“Once it’s enacted, the impact of climate change legislation on the electric power industry will be ten times bigger than that of the Clean Air Act,” said Dan Adamson, an attorney with the law firm of Davis Wright Tremaine and chair of the opening session at the 2nd Annual Carbon Constraint Conference (Figure 1).
1. Searching for low-carbon solutions. Dan Adamson, an attorney with the law firm of Davis Wright Tremaine, welcomed participants at the 2nd Annual Carbon Constraint Conference. Conference sessions explored where the electric power industry stands today with regard to carbon legislation and regulations. Source: POWER
His was just one of many interesting predictions made during the lively presentations and discussions at the event, which is now colocated with the ELECTRIC POWER Conference & Exhibition. This two-day conference focused on the impact of carbon constraint laws and technical solutions for the power generation industry.
Although the panelists all agreed that the current political move toward some type of climate change legislation has created great uncertainty for the utility industry, they expressed a variety of views about the best way for the industry to prepare for the likely implementation of proposed new laws.
National cap-and-trade program on the horizon
The conference began with a focus on the impact of proposed carbon constraint legislation and regulations on the electric power industry. Adamson discussed the Leiberman-Warner bill that was then pending in the U.S. Senate (and that died a month later after a procedural vote in the Senate). The bill, named America’s Climate Security Act (S. 2191), sought to cut total U.S. greenhouse gas (GHG) emissions by as much as 19% below the 2005 level by 2020.
Adamson suspected that the legislation, cosponsored by Sen. Joe Lieberman (I-Conn.) and Sen. John Warner (R-Va.), probably would not pass in 2008 because of the pending presidential election. However, federal climate change legislation could be passed in 2009 or 2010, because the remaining presidential candidates support enacting some type of bill that will control GHG emissions, Adamson said. (For more information on the candidates’ positions on energy policy, see "Not a quarter's worth of difference.")
The important issues that will have to be addressed in any national cap and trade program set up under federal legislation, according to Adamson, are as follows:
- What should be the pace of CO2 reduction, and how do we determine the appropriate amount of CO2 reduction?
- How should we handle possible cost controls? Will there be a cap on the price of CO2?
- How will allowances to emit be handled?
- What happens to existing emissions trading programs set up by different U.S. regions and states, such as the Regional Greenhouse Gas Initiative (composed of 10 northeastern states) and the Western Climate Initiative (including five western states and one Canadian province)?
- How should offsets be handled? A big challenge will involve setting up standards that are acceptable to different stakeholders, such as the electric power industry and environmental groups.
- What will be the United States’ role in an international context as far as determining overall global carbon constraints?
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