Cap-and-trade plan formed
WASHINGTON -- An influential group of large U.S. corporations and environmental organizations have forged a detailed blueprint for limiting greenhouse gases in the hope of shaping and pushing forward climate change legislation this year. The U.S....
WASHINGTON -- An influential group of large U.S. corporations and environmental organizations have forged
a detailed blueprint for limiting greenhouse gases in the hope of shaping and pushing forward climate change legislation this year.
The U.S. Climate Action Partnership says its ability to reach consensus is a crucial step forward since its 32 members include corporate giants such as General Electric, Conoco Phillips, Duke Energy, DuPont and General Motors as well as the Environmental Defense Fund and World Resources Institute.
Their plan for a cap-and-trade system calls for a 42 percent cut in emissions by 2030 from 2005 levels, limits on emissions from petroleum products and natural gas, rich incentives for the first few coal plants to capture and sequester carbon dioxide emissions, and a carbon market board to examine offsets and contain costs.
The plan also would require any coal plant permitted after Jan. 1, 2015, to emit no more than half the carbon dioxide emissions now considered normal and require any newly permitted plant today to have the ability to be retrofitted to meet that standard.
"The fact that we got this coalition to coalesce around a set of choices I think is impressive," says Jeffrey R. Immelt, chief executive of General Electric. "Most businesses prefer to make investments with certainty about what regulations are going to be in place."
Though some critics have said that climate legislation could impose costs on an already weak economy, DuPont Chairman Charles Holliday says his company likely would boost spending on thin film solar panels and some biofuel projects if a bill established incentives for noncarbon energy sources.
The same group issued an action plan two years ago, but at that time members could not agree on key specifics. Today's more detailed blueprint is "more aggressive than what we called for two years ago," says Fred Krupp, president of the Environmental Defense Fund.
A cap-and-trade system establishes a limit on carbon emissions, then allows companies to buy and sell allowances to meet the targets. Climate Action Partnership's proposal would allow companies to offset a limited amount of their own emissions by reducing emissions in developing countries.
However, elements of the plan designed to win corporate support likely will face criticism from some supporters of cap-and-trade. Whereas many economists and environmentalists support auctioning all emission allowances, Climate Action Partnership says its blueprint gives a significant number allowances away free to companies currently releasing carbon dioxide. The free allowances would be phased out.