Why should very companies that have polluted the upper atmosphere now want to be rewarded?

Question

Many of the biggest coal-burning power companies claim they own the sky—and should be paid billions of dollars to reduce their emissions.

A new Clean Air Watch white paper concludes that the 10 most polluting electric power companies collectively could pocket $9 billion every year under the wrong kind of cap-and-trade program—one that hands out emission credits free to companies based on past pollution levels.

One company alone—Ohio-based American Electric Power—could rake in more than a billion and a half dollars every year. AEP has been among the polluters that have lobbied in favor of free credits.

http://www.tompaine.com/articles/2007/06/28/who_owns_the_sky.php

Answer 1

You're looking at it logically, but you're not looking at it realistically.

If we don't give the credits, then pollution remains, or congress has to pass a bill doing something about it. That bill will never pass, or at the least it won't reduce as much pollution as an incentive.

It's very tough to swallow, but that's the way it is. So we have to keep the big picture in mind. If we give them unfair incentives, then the world becomes a better place, faster.

If we don't then it remains dirty and we keep fighting to try and pass legislation to force them to do something about it, and then we pay to enforce the laws that we did pass.

Incentives are almost always a better way, even if they are unfair.

Answer 2

AEP and the others have been getting a free ride for about 30 years now. The Clean Air Act, passed  in 1977, contained a 'grandfather clause' allowing power plants to continue polluting at then-current levels.  There was a provision though that if plants performed modifications to increase production, they would have to undergo a New Source Review (NSR) by the government to determine if pollution controls should be required.  From '77 to '99, "the provision regarding new source review was largely ignored, with hundreds of energy companies carrying out substantial reconstruction without any environmental protections being added and without government approval."

"In 1999, the Environmental Protection Agency (EPA) and the Justice Department moved to enforce NSR more strictly. The Clinton administration brought 51 lawsuits  against nine mainly Midwestern and Southern corporations".  AEP received a notice of violation and a recommended $500,000 fine

http://www.wsws.org/articles/2002/apr200...

Shortly after Bush took office, Cheney ordered a 90 day review of the cases, including the one against AEP,  Instead of the EPA conducting the review, as was normal, the EPA was ordered conduct the review “in consultation with” the energy department.  The result of this review was the “Clear Skies” initiative which eliminated mandatory pollution caps for individual plants in favor of industry-wide levels that allow for companies to buy and sell emissions credits, as you outlined in your post.

AEP avoided paying the $500,000 fine for their previous 20 years of violations.  Now they get another free rride because "clear skies" also states that no improvements in pollution levels would be required of any companies for at least 10 years.  

You asked "Why?"  4.8 million dollars in campaign contributions from the electic utility industry to the Bush campaign, the Republican National Committee and the inagural committee.  That total included 1.85 million from the four largest utilities facing NSR enforcement actions, and another $424,770 from five other utilities also facing NSR actions.  I can't grasp why this is legal!

<EDIT - corrected link>

http://www.whitehouseforsale.org/documen...

http://64.233.167.104/search?q=cache:GVK...

Answer 3

But YOU, since you don't use electricity or drive or heat your home, don't pollute at all.

Answer 4

that is what we have elected officials for. to pass new laws to make it better. they have the carrot (tax incentives and more) and they have the stick (tax penalities and fines and more) to "encourage" the SOB's to do the right thing or be quickly driven out of business and make room for those who will do the right thing as we see it. need a lot of rewards and a lot of huge fines and big jail time for management who fail to do the right thing. really big jail time and huge financial penalities for those who overtly do the wrong thing. easy logic -- carrot and stick. nothing new about that but the intensity and certainty of the stick is vital with these greed sobs. greed is good but the stick must be big and sure.

Answer 5

When we set the EUETS system in Europe, it was kind of a "bootcamp" strategy. Since there was no experience it was important to go as fast as possible on the field to test emission trading from CO2.

The US is not in this case and should look as much as possible at the mistakes done in Europe regarding:

- monitoring and verification of emissions

- the establishment of baselines

- an overallocation based on a non fair and logical system

- the lack of auctioning of any allowances

It has resulted in a lot of fake credits which did not contribute to a better atmosphere.

I am really curious to see what will happen in the RGGI system regarding the 100% of allocation.

The problem of "hot air" is simple:

The possible electricity price increase corresponds to a real cost for fossile fuel power plants but hydro power plants and nuclear power plants, will just have higher prices to cash in.

So here are the solutions:

- you oblige each electricity producer to invest in emission reductions, regardless of their kind of generation.

- establish a benchmark and price levy per kind of generation (in order to progressively phase out coal power plants)