Global Warming Revolt

Utilities Leave Chamber Over Global Warming

by Deb Powers

Over the past week, something very interesting has started to happen in the highest echelon of US business supporters. The US Chamber of Commerce is one of the largest pro-business lobbying and PR groups on the national scene. It boasts hundreds of thousands of member businesses, from one person real estate offices to major department stores, and claims to represent the interests of US businesses, small and large. Among its wealthiest constituents are energy companies that provide public utilities - electric and gas companies with familiar names.

The US Chamber of Commerce routinely takes a pro-business stance on most national issues. They are for tort reform - often at the expense of individuals who have been harmed by industry - and often anti-environmental causes. Specifically, the Chamber opposes all cap and trade efforts, and most other regulations that would require their largest member businesses to change the way that they use energy. To that end, the Chamber made news this summer when it issued a demand that the US Environmental Protection Agency convene a series of public hearings to examine the science behind climate change theories, quite literally and openly calling for the climate change equivalent of the Scopes monkey trials.

 The Chamber's attempt to force the US government to hold open hearings on what is, throughout the world, accepted and established science, is little more than an attempt to ensure wider spread of the manufactured controversy. The evidence is there. The facts are clear. Every major scientific body in the world is in agreement that the planet is warming over time and that the warming trend is directly traceable to man's activities. More specifically, the warming trend has greatly accelerated in the period of time since man has been using fossil fuels in earnest. The only groups that dispute those facts are those who face the most loss if we shift to using other sources of energy generation - the coal and oil companies and those funded by the coal and oil industry.

Of course, it's all about money. Cap and trade policies will push the prices of energy generated by coal and oil higher and make energy from renewable energy sources more expensive. They would eventually reduce the need for coal-fired energy plants, which are the source of the majority of US energy. For that reason, utility companies - which have a hefty investment in owning and holding those coal-fired plants - have traditionally aligned themselves with the Chamber of Commerce against many major changes in energy policy. There are exceptions, of course. Utility companies have traditionally favored energy policies that encourage conservation of energy rather than those that represent a fundamental change in the way that energy is produced and distributed.

And yet last week, three major US utility companies very publicly canceled their memberships in the US Chamber of Commerce to protest the Chamber's "embarrassing" position on climage change and global warming science.

San Francisco's PG&E (Pacific Gas & Electric) led the revolt, publicly withdrawing from the Chamber because of its "extreme rhetoric and obstructionist tactics" in the public debate over the US climate change bill. In a two page letter, PG&E chairman Peter Darbee, called the Chamber's tactics "disingenuous" and "dismaying".

PG&E was followed closely by PNM, which provides power for New Mexico, and Chicago's Exelon. Word from inside the industry is that there is  growing pressure on other utility companies and major corporations to withdraw from the Chamber in protest.

What inspired the defection from the US Chamber?

A hint of the answer may be in a public comment made by Exelon CEO John Rowe. "The carbon-based free lunch is over", he said. While he may have have been referring to man's "free lunch" at the expense of the environment, he could just as easily have been referring to the free lunch that coal and oil companies have enjoyed for years, thanks to heavy government subsidies. Those subsidies have contributed to keeping the price of coal and oil energy affordable. New legislation that reduces those subsidies and imposes new fees, shifting the subsidies instead to renewable energy sources, is the writing on the wall. It's nice to know that some companies can actually read it.

Climate Change Bill

U.S. To Pass Climate Change Bill Friday

CBO says cap and trade bill will cut energy costs for most households

Breakthrough: The BookThe newspapers here in the U.S. are reporting today that the Senate Democrats believe that they have the votes to pass a sweeping, enormous (about 1,200 pages worth of enormous) climate change bill when it comes to a vote on Friday. This comes on the heels of a press conference where President Barack Obama hit heavily on the theme that we need to do something about global warming and climate change. According to the various news reports, Senators Waxman (D., CA) and Markey (D., MA), sponsors of the bill, believe that they have the votes to pass the bill after they've worked hard to reach compromises with those from farming states.

The news that most folks want to hear, though, is buried deep in most news stories - if it's there at all. A couple of months back, those who oppose the cap-and-trade bill were throwing around a $3,000 figure as "cost to the average household" if this bill were passed. The Congressional Budget Office and the Environmental Protection Agency are contesting that figure - bigtime. The CBO estimates that by 2020, the changes mandated in the climate change bill may cost the average household about $175 a year, while the lowest income households will see a $40 drop in energy costs annually with these changes.

The EPA's figures are even prettier. According to their estimates, the average household will pay between $80 and $111 a year - but, they add, because of efficiency requirements in the bill, average energy costs for households will actually be about 7% lower in 2020 than they would be if the climate change bill doesn't pass.

Interestingly, one of the most interesting takes on the climate change bill is one espoused by The Breakthrough Institute, which calls itself "the small think tank with big ideas". According to the Breakthrough Institute, we're approaching the problem of carbon emissions in exactly the wrong way; that regulating carbon emissions and making coal and carbon fuel energy more expensive is NOT the best way to increase the investment in green energy by private institutions; that instead, the U.S. government should be making massive investments in green energy research to make those methods of generating energy cheaper. As they point out, the personal computer didn't succeed by making the typewriter more expensive.

Of course, this is precisely the wrong time to be talking about massive spending on researching anything. And yet, last night I found myself thinking about the Space Race in the 1960s - the last time I can remember the country being solidly enthusiastic and invested and PROUD in something our country was doing. That was where President Obama's words on energy production and leading the world in green energy production hit me yesterday - as a matter of national pride and leadership.

I'm wondering what you think. Where should we - not just the U.S., but the world at large - where should we be focusing our efforts? Is it more effective to regulate, penalize and make carbon energy more expensive? Will that spark private industry to innovate? Or is it exactly the opposite? Do we need to be dangling carrots and investing money in energy innovation to reduce carbon emissions and reverse - or at least slow - global warming?

Cap and Trade - A Primer for the Newbie

Photo Credit: RybsonChances are that you've heard the phrase "cap and trade", and that you know it's a proposed way to reduce greenhouse gas emissions. You probably also know that there's some controversy about it - one of the major Conservative talking points about Cap and Trade, for instance, is that it will add thousands of dollars a year to the average family's energy bills. That figure is still under considerable contenton - and it doesn't take into account that those added costs would be "front-loaded" - sorta the way that you pay for a new furnace all at once, so it adds several thousand dollars to your heating bills for the first year or two - but it also reduces your ongoing energy costs. Eventually, you're done paying for the improvement to your heating system - and have actually got that money back because you're paying LESS for your heating/cooling every month.

But I've got off track here. What I wanted to do in this post is talk about what's a cap, what's a trade, and how is it supposed to reduce global warming. So here goes - quick, simple answers to some not so simple questions.

What is "cap and trade"?

Cap and trade is a series of regulations that encourage businesses to reduce the amount of carbon emissions they release into the atmosphere. Capping emissions is nothing new - the U.S. government did it in the 1990s to reduce sulfur emissions, for instance. Cap and trade would set a goal for the total amount of carbon emissions allowed into the atmosphere, and then auction off "permits" to companies that pollute. In a model cap and trade program, each permit would allow a company to emit one ton of carbon emissions into the air. Companies would purchase permits to cover the amount of carbon emissions that they put out. If they put out more than their permits allow, they'll be penalized.

Okay - what about the "trade" part?

The model program would allow the companies involved to trade/sell permits among each other. That means that a company with lower carbon emissions or more efficient energy use could sell their permits to a company that uses more "dirty" energy. The key to cap and trade would be that the total number of permits - and thus the total amount of greenhouse gasses emitted - would remain the same. The difference would be in the distribution and the flexibility it gives companies to make changes in energy efficiency on a timetable.

How does it help reduce carbon emissions and slow global warming?

Cap and trade is a market-driven solution to carbon emissions. Basically, companies that emit carbon gasses would pay for the amount of carbon gas that they dump into our air - which will encourage them to reduce the amount of carbon emissions in order to reduce their expenses.

Won't that make energy more expensive?

I guess that depends on how long a view you take and what you consider "energy". Energy that depends on carbon fuels -oil and coal, for instance - will certainly become more expensive - that's part of the goal. The intent is to push the development of greener energy sources. The faster energy companies make the switch to renewable, green sources of energy, the more it will cost them up front, but the sooner those new energy sources will become viable.

See, a big part of the reason that we're still using the old legacy forms of energy like coal and oil is that it's cheaper to keep doing that - in the short run. It's all stasis - we know how to do this, we have a lot invested in doing things this way, and we don't want to change the way we do things because it will cost us money up front.

Part of the idea behind cap and trade is to make our current energy sources more expensive and spur the development of green energy by making it less expensive. Other complementary measures will also be in place to spur green energy production - things like money available for job re-training for those who will lose jobs in the coal and energy industries, like subsidies for those who make energy-efficient changes to their production and facilities, and grants to those who are developing green energy sources and delivery systems.

$3,120 a year? Really??

One of the figures that's been floated by the opponents of cap and trade is $3,120. That's the amount that conservative talking point memos say it will cost the average family every year in increased energy and other costs. That figure was pulled from a report/study done at MIT. The author of the study has contested that, claiming that the figure was taken completely out of context and includes figures that shouldn't be in there. One writer claims that since then, the study author has reversed himself and admitted that it may be a fairly realistic figure. They also claim that he had been "miscategorizing" costs as "investments".

And that's where I go back to my opening paragraph, about putting in a new furnace. If you only look at the costs for the first years when you're still paying for the changeover to greener, more efficient and more sustainable energy sources, then it's an expense. I've never been one to take a short range view of things, though. I pay more for my coffee because I believe in economic justice and reduction of global warming, and I don't mind paying more for my heating, cooling, electricty and other things - especially in the short term - if it means that in the long term, my kids will have a safer, more beautiful world.