Energy bill needs carbon cap: White House

U.S. Cap-and-Trade Climate Bill aligns climate policy, carbon permits, emissions trading, and renewable energy, as Senate debates coordination with energy package, utilities, factories, and Copenhagen talks to replace Kyoto under bipartisan scrutiny.

It would be a \"big mistake\" for the Congress to approve an energy bill this year without placing a cap on greenhouse emissions, the White House's top climate and energy adviser said.

"We think that would be a big mistake," Carol Browner told business leaders at a clean energy forum. "I think you have to keep these programs coordinated because they do impact with each other."

With climate change legislation facing a tough road to passage in the Senate, some lawmakers have suggested the chamber should instead focus on moving less controversial legislation that would just support renewable energy, such as a renewable power goal standard favored by some lawmakers.

Both the House and Senate bills center around a cap-and-trade system that, despite the obstacles to capping gases lawmakers cite, limits carbon emissions. Companies would need permits for every ton of carbon pollution they release into the atmosphere. Utilities and factories that don't use all their permits could trade, or sell them, to companies that need more.

Browner played down the significance of having a climate change bill approved by both chambers and signed into law before international climate negotiations begin in Copenhagen in December to try to hammer out an agreement to replace the 1997 Kyoto protocol on fighting climate change.

"We will manage in Copenhagen wherever we are in the process," Browner said.

The House passed legislation earlier this year, a utility-first climate bill in Congress, that would limit greenhouse emissions by requiring companies to acquire permits for the carbon dioxide they release into the atmosphere.

After several delays, Senators John Kerry and Barbara Boxer unveiled their climate bill that calls for a 20 percent reduction in smokestack emissions by 2020 from 2005 levels.

Senate Majority Leader Harry Reid has said he hopes to combine the climate bill with a comprehensive energy package approved by the Senate Energy and Natural Resources committee earlier this year.

But some moderate Senate Democrats have said they would prefer to simply pass the energy package, reflecting how Democrats abandoned a comprehensive energy bill in related debates, which would require utilities to generate more electricity from renewable sources and allow more oil and gas drilling off Florida's Gulf coast.

Any climate legislation in the Senate likely faces an uphill battle, with some warning of an energy bill watered down by concessions, as lawmakers from heavy industrial states in both parties have raised concerns about burdening companies with additional energy costs.

Lawmakers must also contend with a crowded legislative calendar, that also includes healthcare and financial reform.

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