by Nancy Spring, managing editor
Federal climate change legislation is inevitable — that’s the consensus on U.S. global warming policy. Beyond that, there’s no accord as far as “when” or “what.”
In the meantime, state governments have been moving ahead quickly with their own climate change legislation. These plans are ambitious and earnest in their desire to control greenhouse gases but lack specifics. They also create another planning nightmare: When a national program is put in place, will state programs be pre-empted?
Charged with providing reliable and affordable electricity, electric utilities uneasily watch demand grow while capacity margins thin, but without clarity on the cost of carbon, power plant projects are in jeopardy. In Benefit of Counsel, page 12, Richard Lehfeldt sums up the pricey dilemma: “Investment choices will for the most part be frozen with regard to all fuels until the rules of the road for (and full costs of) coal-fired generation are known. Until then, fossil-fired plant development will continue to lurch forward in a perilous zone somewhere between the difficult and the impossible.” The future for nuclear is unclear, too.
One thing is for certain, climate change regulations are going to hit this industry hard. The electric power sector accounts for 40 percent of total U.S. carbon emissions and it will be called upon to shoulder most of the carbon burden.
“Unfortunately, the debate on climate change will continue for some time and that’s not desireable,” said FERC Chairman Joseph Kelliher in the opening address of the second power day at CERA Week in February. “Fifty-four percent of the coal plants ordered in the past two years have been cancelled.”
Complexity is phenomenal
Most analysts agree that climate change legislation is unlikely to go to the president in 2008. The holding pattern will probably continue until after the election.
Speaking at the Clean Tech Investor Summit in February, John Podesta, former White House chief of staff under Bill Clinton and head of the Center for American Progress, noted that all of the major presidential candidates—Hillary Clinton, Barack Obama and John McCain—have made global warming a central issue in their campaigns. “Regardless of who wins,” he said, “we will see a lid on carbon within the next few years.”
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