Cap-and-Trade or Trade War: Obama Wants Tariff Out of Climate Bill

Like many of you, I am counting down the days to Copenhagen, even making my own sort of clean energy geek’s version of an Advent calendar and putting up an LED-bedecked tree (sustainably-harvested, of course).

But, I’m beginning to worry that we won’t get there before a trade war erupts over the last-minute amendment inserted into Waxman-Markey before Friday’s 219-212 passage of the bill. According to several sources, President Obama is worried too.

Obama told reporters Sunday that the final legislation should lose any language imposing tariffs on goods imported from nations under no carbon capping regime. The provision was inserted to ease concerns that carbon-capped US interests will be at a competitive disadvantage against importers who are free to emit with impunity.

I shamelessly direct you to my May paper on the NAFTA implications of the bill’s hydroelectric restrictions. That is a smaller and much more nuanced issue, this threatens to be a major issue and a blunt cudgel for opponents.

On talk radio, Laura Ingraham has already glossed the bill “kneecap our trade,” and Rush Limbaugh led off yesterday’s show with a reference to a Bloomberg News story noting that rather than face overruns on emissions allowances, it might be cheaper for US refineries to shut down and import more foreign oil (sound familiar California energy regulators?).

Another Bloomberg story has Senate Democrat Sherrod Brown of Ohio already looking for more leniency on manufacturing interests. That is the kind of concern that is going to make any bill a really tough sell in the Senate.

There appears to be time. On the weekend talk shows, David Axelrod allowed that no vote in the Senate would be likely “until the fall.” That may give Obama and his allies some time to push – keep in mind they are likely to be pushing pretty hard already on a Supreme Court nominee and health care reform – but, it also brings us that much closer to Copenhagen. The world is watching.