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Power company chief wants warming tax

Duke Energy's chairman said Thursday he'll lobby for a tax on carbon dioxide emissions that would reduce fossil fuel consumption and begin addressing the global warming problem.
/ Source: The Associated Press

Duke Energy Corp. will lobby for a tax on carbon dioxide emissions that would reduce fossil fuel consumption and begin addressing the global warming problem, the company’s chairman and chief executive said Thursday.

“Personally, I feel the time has come to act — to take steps as a nation to reduce the carbon intensity of our economy,” Paul Anderson told several hundred Charlotte business and civil leaders at a breakfast meeting. “And it’s going to take all of us to do it.”

Anderson acknowledged a national carbon tax would mean bigger utility bills and higher prices at the gas pump for consumers. But unless industry leaders take the lead, he said, the long-term outcome could be even more disastrous.

“If we (the U.S. energy industry) ignore the issue, we would be the easy target,” he said, referring to lawsuits against the industry. “The worst scenario would be if all 50 states took separate actions and we have to comply with 50 different laws.”

Annual report signals shift
Anderson’s speech was a follow-up to a letter he wrote last week to shareholders that accompanied the Charlotte-based company’s annual report. In the letter, Anderson vowed to be proactive in shaping national policy on global warming and climate change.

In his letter, Anderson said political leaders must break through the congressional stalemate on multi-pollutant legislation and formulate a new national energy policy.

“It is clear that the United States needs cohesive environmental and energy policies that break the continuing logjam, and we intend to take a leadership role in developing and advancing those policies,” he wrote.

“For example, we will be proactive on the issue of global climate change. By helping shape public policy, we can advance the interests of our investors and customers, while also addressing the issue itself.”

Cinergy took similar stand
Duke Energy, which ranked 86th in the recent Fortune 500 list, follows Cincinnati-based Cinergy Corp., which addressed global warming in an annual report issued last week.

“As a major coal-burning utility, some might expect us to duck this issue,” wrote James Rogers, chairman, president and chief executive. “But avoiding the debate over global climate change and failing to understand its consequences are not options for us.”

In Thursday’s speech, Anderson said the greatest attraction of a mandatory carbon tax is that “it allows us to share the cost of reducing greenhouse gas emissions across all sectors of the economy — minimizing the disruption in any one area.”

“You can imagine the reaction I get when I say ’carbon tax’ in the halls of Duke Energy,” he said. “One employee wrote me that as a shareholder, he couldn’t fathom why I would advocate a position that would discourage use of our product by potentially increasing its price.”

No change seen soon
Duke Power Co., Duke Energy’s regulated utility, relies heavily on carbon-based coal and nuclear energy to produce nearly all its power.

After his speech, Anderson acknowledged he does not expect to see a carbon tax enacted while President Bush is in the White House. Bush withdrew the United States from participation in the Kyoto Protocol, an international global warming treaty that took effect in February.

The Kyoto Treaty requires more than 30 industrial countries to reduce their emissions of six greenhouse gases by a combined average of 5.2 percent below 1990 levels by 2012.

“I don’t think this will happen during this administration,” Anderson said. “This will take several years of debate.”