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Summary:

At the opening dinner for the Forbes Energy conference on Tuesday night in New York, three former secretaries discussed their opinions about necessary energy and climate change policy, and at least two of them were in strong agreement that a cap and trade system in the U.S. would be bad for business.

In the bubble of the Bay Area it’s easy to forget that there’s not a consensus on carbon regulation out there. At the opening dinner for the Forbes Energy conference on Tuesday night in New York, three former secretaries discussed their opinions about necessary energy and climate change policy, and at least two of them were in strong agreement that a cap-and-trade system in the U.S. would be bad for business.

Both James Edwards, who was Secretary of Energy under President Reagan from 1981 to 1982 and John Herrington, Secretary of Energy under Reagan from 1985 to 1989, said a cap-and-trade system won’t work, will raise costs for consumers, and hurt business.

Edwards and Herrington have long Republican political careers and oppose cap-and-trade systems, which set up a limit and market system to reduce companies’ green house gases, partly because they believe in lighter government interference. But both were very vocal about how they think a cap-and-trade system will hurt the U.S. economy in these difficult times. Cap and trade is “an industrial manager’s nightmare,” and will “destroy industry in America,” said Edwards, who was also the Governor of South Carolina from 1975 to 1979. Herrington said cap and trade is “the wrong direction to go,” for this country.

The third Secretary of Energy on the panel, Spencer Abraham, who served between 2001 to 2005 under President George W. Bush, also expressed his reservations about a cap-and-trade system, but acknowledged that a system would likely be implemented eventually in the U.S. The business community has started to get behind this because they see it as inevitable, and no one wants to pass a carbon tax, said Abraham, who has also had a long Republican political career.

Implementing some sort of cap-and-trade system in the U.S. has gained widespread support over the past year. During the recent presidential campaign both Barack Obama and John McCain ran on a platform that supported implementing a cap and trade system. At this point it’s unclear when, or if, President-elect Obama will push for adoption of such a system, but we’ll learn about how realistic his election pledges were in 2009 as he sets his agenda. Regardless, based on the assumption that such a system will emerge in the U.S., major banks Citigroup, J.P. Morgan Chase and Morgan Stanley drew up The Carbon Principles earlier this year, aimed at guiding the way in which they could finance coal plants and other forms of electricity generation.

While Edwards and Herrington were riled up over cap and trade, Abraham’s biggest issue was actually with people who fight both climate change and nuclear power. It’s impossible to fight both, and nuclear will need to be a big part of the clean power equation, Abraham said. The other Secretaries agreed that nuclear was very important but said that they didn’t think anything would get done on that front in the next four years.

The Republican panelists were in agreement on one issue, which they expressed to the company executives and investors in the room: they weren’t too happy with the fact that Democrats are now largely in control of the country’s future for at least the next four years. That’s somewhat of a different sentiment then we’re used to hearing over in the Bay Area and Silicon Valley.

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  1. Even though I agree the “cap & trade” system will hurt the competitiveness of Industry here in the USA because other countries will not have the same policies and companies will shift more operations overseas to reduce their costs. Why don’t we make this simple and join the Kyoto protocol like the rest of the world? Also these “energy sectaries” should have rotten tomatoes thrown at them because they are the reason we’re in this energy mess, because we did not go down the path of renewable energy in the 70s. Remeber it was the Regan administration that took down the solar panels off the roof of the white house.

  2. Rise & Shine: November 13, 2008 Thursday, November 13, 2008

    [...] Former Energy Secretaries: Cap and Trade is Bad for Business 3 former secretaries discussed their opinions about necessary energy and climate change policy, and at least 2 of them agree that a cap-and-trade system in the U.S. would be bad for business. [...]

  3. I reject the partisan notion expressed by these three Republican gentlemen, none of whom took the opportunity while they were in office to do anything substantial about building new nuclear power plants, that Obama’s election means that we are stalled on nuclear power development for the next four years.

    The man I voted for frequently expressed his support of safe, clean nuclear power, told us that he wanted a better solution for used nuclear fuel than to bury it in a remote area of Nevada, and that he came from a state where 50% of the power is nuclear.

    He has also stated that “you cannot get there without nuclear” when it comes to taking action on CO2 emissions.

    Perhaps the Bay area is not as out of step with the rest of the country as the three amigos who have driven what used to be a reasonable approach to government into a morass of debts, silly social programs, and an immigration policy that prevents high motivated people from coming to America and buying homes and building businesses.

  4. Aberant News » Blog Archive » Cap and Trade Speaks for Itself Sunday, March 1, 2009

    [...] Fehrenbacher, K. (2008). Former Energy Secretaries: Cap and Trade Is Bad for Business, earth2tech.com, Retrieved March 1, 2009, from: http://earth2tech.com/2008/11/12/former-energy-secretaries-cap-and-trade-is-bad-for-business/ [...]

  5. It is the author who is making this a “partisan” issue. Do you see advocates interject the party affiliation of a proponent of cap and trade?

    Sorry, the Bay area is out of step with the rest of the country. Get ready to welcome the Mexican drug cartels to your community. Now those folks are MOTIVATED.

  6. World Research Exploration » Blog Archive » Pondering Primate November 08 Tuesday, November 10, 2009

    [...] U.S.Energy secretaries call cap and trade an “industrial manager’s nightmare”linkT. Boone Pickens delays his wind farm plan. The biggest advocate of clean energy loses billions with [...]

  7. 10 Former Politicians With Connections to Greentech Monday, January 4, 2010

    [...] startup C3. Non-executive chairman of the board for the U.S. arm of French nuclear company AREVA. Has reservations about a cap-and-trade system, but thinks that a system would likely be implemented eventually in the [...]

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