Randall LaBauve by owm23003

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									Florida Climate Change Action Team
       Executive Order 07-128
Greenhouse Gas Policy Design Menu
         Recommendations
           October 5, 2007




                               POWERING TODAY.
                          EMPOWERING TOMORROW.®
        FPL Group Overview


•   FPL is one of the largest investor owned
    utilities in the nation
•   Ranked #1 in environmental management
    five times by Innovest
•   FPL recognized by DOE as the top US
    utility in energy efficiency
•   Fortune’s 2007 #1 Most Admired Company
    in electric sector
•   Largest producer of renewable energy in
    the US
                                               2
                                  Florida Climate
                                 Change Initiatives




                                                                  Greenhouse Gas
      Nuclear            Renewables          Energy Efficiency
                                                                      Policy



• Very important part   • FPL supports an   • Opportunity to      • DEP rulemaking
  of the climate          appropriately       expand leadership
                                                                  • FPL design menu
  change solution         designed RPS        position
                                                                    recommendations
• FPL new generation    • FPL RPS           • Appropriate
  projects in process     strawman 10/16      incentives for
                                              stakeholders is
                                              critical


                                                                             3
                                  Florida Climate
                                 Change Initiatives




                                                                  Greenhouse Gas
      Nuclear            Renewables          Energy Efficiency
                                                                      Policy



• Very important part   • FPL supports an   • Opportunity to      • DEP rulemaking
  of the climate          appropriately       expand leadership
                                                                  • FPL design menu
  change solution         designed RPS        position
                                                                    recommendations
• FPL new generation    • FPL RPS           • Appropriate
  projects in process     strawman 10/16      incentives for
                                              stakeholders is
                                              critical                Today’s
                                                                       Focus
                                                                             4
   Which greenhouse gases should be
   regulated?
• Florida’s primary focus should be to regulate
  CO2 emissions from all sectors.
• Other greenhouse gases should be regulated as
  the program matures.
• Reductions of non CO2 greenhouse gases
  should be recognized as offsets.


                                                  5
Which economic sectors should be included?
           2003 Florida CO2 Emissions
           Industr/Comm/Residential 9%




                                Transportation
                                     40%
                  Electricity
                     51%
  Electricity


   A solution should be economy wide and include all sectors
                                                               6
      Which electric sources should be regulated?

Baselines should include all generation > 25 MW (investor
owned and public power) used to meet Florida electricity
requirements
• Including purchased power and out of state generation more
  realistically reflects Florida’s GHG footprint
• Including purchased power provides incentives to enter into
  lower carbon emission generating contracts
• Baselines should be updated every few years to reflect
  changes in customer loss/growth and adjustments to load
  requirements through franchise changes and new contracts

                                                          7
 Emissions leakage can be most effectively addressed by
 requiring Florida companies to account for greenhouse
 gas emissions, regardless of where the electricity is
 generated.
• By imposing the compliance requirements on Florida
  companies which Florida has jurisdiction over, potential
  leakage of emissions from out of state sources can be
  addressed
• Purchased power and out of state generating sources must
  be included in the GHG inventory of Florida GHG emissions
• Emissions leakage if unchecked will negate Florida
  advances to reduce GHG emissions
                                                         8
 What are the emissions levels and compliance
 dates of Executive Order 07-127?
• Florida electric utilities to meet 2000 levels by 2017,
  1990 levels by 2025 and 80% below 1990 by 2050
• Interim targets prior to or between the target dates
  would be premature without commercially available and
  economic technologies; moreover, this would result in
  higher costs to customers
• Electric sector has long lived assets and require
  certainty in resource planning

                                                            9
The emissions targets should be met by converting the
target to a state average CO2 emissions rate in lbs/MWh
(emissions performance standard) by dividing the target
cap on emissions by the annual state generation. Each
electric utility must meet the emissions performance
standard as an average across all generation produced or
imported into Florida
 • Setting a CO2 emissions performance standard to be met as a fleet
   average gives each electric utility flexibility in choosing how to meet the
   target
 • Those that have already reduced emissions through repowerings and
   new efficient generation should not be penalized
 • Older, inefficient power plants with the highest CO2 emission rates in
   lbs/MWh should be repowered or retired by 2017
 • Higher emitting coal units have disproportionately lower operating costs
   compared to newer clean and efficient generation                    10
    Should the Program Utilize a Carbon Fee or a Cap &
    Trade Market Design?
    An upstream Florida carbon fee would be an effective
    method to accomplish the Governor’s statewide
    reduction goals
• Assigns a predictable price on carbon economy-wide
   • Provides for a progressive measured implementation over time
   • Easy and much less expensive to administer
   • Provides clear cost transparency to all parties
• Avoids cap & trade pitfalls, such as market manipulation, windfall profits, price volatility and
  regressive impacts on low income consumers
• Incents the capture and reduction of emissions, the development of cleaner generation and
  renewables and creates a price signal encouraging energy conservation
• Provides certainty for long term investments and economic benefit for early action
• Provides funding for R&D for lower carbon technologies and the protection of internationally
  competing industries and recycles the bulk of revenue back to consumers
• Best multi sector approach, particularly if we do not join a regional Cap & Trade program
• Easily allows border adjustment – tariffs on imports, credits on exports
                                                                                              11
  Potential Alternative: The Right Cap &
  Trade Program
• 100% allowances to be auctioned
• Revenue to be recycled to the economy
• With free allowances – should be limited, output based
  and phased out quickly
• Safety valve and floor
“Allowances are a public good and should not be given away for free.
Instead, polluting companies should be required to purchase the
allowances.”                                    Clean Air Watch

                                   “Clean Air Watch Warns of Windfall Profits to Global
                                   Warmers” June 25, 2007
                                                                                          12
 Should Florida link to other greenhouse gas markets?

 Florida should initiate a Southeast regional trading program;
 or join a regional trading program such as RGGI
• Regional programs provide greater trading opportunities and thus
  provide market efficiency
• A southeast regional program would reduce unaccounted for leakage
  into Florida
• A regional program mitigates the stand alone, negative impacts to a
  single state economy
• Greater opportunities for offset programs could be realized
• Spreads administrative costs over a larger base
                                                                    13
Should Florida use offsets for sectors outside the cap ?

Florida should allow the unlimited use of verifiable
greenhouse gas emissions reduction offsets - regardless
of the location of the source
 • Greenhouse gases know no boundary and should be treated
   accordingly
 • Less costly offsets can be used to reduce the burden of GHG
   reduction compliance
 • Offsets projects from other states or countries have an equal
   impact on the environment as in-state projects and thus should
   be unlimited if verified through U. N. and accepted U. S.
   protocols
 • Applicable offsets should include the CO2 equivalent of other
   greenhouse gas reduction projects (HFCs, SF6, methane etc.)      14
How should emission allowances be allocated?

Under a Cap & Trade program, allowances should be
auctioned. If there are free allowance allocations –
distribution should be on an output basis.
 • Auctions provide fair allocations recognizing the relative emissions
   levels of affected sources
 • With 100% auction, revenue should be used for carbon technology
   R&D, protection of internationally competing companies, and the
   recycling of revenues to consumers
 • With free allocation – output based allocation recognizes clean and
   efficient generation and avoids the rewarding of those who have failed
   to reduce emissions
                                                                    15
The emissions reduction program should recognize early
steps taken to reduce emissions and provide credit for
early action
• Credit for early action rewards utilities and their customers who have
  “done the right thing” to reduce emissions through conservation and
  efficiency improvements, repowerings and new clean and efficient
  generation
• Some companies have already invested substantial resources in taking
  proactive steps to reduce GHG emissions and maintain a low GHG
  emissions rate
• Participation in early action programs such as Climate Leaders, DOE’s
  Climate Challenge and EPA’s SF6 Gas Capture Programs held the
  promise of receiving Early Action Credit
                                                                   16
   What should be the rules for banking
   and borrowing allowances?
Banking and borrowing should be allowed to
provide flexibility for compliance over time
• Unused allowances should be transferable to future
  year’s compliance
• Borrowing from future year’s allocations could allow
  flexibility for current compliance and greater future
  reductions later with new technologies
• Banking and borrowing allow compliance at the most
  economic cost
                                                          17
Should the program include a “safety valve” for emergencies?

The compliance program should utilize a consumer protection
mechanism to regulate the cost of GHG allowances to insure against
detrimental economic impacts
  • The consumer protection mechanism or “safety valve” would set
     an upper limit on allowance cost that can gradually adjust by
     predetermined amounts or could be adjusted by an Oversight
     Board
  • A consumer protection mechanism provides certainty to the
     Florida business community for future economic planning and
     provides protection to consumers against detrimental economic
     impacts
  • Consumer protection mechanism would control unacceptable
     volatility in allowance cost that has been seen historically in cap &
     trade programs
                                                                     18
    What reporting will be required ?

Florida should adopt currently accepted reporting protocols
such as those utilized by the World Resources Institute or
the California Climate Registry
 • Florida should adopt a widely recognized Greenhouse Gas (GHG)
   Registry to insure national consistency for trading and offsets
   recognition
 • Reporting protocols are necessary to understand historic and annual
   emissions and to establish an effective compliance program
 • In establishing baselines, Florida should consider credit for early action
   programs such as, Demand Side Management (DSM) projects, DOE’s
   1605b reporting program and EPA’s Climate Leaders
 • Allow direct use of continuous emissions monitors (CEMs) for
   verification and reporting of power plant emissions.
                                                                     19
 Who should oversee allowance allocations and
 compliance monitoring?

• DEP should administer allowance allocations,
  compliance reporting and monitoring.
• To establish baselines and reporting requirements for the
  electric utility industry DEP should utilize currently
  acceptable EPA methods of measuring and reporting
  emissions.
• Third party verification may be required for offset
  programs such as SF6 gas capture, energy efficiency
  projects and geologic sequestration projects.
                                                         20
 Who oversees technology and economic impacts?

 Florida should establish a Climate Change Oversight
 Board to periodically evaluate the economic impacts
 and efficiency of Florida’s climate change reduction
 program
• The Board should periodically review and adjust GHG reduction targets as
  compared to available technologies
• Evaluate technological advances that may be cost effectively implemented and
  recommend R&D funding to speed up technologies to match reduction targets
• Consider detrimental economic impacts of compliance requirements and take
  action to mitigate
• Evaluate the effectiveness and impacts of allowance auctions, GHG cap level
  and trading program and institute price controls when necessary to prevent
  economic harm
• Harmonize the Florida program with any new Federal requirements to promote
  consistency and efficiency of the program requirements
                                                                                 21
The Florida program should include the allocation
of resources and the oversight of research and
development of carbon capture and sequestration
technologies
• The future key to GHG reductions are new technologies that reduce
  emissions or capture and store carbon.
• Florida should become a leader in this area by:
   • Supporting pilot projects for carbon capture and sequestration
   • Developing a robust legal, regulatory, permitting, and compliance
     framework to support carbon sequestration
   • Charge Florida’s Geological Survey with the task of evaluating
     suitable carbon storage reservoirs in the state (deep saline aquifers)
   • Partner with Florida oil and gas companies to evaluate the use of
     captured CO2 to revitalize stagnant oil wells in Florida (Sunniland)
                                                                      22
Should there be a trial period?
• EU experience shows that a brief trial period
  could provide learning for the implementation of
  the compliance program
• Trial period should be coordinated with the
  implementation of any regional program that
  Florida participates in


                                                     23
          Appendix

FPL Comments to DEP Rulemaking




                                 24
Florida Climate Change Regulation
      Executive Order 07-127
   Department of Environmental
      Protection Rulemaking

       September 10, 2007




                                 POWERING TODAY.
                            EMPOWERING TOMORROW.®
                  FPL Group’s View
“The threat of major, long-term environmental and
economic damage from climate change is real and
warrants action to slow, stop and eventually reverse
growth in greenhouse gas emissions such as CO2.
Because industrial activity is at least partly to blame for the
problem, business leaders have a responsibility to be part
of the solution. It is critical to put the right policies in place
that will be effective in reducing emissions without
imposing unacceptable costs or needlessly shocking the
economy. Bad policy can be just as damaging as no
policy. In addressing this issue, we need to think as
Floridians because different potential policies can vary
dramatically in their impact on our state.”
                                      Lewis Hay, III
                                      Chairman and CEO
                                      FPL Group
                                      Palm Beach Post Op Ed
                                                               26
                                      May 27, 2007
                      FPL Overview


• One of the largest investor
  owned utilities in the nation
• ~21,000 MW(1) of generation
• 4.4 million(2) customer
  accounts
• ~3% average annual growth(3)
• Superior environmental
  performance
       (1) As of December 31, 2006
       (2) As of March 31, 2007
       (3) Ten year historical average for period ending December 31, 2006   27
A Clean Generation Portfolio
                FPL 2006 Fuel Sources(1)
                    (MWh produced)
                             Coal
                             5% Oil
                                8%


                   Gas           Purchased
                   50%             Power
                                    17%

                               Nuclear
                                 20%



70% of MWh production from zero emission nuclear and low
             emission natural gas sources
                                                           28
(1) 2006 10-K
                         A Leader in Conservation
          4,000
                                      Load Control and Conservation
          3,500

          3,000

          2,500
MWs
Avoided   2,000

          1,500

          1,000

           500

             0
                                        &E




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          • Conservation efforts have eliminated the need to build 11
          medium sized power plants over the past 25 years
          • U.S. Department of Energy reveals that FPL is #1 in
          conservation and #4 for demand side management programs
                  Source: 2005 U.S. Department of Energy                                                                   29
A Leader on the Environment
         •   FPL Group has committed to a 15% improvement in
             generation efficiency by 2020 from a baseline year
             of 2000
         •   Generation efficiency improvements will result in an
             estimated 19 million tons of CO2 reductions in 2020
             as compared to the same generation in 2000

 FPL Group has committed to an 18% reduction in CO2
 emissions rate by 2008 compared to a 2001 baseline
         •   Account for global dimensions of climate change
         •   Recognize the importance of technology
         •   Be environmentally effective
         •   Create opportunity and advantage
         •   Be fair to sectors disproportionately impacted
         •   Recognize and encourage early action
  FPL Group is a member of The Climate Group, whose mission
  is to catalyze business and government leadership on climate
  change in order to put the world on track for a low carbon
  economy.
                                                                 30
                                                                 State CO2 Emissions
lbs/MWh                                                          Rates – Electric Only
 2,600                                                                                              2005 Data


2,000
                                                                                                                                                                           U.S. Avg.
                                                                                                                                 Florida
                                                                                                                                                                        1,366 lbs/MWh
1,600



1,000



 600



    0
        DC ND   WY UT   IN   NM   KY   IA   WV MO WI   OH   DE CO KS   HI   OK   MN NE MT AK   GA   TX   MI   NV   IL   MD LA   TN   AL   VA   FL   NC PA   MA MS AK   AZ   SD   RI   NY SC   ME NJ   CT   NH CA   OR WA   ID   VT




                                  Florida electric CO2 emission rate lower than U.S. average                                                                                                                         31
    Several Key Principles are Critical for an
          Effective DEP Rulemaking
1. Executive Order 07-127 emissions targets in 2017, 2025 and 2050 are aggressive
   and should be implemented without interim requirements
2. Florida should adopt currently accepted reporting protocols such as those utilized by
   the World Resource Institute or the California Climate Registry
3. Baselines should include all generation > 25 MW (investor owned and public power)
   used to meet Florida electricity requirements
4. The emissions reduction program should recognize early steps taken to reduce
   emissions and provide credit for early action
5. The emissions targets should be met by converting the target to a state average CO2
   emissions rate in lbs/MWh (emissions performance standard) by dividing the target
   cap on emissions by the annual state generation. Each electric utility must meet the
   emissions performance standard as an average across all generation produced or
   imported into Florida
                                                                                   32
   Several Key Principles are Critical for an
         Effective DEP Rulemaking
6. Emissions leakage can be most effectively addressed by requiring Florida
   companies to meet the state emissions performance standard, regardless of where
   the electricity is generated
7. Establish a Climate Change Oversight Board to periodically evaluate the economic
   impacts and efficiency of Florida’s climate change reduction program
8. An upstream Florida carbon fee would be an effective method to accomplish the
   Governor’s statewide reduction goals
9. If the decision is to utilize a Cap & Trade program instead of a carbon fee, Florida
   should not try to do so on its own; instead Florida should initiate a Southeast
   regional trading program; or join a regional trading program such as Regional
   Greenhouse Gas Initiative (RGGI)
10. If the compliance program utilizes a Cap & Trade, allowances should be auctioned.
    If there are free allowance allocations – distribution should be on an output basis

                                                                                    33
   Several Key Principles are Critical for an
         Effective DEP Rulemaking
11. The compliance program should utilize a consumer protection mechanism to
    regulate the cost of GHG allowances to insure against detrimental economic
    impacts
12. Florida should allow the unlimited use of verifiable greenhouse gas emissions
    reduction offsets – regardless of the location of the source
13. If the Federal government develops a national greenhouse gas reduction program,
    Florida’s targets and compliance program should be harmonized with the federal
    program to efficiently meet targets at the lowest cost to Florida customers
14. The Florida program should include the allocation of resources and the oversight of
    research and development of carbon capture and sequestration technologies



                                                                                 34
Key Principle 1: Executive Order 07-127 emissions
targets in 2017, 2025 and 2050 are aggressive and
should be implemented without interim requirements
 • Electric sector has long lived assets and require certainty in
   resource planning
 • 2017, 2025 and 2050 target dates allow for planning certainty and
   the development of needed technologies to meet reduction
   requirements
 • There should be no interim targets prior to 2017, 2025 or 2050
   limits set in Executive Order
 • Interim targets prior to or between the target dates would be
   premature without commercially available and economic
   technologies; moreover, this would result in higher costs to
   customers                                                        35
                                          Florida in Total:
                               Electric Sector CO2 Reduction Targets
             190.0
                                                                                                   179
                                                       Difference = 38 million
             170.0                                         (23% reduction)           165


             150.0
   CO2
  Short                 2017 Target
  Tons*      130.0
(millions)                                                                           127

             110.0

                                                                        Difference = 75 million    104
                        2025 Target
              90.0                                                          (42% reduction)


              70.0
                                  All FL Utilities
                                  Business as Usual
              50.0
                     1989       1994       1999       2004       2009         2014         2019   2024


                                                                                                   36
                     * Includes Purchased Power
       Reduction targets must correlate with the
         development of future technologies



                        N
U S Electric Sector
CO2 Emissions
                        o
(million metric tons)
                        w

                        i
                        s
                        t
                        h




                                                   37
                                         Carbon technologies must evolve to meet
                                                   aggressive targets
                                                        Low Cost                             CCS; New Coal
                                   50
Cost of Abatement € per ton CO2




                                                      Forestation
                                              Livestock

                                     0

                                                          Nuclear                                                 Biodiesel
                                  -50                                                                        CCS Retrofit
                                                    Sugar Cane Biofuel
                                                                                                       Avoided Deforestation
                                                Fuel Efficiency in Vehicles
                                  -100      Air Conditioning
                                           Lighting Systems
                                  -150     Building Insulation
                                                    5               10                15               20         25           30

                                                             Gigatons of CO2 per year in 2030
                                                                                                                                    38
                                              Source: McKinsey & Co. “The McKinsey Quarterly – Number 1”
Key Principle 2: Florida should adopt currently
accepted reporting protocols such as those utilized
by the World Resource Institute or the California
Climate Registry
 • Florida should adopt a widely recognized Greenhouse Gas (GHG)
   Registry to insure national consistency for trading and offsets
   recognition
 • Reporting protocols are necessary to understand historic and annual
   emissions and to establish an effective compliance program
 • In establishing baselines, Florida should consider credit for early action
   programs such as, Demand Side Management (DSM) projects, DOE’s
   1605b reporting program and EPA’s Climate Leaders
 • Allow direct use of continuous emissions monitors (CEMs) for
   verification and reporting of power plant emissions.              39
              The GHG Protocol

The GHG Protocol – a joint initiative between WRI
and the World Business Council for Sustainable
Development - is the most widely used international
accounting tool for government and business leaders
to understand, quantify, and manage greenhouse gas
emissions.
                          World Resources Institute

                                               40
Key Principle 3: Baselines should include all
generation > 25 MW (investor owned and public
power) used to meet Florida electricity requirements
• Including purchased power and out of state generation more
  realistically reflects Florida’s GHG footprint
• Should include Florida generation exported out of state
• Including purchased power provides incentives to enter into lower
  carbon emission generating contracts
• Including out of state contracts and generating sources addresses
  emissions leakage issues
• Baselines should be updated every few years to reflect changes in
  customer loss/growth and adjustments to load requirements through
  franchise changes and new contracts                               41
   California Public Utilities Commission
In order to have any meaningful impact on
climate change, the Governor’s GHG emissions
reduction goals must be applied to the state’s
electricity consumption, not just the state’s
electricity production
             Policy Statement on Greenhouse Gas Performance Standards
                                                      October 6, 2005



                                                                42
Key Principle 4: The emissions reduction program
should recognize early steps taken to reduce
emissions and provide credit for early action
• Credit for early action rewards utilities and their customers who have
  “done the right thing” to reduce emissions through conservation and
  efficiency improvements, repowerings and new clean and efficient
  generation
• Some companies have already invested substantial resources in taking
  proactive steps to reduce GHG emissions and maintain a low GHG
  emissions rate
• Participation in early action programs such as Climate Leaders, DOE’s
  Climate Challenge and EPA’s SF6 Gas Capture Programs held the
  promise of receiving Early Action Credit
                                                                   43
Environmental Defense Supports Credit For
              Early Action
Baseline Protection. Companies that have initiated climate policies
early and that have begun to reduce their GHG emissions must be
treated equitably. As I mentioned, Environmental Defense has
been working with some of the world’s largest corporations through
Partnership for Climate Action (PCA). Baseline protection is
intended to ensure that forward-looking companies such as
DuPont and Alcan, which are acting on the problem in advance of
a legal mandate, are not penalized.

                        Testimony of Fred Krupp, President, Environmental Defense
       Before the Committee on Commerce, Science and Transportation, U.S. Senate
                                                                   January 8, 2003
                                                                               44
           World Resources Institute Supports
                 Credit For Early Action
The most straightforward way to reward early reductions is through baseline-setting and
allocation of allowances once the cap and trade system commences. All else equal, a
company that reduces its emissions early will be automatically rewarded, because it will
require fewer allowances once the program begins. The only caveat is that if allowances
are not auctioned, care must be taken not to unjustly penalize companies that take early
action by giving them a correspondingly lower allocation of allowances. If allowances are
allocated based on historical emissions, for example, a baseline year should be chosen
that is far enough in the past to capture any meaningful reductions that were undertaken
prior to the onset of the cap and trade program.
                                                                World Resources Institute



                                                                                   45
  USCAP Supports Credit for Early Action
We need to reward those firms that have acted to reduce GHG
emissions and encourage others to do so while the program is
being established. Legislation should require regulations to be
promulgated by no later than the end of 2008 establishing an early
action program that grants a credit for reductions made starting
from a specified date, such as 1995, until such time as the
mandatory program becomes effective. Claimants would be
required to demonstrate their eligibility for the credit based on
accurate data.
                                        US Climate Action Partnership
                                  Call For Action Recommendations
                                                                        46
Key Principle 5: The emissions targets should be met by
converting the target to a state average CO2 emissions
rate in lbs/MWh (emissions performance standard) by
dividing the target cap on emissions by the annual state
generation. Each electric utility must meet the emissions
performance standard as an average across all generation
produced or imported into Florida
 • Setting a CO2 emissions performance standard to be met as a fleet
   average gives each electric utility flexibility in choosing how to meet the
   target
 • Those that have already reduced emissions through repowerings and
   new efficient generation should not be penalized
 • Older, inefficient power plants with the highest CO2 emission rates in
   lbs/MWh should be repowered or retired by 2017
 • Higher emitting coal units have disproportionately lower operating costs
   compared to newer clean and efficient generation                    47
     The operating costs of a coal-fired power plant remain competitive
     with natural gas-fired facilities even with the addition of SO2, NOx,
     mercury and CO2 control costs
       $120.00



                                                             $99.88 total
                     CO2 Costs
       $100.00
                     Controls                                  $8.31
                     Variable O&M       $85.19 total          $1.00
                                                               $2.60
                     Delivered Fuel
                                          $4.56
        $80.00                            $2.00

$ per MWH

        $60.00



                    $38.76 total
                                                              $87.97
        $40.00                            $78.62
                      $11.55

                      $3.90
                      $2.20
        $20.00

                      $21.11


            $0.00
                       Coal                Gas                  Oil         48
California Public Utilities Commission
A GHG emissions standard will further serve to
internalize “the significant and under-recognized
cost of GHG emissions” recognized in the PUC
Decision, and to reduce California’s exposure to
costs associated with future regulation of these
emissions
Policy Statement on Greenhouse Gas Performance Standards
                                         October 6, 2005
                                                     49
 Key Principle 6: Emissions leakage can be most
 effectively addressed by requiring Florida
 companies to meet the state emissions
 performance standard, regardless of where the
 electricity is generated
• By imposing the emissions performance standard on Florida companies which
  Florida has jurisdiction over, potential leakage of emissions from out of state sources
  can be addressed
• Purchased power and out of state generating sources must be included in the GHG
  inventory of Florida GHG emissions
• Emissions leakage if unchecked will negate Florida advances to reduce GHG
  emissions
• Florida should develop an emissions leakage workgroup to determine methods of
  controlling carbon leakage into Florida. A similar group is active in the northeast
  RGGI states
                                                                                        50
RGGI Approach to Addressing Potential Emissions Leakage
• RGGI program acknowledges potential for emissions leakage


• RGGI Memorandum of Understanding (MOU) called for establishment of multi-state
  emissions leakage working group. The MOU tasks the Working Group with the following:

        • Consider policy options and mechanisms to address potential emissions leakage

        • Consult with a panel of experts, stakeholders, and representatives of regional
          transmission organizations and issue its findings and conclusions by December
          2007

• RGGI MOU calls for monitoring of emissions leakage on an ongoing basis commencing
  from the start of the program, and the reporting of results of the monitoring on an annual
  basis beginning in 2010
                                                                                               51
 Key Principle 7: Establish a Climate Change
 Oversight Board to periodically evaluate the
 economic impacts and efficiency of Florida’s
 climate change reduction program
• The Board should periodically review and adjust GHG reduction targets as
  compared to available technologies
• Evaluate technological advances that may be cost effectively implemented and
  recommend R&D funding to speed up technologies to match reduction targets
• Consider detrimental economic impacts of compliance requirements and take
  action to mitigate
• Evaluate the effectiveness and impacts of allowance auctions, GHG cap level
  and trading program and institute price controls when necessary to prevent
  economic harm
• Harmonize the Florida program with any new Federal requirements to promote
  consistency and efficiency of the program requirements
                                                                                 52
Florida Population Growth:
Impact on Governor’s Proposed CO2 Targets
            45                           Florida Population *
                                                                                %    39.8
            40                                                               1.7 R
                                                                                G
                                                                             CA
            35
                                                             2.0%
                                                                  R
            30                                               CAG      25.9
                                             1.9% R
 Population 25                   %           CAG      22.1
                              2.2 R
  Millions  20                CA
                                 G    16.0
            15        12.9

            10
             5
             0
                     1990             2000            2017            2025           2050
                                  Per Capita CO2 Emissions (metric tons)

                      Actual           Actual                 Implied Governor’s Targets
                         1990           2000                 2017             2025          2050
    Florida                  14              15                11                7            1
    Ohio                     23              23                23               21            4
    Pennsylvania             22              22                22               20            4
                                                                                                   53
       * Source: U.S. Census Bureau
  Key Principle 8: An upstream Florida carbon
  fee would be an effective method to accomplish
  the Governor’s statewide reduction goals
• Assigns a predictable price on carbon economy-wide
   • Provides for a progressive measured implementation over time
   • Easy and much less expensive to administer
   • Provides clear cost transparency to all parties
• Avoids cap & trade pitfalls, such as market manipulation, windfall profits, price volatility and
  regressive impacts on low income consumers
• Incents the capture and reduction of emissions, the development of cleaner generation and
  renewables and creates a price signal encouraging energy conservation
• Provides certainty for long term investments and economic benefit for early action
• Provides funding for R&D for lower carbon technologies and the protection of internationally
  competing industries and recycles the bulk of revenue back to consumers
• Best multi sector approach, particularly if we do not join a regional Cap & Trade program
• Easily allows border adjustment – tariffs on imports, credits on exports
                                                                                              54
CO2 Policy Options       Market-based

 Command         Cap and
                                    Carbon Fee
and Control       Trade

• Inefficient   • Uncertain        • Pre-
                  and volatile       determined
• Inequitable
                  prices             price profile
                • Fixed            • Uncertain
                  emissions          short-term
                  levels             emission
                                     levels
                   Both result in a market price
                        for CO2 emissions

                                                     55
      Potential Market Based Structures
         Carbon Fee                                    Cap & Trade


• Provides a transparent fee on             • Provides a cap on emissions
emissions
                                            • Price of emissions will vary
• Emissions volumes will vary
                                            • Creates allowances for
• No need for allowances and                emissions
 allocations
                                          Input          Output             Auction



                         • Free allocation of        • Free allocation of   • Companies purchase
                         allowances based on fuel    allowances based on    the amount needed to
                         input                       MWh output             cover emissions
                         • Largest benefit to coal   • Largest benefit to   • No fight over allocation
                         generation                  cleaner generation     methodology
                                                     sources

                                                                                          56
             All approaches involve administrative complexity;
             some are more complex than others
            Unconstrained                 Constrained                       Carbon
             Cap & Trade                  Cap & Trade                        Fee
                                                        Ceiling


                                                        Floor
CO2 Price




             •   Distribution of allocations
                  • % free vs. auction                            •   Monitoring and measurement
                  • Allocation basis
             •   Monitoring and measurement
             •   “Leakage” from uncovered sectors
             •   Import/export complexities

 Unless 100% of allowances are “free”, all approaches create a revenue stream (a “tax”)
                                                                                             57
       The Economics of Allocations
                                     Hypothetical         Hypothetical
                                       “Clean”              “Dirty”
                                      Portfolio            Portfolio
Input Based Allocations (tons)                29                49

Value at $20/ton                             $580             $980



Output Based Allocations (tons)               42                42

Value at $20/ton                             $840             $840

             For two equally sized portfolios, use of an input based
         allocation clearly disadvantages the “clean” portfolio relative
                             to the “dirty” portfolio.

          Note: Tons and $ are in Millions                                 58
Our analysis suggests that large, free allocations are not
necessary to protect generators’ financial health




             Note: Points represent leading consolidated regulated and non-regulated generators
             operating within the Eastern transmission interconnect
             Source: FPL Group in collaboration with The Brattle Group                        59
           SO2 Program
           A Real World Cap & Trade Example
$/ton                                                  $860
$800                                                          • Prices have moved
                                                                up and down as
$700
                                                                much as 43% in one
$600                                                            year
$500                                                          • Prices have risen
$400                                                            80% per year over
$300                                                            the last 3 years
$200
$100      $66
        1997                                           2006
          Extrapolation of this type of volatility to a much larger CO2 program
           would have significant economic consequences. For example, an
           80% increase from $20/ton applied to 7 billion tons of CO2 in 2010
               would charge the economy with an additional $112 billion

           Note: Volatility in graph is illustrative                              60
Cap & Trade Complexities
• Allocation distribution            •   Updating vs. Historic
• Percent of free vs. auction over   •   Upstream vs. Downstream
  time                               •   Level to set caps
• Banking/borrowing of credits       •   Credit for early action
• Safety valve and floor             •   Administrative complexity
• Price volatility                   •   Fraud and market manipulation
• Measurement term                   •   Economic cycles
• Age of plant                       •   Weather variability
• Offsets

                                                                   61
 A carbon fee offers substantial advantages
 over cap & trade
A CO2 fee beginning initially at a modest level ($10/ton) increasing over time
   • Can be easily applied to the entire economy
   • Allows sufficient time and opportunity for producers and consumers to adjust to the
     new price of CO2 and with revenue neutrality avoids regressive impacts on
     consumers
   • Encourages investment in CO2 reduction – more likely to yield greater long-run CO2
     cuts
   • Avoids economic distortion and windfalls that can accompany free allocations
   • Provides a reliable source of revenue to underwrite R&D and other programs to
     benefit consumers
   • Is relatively easy to administer, avoiding unnecessary costs
   • Is equitable and efficient, with limited (and known) economic impact
   • Easily allows border adjustment – tariffs on imports, credits on exports
   • Provides economic benefit for early action
                                                                                   62
Proper “recycling” of CO2 revenues is
required if the economy is not to be
damaged




                                        63
Growing Support for the Concept of a
Fee
•     Leading policy makers such as Alan Greenspan, Paul Volcker, Al Gore, George Soros, George Shultz, and
      Barak Obama
•     Respected think tanks – AEI, Resources for the Future, Earth Policy Institute
•     Leading publications including the Wall Street Journal, Detroit Free Press, New Yorker, New York Times,
      Los Angeles Times, Washington Post, and The Economist
•     Noted columnists Thomas Friedman, Jonathan Rauch, Phil Izzo, and Steve Chapman
•     Leading economists such as William Nordhaus, Robert Shapiro, Stephan Schneider, Robert Reich, Jeffrey
      Sachs, and Lawrence Summers
•     Carbon tax proposals have been proffered by Congressmen Dingell, McDermott, Stark and Larson and
      Senator Dodd
    “I find that price mechanisms produce expected net gains five times higher
    than even the most favorably designed quantity target.”
                                                                 William Pizer
                                                                 Resources for the Future
    Pizer, William, “Choosing Price or Quantity Controls for Greenhouse Gases”, July 1999
                                                                                                    64
    *Specific Supporter Quotes in the Appendix
Key Principle 9: If the decision is to utilize a Cap &
Trade program instead of a carbon fee, Florida
should not try to do so on its own; instead Florida
should initiate a Southeast regional trading program;
or join a regional trading program such as RGGI
• Regional programs provide greater trading opportunities and thus
  provide market efficiency
• A southeast regional program would reduce unaccounted for leakage
  into Florida
• A regional program mitigates the stand alone, negative impacts to a
  single state economy
• Greater opportunities for offset programs could be realized
• Spreads administrative costs over a larger base                   65
Pew Center position on regional programs
Regional initiatives can be more efficient than programs at
the state level, as they encompass a broader geographic
area, eliminate duplication of work, and create more uniform
regulatory environments. Over the past few years, a number
of regional initiatives have begun developing systems to
reduce carbon dioxide emissions from power plants, increase
renewable energy generation, track renewable energy
credits, and research and establish baselines for carbon
sequestration.
                                   Pew Center Global Climate Change
                                                              66
Regional Greenhouse Gas Initiatives




                  Pew Center Global Climate Change

                                                67
Key Principle 10: If the compliance program utilizes
a Cap & Trade, allowances should be auctioned. If
there are free allowance allocations – distribution
should be on an output basis
• Auctions provide fair allocations recognizing the relative emissions
  levels of affected sources
• With 100% auction, revenue should be used for carbon technology
  R&D, protection of internationally competing companies, and the
  recycling of revenues to consumers
• With free allocation – output based allocation recognizes clean and
  efficient generation and avoids the rewarding of those who have failed
  to reduce emissions
• Unlimited banking and borrowing of allowances should be allowed
                                                               68
Auctioning allowances is most efficient approach
to market-based system
Economic models offer some evidence that auctioning allowances and
using the revenues to cut distortionary taxes is the most efficient and
least expensive approach to implementing a market-based system.1
Auctions may also allow the government to raise revenue for any number
of purposes, including technology investments or deficit reduction.
Furthermore, evidence exists that auctions tend to stimulate greater
innovation than free allocations and may lead to more efficient
investments in technology.2
1 Fullerton, D., and G. E. Metcalf. 2001. Journal of Public Economics. Goulder, L. H., et al 1999.
Journal of Public Economics
2Kerr, S., and R. G. Newell. 2003. Journal of Industrial Economics. Milliman, S. R., and R. Prince.
1989 Journal of Environmental Economics and Management
                                                                                         69
Allowances should not be distributed for free

“Allowances are a public good and should not be
given away for free. Instead, polluting companies
should be required to purchase the allowances.”


                                                        Clean Air Watch

“Clean Air Watch Warns of Windfall Profits to Global Warmers” June 25, 2007
                                                                              70
 California Market Advisory Committee recommends
 use of auctioned CO2 allowances
The Committee recommends a mixed approach of initially
auctioning and freely allocating allowances, and increasing the
percentage auctioned over time. The Committee recommends
the state retain flexibility to freely allocate some of the
allowances for the purposes of stabilizing price impacts,
particularly on low-income consumers, and managing
competitiveness issues for California firms, particularly in the
near term.
               Final Recommendations of CA Environmental Protection Agency’s,
                                    Market Advisory Committee, June 29, 2007
                                                                       71
Auction revenues can provide funding for technology
research, development and deployment




                                                 72
  At realistic values for CO2 pricing, Florida’s market
  value of allowances will be large
                                     2017                              2025
                 Estimated                        Annual      Estimated        Annual
Allowance        FL Tons1                          Value      FL Tons1          Value
 $ per ton       2000 level                      (Millions)   1990 level      (Millions)


  $10                                               $1,323                        $986

  $20         132,300,000                           $2,646    98,600,000       $1,972

  $50                                               $6,615                      $4,930


             1 Source: DOE State Electricity Profiles
                                                                                   73
 Potential Alternative: The Right Cap &
 Trade
• High percentage of allowances to be auctioned
• Revenue to be recycled to the economy, just as with a fee
• Limited free allowances – output based and phased out quickly
• Safety valve and floor

 “Allowances are a public good and should not be given away for free.
 Instead, polluting companies should be required to purchase the
 allowances.”
                                               Clean Air Watch


        “Clean Air Watch Warns of Windfall Profits to Global Warmers” June
        25, 2007
                                                                             74
Advantages of allocating emissions credits based
on efficiency—Clean Energy Group position paper
 The allocation of pollution allowances based on electric generation
 output is a common-sense way to promote efficiency, fairness, and
 environmental protection:
• Output-based allocation: distributes allowances based on the amount of electricity a
  facility produces. A power plant that produces 5% of the electricity receives 5% of the
  available pollution allowances.
• Input-based allocation: distributes pollution allowances based on emissions, not on
  how much electricity it produces. For example, a power plant that emits 5% of the
  total amount of emissions receives 5% of the pollution allowances, even if it produces
  only 2% of the electricity.
• Bottom Line: In an output-based system, companies have a strong incentive to
  generate more electricity while using fewer resources (i.e., fossil fuels) and producing
  less pollution
                                                                                      75
Key Principle 11: The compliance program should
utilize a consumer protection mechanism to
regulate the cost of GHG allowances to insure
against detrimental economic impacts
• The consumer protection mechanism or “safety valve” would set
  an upper limit on allowance cost that can gradually adjust by
  predetermined amounts or could be adjusted by an Oversight
  Board
• A consumer protection mechanism provides certainty to the
  Florida business community for future economic planning and
  provides protection to consumers against detrimental economic
  impacts
• Consumer protection mechanism would control unacceptable
  volatility in allowance cost that has been seen historically in cap &
  trade programs
• The European Union trading program suffered periods of
  extremely high allowance cost                                       76
Safety Valve
• MIT Joint Program on the Science and Policy of Global Climate
  Change notes that the “safety valve” can be useful in taming “an
  overly stringent emissions target. It can also control the price
  volatility during the introduction of a gradually tightening [target]”
• A safety valve starting at $12 is proposed in Senator Bingaman’s
  bill the Low Carbon Economy Act of 2007
• The Regional Greenhouse Gas Initiative uses an allowance price
  “Safety Valve” to trigger expanded uses of offsets reduce the
  costs of compliance




                                                                       77
Key Principle 12: Florida should allow the
unlimited use of verifiable greenhouse gas
emissions reduction offsets - regardless of the
location of the source
• Greenhouse gases know no boundary and should be treated
  accordingly
• Less costly offsets can be used to reduce the burden of GHG
  reduction compliance
• Offsets projects from other states or countries have an equal
  impact on the environment as in-state projects and thus should
  be unlimited if verified through U. N. and accepted U. S.
  protocols
• Applicable offsets should include the CO2 equivalent of other
  greenhouse gas reduction projects (HFCs, SF6, methane etc.)
                                                                   78
California Market Advisory Committee
Recommends use of Offsets in California
CO2 reduction program
Emission reductions by sources not included in the cap-and-
trade program can be used to assist in meeting California’s
2020 emission reduction requirement, reduce costs and
increase flexibility through the use of offsets. However, the
Committee recommends the use of rigorous criteria to ensure
high-quality offsets.
               Final Recommendations of CA Environmental Protection Agency’s,
                                    Market Advisory Committee, June 29, 2007
                                                                        79
  Environmental Defense supports use of
  offsets to mitigate CO2 emissions
So if a utility is required to reduce their emissions by 100 tons over the
next year, an offset market allows them maximum flexibility to meet that
goal while not driving prices higher for consumers. The utility could
reduce its direct emissions to reach part of the goal, increase its
efficiency to meet part, and it could choose to purchase GHG reductions
from farmers for part – or all of its target depending on which choices
make the most economic sense. In this way, offset markets make it
possible to take action to reduce greenhouse gases without significantly
disrupting the economy. It creates a market that rewards those who
make emission reductions in the most efficient manner.
                                                        Environmental Defense Fund
                                        Agriculture’s Ability to Offset Climate Change
                                                                                 3/8/07
                                                                                 80
Summary of Carbon Offset programs in the
United States
• Currently, there are 4 groups intending to certify GHG reduction
  programs
   • Center for Resource Solutions (“Green-e”)
   • The Climate Group
   • GE AES Greenhouse Gas Services
   • Chicago Climate Exchange (“CCX”)
• Each is developing their own standard, generally defining Carbon
  Offsets as “real, permanent, verifiable, and additional”


                                                                     81
Key Principle 13: If the Federal government develops a
national greenhouse gas reduction program, Florida’s
targets and compliance program should be harmonized
with the federal program to efficiently meet targets at the
lowest costs to Florida customers
• Compliance with multi states’ programs and a federal program will
  result in confusion, redundancies and inefficiency in meeting
  compliance requirements
• A federal based system with state delegation and authorization
  would be economically efficient
• International border issues can best be managed through a
  coordinated federal approach

                                                                   82
Key Principle 14: The Florida program should
include the allocation of resources and the
oversight of research and development of carbon
capture and sequestration technologies
• The future key to GHG reductions are new technologies that reduce
  emissions or capture and store carbon.
• Florida should become a leader in this area by:
   • Supporting pilot projects for carbon capture and sequestration
   • Developing a robust legal, regulatory, permitting, and compliance
     framework to support carbon sequestration
   • Charge Florida’s Geological Survey with the task of evaluating
     suitable carbon storage reservoirs in the state (deep saline aquifers)
   • Partner with Florida oil and gas companies to evaluate the use of
     captured CO2 to revitalize stagnant oil wells in Florida (Sunniland)
                                                                      83
U.S. Climate Action Partnership
recommendations: Carbon Capture and
Storage
• Congress should require the EPA to promulgate regulations
  promptly to permit long-term geologic sequestration of carbon
  dioxide from stationary sources
• Congress should fund at least three sequestration demonstration
  projects in depleted and abandoned oil and gas fields and saline
  aquifers with CO2 injection
• Each project should sequester at levels equivalent to emissions
  produced by a large coal-based power plant
                       U.S. Climate Action Partnership, Call For Action Presentation
                                                                        May 8, 2007

                                                                               84
Carbon Capture and Sequestration (CCS)
 • FutureGen, a Department of Energy sponsored IGCC with CCS
   project, is moving forward toward site determination and construction
   (Illinois or Texas).
 • The Southeast Regional Carbon Sequestration Partnership
   (SECARB) is in process of qualifying geologic storage capacity in the
   Southeast.
 • Florida should participate fully with SECARB qualification.
 • Issues requiring agreement to foster CCS
    • Liability determination
    • State/Private Project Partnerships
    • Incentives for Investment
    • Resource Access and Expertise

                                                                    85
Summary
The DEP rulemaking should incorporate
these Key Principles which will most
effectively implement the Governor’s
Executive Order 07-127 while protecting
the long term economy of Florida


                                          86
Appendix




           87
 Los Angeles Times
“While cap-and-trade creates opportunities for
cheating, leads to unpredictable fluctuations in
energy prices and does nothing to offset high power
costs for consumers, carbon taxes can be
structured to sidestep all those problems while
providing a more reliable market incentive to
produce clean-energy technology… A carbon tax is
the best, cheapest and most efficient way to combat
cataclysmic climate change.”
       “Time to Tax Carbon,” Los Angeles Times, 28 May 2007

                                                          88
   Al Gore
"We should sharply reduce payroll taxes and make it all
up in CO2 taxes so the low- and middle-income people
don’t bear the cost burden of this big transition in energy
sources."


          The Honorable Al Gore, Former Senator and Vice President
Speech at Wal-Mart Headquarters, Bentonville, Arkansas, 19 July 2006


                                                               89
        Wall Street Journal
“A tax would make emissions more expensive; discourage
carbon-intensive power generation; and it would allow the
market to decide which environmentally more-friendly
technologies would be competitive enough to take its
place… A carbon tax, [unlike a cap and trade, would not]
create a new multibillion-dollar global commodity whose
value would depend on political manipulation. The
[government] could use the revenues from such a levy to
reduce other taxes… and to spur the massive private
investment needed to build the next generation of power
generators.”
                “A Carbon Tax Would Be Cleaner,” Wall Street Journal, 23 August 2007
                                                                              90
    George Shultz
“Even with clear units of account, large problems arise as
the coverage and heterogeneity of the system grow…
Scams are easy to imagine… In many respects, a straight-
out carbon tax is simpler and likelier to produce the desired
result. If the tax were offset by cuts elsewhere to make it
revenue-neutral, acceptability would be enhanced.”


             The Honorable George P. Shultz, Former Secretary of State
“How to Gain a Climate Consensus,” Washington Post, 5 September 2007

                                                                 91
   George Soros
“[A cap and trade] system can be gamed. That’s why
financial types like me like it – because there are
financial opportunities. A carbon tax would be
better.”

                                            George Soros
                   London School of Economics, 5 July 2007



                                                         92
     Congressman John Dingell
“Some form of carbon emissions fee or tax would be the
most effective way to curb carbon emissions and make
alternatives economically viable… History shows that we
respond to market forces. Between 1980 and 1981, the fuel
economy of the vehicles Americans purchased increased
16 percent. That wasn't because of a technological
breakthrough or a regulatory requirement. It was because
the price of gas had risen to the point where consumers
made fuel economy a priority. Market forces and
mechanisms proved far more powerful than mandates.”
           Rep. John Dingell, Chairman, House Energy and Commerce Committee
                 “The Power in the Carbon Tax”, Washington Post, 2 August 2007
                                                                      93
           Detroit Free Press
“A tax on carbon dioxide emissions, phased in gradually but
relentlessly, would be the most transparent and efficient
step this country could take in the search for energy
independence and reductions in many emissions, including
carbon dioxide. It would send a hugely important signal to
the markets — for cars and for alternative energy sources
such as windmills and solar collectors, in particular — that
innovation and conservation are essential.”

“Keep Carbon Tax in the Mix of Solutions,” Detroit Free Press, 12 July 2007
                                                                      94
              The Economist
“Most economists agree that carbon taxes are a better way to reduce
greenhouse gases than cap-and-trade schemes. That is because taxes
deal more efficiently than do permits with the uncertainty surrounding
carbon control… [So] why are politicians so reluctant to impose
carbon taxes in the first place? Many politicians pretend that carbon
taxes will hurt consumers more than a cap-and-trade scheme, even
though the cost of carbon permits will be passed on to consumers just
as quickly as a tax. But the biggest problem, at least politically, is that
carbon taxes are transparent and simple, whereas cap-and-trade
systems are complicated and conveniently opaque. Under a cap-and-
trade scheme, governments can pay off politically powerful polluters
by giving them permits.”
                            “Doffing the Cap,” The Economist, 12 July 2007
                                                                      95
AEI Analysis of Caps vs. Taxes
“A program of carbon-centered tax reform, by contrast, lacks
most of the negative attributes of cap-and-trade, and could
convey significant benefits unrelated to GHG reductions or
avoidance of potential climate harms, making this a no-regrets
policy. A tax swap would create economy-wide incentives for
energy efficiency and lower-carbon energy, and by raising the
price of energy would also reduce energy use. At the same
time, revenues generated would allow the mitigation of the
economic impact of higher energy prices, both on the general
economy and on the lower-income earners who might be
disproportionately affected by such a change.”

          American Enterprise Institute for Public Policy Research,
                   “Climate Change: Caps vs Taxes”, June 200796
The Washington Post
“….a coalition of academics and polluters now argues
that a simple tax on each ton of emissions would offer
a more efficient and less bureaucratic way of curbing
carbon dioxide buildup, which scientists have linked
to climate change.”



The Washington Post “Tax on Carbon Emissions Gains Support”,
                                               April 1, 2007
                                                               97
Resources for the Future

“I find that price mechanisms produce expected net
gains five times higher than even the most favorably
designed quantity target.”



    Pizer, William, “Choosing Price or Quantity Controls for Greenhouse Gases.”
                                                                      July 1999


                                                                             98
Clean Air Watch
“Allowances are a public good and should not be
given away for free. Instead, polluting companies
should be required to purchase the allowances. The
revenue from the sale of the allowances could then be
utilized for public benefits – including energy
efficiency and renewable energy investments, worker
transition, habitat preservation, and adaptation to the
impacts of climate change (e.g., constructing sea
walls). In other words, the polluters would pay for the
costs resulting from and made necessary by the CO2
pollution.”
            Clean Air Watch, “Should Polluters Own the Sky?”, June 2007

                                                                          99
          SIGNIFICANT SUPPORT FOR CO2 TAX/FEE
GOVERNMENT OFFICES/PUBLIC OFFICIALS
Stavros Dimas, EU Environment Commissioner.
Al Gore, the 45th Vice President of the United States
Congressional Budget Office
Paul Volcker, Former Chairman of the U.S. Federal Reserve
Alan Greenspan, Former Chairman of the U. S. Federal Reserve
Senator Christopher Dodd
Congressman John Dingell
Congressman Pete Stark
Congressman Jim McDermott
Bill Bradley, former U. S. Senator from New Jersey
George P. Shultz, former Secretary of State

ENVIRONMENTAL SCIENTISTS
James Hansen, Director of the NASA Goddard Institute for Space Studies and Adjunct Professor of Earth and Environmental Sciences at
    Columbia University's Earth Institute.
William H. Schlesinger, Dean of the Nicholas School of the Environment and Earth Sciences.
S. Fred Singer, Professor Emeritus of Environmental Sciences at the University of Virginia.
J. Thomas McKinnon, Professor of Chemical Engineering at Colorado School of Mines.
Herman E. Daly, author and Professor in the School of Public Policy at the University of Maryland

BUSINESS LEADERS
Duke Energy - Paul Anderson, Chairman and Chief Executive Officer
Ken Cohen, ExxonMobil’s Vice President for Public Affairs
Rex Tillerson, CEO, ExxonMobil
Peter Darbee, Chairman, President and CEO of PG&E Corp.
Steve Rowlan, Director Environmental Affairs, Nucor (major steel manufacturer)
George Soros, Global Financier & Philanthropist
Glenn Cannon, General Manager, Waverly Light and Power and Past Chair of the American Public Power Association
Bruce Williamson, CEO Dynegy                                                                                                  100
Lewis Hay III, Chief Executive of FPL Group
ECONOMISTS
Greg Mankiw, Professor of Economics at Harvard University (and former Bush chief economist)
Paul Krugman, Professor of Economics, Princeton, and New York Times Op-ed columnist
Joseph Stiglitz, Professor of Economics at Colombia University
Charles Kolstad, Co-editor of the Review of Environmental Economics and Policy and a former president of the
        Association of Environmental and Resource Economists (AERE), author of Environmental Economics textbook
William D. Nordhaus, Sterling Professor of Economics at Yale University.
Edward Snyder, Dean of the University of Chicago’s Graduate School of Business
Richard Pierce, Lyle T. Alverson Professor of Law; George Washington University
Stephen Schneider, Professor, Stanford University
Robert Shapiro, Chairman of Sonecon LLC
Ray Kopp, Senior Fellow, Resources for the Future
William A. Pizer, Senior Research Fellow for Resources for the Future (RFF)
Robert Stavins, Environmental Economist, Harvard University
Economics Columnist Daniel Akst
Financial Journalist Doug Henwood
Robert Reich, Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley,
        former Secretary of Labor and co-founder of The American Prospect

THINK-TANKS/ ENVIRONMENTAL ORGANIZATIONS
Kevin Smith, Researcher with Carbon Trade Watch
Lawrence H. Goulder, Shuzo Nishihara Professor of Environmental and Resource Economics at Stanford University,
    University Fellow, Resources for the Future
Resources for the Future Report (New Approaches on Energy and the Environment: Policy Advice for the President)
Ian W.H. Parry, Senior Research Fellow at Resources for the Future
Lester Brown, Founder and President of Earth Policy Institute
Erich Pica, Director of Environmental Economics Program at Friends of the Earth.
Kevin Hassett, Director of Economic Policy Studies, American Enterprise Institute
Michael Canes, Senior Research Fellow with Logistics Management Institute
American Enterprise Institute
                                                                                                                               101
JOURNALISTS/COLUMNISTS
Gregg Easterbrook, Author, Senior Editor for the New Republic
Jonathan Rauch, Senior writer for the National Journal
Thomas Friedman, Author, Three time winner of Pulitzer Prize.
Andrew Sullivan, Journalist, Former Editor for the New Republic
Holman W. Jenkins Jr., Wall Street Journal Business Columnist
David Brooks, the New York Times Op-ed columnist
David Leonhardt, the New York Times Economics Columnist
Sebastian Mallaby, Washington Post Op-ed Columnist, A Dated Carbon Approach, July 10, 2006
Paul Rogers, Columnist in the Mercury News
Jeffrey Ball, Wall Street Journal Columnist
Steven Mufson and Juliet Eilperin, Washington Post Staff Writers
Martin A. Sullivan, Contributing Editor in Tax Analysts Publications
Anne Applebaum, Washington Post Op-Ed Columnist
Phil Izzo, The Wall Street Journal, Columnist.
John Tierney, The New York Times, Columnist
Wayne Madsen, Salt Lake Tribune
Brian Schimmoller, Contributing Editor, Power Engineering
The Christian Science Monitor
Fareed Zakaria, Newsweek Columnist
The Nation Magazine
Robert Robb, Arizona Republic
Nicole Gelinas, Contributing Editor to City Journal
Steve Chapman, Chicago Tribune Editorial Board Member
Los Angeles Times
Detroit Free Press
                                                                                             102

								
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