I noted yesterday that the American Power Act, the Lieberman-Kerry climate change bill, would reduce the deficit, according to the CBO. I should have added what Bryan Walsh notes today, that the replacement for the American Power Act, whatever bill Senate Democrats come up with, whether it has a utility-only cap on carbon emissions or no cap at all with an energy focus, would likely NOT reduce the deficit. And the same people who resisted the industry-wide cap and trade program in the APA will bitch about the cost of the alternative climate and energy bill, even though their resistance created the cost:

Fred Krupp—the president of the Environmental Defense Fund and a fierce warrior for a carbon cap—told reporters last week that Kerry-Lieberman as it stands now is unlikely to ever reach a vote, and that green groups need to be open to a less ambitious bill, such as one that only caps emissions from power utilities.

How much will that cost? The CBO hasn’t done an analysis—because there’s been no bill written—but on his blog Michael Levi of the Council on Foreign Relations has written that a utility-only cap could have fewer sources of revenue because the carbon market itself would be much smaller than with an economy-wide cap. It’d be ironic if, in trying to craft a climate bill that is less ambitious and costs less, the Senate actually produces one that’s a greater drain on the budget. But maybe we shouldn’t be surprised. It is the Senate, after all.

Not only will such a “compromise” bill cause howling among the deficit peacocks, who like to preen about the deficit until it comes time to taxing or cutting something central to their re-election efforts, but it will split the green groups, in all likelihood.

It seems increasingly likely that whatever energy bill comes to the Senate floor in the coming weeks will be built not around a carbon price but rather around the renewable electricity mandate of Jeff Bingaman’s ACELA bill. That’s splitting senators on the left and many in the green community. Plenty of enviros and a bloc of liberal Dems still say they view an energy-only bill as a failure, and will withdraw their support if it comes up. At least one group, the Alliance to Save Energy, which will see its agenda of new energy-efficiency provisions met either way, says that’s where they’ll part company with many environmental groups — and they’re trying to persuade liberal Senators like Frank Lautenberg, Bernie Sanders and Sheldon Whitehouse to come along with them. “We’re hitting all of the friends of efficiency and renewables regardless of committee affiliation,” Kateri Callahan, head of the Alliance, tells Morning Energy. “Some folks who really want to see comprehensive energy legislation don’t want people to talk about plan B, don’t want a fallback. We don’t want to look like we’re not supporting a comprehensive bill that supports comprehensive carbon abatement. But if you can’t get the full loaf then you have to get three quarters of the loaf and half loaf.”

ALSO FINE WITH HALF A LOAF are many in the wind and solar power industry, who will get a huge boost with a carbon price bill, a big boost with an ACELA renewable electricity mandate, and no boost at all if liberal Dems block Plan B on principle. Next Wednesday, 14 execs from the wind power industry will meet with senators and ask them to get behind a final product with a renewable power standard – and to move it fast. Among those in the lobbying push: Jan Blittersdorf, CEO and President of NRG Systems, Steve Dayney, CEO of REPower USA, James Spencer, CEO and President of EverPower, Joe Condo, Vice President and General Counsel, Invenergy and Anna Giovinetto, VP Public Affairs, RES Americas.

Boy, if there’s one term that I would happily banish from the realm of politics, it would be “half a loaf.”

But the White House clearly signaled their willingness to bend from the beginning. The New York Times reports today on Energy Secretary Steven Chu telling a Democratic Senator that he would be acceptable with a utility-only bill. And I’m sure that will hold right up until the moment that it adds to the deficit. Heck, the Senate can’t even get unemployment benefits extended because of deficit concerns. You think a climate bill will somehow be a lighter lift?

A comprehensive climate cap will not pass Congress this year. That much is obvious. But anything that doesn’t generate the kind of revenue to offset the cost of investment in renewable energy and efficiency measures won’t pass either. Dragging out that per-barrel increase on fees on oil companies for the oil spill liability fund, which helped balance out the now-dead tax extenders bill, may make a comeback here.