As Congress begins work on climate change legislation, the most likely mechanism for tackling global warming is a “cap and trade” system that would limit and reduce overall greenhouse gas emissions. Both presidential candidates campaigned on the idea last fall.
But depending on how it is designed, such a system can be heavily tilted toward the public interest or, as some would prefer, the interests of polluters. That debate is just beginning.
Jim Rogers, the high-profile CEO of Duke Energy is on record supporting cap and trade legislation — but on Duke’s terms.
Last week, Rogers blasted President Obama’s plan to charge polluters who emit greenhouse gases and invest the proceeds from the sale of carbon permits into speeding up the transition to clean energy. Rogers called Obama’s plan a tax that would hurt consumers.
Duke Energy has a different plan: for Congress to give valuable carbon permits free of charge to polluters, who can then sell them for profit. The stakes are enormous for Duke Energy, which is the third-largest emitter of carbon dioxide among U.S. utilities.
Cleaning up our coal burning plants will be costly. It is likely those increased costs will be passed on to ratepayers regardless of the outcome of this debate.
The details won’t always be easy to follow, but a few principles should be clear. Permits to emit carbon should be used for public benefit, not private windfall. And free allocations, if any, should be limited in size and restricted to a short transition period.
