Carbon Trading A Huge Business;Cap-and-trade system for carbon dioxide tantamount to tax
Implementing a national carbon cap-and-trade system without new technology to implement it is nothing more than a tax that could cripple the nation's economy if not done wisely, MidAmerican Holdings Chairman and CEO David Sokol said February 19.
The Lieberman-Warner bill would create a system wherein carbon emitters could receive credits for cutting carbon emissions they could trade among themselves."Early implementation of a cap-and-trade system needs to be called what it is: It's a tax," Sokol told attendees at the National Association of Regulatory Utility Commissioners meeting in Washington, adding that cap and trade, "without providing for a technology period, would be a mistake."
Sokol helped steer the company from an owner/operator of one geothermal plant in 1991 into a company with 17,000 employees and annual revenues of $12.4 billion. It was acquired by a partnership controlled by Berkshire Hathaway in 2000. This week Sokol warned of the effects of the bill proposed by Senator Joseph Lieberman, an Independent Democrat from Connecticut, and Senator John Warner, a Virginia Republican, saying that without new technology the bill's goals are unrealistic.
The Lieberman-Warner bill would create a system wherein carbon emitters could receive credits for cutting carbon emissions they could trade among themselves. The bill sets annual caps on emissions of greenhouse gases or carbon dioxide equivalents on the power generation sector starting at 2005 levels in 2012, then ratchets the cap down so that by 2050 these industries must have reduced their emissions to 70% below their 2005 levels.
"The Lieberman-Warner bill would be phenomenally expensive to the American consumer," Sokol said, adding that Congress is lacking vision on the issue. He also said the amount of time Congress is spending investigating other issues such as steroid use in baseball is "an embarrassment."
Placing caps on carbon emissions prior to the development of technology to actually reduce those emissions would simply impose a tax on the American people without any positive environmental benefits, Sokol said.
Sokol is pushing a "slow, stop, reverse" policy toward carbon emissions that involves finding new funding to develop technology, bringing down the level of emissions to the point of zero, and then maintaining zero carbon emissions.
The American public wants action on the climate change issue, but questions need to be asked regarding how much they are willing to pay -- "a critical issue," Sokol said. "We believe strongly that this is doable ... we have to get it right, or we are going to make an enormous mess out of this whole situation."
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