Reporters on the climate beat know that addressing global warming is a top legislative priority for Senate Democrats. What may be news to some, perhaps, is that the committees engaged in the fight against this crisis are pursuing a collaborative approach that is coordinated, cooperative and strategic.
For example, today’s Dallas Morning News features a joint op-ed by Sens. Bingaman and Boxer, chairs of the two committees engaged in the fight against global warming. Why Dallas? Because global warming is a hot topic in Texas, due to a storm over plans to build new coal-fired power plants using old technologies. The Chairs wanted business leaders to better understand the impacts of financial and investment decisions being made right now by big utilities and other companies. The Dallas newspaper was the ideal forum to clear the air over these proposed plants.
Jeff Bingaman and Barbara Boxer:
Utilities that rush new coal plants now won’t get bigger emission breaks later
Many leaders of American industry are coming around to the view that global warming is happening and that Congress is going to address the problem. But a few companies are now considering major investments in old technologies for burning coal that would both endanger the climate and jeopardize the financial position of their investors and shareholders.
As members of the United States Senate, we have both worked on legislation designed to combat global warming and to reduce greenhouse gases, such as carbon dioxide emitted from fossil fuels. Although our approaches have differed slightly, we both agree that global warming is real, that we need to act rapidly to pass legislation, and that we are committed to working together to achieve that result as soon as possible. Global warming is an enormous threat to mankind and the United States can, and must, be a leader in reducing greenhouse gas emissions.
One of the largest sources of greenhouse gas emissions comes from burning coal to produce electricity. While ultimately our goal should be to move towards efficient use of renewable energy sources, we recognize that currently coal is America’s most abundant domestic energy source and will be a critical resource for many years to come. Fortunately, several technologies are available and under development to facilitate our ability to continue using coal in the United States in ways that are both financially sustainable and that will address its climate impacts. Power plants that rely on technologies such as coal gasification, for example, will ultimately allow carbon dioxide emissions to be captured and stored at a much lower cost than coal plants using old-fashioned technology.
The bills that we and our colleagues have worked on anticipate that coal-fired power plants will need to substantially reduce greenhouse gas emissions. Perhaps most importantly, companies building new coal-fired power plants today should acknowledge that over the 50-year lifespan of such plants, reduction of global warming emissions will become mandatory –probably sooner rather than later. Building a new coal plant without taking into account global warming is neither good for the environment, nor smart financially.
We have been dismayed to watch some companies unveil plans to spend billions of dollars to build new coal-fired power plants using old technology that cannot capture global warming emissions. Apparently part of the motivation for building these plants is that the companies mistakenly believe that these new plants will garner “grandfathered” emission allowances under some future law. Such plans assume that future legislation will freely award the majority of such allowances to the biggest emitters, and, therefore, increasing pollution through new plants will reap large sums of emission allowances. This flawed thinking will be a tragedy for the climate because of the additional carbon dioxide emissions this old technology creates. It also is a dangerous business strategy for the utility’s investors and shareholders, who are putting money into technology that will be obsolete the very day it goes into service.
As the new Senate Chairs of Committees engaged in the fight against global warming, we think it is important for investors to understand that there is little chance that the majority of such allowances will be allocated without cost and exclusively to large emitters of greenhouse gases. In fact, companies that appear to be inflating their emissions right before legislation is passed are likely to find themselves in a position of having to make even larger emissions reductions than companies that do not attempt this strategy.
We do not envision that any successful legislative proposal will contain a provision that would allow those building traditional coal-fired power plants to economically benefit from coming in “under the wire” and being considered part of the emissions baseline – in fact, the opposite is likely to occur. Any company planning to spend billions of dollars on new coal-fired power plants, and any investor in such a company, should think carefully about how to spend their funds so as to be part of the solution to climate change, not a part of the problem.
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