Thursday, October 15, 2009
Cap-and-trade is the wrong approach
From the RoundTable blog
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Robert Sells
Sells is the president of the Mid-Atlantic Business Unit for Titan America LLC in Roanoke.
As the owner of Virginia's only cement plant, which is the largest employer in Botetourt County, and with our parent company headquartered in Greece, I think Titan America LLC can offer important perspectives on the current discussion regarding H.R. 2454, the Waxman-Markey cap-and-trade legislation, and similar greenhouse gas legislation like the Kerry-Boxer bill, soon to be considered by the U.S. Senate. A similar cap-and-trade regime has been in place in the European Union for several years.
A study prepared last year by the Boston Consulting Group found that the EU's system is damaging the competitiveness of businesses in Europe and favoring countries that have no emission constraints. As a result, companies like ours in Europe are moving to other countries. We should not allow this to happen in the United States.
Moreover, the study found that greenhouse gas emissions would not decrease on a global level but rather be merely displaced, and possibly increased due to additional emissions in transportation.
I am therefore concerned to see Congress considering establishing similar requirements in our country.
We are committed to promoting a clean environment. Titan America has a stellar environmental record and has received numerous awards from government and industry groups for our efforts to promote a better environment. The Roanoke Cement Co. is highly dependent upon coal for our manufacturing process. We support clean-coal technology, but such technology is not available today to meet the standards required by the Waxman-Markey bill.
While we heard that the Senate legislation would likely be more reasonable than the legislation that passed the House, we were discouraged to learn recently that the legislation released by Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment and Public Works Committee, and Sen. John Kerry, DMass., chairman of the Senate Foreign Relations Committee, requires that greenhouse gas emissions be reduced by 20 percent by 2020; this is a higher standard than was passed by the House.
This legislation will place burdensome and unworkable requirements on American businesses that some of our biggest economic competitors like China and India will not have to endure. The undesirable consequence is that companies will relocate to countries in which they will have less strenuous requirements.
We are concerned that a greater opportunity for true investment in energy reduction, energy efficiency and renewable/alternate energy is being missed at the expense of instituting a large government bureaucracy. The Senate should scrap Waxman-Markey-type legislation and develop legislation that protects our environment and our economic interests.
The Senate should develop legislation that creates incentives for developing new and renewable energy sources, invest in energy-efficient technology, build energy-efficient buildings, create jobs and get an economic return on the investment.
The United States should consider an approach that: provides incentives such as tax or investment credits for innovators and implementers of new clean energy technologies; places a reasonable carbon tax on the use of fossil fuels and electricity only to fund the program and investments in research; and ensures that the revenues go to the development of alternate and renewable energy, energy efficiency and measures that actually will protect people from the effects of greenhouse gases.
The Obama administration needs to pursue this issue on an international basis to seek a global solution that does not put requirements on businesses in this country that are not placed on others around the world.
