Utilities diss utility-only cap

A climate bill without any emissions cap may be politically unworkable, as we’ve seen — Stick a fork in the energy-only bill: Lindsey Graham (R-SC) slams push for a “half-assed energy bill”.

Because of the challenge of getting 60 votes for an economy-wide emissions cap, some folks are pursuing the idea of a climate bill with a cap just on utility emissions.

I have serious doubts that works politically.  I have bigger doubts that such a bill would satisfy the requirements needed for a good bill, not the least of which is that it must enable a global deal, which requires meeting the U.S. promise of close to a 17% emissions reduction in total U.S. GHG emissions by 2020.  The utility sector covers about one third of U.S. emissions, and a utility-only bill is not going to require, say, a 50% reduction in utility emissions by 2020.  Indeed, it would likely be far less.

As E&E News (subs. req’d) reports today, “it is far from certain that Senate politics would be any different if lawmakers set aside the House-passed economywide approach that goes after major energy, transportation and manufacturing companies — accounting for more than two-thirds of U.S. emissions.”

Not surprisingly, utilities, which were key to passage of the first ever climate bill in the House, aren’t signing up to be the sole focus of emissions reductions:

EEI is urging the Senate to stick with an economywide approach. And several of its biggest member companies are also speaking out on the need to keep the emission limits as broad as possible.

“We don’t agree that there should be a utility-only bill,” said Melissa McHenry, a spokeswoman at Columbus, Ohio-based American Electric Power Corp. “In our view, it’d just raise electricity costs for some utilities and it wouldn’t address the bigger situation, which is global concentrations of CO2, because you’d only be capping a small portion of U.S. emissions, and you’re just going to raise electricity costs in a big portion of the United states without having a global agreement to address overall climate emissions.”

Chicago-based Exelon Corp., which runs the nation’s largest fleet of nuclear power-generating plants, offered a similar plea. “We continue to be a consistent and forceful advocate for comprehensive economywide cap-and-trade legislation,” said spokesman Paul Elsberg.

“We’re focused on comprehensive energy and climate legislation,” added Randy Clerihue of FPL Group, the Juno Beach, Fla., umbrella company for NextEra Energy Resources LLC, and Florida Power & Light Co.

Industry lobbyist Scott Segal said he doubts a power plant-only approach has much of a chance on Capitol Hill as lawmakers representing the power companies would quickly start to hear about how they are taking on too great of a burden compared with other industrial sectors.

“I don’t see how it changes the math very much,” Segal said. “Even if it’s utilities only, it’s still a big honking bill with potential for regional disparities. And if it’s not properly constructed, I don’t think the politics are any different.”

I’m still inclined to think that right now, we’re in an all or nothing at all situation when it comes to comprehensive, bipartisan climate and energy legislation.

Graham, Kerry, and Lieberman seem to be working on some hybrid strategy that doesn’t treat every sector of the economy the same, but still gets you the required economy wide reductions and a carbon price.  I haven’t seen any details on their plan, which he isn’t expected until next month.

4 Responses to Utilities diss utility-only cap

  1. John McCormick says:

    What ever became of the *sectoral approach* once advocated by NRDC.

    It made a lot of sense but had no legs because it got in the way of the W-M freight train.

  2. Jeff Huggins says:

    Forget a bill that puts a cap only on utilities and leaves everything else uncapped and without any means to result in a price for carbon. Forget it. It won’t work, and it would only be a damaging defeat for the climate cause relative to other industries that pump products that put huge amounts of CO2 into the atmosphere and show no signs of wanting to slow that down — e.g., oil.

    If such a bill is passed, “I quit”. And if such a bill is supported by folks in the oil lobby, at ExxonMobil, or etc., all the more reason (we’ve got plenty already!) to boycott them, pronto.



  3. Cap and Trade vs. Carbon tax

    From a political point of view, many say, there is no way to legislate a carbon tax in the USA. Most businesses want cap & trade to allow them to continue to emit greenhouse gases as long as they can at the minimum cost. And Congress obviously is highly “influenced” by the business lobby. Money speaks lauder than reality in Congress.

    We continue to lie to ourselves, and most of the environmental movement is keeping quiet about this issue. But it is bigger than C&T, it is fiction vs., Nature.

    It is obvious that carbon tax is a much superior approach to cutting GHG. But it will force the fossil fuel industry and the electric power industry to change their customary ways of large GHG emission, and will reduce their profits. And the financial sector will not be able to speculate profitably with C&T permits. So they all oppose it vigorously.

    Lets’ summarize the differences: (Good info in Harper Feb. issue by Mark Shapiro)
    The superiority of carbon tax is that it is more accurate means of cutting GHG.
    It is easier to tax, easier to monitor, and harder to evade. As a result it is easier and faster to implement, requires relatively low administration, and thus less costly to the economy.
    In short, you know what you are dealing with, and you can achieve the results our nation needs.

    Cap & Trade has all the opposite characteristics: It is considerably more complex, by at least ten to one, very harder to monitor, easier to falsify data- to claim you did more than you actually achieve. And since C&T is very hard to monitor it will NOT cut GHG by the amount expected. Studies of the European experience indicated that the claims were some 30% higher than the real cuts in GHG. It is clear that if businesses will find any loopholes, they will use them extensively: less cuts in GHG, higher cost to the public.

    [JR: No. Very hard to falsify data. Very easy to track coal, oil, natural gas use in quantity.]

    And one of the most appealing aspects to the financial sector of C&T is a very big and hugely profitable financial trading in C&T Permits and Futures. It is estimated to be in the many trillions dollar range – much larger than the recent financial speculation that brought us to the current global economic near-collapse.

    [JR: This is rather easy to deal with and avoid.]

    The pressure by the all powerful financial industry in the US may be the largest forcing element in the C&T picture. When they are expecting profits in hundreds of billions, no limit is set on their lobbying. The financial sector- now a powerful 20% of our total US economy, has immensely powerful political influence that the environmental sector is unable to comprehend. The financial sector controls our country more than any other sector since it is the largest sector, and the one with the most amount of ready lobbying cash. And the one with a very low morality. (see the recent PBS exposition of the banking industry).

    Now add to the above that the IPCC underestimated the speed of global warming, and that we must add a safety factor to the needed reductions- we do not have neither time to delay action and we should not tolerate half measures. Nature does not care about our political games.

    And that is what I am leading to; Our country is govern to a large extent by the laws Congress pass. Even the president has limited ability to influence Congress. And it is obvious that Congress is unable to function in the interest of the nation. Congress does not want to do what the country needs – curtail the rise in GHG emission. (Obviously some Congresspersons are much better than others, but the majority rule.)

    We need true leadership and we do not have any now: Leadership means willingness to risk, willingness to put the national interest above your own.
    As long as Congress does not face the reality of its actions, the reality of nature, as long as Congress continues to mislead itself and believes in convoluted ways represented by Cap and Trade, there is very little likelihood that the US will cut its GHG emissions by the required amount to limit the expected rise in global temperature.

  4. Dan says:

    This utility-only thing really irks me. The first I saw of it was Fmr. Sen. Tim Wirth:

    This isn’t SO2 trading we’re talking about. An economy wide problem requires an economy wide solution.