College of Business: University of Illinois at Urbana-Champaign

Important Site Links

Panel of Experts Discuss Environmental Regulations


11/2/2010

by Sarah Small

The Center for Business and Public Policy hosted a talk on October 19, titled “Environmental Regulations: Building a Low Carbon Society,” which included lectures from three experts in the field of environmental regulations. The presenters focused their discussion on current and developing environmental regulations in the United States, and provided various viewpoints on the necessity for carbon emissions regulations and the challenge of establishing such regulations while still maintaining the stability of utilities in the marketplace.

Although the three speakers presented different perspectives on the current state of environmental regulations, they generally shared the same concerns: that some form of carbon emission regulation, such as a cap-and-trade policy was necessary, and that it is important to find a way include clean-energy utilities in the marketplace. Another key factor discussed at length was the repercussion of waiting too long to establish an environment in which clean-air technologies can thrive.

“What is abundantly clear in this environment that I’ve described is that electric utilities have a leading role in charting the course of the clean energy future, as uncertain as that path must be,” said William Von Hoene, executive vice president for financial and legal at Exelon Corporation. “The uncertainty in that path is a very, very important ingredient upon which I will focus today because it’s that uncertainty that has made our industry reluctant to make a large-scale investments needed to make the transition into a clean energy future.”

He presented many of the options for energy technologies, like coal, natural gas and renewable energies, but emphasized that there was no “silver bullet” out of any of the solutions available.

“This issue that we have in terms of picking the right source is compounded by what we like to refer to as a perfect storm of political and economic challenges that has made it an especially difficult transition to clean-energy sources,” Von Hoene said.

He referenced the inconsistency in carbon and environmental regulations in the United States at the current time, and he also called upon Congress’s inability to establish set regulations that would add definition and resolution to current uncertainties in the energy industry, and allow it to begin growing and advancing.

“Once the industry gets some clarity around how emissions will be legislated or regulated, and therefore which clean energy object will make best economic sense, we can then start to make significant investments that will help the economy and create jobs,” Von Hoene said.

Mark Brownstein, deputy director of the Environmental Defense Fund’s energy program, also spoke out about the absence of nationwide legislation.

When he began his presentation, he spoke of his disappointment that his lecture would not be on explaining the meaning behind newly-signed clean-energy legislation, because, in fact, the legislation that had been proposed just weeks before did not get passed.

Undeterred by the failure of the proposed legislation, Brownstein chose instead to take a progressive approach by discussing what did not work in the attempt to pass new legislations, and what needed to be done in order to be successful the second time around.

“Clearly partisan politics played a role in our inability to get climate legs done, but we knew going in that this would be about more than partisan politics, this was going to be about regions,” Brownstein said.

He spoke about how various regions of the United States depended more or less heavily on energy sources, like coal in Illinois, and how that dependence shaped people’s perspectives on whether or not rewriting environmental legislation would make sense economically and socially. In addition, the weakened economy was a main factor for the proposed bill not being signed into law.

Until national environmental regulations can be passed, Brownstein said the major role of regulating would come individually from the states, and he said that 30 states have established portfolios for renewable energy.

The third speaker, John Anda, vice chairman and head of environmental markets for USB Securities looked at the topic of environmental regulations for an economic-heavy perspective. He challenged the audience to think about how developing clean-air technologies and energy will find a place in the utility marketplace. One of the greatest challenges, he said, was finding a way to make money from using new technologies.

You want to set up incentives where the shareholders of utilities say, ‘Yeah, do that,’ Anda said. “But let’s find a way to do it so the industry can make money.”

Overall, the theme of the discussion was “uncertainty” from the perspectives of all three presenters. While each could offer his own perspectives on what needed to be done to facilitate the development of clean-energy technologies and help these technologies find a place on the utility marketplace, the current political, social and economic climate makes the creation of definite solutions difficult.

“We have a paralysis of sorts in terms of our national energy policy and we’re all here today to talk about ways to advance forward in that paralysis,” Von Hoene said.

   


UIUC College of Business