By Juliet Eilperin
Washington Post Staff Writer
Monday, December 20, 2010; 11:16 PM

As 2010 comes to a close, U.S. environmentalists are engaged in their most profound bout of soul-searching in more than a decade. Their top policy priority – imposing a nationwide cap on carbon emissions – has foundered in the face of competing concerns about jobs. Many of their political allies on both the state and federal level have been ousted. And the Obama administration has just signaled it could retreat on a couple of key air-quality rules.

Hence a shift of focus away from the toxic partisanship of Washington back to the grass roots and the shared values that gave the movement its initial momentum more than 40 years ago.

“Certainly I think we have figured out we need to find a way to really listen harder and connect with people all over America, especially in rural America,” said Fred Krupp, president of the Environmental Defense Fund. “I don’t think we’ve done a particularly good job of that.”

The change casts a sudden pall over environmentalists’ top-down approach.

“The tragedy is that they spent the last 10 years on this and not anything else,” said Clean Air Task Force Executive Director Armond Cohen, whose group has pursued an array of alternative strategies aimed at curbing climate change and air pollution.

Now, instead of spending millions of dollars seeking to win over wavering lawmakers on the Hill, green groups are ramping up their operations outside D.C., focusing on public utilities commissions that sign off on new power plants and state ballot initiatives that could potentially funnel hundreds of millions of dollars to conservation efforts.

The Nature Conservancy, for example, successfully championed a ballot initiative in Iowa this fall that will devote a portion of any future sales tax increase to land and water conservation initiatives. According to its president, Mark Tercek, a series of floods helped focus Iowans’ attention on the benefits of preventing soil erosion and other problems.

“The average Iowan is not liberal,” Tercek said, noting the initiative could generate $150 million a year for conservation. “They’re saying through this, ‘We need to invest in ecosystems.’ ”

The Sierra Club, meanwhile, is bolstering its long-standing campaign to block the construction of power plants across the country, assembling a team of 100 full-time employees to focus on the issue in 45 states.

“This is where the environmental movement will make the most progress in the next five years,” said Sierra Club Executive Director Michael Brune.

350.org founder Bill McKibben, who has been trying to foster a global grass-roots movement, wrote in an e-mail he sees it as the only way to overcome traditional opponents who are far better positioned in Washington: “Since we’re never going to compete with Exxon in money,” he wrote, “we better find another currency, and to me bodies, spirit, creativity are probably our best bet.”

This strategic reassessment also has given hope to those working on lower-profile environmental issues, which were largely sidelined during the climate change debate. Vikki Spruill, president of the Ocean Conservancy, noted that the combination of the Gulf of Mexico oil spill and the fact that oceans have “less partisan baggage” could enhance the prospects for marine conservation next year.

And some of the philanthropists who have directed much of their spending on federal climate change policy in recent years are looking at funding local or international green efforts.

“We can’t just depend on everything to happen in Washington,” said Rachel Leon, executive director of the Environmental Grantmakers Association.

But several national green leaders said they cannot afford to abandon Washington, with Republicans indicating they may seek to limit the Environmental Protection Agency’s powers under the Clean Air Act to regulate greenhouse gases. Looking ahead, League of Conservation Voters President Gene Karpinski said, “Sadly, too much of our work in Congress may be focused on protecting EPA’s job to hold polluters accountable and protect our health.”

It remains unclear how hard President Obama will fight to advance environmental priorities: last week the EPA said it would postpone regulations on smog until July 2011 and on industrial boilers until April 2012, handing two victories to business interests and a bipartisan coalition of lawmakers who warned the stricter rules could exact a severe economic toll.

White House aides who had met with manufacturing and union representatives on the boiler rule urged EPA to take a closer look at its economic impact, helping prompt the delay.

U.N. Foundation president Tim Wirth, who served in both the House and Senate, said he is still working on “fathoming” the administration’s environmental agenda. “One of the failures of the administration has been not developing the economic case for what they’re trying to do,” he said. “They’ve got to construct a bullet-proof case, and that’s not been done.”

White House spokesman Clark Stevens said regardless of the political climate, the administration “will continue to take steps to develop science-based, common-sense policies that focus on creating jobs, reducing dependence on foreign oil, and cutting pollution.”

Many both inside and outside the environmental movement say it needs to overhaul its traditional policy prescriptions, as well as the way it frames what’s at stake.

This fall three think tanks – the Breakthrough Institute, Brookings Institution and the American Enterprise Institute – offered the idea of a “post-partisan power” plan to devote $100 billion a year to pioneering low-carbon energy.

Others suggest these groups would be better off cutting modest deals with Republicans, whether it involves new energy efficiency mandates or subsidies for nuclear power plants.

“It shouldn’t be all or nothing,” said Keith McCoy, the National Association of Manufacturers’ vice president for energy and resources policy .

But Green Strategies president Roger Ballentine, who chaired the White House Task Force on Climate Change under President Clinton, said neither a big spending program nor government mandates are likely to gain traction in the near future.

“Any policy in the past that’s based on government largesse is doomed to failure because we are entering an era of financial retrenchment,” he said.

Instead Ballentine and others, such as National Wildlife Federation President Larry Schweiger, argue Obama and his allies need to make the moral and scientific case for addressing climate change and other environmental challenges.

“This is a values issue,” Schweiger said.

And in the end, Wirth said, it will be younger activists and politicians who need to chart a new course for environmentalists.

“The next generation has got to define the new agenda,” he said. “The current generation has got to hold onto what we have.”