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Big environmental plan runs into big opposition

“Cap and trade” legislation that’s seen as key in meeting goals in Minnesota’s landmark 2007 carbon-emissions law is wilting in the Legislature like an Arctic glacier beset by global warming.

What’s more, a company that boasts two major environmental clean-air awards in recent years — Flint Hills Refinery at Pine Bend near Hastings — is credited with marshalling an intense lobbying blitz at the Capitol that has denuded a bill by state Sen. Ellen Anderson, DFL-St. Paul, that she calls the Green Solutions Act.  

“We are proud of our [award-winning] emissions reductions,” said refinery spokesman John Hofland, who emphasized that his company is not trying to kill Anderson’s bill.  “We just think that not enough is known about costs of some carbon-reduction proposals, including cap and trade, and its effects on the refining industry.”

The Minnesota Chamber of Commerce also is weighing in against Anderson’s bill and a companion in the House by DFL Rep. Kate Knuth of New Brighton. So far, the bill’s opponents seem to have the upper hand despite an equally intense lobbying effort by environmental advocates.   

“I am not very happy about this,” Anderson said in her office after the Senate’s Business, Industry and Jobs Committee delayed action on the legislation, effectively preventing it from being among marquee green bills that DFL Majority Leader Larry Pogemiller plans to feature on the Senate floor Monday. 

The bill’s tough-sledding also pits DFL heavyweights Anderson, Pogemiller and three others in the leadership against powerhouse Sen. Tom Bakk, DFL-Cook, who’s said the bill would put the timber industry at a competitive disadvantage with other national producers.  Bakk’s district in Minnesota’s Arrowhead is economically grounded in energy-intensive industries like pulp paper, wood products and taconite.  

“I’m all for reducing carbon emissions, but this is something that needs to be done at the federal level to be fair for everyone,” Bakk said, noting that all three remaining presidential candidates favor a national cap-and-trade system. 

Modeled after national plan

The cap-and-trade approach in Anderson’s original bill was modeled after a 1990s national effort to reduce sulfur-dioxide emissions.  In this case an over-all limit (cap) would be set on carbon emissions linked to climate change and carbon-emitting industries would be assigned a limit within the cap.  Those under the allowable limit could sell their credits in a market-driven auction (trade) to those who couldn’t, and the resulting costs would provide incentive to reduce emissions.   

This approach for sulfur reduced emissions to 20 percent below U.S. target levels and cost nearly 10 times less than the polluting industries feared it would, according to the Environmental Defense Fund.

The approach, at least in concept, is favored by Republican Gov. Tim Pawlenty. Last fall he teamed with Wisconsin Gov. Jim Doyle to gain support of six states of the Midwest Governors’ Conference and Manitoba for a regional cap and trade system.  

Pawlenty’s office will be part of a task force that’s to develop a regional cap-and-trade system by next fall, but there’s already some wonder about what will come of it. 

The governor-appointed Minnesota Climate Change Advisory Committee has studied cap and trade as a means of reducing carbon emissions to meet goals set in the 2007 Next Generation Energy law that Pawlenty signed last May. The committee’s final report is expected in late spring.  

Key goals
To assist the regional task force, Pawlenty has named a four-member advisory team that includes at least one member who’s working at the Capitol to blunt Anderson’s bill. He’s Mike Robertson of the Minnesota Chamber of Commerce.

Other advisers are Bill Grant of the Izaak Walton League, Mike Sparby of Xcel Energy and Peter Sullivan of GE Capital Solutions. 

Grant is an advocate of the cap-and-trade system and is frequent member of any hearing at the Capitol when energy issues are discussed. 

“Without a good cap-and-trade system, Minnesota’s carbon reduction goals cannot be met,” said Grant after the Senate meeting when Anderson’s bill was put on hold. 

The Next Generation Energy law’s goals are that Minnesota’s carbon emissions be reduced by 15 percent below 2005 levels by 2015, 30 percent by 2025, and 80 percent by 2050. 

The cap and trade bill met with stiff resistance almost as soon as it was introduced, and in the process of wending through several Senate committees it has been whittled to exclude any system in the state to set carbon caps and an auction trading system. This happened after Anderson and others met with a group of stakeholders, including Flint Hills and the Minnesota Chamber, who voiced strong objections to creating the system. 

Anderson’s bill essentially requires the governor to report back to the Legislature on any regional cap-and-trade system that the other states and Manitoba agree to, and keeps the Legislature involved in the push to reduce carbon emissions. Anderson has also stripped a series of policy statements from the bill and will put them into a resolution that she intends to take to the Senate. 

Through it all, two things have become clear:  it’s always easier to set goals than to put in place a system to actually meet them, and in a short legislative session it’s easier to kill than to enact legislation. 

But Anderson’s been through it before; she points out that it took seven years to pass the Next Generation Energy law.

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