[The following is an open letter from Senator Jeff Bingaman (D-NM), chairman of the Senate Committee on Energy and Natural Resources, and Senator Barbara Boxer (D-CA), chairwoman of the Senate Committee on Environment and Public Works, the two key committees that would hear bills addressing climate change and global warming emissions:]Many leaders of American industry are coming around to the view that global warming is occurring and that Congress will address the problem. In contrast, a few companies are 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 U.S. 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 toward 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 ways that are both financially sustainable and address its climate impact. 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 important, 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 utilities' investors and shareholders, who are putting money into technology that will be obsolete the very day it goes into service.
As the new Senate committee chairs 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.
Jeff Bingaman chairs the Senate Committee on Energy and Natural Resources, and Barbara Boxer chairs the Senate Committee on Environment and Public Works. Their e-mail addresses are Senator_ Bingaman@bingaman.senate.gov and feedback@boxer.senate.gov.
This letter was much needed! My boss, Rachel Shimshak, and allies at the National Resource Defense Council have been pushing the idea of a bipartisan letter from the key sponsors of the climate change bills in the Senate and House - i.e. Boxer, Bingaman, McCain and Lieberman - and as many others as possible putting utilities on notice that any new coal-fired power plants built in an attempt to get in 'under the wire' of upcoming climate change regulations would NOT be grandfathered into the bills (as was the case in the Clean Air Act).
Apparently, either the right people in the Senate Democratic Leadership heard the idea, or they had a similar one themselves and chose to issue this letter. It would have probably had more impact if it could have been a bipartisan letter, with more signatories, but this is still a very clear notice from the chairs of both key Senate committees that will be relevent to the upcoming debates on climate change regulation.
Thank you Senators Boxer and Bingaman.
Now if we can only ensure that Boxer's bill, or a similar one, is the one that finally moves. Bingaman's bill is pathetically lenient and won't accomplish enough to really save us from the brunt of climate change consequences. The McCain-Lieberman bill is a bit better, but is still more focused on economic and political rationale than scientific ones. When it comes to climate change, there's no point in a bill that isn't based on the science. Why try to rein in our emissions if we're not going to do it quickly enough or seriously enough to stabalize atmospheric CO2 emissions at a low enough level and avoid anything more than a 2 degree C temperature increase (and the associated consequences)?!
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