With the entire U.S. political world engaged in handicapping the likely outcome of the health care reform debate, while others focus on the Obama administration’s impending decision on strategy and troop levels for Afghanistan, there hasn’t been much attention paid outside advocacy groups to prospects for action on climate change legislation (passed, as you might recall, by the House during the summer).
The general prognosis has been pretty negative, in part because of the extreme difficulty encountered in getting the revised Waxman-Markey legislation through the House (requiring compromises that left a lot of advocates cold or lukewarm), and in part because the Senate was so absorbed with health reform.
But last weekend the leading Senate climate change legislation advocate, John Kerry, threw a change-up that will at the very least require a recalibration of expectations, by signing onto a New York Times op-ed with Republican Sen. Lindsay Graham offering a new “deal”: combining a cap-and-trade system for carbon emissions with provisions liberalizing offshore oil drilling and relaxing regulations on nuclear power development.
The op-ed is worth reading in its entirety, but aside from offering conservatives the carrot of more U.S. oil and nuclear power, it also bluntly threatens the stick of unileratal action on climate change by the Obama administration:

Failure to act comes with another cost. If Congress does not pass legislation dealing with climate change, the administration will use the Environmental Protection Agency to impose new regulations. Imposed regulations are likely to be tougher and they certainly will not include the job protections and investment incentives we are proposing.
The message to those who have stalled for years is clear: killing a Senate bill is not success; indeed, given the threat of agency regulation, those who have been content to make the legislative process grind to a halt would later come running to Congress in a panic to secure the kinds of incentives and investments we can pass today. Industry needs the certainty that comes with Congressional action.

This threat may actually be welcomed by hard-core Republican pols who would lick their chops at the idea of “bureaucrats” end-running Congress to set up a cap-and-trade system, but not by those industries that would actually be affected, particularly since the business community is already divided on the issue.
The op-ed also discusses the national security case for action on climate change, and as Brad Plumer at The Vine notes, this argument polls well, has some appeal to conservatives, and also explains why Foreign Relations Committee chairman Kerry has for the moment displaced Barbara Boxer of CA as the “face” of the climate change initiative in the Senate.
Meanwhile, Nate Silver goes through the Senate membership and tries to assess which specific senators might be moved by a new bipartisan “deal” on climate change:

So what does this get the Democrats? It gets them Linsday Graham’s vote, and possibly Lisa Murkowski’s. It takes Mark Begich from a leaner to a likely yes. It might encourage Mary Landrieu, and possibly George LeMieux of Florida, to look more sympathetically at the bill. Then there are a whole host of more remote possibilities: Isakson of Georgia, and perhaps Cochran and Wicker of Mississippi or Burr of North Carolina; none of those votes are likely, but they become more plausible with offshore drilling in place. Overall, it seems to be worth something like 2-4 votes at the margin.
That would give the Kerry-Graham bill a fighting chance, especially if an additional vote or two — possibly John McCain’s — can also be picked up as a result of the nuclear energy compromise. Of course, that’s assuming that no liberals would rebel against the new provisions, but the opposition to both offshore drilling and nuclear energy seems to be fairly soft in the liberal caucus

On this last point, it’s worth noting that Dave Roberts of Grist, a highly credible warrior for action on climate change, adjudges the concessions on oil and nuclear energy “an affordable price [to pay] for the benefits of passing a bill.”
If nothing else, Kerry’s gambit has shuffled the deck, complicated Republican claims that Democrats are uninterested in genuine bipartisanship, and offered a sign of potential progress in advance of international climate change negotiations in December. All in all, it’s a good example of strategic audacity on an extraordinarily wonky issue, and well worth watching.