A Free-Market Energy Blog

Ken Lay to California II: BLOCK the PROP (A.B. 32 is ‘Not a Sprint but a Marathon’)

By Robert Bradley Jr. -- October 5, 2010

Yesterday, an op-ed by the late Ken Lay urged for climate action as a easy winner in benefits versus costs–something that was hardly true when he said it and known to be untrue now. Drastic action barely registers on the temperature/sea level/precipitation scale.

Here is Ken Lay (with Roger Sant) a year later with more advice for California in its current debate over whether to pass California’s Prop. 23, a measure to suspend the Global Warming Solutions Act of 2006 (AB 32).

Enron had seven profit centers tied to regulating carbon dioxide (CO2). What ‘Enrons’ are involved in the climate scare today?

The op-ed from September 1998 follows:

Kenneth Lay & Roger Sant, “Controlling Climate Change: It Is Not A Sprint, It Is A Marathon.” The Energy Daily (September 1, 1998)

Man-made emissions of certain gases—primarily carbon dioxide from burning fossil fuels—could alter the world’s climate in the next century. The threat is long term and global, but the current debate is too narrowly focused on a 10 to 15 year target.

Although there is some disagreement among scientists on the rate at which climate change will occur or whether is already occurring, there is little doubt that world population growth, economic growth, inefficient energy use and heavy reliance on fossil fuels are a potentially disastrous mix.

As energy company executives, we are aware of the difficulty of meeting the climate change challenge. The good news is that we have time. The race, however, is not a sprint. It is a marathon. If we start sprinting—focusing primarily on emissions reductions in the next decade—we risk squandering our resources. But this is not a call for inaction. If we fail to start now, we will not finish in time.

One hundred energy and environmental leaders with very diverse views recently gathered at the Aspen Institute in Colorado to discuss climate change. We were encouraged to speak for ourselves and not be bound by our companies’ or organizations’ positions, and we were surprised at the level of consensus we reached.

We believe a broad bipartisan majority of Americans could agree with these eight conclusions of the Aspen group.

1. Take a long-term focus.

Climate change is a long-term problem, and the focus should be on achieving sustainable levels of greenhouse gas concentrations at the least cost, not merely on near-term emissions reductions. Nevertheless, certain early actions, based on industry and other public suggestions, are desirable to develop institutions, mechanisms, technologies and domestic and international support for long-term programs.

2. Do not reject the Kyoto Protocol nor seek its ratification now.

The protocol agreed to last December and signed so far by 49 countries would require the U.S. to reduce greenhouse gas emissions by 7 percent by 2008 to 2012. It is an imperfect agreement that cannot be accepted unless it is improved.

Submission to the Senate now for the promised quick rejection would remove the U.S. from a constructive political leadership role and put America at a competitive disadvantage in the development of a sustainable energy system. A delay offers an opportunity that should be attractive for both proponents and opponents to broaden the international base of support and participation, to begin to reduce the cost of compliance, and to take the issue out of the partisan political area in 1998 and 2000.

3. De-politicize the issue and educate the public.

U. S. political and intellectual leadership should undertake a high-priority effort to increase public understanding of the issues, moderate the political aspects of the debate and develop a broad public consensus that can be sustained through many electoral cycles.

One option for the administration to consider is the establishment, in consultation with Congress, of a bipartisan blue ribbon commission to lead in the development of a national consensus. Former presidents, Nobel Prize winners and leaders of similar stature could help put the debate on a constructive plane.

4. Establish bilateral programs with developing countries.

A major concern with the Kyoto Protocol is the failure of key developing countries to participate. As the expected largest emitters of greenhouse gases in the next century, they must be a part of any solution, yet their immediate economic needs make it difficult for them to commit resources to solving a future problem that they argue was caused by the industrialized nations.

The administration should work aggressively and quickly to establish bilateral carbon reduction programs with countries such as China, India and Brazil. A focus on an early start toward cost-effective energy efficiency and a long-term reduction in the dependence on fossil fuels would allow them to participate in an international climate change approach while also contributing to their economic development.

5. Increase R&D

To reduce the cost of eventual stabilization of greenhouse gas concentrations in the atmosphere, we should significantly increase public and private spending for research and development of lower carbon and carbon-free fuels, technologies and systems, including end-use efficiency and the capture and non-atmospheric disposal of carbon dioxide.

Such spending should build on the successes and failures of past programs. Coordination between public and private research efforts should be increased, and the commercial deployment of successful technologies should be left to the private sector.

6. Set the rules for crediting early voluntary reductions.

Many industries are ready and willing to make voluntary emission reductions now. They fear, however, that any future program will take their lower emissions as a new baseline. The government, with broad industry and other public involvement, should quickly establish rules for crediting these voluntary emissions reductions against any future requirements.

7. Review barriers to innovation.

Many lower carbon technologies and more efficient systems are available now, but long-standing laws and regulations often discourage their adoption. These barriers should be reviewed and, where more valuable objectives are not being served, should be removed promptly.

8. Ensure policies are flexible.

We know enough to begin action now, but we also know from experience that we should expect surprises. Any governance mechanisms and policies we adopt should be sufficiently flexible to adapt to changing scientific knowledge and to the lessons we learn during implementation.

Adoption of these Aspen recommendations will help prepare us to win the climate change marathon. It is a race we cannot afford to lose.

Lay is chairman and CEO of Enron Corporation; Sant is chairman of AES Corporation and of the World Wildlife Fund. The views expressed are their own.

One Comment for “Ken Lay to California II: BLOCK the PROP (A.B. 32 is ‘Not a Sprint but a Marathon’)”

  1. Chip Knappenberger  


    Here are a few specifics for California showing how ridiculous the debate over AB 32 really is.

    California, currently, produces about 400 million metric tons of CO2 annually.

    China, during the past 5 years, has grown its annual CO2 emissions by about 400 mmtCO2 per year.

    So, if California stopped all CO2 emissions now and forever, new emissions from China would completely replace California’s halted emissions in just one year’s time. And AB 32 doesn’t come close to halting California’s CO2 emissions now and forever, in fact, it only mandates a roll back to the 1990 emissions levels by 2020 and constant thereafter.

    At current growth rates, China will replace all that AB 32 could ever hope to achieve—and all the aches and pains that would come along with it—in only a few months.

    Clearly, AB 32 is merely hollow do-gooding and political posturing. It is completely meaningless when it comes to the climate—local, regional, or global.



Leave a Reply