Global Climate Change
MidAmerican Energy Holdings Company supports well-designed policies to reduce greenhouse gas emissions. We have been industry leaders in offering energy efficiency and demand-side programs to our customers, and are constantly looking for opportunities to enhance these programs in a cost-effective manner.
Since the United States has relied on a carbon-based economy for approximately 200 years, the transition to a low-carbon economy will not happen overnight. Reducing greenhouse gas emissions must be placed in the context of satisfying the nation’s growing demand for electricity while ensuring access to affordable electricity. If climate change and energy policies conflict, the economic consequences – particularly for low- and fixed-income customers – will be severe.
Nowhere was this more apparent than in America’s Climate Security Act, legislation considered by the U.S. Senate in June 2008. The bill, with a cost estimate of $6.7 trillion, would have had an historic impact on energy use and economic activity in the United States. After the bill was pulled from the Senate floor, moderate senators of both political parties came to the realization that a more balanced approach is needed, and key issues were identified: cost containment, investing in technology research and development, protecting working families, protecting U.S. manufacturing and competitiveness, clarifying federal and state authority and accountability.
To achieve greenhouse gas reduction targets of 60-80 percent by 2050, it is critical to deploy a variety of low-carbon technologies, such as clean coal, carbon sequestration and advanced nuclear power, by 2020. MidAmerican has proposed the federal government and electric utility industry collaborate on an eight-year program, beginning in 2009, to develop and deploy the technologies needed to reduce emissions in a cost-effective way. By using the same mission-based approach that put a man on the moon in 1969, the United States can develop clean technologies needed for a low-carbon future.
MidAmerican’s position on climate change also is guided by the following corporate beliefs:
- In the short-term, MidAmerican is investing in renewable generation sources and energy efficiency programs for customers to help reduce the increasing demand for electricity, while addressing environmental concerns. However, no technology currently exists to reduce greenhouse gas emissions from existing generation sources used to meet historical energy demand.
- To achieve the significant carbon emissions reductions by 2050 that policymakers desire, the United States needs the vision and commitment Congress demonstrated with the Apollo program in 1961. In the next 10 years, a significant investment must be made in research and development to create and field-test technologies that are commercially viable and that will accomplish carbon reductions. The technology must then be implemented over the following years so the desired reductions in carbon emissions can be realized by 2050.
- Recent history shows that Congress alone cannot provide the needed and sustainable funding for the required new technology programs. MidAmerican proposes the process be jump-started by instituting a fee of at least one-tenth of a cent per kilowatt-hour of electricity consumed. This money would be collected and used to fund public/private partnerships that are necessary to develop the new technologies required to achieve meaningful reductions of greenhouse gas emissions.
- Technology investment and deployment should then be followed by a regulatory mechanism to reduce greenhouse gas emissions. Premature implementation of a mandatory reduction requirement, including a cap and trade policy, with emissions reductions targets and timelines out of synch with available technology, will cause increases in energy prices without accomplishing the policy’s intended objective of reducing emissions. Without sufficient technology development, a cap and trade policy becomes nothing more than a tax on emissions, while allowing the same emission levels to exist.
- MidAmerican believes this approach is the lowest-cost model capable of delivering the targeted carbon emissions reductions that have been adopted or discussed by lawmakers in Congress and in many states.