Energy Watch: Electric utilities and their beholden politicians use economic crisis to argue for free carbon pollution permits

The Associated Press published a story earlier this week examining how the economic crisis might interfere with efforts to cap the greenhouse gases emissions that are disrupting the earth's climate.

The first source quoted by the AP was a spokesperson for Duke Energy, a major greenhouse gas polluter. Duke's executives have a record of speaking out of both sides of their mouths when it comes to the climate (and in fact the company is the target of a protest being held today over its construction of a heavily polluting coal-fired power plant in western North Carolina). But you wouldn't know that from the AP story, which presents the Charlotte, N.C.-based company as a paragon of climate virtue:

"Clearly it is somewhere down the totem pole given the economic realities we are facing," said Tom Williams, a spokesman for Duke Energy Corp., an electricity producer that has supported federal mandates on greenhouse gases. Duke is a member of the U.S. Climate Action Partnership, an association of businesses and nonprofit groups that has lobbied Congress to act.

It's true that Duke is a member of the U.S. Climate Action Partnership, which has spoken in favor of a market-based cap-and-trade approach to controlling carbon dioxide emissions. But Duke is also a member of the American Coalition for Clean Coal Electricity, which lobbied against and ultimately helped kill a proposed federal cap-and-trade program because it did not give away emissions allowances to big polluters.

Duke is currently tied for third place with Virginia-based AES Corp. among the top carbon dioxide-polluting U.S. electrical utilities, according to Carbon Monitoring for Action. American Electric Power of Ohio is first, followed by The Southern Company of Georgia.
 

U.S. Rep. Rick Boucher, a Virginia Democrat, told the AP that the current economic downturn means Duke and the other big utilities should be given free permits to pollute. He and Rep. John Dingell (D-Mich.) released a draft of a bill last week that would do just that.

The AP story didn't report just how beholden Boucher and Dingell are to electrical utilities. The industry is by far the top contributor to Boucher's campaign, having given him $710,560 during his time in Congress, according to OpenSecrets.org. Electrical utilities are also the top industry contributors to Boucher's 2008 campaign, donating $188,397. Among all House members, Boucher is the third-biggest recipient of electrical utility money during this campaign cycle.

The House's top recipient of the industry's money this election season, with a haul of $302,600? Dingell.

Not everyone agrees that auctioning off pollution permits would further damage the broken economy, though. Some lawmakers say the government revenues raised from selling the permits could actually spur economic growth.

They include Democratic presidential nominee Sen. Barack Obama, who wants to auction off all permits and invest the money in alternative energy development. While Republican nominee Sen. John McCain also supports cap-and-trade, he would give away most of the permits to the biggest polluters.
 

The AP story limited its discussion of reining in carbon emissions to the cap-and-trade approach. But there's an alternative to complex and potentially loophole-ridden cap-and-trade schemes: a simple carbon tax, levied on carbon-based fuels such as coal, oil, and gas at the point they're extracted from the earth or imported into the United States. Leading climate scientist James Hansen of NASA has called for a carbon tax with 100 percent of the dividends deposited equally each month in individuals' bank accounts.

The Carbon Tax Center blog recently noted that the Alaska Permanent Fund -- which landed in the national spotlight after McCain picked Gov. Sarah Palin as his running mate -- offers a model for distributing carbon tax revenues in revenue-neutral and progressive fashion by returning them equally to all U.S. residents. Each year the fund sends every Alaska resident an identical check drawn from investing the state's North Slope oil royalties.

Under Palin, Alaska added $1,200 to the annual checks sent to residents. As a result, every eligible man, woman and child in the state got a check this year for $3,269 -- a record amount.

[CORRECTION: The original version of this post said that the Alaska Permanent Fund sent residents a check drawn from the state's oil royalties. In fact, that check was drawn from investing the oil royalties. The extra $1,200 added under Palin came straight from oil revenues -- royalties and taxes -- in the state's general fund. Thanks to APF's Laura Achee for the clarification.]