MoreBeach.com

September 29, 2009 - Power companies have been quitting the US Chamber of Commerce because it opposes laws that would limit emissions of greenhouse gases. Yesterday, Chicago-based Exelon Corp., a leading provider of nuclear power, joined the Public Service Company of New Mexico and California's Pacific Gas and Electric in saying that it was quitting the U.S. Chamber of Commerce because of the group's position on global warming. The heart of the dispute is more than an interest in doing good. It's also about money. The power companies see action on climate change as inevitable and want to plan for it. Placing a cost on carbon emissions enables them to make investment decisions on what kinds of plants to build and whom to buy energy from. Currently proposed "cap and trade" legislation would set maximum limits on greenhouse gas emissions. Coal powered utilities that exceed set limits would buy credits from cleaner utilities with emissions below the set levels.

Economists have been saying for years that the best way to reduce greenhouse gas emissions would be to tax those emissions directly. One example would be a $1 per gallon tax on gasoline. Politicians have avoided this approach because they believe the public would not accept it. Thus cap and trade is set to join EPA requirements for car mileage as a way to enact what is believed to be a necessary public policy. However, unlike an EPA mandate, cap and trade is a market based solution that should allocate resources more efficiently. In a speech at an energy-efficiency conference John Rowe, Exelon's chairman and chief executive, said, "If Congress does not act, the EPA will, and the result will be more arbitrary, more expensive and more uncertain for investors and the industry than a reasonable, market-based legislative solution."