Exelon's Rowe: cap and dividend is a no-go
Exelon Corp. Chief Executive John Rowe on Saturday slammed an alternative to cap-and-trade now being considered by Congress and said the EPA’s plan to regulate carbon emissions is a nonstarter.
Rowe, who runs one of the country’s largest utilities, said the so-called cap and dividend plan would “not work” and would act as “a halfway house to a full cap-and-trade system.”
Rowe was speaking at the MIT Energy Conference in Boston this morning.
While there is growing consensus, at least on Capitol Hill, that cap-and-trade legislation has little chance of passing the Senate this year, Rowe remains cautiously optimistic.
He tells GER: “Cap-and-trade is not dead but it’s certainly been healthier.”
Rowe is passionate about cap-and-trade. Exelon was one of a number of Fortune 500 companies that did not renew its company’s membership with the powerful U.S. Chamber of Commerce last year because of the lobbying group’s opposition to cap-and-trade.
Exelon and other electric utilities prefer a legislated cap-and-trade system over a less flexible regulated option. Environmental Protection Agency (EPA) Administrator Lisa Jackson recently issued an endangerment finding, which mean that the EPA can regulate CO2 and other greenhouse gases under the Clean Air act.
But can the EPA actually regulate carbon emissions?
Rowe says no. He points out that the carbon-cutting technology the EPA would need to actually regulate CO2 and other green house gases remains, at best, unproven.
On the endangerment finding Rowe says:
It’s an honest finding, but [Lisa Jackson] does not know where to go from there. How do you [use] carbon management technology when it does not even exist?
Back to cap and dividend: that provision is part of the CLEAR act authored by Senators Maria Cantwell (D-Wash.), and Susan Collins, (R-Maine). It was introduced to the Senate last December as an alternative to cap-and-trade.
Under cap and dividend, the government would sell pollution allowances to carbon-dependent industries to cut greenhouse gas emissions. But unlike a standard cap-and-trade system, only polluting industries would be able to purchase the emissions and the entities could not trade the emissions once they are purchased. Most of the proceeds would go directly to consumers to offset increased energy costs.
Under cap and trade, emissions allowances would be given to regulated entities, but they would have to use most of the proceeds from the allowances to keep electricity prices low for consumers.