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Utilities concerned over cap-and-trade

Jennifer Collins Apr 27, 2009
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Utilities concerned over cap-and-trade

Jennifer Collins Apr 27, 2009
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TEXT OF STORY

Steve Chiotakis: President Obama hosts a meeting in Washington today that could set the stage for how governments tackle global warming. At the same time, House lawmakers may have a new version of a climate change bill this week. From the Marketplace Sustainability Desk, Jennifer Collins reports.


Jennifer Collins: American power producers have a message, it goes like this:

Ad: One, two, three, four: Give me a break, Give me a break . . .

Utilities are worried about the expense of a proposed cap-and-trade system. The system would require utilities to buy rights to pollute.

Mark Crisson of the American Public Power Association has another idea:

Mark Crisson: In the initial years of the program in particular, give away for free the allowances necessary to allow power plant operation.

Now, House Democrats are considering giving away 40 percent of the permits.

Environmental economist Robert Stavins of Harvard says there’s room for that.

Robert Stavins: There is in my mind a sound argument for targeting the freely allocated allowances to the most burdened sectors of the economy.

Those include regions dependent on coal and utilities serving low-income populations. But free permits mean the government makes less money — money that’s supposed to fund alternatives to fossil fuels.

I’m Jennifer Collins for Marketplace.

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