Given the complexity of the climate legislation and White House opposition, few expect the Warner-Lieberman bill --or a broadly similar House version -- to pass in the current Congress.
All three presidential candidates support some form of cap-and-trade scheme, the centerpiece of the current bill, but most observers expect final adoption of climate legislation will have to await a new president, unless some dramatic evidence of global warming jolts Washington into acting sooner.
Still, this week’s debate will provide the American public – and investors - with a critical glimpse of the brave new energy future, in which carbon emissions will start being squeezed from the economy.
The legislation will have broad economic impacts, but also significant, and uneven, effects on particular industries and parts of the country, which has already sparked discontent.
Refiners, for instance, complain they are unfairly discriminated against compared to utilities.
Another controversy is how to allocate emissions permits. Currently, roughly half will be provided to regulated industries free, half will be auctioned.
The billions raised through the annual auctions called for in the legislation will be distributed to dozens of industries as transitional aid. Utilities, for instance, are slated to receive $307 billion through 2050. Oil and gas refiners are earmarked $54 billion.
Sen. Barbara Boxer recently amended the Warner-Lieberman bill to lower adjustment costs to business, while providing nearly $1.7 trillion in tax relief to consumers to cope with higher energy prices and promote energy efficiency.
“In our view she is trying to strike a balance between environmental integrity and yet building in lots of safeguards for industry and the economy,” Manik Roy, Pew Center for Global Climate Change. “This does feel like a step in the right direction.”
It is also just one step in a complicated dance that involves more than the U.S. Climate policy is not just a national problem, it is inherently global as well.
For supporters and opponents alike, a key issue is how aggressively to reduce emissions and whether to proceed before other major polluters, such as China and India, are also on-board.
“A ton of carbon emitted in Cincinnati or Columbus is the same ton of carbon emitted in Moscow or Beijing or wherever,” says Holbrook.