In another sign that the energy industry is preparing for the inevitable crackdown on emissions, the CEO of Duke Energy, Paul Anderson, announced today that the time has come for the US to adopt a mandatory nationwide carbon dioxide tax—a move which has some shareholders a bit perplexed. To quote Anderson:
You can imagine the reaction I get when I say ‘carbon tax’ in the hall’s of Duke Energy. 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.
Even so, there have been other signs that energy companies feel compelled to act, as many in the financial community feel that the time has come to hedge their bets against impending CO2-reduction standards in the future. With the passage of the Kyoto Protocol earlier this year, many shareholders of energy corporations are already demanding to know how their companies are preparing to meet requirements and protect their investments against lawsuits and fines.
According to Anderson, although a national tax would mean bigger utility bills and higher gas prices, unless the industry takes the lead, the long-term outcome could be even more disastrous:
“If we (the 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.”
As we’ve seen recently with mercury emissions reduction passages, inadequate federal rules—or the lack of them—can spur states into taking action of their own. Already, nine states have sued the EPA over its mercury plan, and are looking ahead to creating stricter plans of their own. Anderson acknowledged that the U.S. is not likely to see a carbon tax until we see a new president, but that the time has come to be proactive and help shape policy at the federal level.