New case for regulating CO2 emissions

The nation's big power companies are creating smaller amounts of gases that cause smog and acid rain than they were 15 years ago, but they're producing more greenhouse gases.

That's the conclusion of a joint industry- environmentalist report, released Wednesday, which offers a ray of hope in the battle against global warming.

If the American electric industry can cut its air pollution in response to toughened standards, the reasoning goes, then strict controls on greenhouse gases could do the same.

"What this report shows is that with careful government regulation, companies can lower the pollution coming from power plants smokestacks - and we should be doing this with greenhouse gases like carbon dioxide, too," says David Hawkins, climate director of the Natural Resources Defense Council, which coauthored the report with Ceres, a national coalition of environmental and investor groups, and Public Service Enterprise Group, a power company.

But that conclusion remains anathema to many within the electric-power industry, who prefer a voluntary approach.

From 1990, when the Clean Air Act was amended, through 2004, the 100 largest electric-power companies cut by 44 percent their emissions of sulfur dioxide, the gas most associated with acid rain. Nitrous oxides, associated with ozone and smog, have fallen by 36 percent in the same period.

However, carbon dioxide emissions - which are not regulated at the federal level - rose 27 percent through 2004. Power plants are the single largest emitters in the US of carbon dioxide, which many scientists say is the primary culprit behind global warming.

Historically, many within the power industry have resisted limits on emissions, fighting government lawsuits over NOX and sulfur dioxide. Similarly, the Bush administration as well as the power industry, have opposed government regulation of carbon dioxide and the international Kyoto treaty that restricts those emissions.

That's left electric power producers as the leading emitters of carbon dioxide, the report says. In 2004, the top 100 US power producers were responsible for 39 percent of sulfur dioxide emissions, 22 percent of nitrous oxide emissions, and 39 percent of CO2 emissions in the US, the report says.

But some within the power industry have already concluded that some kind of regulation of carbon dioxide emissions is on the way, with only the timing and the amount of the required cuts still uncertain. For them, the need for certainty is growing as an older generation of coal-fired power plants wears out - and new ones begin to be drafted.

"We support implementation of a regulatory program that would provide some certainty for the industry and make a contribution to addressing the global-warming problem, which we think is real and needs to be confronted," says Neil Brown, a spokesman for Public Service Enterprise Group (PSEG), which was a partner in producing the new report.

PSEG, the nation's 19th largest power company by the amount of electricity produced, is looking at many alternatives to reduce its carbon dioxide output.

New technologies like integrated gasification combined cycle - or IGCC - can turn coal into a gas and easily separate out carbon dioxide for injection into underground reservoirs. But without knowing the cost of emitting a pound of CO2, many companies say it will be difficult or impossible to decide if building a costly IGCC plant makes sense.

"One of the issues of not having a real understanding of the cost of carbon is that it makes it difficult to justify going ahead with those kinds of investments," Mr. Brown says. "That's why we feel strongly about the need for certainty."

But others in the industry oppose mandates, while saying they like high-tech options adopted on a free-market, voluntary basis.

"Technology is the key to reducing greenhouse-gas emissions," Michael Morris, chairman of American Electric Power, testified before a Senate committee Tuesday.