The Administration's Next Step on Climate and Energy

The climate bill has died, the blame game has begun, and the back-up plan is ready for deployment. Since March, the EPA has had greenhouse gas regulations scheduled to take effect in January of 2011. The plan was always that Congress would by then have passed an energy package that preempted the regulations, eliminating the need for messy bureaucratic measures beloved by neither party. Some Democrats are still spouting hopes of passing a bill during the lame-duck session in the fall, but with only 59 Democrat votes, this strategy is a stretch of the imagination. Congress and industry alike are now trying to comprehend the pending reality of an EPA crackdown on emissions.

Sen. Lisa Murkowski's bid to block the regulations failed, but Republicans and moderate Democrats are holding out hope for a modified version of her resolution to hit the Senate floor. West Virginia Sen. Jay Rockefeller, a Democrat, has proposed suspending the EPA's greenhouse gas regulations for two years. Majority Leader Harry Reid has not yet announced whether he will take up Rockefeller's amendment before the end of the year. He will face pressure to do so from within his own caucus, as several moderate Democrats voted against Murkowski's resolution because they were promised a later vote on Rockefeller's toned-down version.

The question of whether the EPA has the authority to regulate carbon emissions has already been brought to the Supreme Court, which ruled in 2007 that the Clean Air Act obligated the agency to determine whether greenhouse gases contribute to climate change and, if the answer is yes, to regulate them.

With the climate bill effort pulled out from under them, environmentalist groups are shifting their attention to fighting Rockefeller's proposal. In addition to targeting wavering Dems, the environmental lobby may set its sights on the White House. Obama threatened to veto Murkowski's resolution if it passed, but he has not revealed where he stands on the Rockefeller amendment. If the president pressures the Democratic caucus to vote it down or threatens another veto, he could signal that he has not deserted the climate cause. New EPA regulations would put pressure on the next Congress -- regardless of how the majorities shift -- to take up energy legislation.

If Obama does not make a move, however, he could confirm environmentalists' suspicion that he was never serious about passing climate legislation in the first place. Removing the threat of EPA regulation, or even suspending it for two years, would eliminate one of the primary sources of leverage that Democrats have to pass an energy bill.