One element that came out of Tuesday's hearing with the Senate Environment and Public Works Committee hearing is the idea that the Environmental Protection Agency could use new legislation for the major greenhouse-gas emitting industries, yet want to preserve the authority of the Clean Air Act for other industries.

Noting that the climate bill cap is not "economywide," EPA Administrator Lisa Jackson put forward the idea that "There are important carbon-emission sources that can be addressed through Clean Air Act regulations."

That really opens a whole can of worms over the notion that even if an industry, such as agriculture, is exempted from climate legislation, could the EPA still bring the stick of the Clean Air Act against those businesses?

It was just one of the various elements from Tuesday's hearing, but something to pursue.

From the DTN webinar Tuesday on the climate bill came the question of what happens to companies that exceed their pollution cap? It's a good question, one I haven't examined well. I've looked mostly at how the bill would affect agriculture. I'm going to have to ask just what are the possible ramifications to companies that could not comply with emission controls.

Sen. Charles Grassley, R-Iowa, also wrote a letter on Monday to Environment and Public Works Chairman Barbara Boxer, D-Calif., and Sen. John Kerry, D-Mass., questioning the wisdom of unilateral action on climate change, but noted that if the Senate is going to consider a bill "it should at least share the economic burden equitably across all states and regions of our country."

Kerry highlighted in his statements that the U.S. risks losing stature in the world over the failure to address climate change. One of the problems globally is all countries are afraid of being non-competitive in the business environment.

"Everybody is waiting for the next person to move," Kerry said.

Grassley points out the allocation provisions for pollution allowances gives a share of allowances to a utility regardless of the compliance obligation. Grassley argues that is "in effect a transfer of wealth to the East and West coasts at the expense of other regions, like the Midwest, which will already be shouldering a larger share of the burden under the proposed system. Surely you can recognize that this provision will be unacceptable to senators on both sides of the aisles that represent regions on the losing end of this highly questionable policy and it must be changed for the sake of fairness and credibility."

Grassley's letter again emphasized the Republican argument that a cap-and-trade system "is in effect a national energy tax and emissions allowances represent a portion, but not all of the cost of this tax to the American people. Therefore, most, if not all, of the revenue generated by this tax in the form of emissions allowances should be given back to the American people in proportion to what they were forced to pay in the first place."

I can be found on Twitter at chrisclaytonDTN.