From Clean Air Watch with a forward by
Larry J. Schweiger, President and CEO, National Wildlife Federation
From the Executive Summary:
As Congress debates the issue of global warming, one key issue involves how emission credits or “allowances” should be distributed under a cap-and-trade system. Simply giving allowances away to polluting companies – as Congress did with the Clean Air Act’s acid rain program – could amount to a multi-billion dollar windfall for the nation’s biggest polluters, not to mention a virtual monopoly on the combustion of fossil fuels for incumbent utilities.
At stake is billions of dollars- –the 10 most polluting electric power companies could collectively be awarded $9 billion in allowances annually. The largest emitter of global warming pollution, AEP, could receive ten times the value of its SO2 allocations under the Acid Rain Program.
At the same time, low-income residents could be harmed by a system that simply hands over these windfall profits to private companies. It seems unconscionable to reward the biggest polluters in this fashion. Why should the polluters profit from the legacy of damage they have caused?
Do we really want them to own the sky?
The emissions from the power companies advocating for an approach that would guarantee these windfall profits have released pollution in the past fifty years that still remains in the atmosphere. Giving allowances for free to these polluting companies does not require them to pay for any of the potential consequences caused by their legacy of pollution including sea level rise, increased natural disasters, increased competition for water resources, and adverse health impacts from higher temperatures.
A more thoughtful approach would embody the “polluter pays” principle used in other federal statutes, including the Superfund toxic dump cleanup law with the revenues used to benefit electricity consumers – those who ultimately pay the cost of reducing CO2 emissions.
Rather than giving away these emissions rights, companies should be obligated to purchase allowances. Revenues could be invested in energy efficiency and renewable energy, help for low-income residents, worker transition assistance, protecting wildlife and other socially desirable goals.
Those who pollute the most should pay the most.
Now there's a thought.
14 page PDF
