March 9, 2010

Exelon CEO John Rowe continued to beat the drum for a carbon price at the MIT Energy Conference this weekend.

          "Approaches that put a price on carbon emissions, such as cap-and-trade, remain the only solutions to our energy and climate challenges that give us cleaner, more secure energy while minimizing the costs to consumers and putting more people to work," said Rowe.

          Despite advocating a price on carbon for nearly two decades and seeing legislation make it out of the House last year, Rowe noted some bumps in the road.  Democrats lost their filibuster-proof majority in the Senate and except for the work of Sen Lindsey Graham, R-SC, most Republicans seem to be drifting to a more negative solution.

          "The attention of the Senate seems solely focused on health care," said Rowe.  "And we are entering that time every two years where lawmakers start to focus on re-election at the expense of policymaking.  Everyone knows we need to move to lower CO2 energy supplies, though in the electric sector disagreements over what that supply will look like abound.  Greater energy security and a policy that gives durable, sustainable jobs are also needed."

          Rowe believes that a cap-and-trade system or a carbon tax are the only policy frameworks that achieve all of those outcomes.  That policy will force utilities and other emitters to do the cheapest things such as efficiency and nuclear up-rates first, then the other items in merit order until the cap is met.

          "We must have a system that uses the discipline of the market to control costs," said Rowe.  "Prices may rise, but they will rise less than they would with cruder tools."