Coal-dependent utilities want to slow progress toward a low-carbon economy. In so doing, they might miss an opportunity to increase revenues with little up front investment. The government would give away the vast majority of emissions permits under the proposed cap and trade system — 35% to utilities alone. Reducing carbon emissions gives energy producers a chance to sell excess permits for a enormous profit.
Anne Mulkern of Greenwire (via the Times) describes a coal industry ignoring a windfall staring it in the face.
Lobbyists are asking lawmakers to slow down the pace of any cap-and-trade system, using lower carbon caps that kick in more slowly. The House bill would reduce greenhouse gas emissions from 2005 levels by 17 percent by 2020, 42 percent by 2030, and 83 percent by 2050.
Coal advocates are not revealing what numbers they are willing to accept, only that the ones in the House bill are unrealistic for the industry.
“The most important reason to adjust the timeline is to give technology a chance to catch up,” said Scott Segal, co-head of the federal government relations and strategic communications practices at Bracewell & Giuliani LLP. The firm represents coal, utility and oil interests. Targets for carbon reductions, Segal said, “have to be respectful of what technology can accomplish.”
But nonexistent technology is not the only way to reduce emissions. Conservation is a cheaper, proven way to reduce emissions and open up a revenue stream for utilities. Studies show that personal access to household energy information alone is likely to spur 5–15% savings per month. In the aggregate, that presents a huge opportunity for utilities to reduce emissions, open up a new revenue stream (emissions permit sales) and effectively build generating capacity in the process.
Now, I get it. Utilities are in the business of selling energy so encouraging less use isn’t exactly part of the standard line of thinking among C-Suite execs. What’s clear is that the US government is interested in encouraging utilities to shift its business to selling clean energy. And Uncle Sam has provided the start up investment to help make the switch.