Our guest blogger is Frank O’Donnell, president of Clean Air Watch.
Jim Rogers, President and CEO of Duke Energy, has become one of the most prominent industry voices calling for the regulation of global warming pollution from power plants and other sectors of the economy. Not only does Rogers advocate a cap-and-trade system, like that adopted in Europe, but he also proposes a “surcharge” on all electricity use to fund low carbon technology research and development.
However, as one of the largest producers of global warming pollution, Rogers’ policy prescriptions warrant special scrutiny. In making his case for action, Rogers includes a very important caveat: regulate greenhouse gases, but regulate in a way that ensures that the American taxpayer foots the bill for cleaning up the company’s aging and high-emitting power plants. In 2007, Duke’s coal-heavy fleet released 108,500,000 tons of CO2 to the atmosphere, the equivalent of about 18 million cars. This climate two-step is not new for Rogers:
|As a member of the U.S. Climate Action Partnership, Duke Energy calls on the federal government to “quickly enact strong national legislation to require significant reductions of greenhouse gas emissions.”||The U.S. Chamber of Commerce has lambasted the leading Congressional climate change bill with an aggressive ad campaign. Jim Rogers is a member of the Chamber’s Board of Directors.|
|Jim Rogers states that “we must be responsible stewards of the environment and our communities.”||Duke Energy is suing EPA to try killing the Clean Air Interstate Rule, which EPA estimates will generate $85 to $100 billion in health benefits by 2015. If Duke wins, thousands of Americans may die prematurely.|
|Jim Rogers proposes a tax (or “surcharge“) on all electricity use to fund low carbon technology research and development.||Jim Rogers says it is “misguided” for cap-and-trade legislation to require “companies to pay for current carbon dioxide emissions using auctions.”|
Rogers’s sleight-of-hand lies in his proposal for distributing the emissions permits (allowances) under a greenhouse gas cap-and-trade program. According to Rogers, Congress should stick to the grandfathering approach that was used more than two decades ago when it established the Acid Rain program, by which he means giving allowances away for free to companies based on their proportional share of historic CO2 emissions.
What he neglects to mention is that Duke Energy would receive an allocation valued at more than $2.0 billion annually (equivalent to 10% of the North Carolina state budget), which the company’s unregulated generating assets will use to drive up company profits while at the same time raising consumer electricity costs — precisely the issue that lead to criticism, and ultimately modification, of the European Union’s cap-and-trade system.
Rogers argues that cap-and-trade based regulation is “not about punishing people for making decisions 40 years ago.” However, nor should it be about rewarding the biggest polluters and preserving the status quo. If companies want free allowances, they should earn them by investing in renewable energy technologies, carbon capture and storage technology, and energy efficiency.