Big Cut: U.S. Companies Give Washington Their Climate-Policy Wish List
Even if the U.S. Congress is unsure just when it will get around to tackling climate change, U.S. corporations are sure legislation is coming—and are desperate to make sure they have a big say in what shape climate-change legislation eventually takes.
The U.S. Climate Action Partnership, a group of big companies and environmental groups, will present its “blueprint” for U.S. climate action on Thursday. The bottom line is that political horse-trading needed to get dozens of big companies on the same page is a precursor to the kind of compromises that will likely mark congressional debate on the matter—the more effort that’s made to make climate legislation politically palatable, the lower its environmental ambitions, and impact.
The group includes such companies as General Electric Co., Duke Energy Corp., Dow Chemical Co. and Alcoa Inc. A copy of USCAP’s blueprint reviewed by The Wall Street Journal provides some telling details. (A USCAP spokesman declined to comment.)
First, the U.S. shouldn’t wait for China or other big developing countries. Climate action “should not be contingent on simultaneous action by other countries,” USCAP says, though it later says that securing global cooperation to curb greenhouse-gas emissions should be a “priority” for the U.S.
Second, talk of a price ceiling has given way to talk of a price floor to make sure there’s an economic incentive to invest in new, cleaner energy technologies. USCAP proposes a floor price of $10 a ton of carbon to send the market a signal it needs to clean up.
But to avoid any economic shocks to the sytem, USCAP wants a “significant” portion of emissions permits given away for free to big polluters. That’s pretty similar to most climate bills that have bounced around Congress in recent years, with early giveaways giving way to auctions of the valuable emissions permits in later years.
Finally, the kind of cap-and-trade system that is politically achievable will do little to actually tackle two of the biggest challenges facing the U.S.—energy generation and transportation. That means the government will have to come up with a raft of other mandates, subsidies, and sundry other policies to speed development of things like clean coal and to make the transportation sector more environmentally-friendly.
Specifically, through at least 2025, the market price for carbon emissions will be too low to spur investment in so-called clean-coal technology, which is a lot more expensive than traditional coal. But since coal makes up half the U.S. electricity mix, clean coal needs to developed as soon as possible to start curbing greenhouse-gas emissions, USCAP says, lest the country “lock-in” dirty old generation technology.
So the government needs to step in and fund the development of at least 5 gigawatts of clean-coal demonstration plants by 2015, the group says, in addition to tightening emission standards for new power plants. The government should also directly subsidize underground storage of carbon emissions for the next 20 years, or until the country has 72 gigawatts of zero-emissions clean coal plants in operations; currently it has none, and the Bush administration pulled the plug a year ago on its biggest clean-coal demonstration plant.
re: Keith Johnson
==price ceiling has given way to talk of a price floor
==
wants a “significant” portion of emissions permits given away for free to big polluters
==
will do little to actually tackle energy generation and transportation.==
_______________
-
I always had my doubts about USCAP.
-
Now it’s pretty obvious now that their organization’s entire purpose for existing is merely to attempt to lobby congress to create the weakest legislation possible, and to get free hand-outs.
_______
-
No big surprise there, I guess.
Clean coal is near complete fraud and the government should have nothing to do with it. Transportation carbon can be reduced with US sugarcane for ethanol production and by using CNG to replace diesel, as T. Boone explains, and net-zero energy construction/renovation should be used to reduce electricity requirements. The government should use it resources to promote these real solutions instead of industry proposed clean coal delusions.
Toes, we know where the delusions are - they’re in your mind. Sugarcane to ethanol (don’t you mean energycane?) is a fraudulent proposal if ever one existed. T. Boone and CNG - ever heard of talking your own book?
What a joke. You’ve totally been taken in by the worst hucksters of the green energy movement to espouse this stuff. Please give us something besides your reflexive anti-industry nonsense in the future.
Carbon emissions caps is a sick joke. Assume for a minute that man-made carbon emissions cause global warming (which they do not, but just assume for the moment).
.
Even if the US completely stopped all of its carbon emissions, the end result would do absolutely nothing.
.
China, India, Russia, Africa, and the rest of the world have exploding growth in carbon emissions that eclipse the US. Unless the entire world reduces emissions significantly, then it will have no affect.
.
Hope this helps.
There was a time when the US was on a path that would have resulted in nearly complete elimination of coal from our electricity mix - all we had to do was to complete the nuclear plants that were already on order or operating by 1978.
Of course, we all “know” (at least we think we do) why we did not do that. Everybody got scared, the utilities were not competent, the suppliers were greedy, interest rates got high, etc., etc.
What many people have forgotten about that era was that there was enormous concern about “overcapacity” from within the energy industry.
Let me translate - the fuel suppliers for the existing plants were worried that their addicted customers would be made obsolete by the continued successful construction and operation of new nuclear power plants. They worked with anyone that might help their efforts to slow down and eventually stop the development of the competition.
Here is a fact that needs to be better understood. If you look at the total cash flow pictures from an operating fossil fuel power plant, fuel represents between 60-93% of the cost/revenue (depending on whether you are selling fuel or buying it.)
With a nuclear plant, fuel only represents about 1/3 of the operating cost and of that portion only about 1/3 is raw material (uranium). The rest of the fuel cost is in the processing, enrichment, fabrication, transportation, and temporary storage of the fuel. In the O&M budget for nuclear, about 50-60% of the cost is salaries for well-trained and reasonably compensated workers.
The coal and gas industry’s fears of electric power overcapacity issues were a major factor in the efforts to hamstring the nuclear competition.
Referring back to the list of companies interested in melding CO2 legislation, please do not think that GE is a “nuclear” company. GE makes more money in each of the following segments of its product offerings than it does in nuclear related components: wind turbines, CFL light bulbs, steam turbines for coal plants, and natural gas fired turbines. In fact, I think its biofuels business is larger than its nuclear business.
Three companies have already backed away from their initial interest in GE’s new ESBWR partially because of a lack of corporate commitment to expeditiously completing the development and getting an NRC license.