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As the World Burns

Page 5 of 6

In the end, Boucher emerged with a sweetheart deal for Big Coal. The climate bill was amended to include more free permits for carbon polluters, as well as $1 billion a year to support "clean coal" research. (That was on top of the $3.4 billion in research funds already included in the president's stimulus plan.) All told, the climate bill now contained $60 billion in support for coal — far more than the aid given to wind, solar and all other forms of renewable energy combined.

Even more striking, Boucher succeeded in switching a single word in the legislation that could potentially save the coal industry billions of dollars. When a draft of the bill was first released in late March, it stipulated that coal plants "finally" permitted after January 1st, 2009, would be subject to new regulations, which was likely to include a requirement that they capture and store carbon emissions. But in the final version of the bill, the word "finally" was changed to "initially" — instantly exempting the 40 or so coal plants currently under construction from the new regulations.

The polluter-friendly measures won the support of some big coal burners, including American Electric Power, the nation's dirtiest utility. But even with all the handouts, the industry's most conservative factions continued to oppose the climate bill. In the final hours, the lobbying went into overdrive. ACCCE spent $545,000 on what turned out to be a fraudulent "grass-roots" campaign, using a Washington consultant called Bonner and Associates to bombard undecided congressmen with fake letters, supposedly from the NAACP, demanding that they vote against the climate bill. The blatant deception — and the use of forged documents — was not discovered until after the vote. "It was old tobacco tactics, pure and simple," Rep. Inslee says.

By that point, the months of backroom deal-making had succeeded in diluting the climate bill and loading it up with tax breaks and subsidies for industry. By the time it came to the floor on June 26th, the measure clocked in at more than 1,400 pages. The all-important target for reducing carbon pollution by 2020 had been cut from 20 percent to 17 percent. The goals for boosting renewable energy were cut nearly in half. The EPA's authority to regulate carbon emissions had been gutted. And instead of auctioning off all pollution permits, as Obama had promised during the campaign, the bill gave 83 percent of them away for free — up to half of them, in the near term, to industrial polluters. According to an analysis by Stanford University economists, polluters received $134 billion in allowances that weren't necessary to ensure America's industrial stability. The nation's dirtiest corporations, the ones most responsible for global warming, had just been given a huge government handout.

Still, even with all its flaws, the climate measure was the first bill Congress had ever seriously considered that placed a comprehensive cap on carbon pollution. And if the bill failed, it might be years before supporters had another shot. "We didn't make a single compromise we didn't have to to get the bill passed," Markey says. With the help of President Obama, who met with undecided members, the climate bill squeaked through the House by a vote of 219 to 212. Even with the president's efforts, 44 Democrats voted against the measure.

Markey believes the legislation will ultimately be seen as groundbreaking: "In 100 years, we'll look back on this moment and realize that 2009 was the year the United States finally decided to take the problems on our planet seriously." And with all its industry giveaways, the bill should have appeased opponents; Waxman, who has a reputation as a pragmatic deal-cutter, notes that the measure "represents a broad diversity of concerns and points of view."

But even in its watered-down form, the climate bill drew fierce attacks from Republicans. The eight GOP congressmen who voted for the measure were labeled "cap and traitors" by party loyalists, and several were told they will face primary challenges next year. The National Republican Congressional Committee also ran ads targeting a dozen or so vulnerable Democrats who supported the bill, including Rep. Tom Perriello of Virginia, who had won his seat by only 727 votes. The ads — foreshadowing the fight to come during this year's midterm elections — accused Perriello of voting for the "Pelosi Energy Tax," falsely claiming that the climate bill would raise energy costs for his constituents by $1,870 per family.

To Perriello, this was the final insult. "It wasn't enough that the fossil-fuel industry got millions of dollars worth of subsidies and benefits from the bill — they then had to act as if the passage of the bill were Armageddon," he says. "If anyone should have been unhappy about that legislation, it was the environmentalists."

In the hours after the House vote, while Markey was celebrating with staffers on a rainy night in Washington, his cellphone rang. It was White House chief of staff Rahm Emanuel, calling to congratulate him. "I didn't think you could do it," Emanuel told him.

The truth is, the climate bill's passage caught the White House off-guard. There was no strategy in place to advance the bill through the Senate, no plans for a prime-time address from the president on the urgency of confronting climate change. "They were surprised by the bill's speed," says one insider. "They suddenly had to focus on where to place their political bets." Bogged down in the fight over health care, Obama faced a dilemma: prodding senators to get moving on climate change might derail health care even further, but waiting too long risked missing the deadline for Copenhagen. "The world was waiting for the Senate to act," says Fred Krupp, head of the Environmental Defense Fund.

The White House wasn't the only one scrambling to regroup. The energy industry and its Republican allies realized that their scare tactics on climate change weren't working: To crank up the opposition, they needed to crank up the fear. To do that, they adopted both the rhetoric and the infrastructure of the burgeoning Tea Party movement that had been formed to fight health care reform. Cap-and-trade, the Republicans began to argue, was part of Obama's master plan to strip Americans of their freedom. "The government is going to monitor where you set your thermostat, how much plane travel you do," declared Marc Morano, a former Republican staffer on the Senate environment committee who now runs Climate Depot, a clearinghouse for disinformation about global warming. "It's a level of control we've never even contemplated in America."

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