FPL Group Chairman calls climate bill "Well-intentioned but fundamentally flawed"
A climate change bill approved by a Senate subcommittee Thursday would reward the country’s biggest emitters of carbon dioxide and fails to provide a reliable mechanism to prevent possible massive economic damage, the head of one of the country’s largest electric power companies said today.
“I acknowledge and applaud the willingness of key senators to try and address the important issue of global climate change. Unfortunately, the bill they have proposed, if left unchanged, would reward the country’s biggest emitters of carbon dioxide with billions of dollars of free allowances that they don’t need. Moreover, the bill contains no clear ‘safety valve,’ to ensure that we don’t inadvertently damage the economy,” said Lewis Hay, III, Chairman and CEO of FPL Group Inc. (NYSE: FPL), which operates the country’s largest wind and solar power generating facilities. His comments came after a subcommittee of the Senate Environment and Public Works Committee voted 4-3 to move the America’s Climate Security Act (S. 2191) to the full committee for hearings and a markup.
Hay, noting that his company is a strong proponent of mandatory climate change legislation, said he appreciated the hard work that the measure’s sponsors, Senators Joseph Lieberman (I-CT) and John Warner (R-VA), and their staffs had put into the effort.
However, he pointed out that the bill as drafted provides generous quantities of free allowances to companies that are the biggest emitters of carbon dioxide, the major greenhouse gas, and that have done little to improve their generating fleets’ emissions profiles. “If allowances are to be given away, they should be given away fairly, treating every kilowatt-hour the same,” Hay said. “It makes no sense to give the biggest emitters a disproportionate share of the allowances. That’s like giving a bigger rebate to those of us who dump the most trash on our sidewalks,” he said. “We have said all along that giving away allowances is problematic, because it leads inevitably to a political food fight. Unfortunately, this draft legislation just illustrates our concern.”
Hay also expressed concerns over the bill’s provisions for controlling costs. “Industry and consumers alike need assurance that the costs of addressing climate change will be manageable. A well-defined ‘safety valve’ mechanism is a must. Unfortunately, the bill proposes an elaborate and murky new bureaucracy that will provide anything but clarity and reassurance,” he said. “Climate change is a long-term problem and requires a long-term solution. We should not run the risk of wrecking our economy in a misguided effort to try and address it too quickly. Any legislation has to provide a sound mechanism to keep that from happening.”
Hay went on to say, “I fully agree with the overall goal of the legislation. We need to enact a mandatory, economy-wide program that slows the growth of carbon emissions and ultimately reverses the trend. But we must take the time to get it right. Compromising on key provisions, like giving away allowances to the biggest emitters or failing to include a clear safety valve, is not the way to start.”
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