The Biggest Flaw in Cap-And-Trade? Follow the Power Lines.

The problem goes well beyond energy recycling. Right now, Congress is crafting legislation to curb U.S. greenhouse gases in order to avert a climate catastrophe. The centerpiece of that bill is a cap-and-trade system that would place an economy-wide limit on carbon-dioxide emissions and let companies trade permits among themselves--in essence, letting the free market decide how best to make cuts. But the electricity sector, which is responsible for roughly 40 percent of the country’s emissions, is anything but free or flexible. Instead, it’s governed by a bewildering patchwork of regulations that depress innovation, thwart efficiency improvements, and hinder the adoption of cleaner forms of energy. That means our best efforts to solve the climate crisis could fall short, unless we revamp the rules that shape the way we get electricity. If health care reform seems nightmarish, just wait for the fight over the grid. To grasp why we have the system we do, you have to travel back to the 1920s. At the time, the U.S. electric industry was dominated by just 16 large "power trusts" that controlled 85 percent of the nation’s electricity. The trusts were infamous for charging bloated rates and providing uneven service. Consumer protections were unheard of. "Nothing like this gigantic monopoly has ever appeared in the history of the world," fumed Gifford Pinchot, who railed against the oligarchs as governor of Pennsylvania in the 1920s and ’30s...read more