"10" on a road signA group of 10 Democrats from industrial and coal-dependent states sent a letter to President Obama on Thursday informing him that they will not support a climate and energy bill that puts American businesses on an uneven playing field.

“Climate change is a reality and the world cannot afford inaction. However, we must not engage in a self-defeating effort that displaces greenhouse gas emissions rather than reducing them and displaces U.S. jobs rather than bolstering them,” they wrote.

Sens. Sherrod Brown (Ohio), Debbie Stabenow (Mich.), Carl Levin (Mich.), Robert Casey (Penn.), Arlen Specter (Penn.), Robert Byrd (W.Va.), Jay Rockefeller (W.Va.), Evan Bayh (Ind.), Russell Feingold (Wis.), and Al Franken (Minn.) signed the letter. All 10 represent states that are coal-dependent and have a significant manufacturing base. Each is seen as a potential swing vote on the climate bill, and three (Bayh, Feingold, and Specter) are up for reelection in 2010 (though only Specter is seen as facing a tough political fight).

Five of the signers — Bayh, Brown, Levin, Rockefeller, and Stabenow — signed a letter last year saying they would have voted against the Lieberman-Warner climate bill had it been brought to a final vote at the time, and many of the 10 hail from states represented by some of the 44 House Democrats who voted against the Waxman-Markey bill in June.

Placing limits on domestic emissions will increase the costs of energy-intensive industries like cement, steel, paper, and aluminum, the senators write, and will push jobs in those industries to countries that do not have limits on emissions. They ask the administration to work with Congress to “ensure that climate change legislation does not produce an international race to the bottom” as more jobs are exported to countries with lower costs.

A climate bill should “include provisions to maintain a level playing field for American manufacturing,” the senators write. “[I]t is essential that any clean energy legislation not only address the crisis of climate change, but include strong provisions to ensure the strength and viability of domestic manufacturing.”

The authors call for transition assistance in the form of energy cost rebates for energy-intensive and trade-exposed industries, and policies and funding to support the research and development of new energy technologies. They also urge the Obama administration to negotiate a strong international agreement for emissions reductions in Copenhagen in December, including programs that “measure, monitor, verify, and hold countries accountable for emissions reductions.”

The biggest flashpoint issue raised in the letter deals with trade. They authors encourage the president to support the inclusion of a border-adjustment policy in the climate bill, which would be a tariff on goods imported into the U.S. from countries that don’t have binding emissions targets. Such a measure will be “critical to ensuring that climate change legislation will be trade neutral and environmentally effective,” they write.

But this is likely to be an issue for the White House, which has already balked at some of the trade-protection elements included in the House bill. The Waxman-Markey proposal would give the president the power to attach special levies on goods from countries that are not abiding by an international agreement. Shortly after passage, Obama criticized the bill’s border adjustment measures as being too “protectionist.” “I think there may be other ways of doing it than with a tariff approach,” said the president.

The letter was sent just before senators return to their districts for the five-week August recess. They are leaving with two of the president’s major policy initiatives — climate and health care — unresolved, to be taken up again when Congress resumes.

Sen. Barbara Boxer (D-Calif.), chair of the Environment and Public Works Committee, told reporters on Thursday that she intends to have legislation ready to introduce after the Senate reconvenes on Sept. 7, with hearings and briefings to follow. Senate Majority Leader Harry Reid (D-Nev.) has asked the various committees with jurisdiction over climate and energy policy to complete their work on a bill by Sept. 28. Boxer said she remains confident that her panel can approve a bill by that deadline.

Another major factor will be whether other committees choose to write components of the bill. Finance Committee Chair Max Baucus (D-Mont.) has said he would like his committee to author the portion dealing with allowance distribution, and his committee held its first hearing on the subject earlier this week. Other committees, like Agriculture, may also want to craft relevant portions of the bill. Boxer said that her committee’s bill would be comprehensive and that she will leave it to Reid to incorporate the work of other committees.

“I welcome all the committees to write whatever parts of the bill they feel they have jurisdiction over,” said Boxer. “I am happy to see all the committees getting involved. And then Harry Reid is going to take all the bills.”

Thursday was the last day of hearings before the congressional break, but there will surely be updates on how senators are positioning themselves in the weeks to come.  Watch our series on swing-vote senators to find out more.