Still unanswered is what the government would do with the money from the permit sales. One proposal is to give a large portion back to consumers as rebates. Another is to give some permits free to businesses that depend heavily on fossil fuels and could be put at a trade disadvantage. Executives from Alcoa, Duke Energy, NRG Energy and other companies told lawmakers they'd drop their support for the bill unless they got free permits.
Rep. Fred Upton, R-Mich., said he wanted to see greenhouse gas emissions reduced and incentives put in place for cleaner energy, but he didn't want U.S. businesses put at a disadvantage compared with those in countries such as China that aren't expected to put similarly tough rules in place soon.
Rep. Edward Markey, D-Mass., a co-author of the early version of the climate bill, said he also was concerned about protecting competitiveness.
Congress will be debating parts of the legislation, such as rebates and tariffs, that are designed to protect businesses from such losses.
Many businesspeople told lawmakers that what they really needed are the rules of the game for the long term. Higher fossil-fuel prices would be an incentive for investments in renewable energy, for example.
A carbon cap would "be one of the biggest growth engines this country has ever seen," said Jack Oswald, the chief executive officer of SynGest of San Francisco, who didn't testify but was in Washington to speak privately with lawmakers.
Oswald's company plans to make fuel and nitrogen fertilizer from crop wastes such as corncobs, using renewable feedstocks instead of fossil fuels. Oswald foresees 200 plants, each employing 200 people, that would produce U.S.-made fertilizer, reducing the need to buy it from abroad.
He said it was important for the United States to be first with clean-energy innovations so that the products were made here, not imported.
Asian and European countries already have government policies in place that provide incentives for using renewable energy.
Without supportive policies here, the United States will lose leadership to other countries, said Nicole Lederer, a co-founder of Environmental Entrepreneurs, a business group.
In separate testimony, Energy Secretary Steven Chu told lawmakers at one of the hearings that he worried about the same thing.
Chu said two dangers could weaken the United States. One is that the world could fail to reduce global emissions in time to avoid dangerous climate shifts, and the other is that "we fail to seize the opportunity to lead, and clean energy jobs will be created elsewhere."
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