climate action has grown substantially since 1997, when the Senate voted 95-0 in support of a nonbinding resolution that rejected the approach international negotiators took on climate in a deal inked at a United Nations conference in Kyoto, Japan. The reason for the unanimous vote, however, was an issue that persists today: The protocol didn’t force fast-growing, still-developing countries like China to curb their carbon emissions. The Clinton administration never submitted Kyoto to the Senate for a ratification vote, and President Bush rejected the treaty outright.
In 2003, Arizona Republican Senator John McCain bucked GOP leaders to work with then-Democratic Senator Joseph Lieberman of Connecticut on a modest cap-and-trade plan. The measure was defeated, 55-43.

By last year, though, it was clear that the climate change game had changed — in the stakes, the sophistication, the spending, and the number of players involved. Republican Senator John Warner, in his last year in office, co-sponsored a new climate bill with Lieberman. The bill’s goal was not as ambitious as Obama’s — a 71 percent reduction from 2005 levels by 2050 — and it had numerous provisions to reduce the cost to industry.

But the nation’s largest business organization, the U.S. Chamber of Commerce, led a high-profile campaign against the legislation. Environmentalists, meanwhile, were bitterly divided over whether to back a bill some viewed as too weak. And with the bill moving forward last spring just as U.S. gasoline prices were on their historic climb to more than $4 a gallon, the debate focused on how climate policy would make the nation’s favored fuels even pricier. On June 6, a 48-36 procedural vote in the Senate showed that supporters lacked the 60 votes needed to end debate. Moreover, nine of those “yeas” came from ten Democrats, a mix of moderate and industrial-state senators, who revealed they would have voted no on the actual bill.

Now the battle is being joined again. House Energy and Commerce Committee Chairman Henry Waxman, a California Democrat who has in the past endorsed emission goals similar to those articulated by Obama, has vowed a vote on a climate bill in his panel by Memorial Day. Senate Environment and Public Works Committee Chair Barbara Boxer, also a California Democrat, has scheduled a Feb. 25 hearing on climate science and promised action by the end of the year but has also acknowledged that many concerns need to be addressed. She has released a set of broad principles for legislation — support for current state efforts on global warming, for inclusion of provisions to spur other countries to cooperate, and for use of revenue both to help consumers and to fund clean energy. She has not yet set any carbon reduction targets. “We want to get a bill out there that is straightforward, that doesn’t have so much weight that it sinks,” she said at a news conference earlier this month.

Who wants what

No group exemplifies the sophistication of the current debate more than the American Coalition for Clean Coal Electricity — a new lobbying organization unveiled just weeks before the vote last June on the Warner-Lieberman bill. Representing 48 mining firms, coal-hauling railroads and coal-burning power companies, ACCCE spent $9.95 million lobbying Capitol Hill on climate in 2008 — more than any other organization solely dedicated to the issue. In addition to the group’s president, Steven Miller, a one-time aide to former Democratic Kentucky Gov. Brereton Jones, and vice president Joe Lucas, who was an aide to former Energy Secretary Hazel O’Leary, ACCCE has at least 15 outside lobbyists, including former White House Counsel Quinn. The big effort is not surprising, since electricity is the largest single source of U.S. greenhouse gas emissions, and the most carbon-intensive fuel, coal, provides half the nation’s power. But ACCCE’s position is that it supports a mandatory federal program to curb the emissions its own members produce — as long as the policy meets ACCCE’s set of principles for keeping electricity affordable, domestically produced, and reliable. And that means encouraging, in ACCCE’s words, “robust utilization of coal.”

That’s a tall order, since there’s no technology on the shelf today that scrubs the carbon out of coal-fired power. So what ACCCE is really seeking out of Congress is money to develop that technology. “Investments, incentives, as well as reasonable regulation based on the ability to use that technology” is how Lucas sums up what the group is seeking. ACCCE opposed Warner-Lieberman, he says, because “it went a little too far a little too fast.”

Of course, coal is only one of the interests weighing in. Manufacturers dominated the climate scene on Capitol Hill last year, with 610 registered lobbyists. And that doesn’t even count the mighty U.S. Chamber of Commerce, which ran ads featuring energy-starved Americans cooking eggs over candles and jogging to work on auto-free streets.

But not all manufacturers picture so bleak a future if the nation puts the brakes on carbon. General Electric, for example, is a member of the Chamber but parts ways with the mega-group on climate. As a leading supplier to power plants, GE would benefit from a move from away from coal. The company makes the big equipment for three low- or no-carbon alternatives: natural gas, wind, and nuclear. And GE also has a bridge technology it says will help pave the way to cleaner use of coal. But the U.S. power industry is now in a quandary over how much to invest in the often expensive climate solutions offered by GE and others. That means a lot of uncertainty for companies like GE, which, working with lobbyists like Charles Knauss, former Republican counsel to the House Energy and Commerce Committee, want to see Congress put a limit on the nation’s greenhouse gas output. “I didn’t come to this as an environmentalist, I come to it as an industrialist,” said GE chief executive Jeff Immelt, at Congress’ first hearing of the year on climate. “I’m a capitalist, plain and simple.”

GE is part of the U.S. Climate Action Partnership, which favors the market-based “cap and trade” approach. But you can’t have a market without marketers. And so another broad interest group is now weighing in on climate — Wall Street banks including Goldman Sachs, J.P. Morgan, Merrill Lynch (both before and after it was swallowed by Bank of America), insurance companies such as American International Group (before it was forced by public outcry to quit lobbying a few weeks after its takeover by the government), private equity firms, and a host of little-known carbon-focused financial players. They would serve as brokers, project developers, financers, verifiers, and consultants in an emissions “permit” market that one federal regulator estimates could reach $2 trillion in value within five years and make carbon the world’s most widely traded commodity. The finance industry has as large a lobbying force on climate as the alternative energy industry, with about 130 reps working the issue last year, including David Leiter, former chief of staff to Democratic Senator John Kerry of Massachusetts, and Steven Shimberg, who was counsel to the late Republican Senator John Chafee of Rhode Island when he chaired the Senate Environment and Public Works Committee.

One of the finance and marketing industry’s main goals is to push for a climate policy that allows companies to meet their carbon reduction goals with the help of “offsets” — investments in greenhouse-gas reducing projects such as wind farms. But controversy has swirled around the offset projects. At a carbon market conference in Washington, D.C., last fall sponsored by the Pew Center on Global Climate Change and market analysis firm Point Carbon, Senate Energy Committee Chairman Jeff Bingaman, a New Mexico Democrat, said he feared offsets were “fraught with opportunities for game-playing, which will be fully exploited, I’m sure.” The danger, he said, was that Congress would set up a program that appears to have aggressive goals, but in reality is so loose about offsets that carbon emissions never really are reduced. Later in the conference, one lobbyist, Kyle Danish of Van Ness Feldman, told carbon marketers that Bingaman’s remarks meant they “need to be prepared to step forward” to make the case for offsets. Danish represents the Coalition for Emission Reduction Projects, which includes power companies and financiers such as Deutsche Bank and the carbon offset firm Blue Source, which has a strategic alliance with Goldman Sachs.

Of course, Wall Street’s effort to promote itself as a trusted source of climate solutions may not be easy, given its other public relations issues at the moment. Bob Baugh, lobbyist for the AFL-CIO and co-chair of its energy task force, says labor long was the “lone critic” of the entire carbon market concept, “And we’ve become prophets all of the sudden.” Baugh says rules, regulations, and restrictions on such a market — “Why do you want speculators in there?” — will be just one set of many issues in the climate debate for organized labor.

Unions had about 60 lobbyists on global warming last year. “This is one of the biggest economic issues — other than the current crisis — that we’re going to deal with in our lifetime,” says Michael Wessel, a former aide to Gephardt and now self-described lobbyist for “products that get heated up” — such as steel and glass. Wessel’s clients’ focus is on “leakage” — jobs migrating to China and elsewhere that would have cheaper energy costs if the United States puts a price on carbon and the developing world doesn’t. The Warner-Lieberman bill tried to address that by requiring countries without carbon curbs to purchase permits on the U.S. carbon markets to cover their exports into the United States. Some felt that didn’t go far enough, notably Ohio Senator Sherrod Brown — one of the “Gang of 10” Democrats who said they would have voted down Warner-Lieberman. Democratic Representatives Jay Inslee of Washington and Mike Doyle of Pennsylvania have proposed that 15 percent of emissions permits in a cap-and-trade program be set aside and given free to industrial sectors vulnerable to international competition. That’s a pot that could be worth tens of billions of dollars — and attract lots of interest from lobbyists.

Labor and industry advocates aren’t the only ones who have noticed that climate policy could provide a new stash of federal money. Obama favors making the fossil fuel industry pay the government for the permits in a cap-and-trade system, and there is no shortage of ideas on how to spend that big new prospective chunk of change. Cities, counties, and municipal agencies have more than 100 lobbyists either following climate developments on the Hill or actively seeking to shape the formulas lawmakers will use for doling out money. Chronically underfunded public transit agencies, for example, see an opportunity to plug into a new federal revenue stream. Mass transit could help get cars — and their carbon emissions — off the road. But would-be grants recipients want as few strings attached as possible, meaning fewer assurances that the money will actually be put to projects that protect the atmosphere.

There are those, of course, who just want to get climate policy in place. Alternative energy, generally more expensive than traditional power generation, would be more competitive if regulators added the price of carbon pollution to every kilowatt generated from now-cheap coal. In 2003, there were actually fewer than five alternative-energy industry lobbyists registered to make their case specifically on climate on Capitol Hill. But by 2008, there were more than 130, representing not only familiar wind and solar, but lesser-known technologies like geothermal, waste-to-energy, and recycled heat.

Last year brought a similar explosion in environmental and health lobbyists, which numbered fewer than 50 five years ago and grew to about 185 in 2008. The old green groups like the Sierra Club and the National Wildlife Federation have now been joined by a new wave of interests, from the American Academy of Pediatrics to the Evangelical Environmental Network. Put the alternative energy and environmental/health lobbyists together, and they are outnumbered by all other interests, more than 8-to-1. But the push they are making is not insignificant. The Environmental Defense Fund says it spent about $40 million on direct climate advocacy, both domestically and internationally last year — about 40 percent of the organization’s budget.

Reading tea leaves

NASA’s Hansen has argued that Obama should set out a strategy for simply sidestepping the lobbyists. Instead of a complicated trading scheme, he says, just put a tax on fossil fuel at the source and call it a tax — then remit all of the revenue to citizens as a “dividend” that will help them cope with higher energy costs while still encouraging conservation. “‘Cap and Trade’ generates special interests, lobbyists, and trading schemes, yielding non-productive millionaires, all at public expense,” Hansen says in one of the letters to Obama he has posted on his website. “The public is fed up with such business.” Tennesseee Republican Senator Bob Corker has voiced support for such an idea, and a simple tax has fans on both left and right in the climate debate, from Friends of the Earth to ExxonMobil chief executive Rex Tillerson.

But the political hurdles to climate legislation — in whatever form — are formidable. In the Senate, climate action advocates picked up only three additional likely votes in November: Senator Mark Begich of Alaska, Senator Mark Udall of Colorado, and Senator Tom Udall of New Mexico. The four other new Democratic senators replaced Republicans who supported Warner-Lieberman; the same would be true of Minnesota’s Al Franken if he wins his recount battle. So if a bill similar to Warner-Lieberman were before the Senate today, reaching a filibuster-proof 60 votes would be daunting.

Environmental Defense Fund lobbyist Mark MacLeod notes how little the political landscape has changed.

“We still have to do something to address the issues about coal. We still have to do something to address the issues about Detroit,” MacLeod says. “All those issues did not go away because of who the president is, and because there’s a handful more members who support doing something.”

Energy lobbyists on all sides are trying to read the tea leaves to predict how aggressively Obama plans to push on the issue. The president has a slew of renowned climate advocates on his team: Energy Secretary and Nobel laureate Steven Chu, White House science adviser John Holdren, Jane Lubchenco, nominated to head the National Oceanic and Atmospheric Administration, and former EPA Administrator Carol Browner, serving in a newly created “climate czar” post. But business lobbyists are quick to point out he has a go-slow-on-climate contingent of advisers, too — most notably economic adviser Lawrence Summers.

Energy lobbyists also note there’s currently little public groundswell for climate action in the United States, given the economic crisis that has consumed the nation’s attention. A Pew Research Center for the People and the Press poll in January showed global warming ranked dead last in a list of 20 priorities for the nation. “You cannot have a climate change policy that would run 100 percent in a contrarian direction to these economic stabilization programs,” says Scott Segal of Bracewell & Giuliani, one of the top climate lobbying firms, whose 10 clients include coal-heavy power giant Southern Company, the coal-hauler railroad CSX, and a utility coalition called the Electric Reliability Coordinating Council.

Indeed, Obama’s approach has been to try to address climate and the economy together; at his urging, the economic stimulus plan included $60 billion for renewable energy, technology research, and a massive energy efficiency program. Climate action advocates view this as a “down payment” on a larger program to address global warming.

And such a program would be needed to meet Obama’s stated goals of an 80 percent reduction in U.S. greenhouse gas emissions by 2050, and returning emissions to their 1990 levels by 2020 — about 15 percent below where they stand today. Pachauri, of the Intergovernmental Panel on Climate Change, has said those targets are too modest. But they are more ambitious than anything Congress has previously considered. Time is running out before the international negotiations set for this December in Copenhagen to conclude a new global climate treaty. The experts see little chance it will succeed without the United States on board.

Marianne Lavelle is a staff writer at the Center for Public Integrity in Washington, D.C. David Donald, the Center’s data editor, contributed to this report, as did staff writer Matthew Lewis.