The Pike County Chamber of Commerce will give its members a forum in which to discuss pending cap and trade legislation — which could result in extreme economic repercussions especially in Central Appalachian communities that are dependent upon fossil fuels — during an upcoming Membership Breakfast.
The legislation would create a cap, that is a limit, on how much carbon dioxide, or CO2, companies can emit. Any CO2 produced that is over the cap would require a permit, or credit, for every ton of CO2 emitted. Companies that produce more CO2 than the cap allows will have to purchase credits from companies that produce less than the cap. This is the trade portion of the bill.
In effect, companies who emit more CO2 will pay a charge for polluting, while those industries which produce less will benefit by selling their credits to companies such as power plants, who produce CO2 from burning coal to produce electricity.
The goal of such a program is to lower emissions; the cap will gradually be lowered over time to meet a target in a reduction of greenhouse gases.
If the cap is set by proposed legislation, companies may be free to choose how, or if, they will reduce their emissions. In theory, firms will choose the least costly way to comply with the legislation.
But how much money would companies such as a power company need to buy credits needed to cover the CO2 produced by burning coal to produce electricity? That is the current controversial question.
Certainly, the cost of carbon credits needed by power companies would be passed on to consumers. But the amount that would be paid by customers varies, depending on the group supplying the numbers.
The Congressional Budget Office (CBO) did an analysis of the bill. According to the CBO, the climate legislation would cost the average household only $175 a year by 2020.
However, the Heritage Foundation, a conservative think tank, did an analysis of the legislation, basing their research on a broader economic picture, and says the bill would cost the economy $161 billion in 2020, which is $1,870 for a family of four.
Certainly, the coal industry would be directly impacted. As the cost of burning coal would increase, companies using coal would necessarily lower their costs by using less coal.
Coal mining, which provides more than half of the nations electricity, generates more than 550,000 jobs nationwide, contributing $8.2 billion in payroll, according to a study by the National Mining Association. Total economic output from coal approached $80 billion in 2007.
In Kentucky, 90 percent of the states electricity comes from coal generated power plants. Kentucky is third in the nation in coal production, generating over $3 billion in sales and hundreds of millions in tax revenue. The Kentucky coal industry employs more than 11,000 people. Kentucky also produces 30 percent of the nations steel and aluminum, another industry which would feel major impact from cap and trade legislation.
While no hard numbers are available to represent the number of mining-related jobs that would be lost in Kentucky, legislators in the commonwealth fear the bill would substantially increase electric rates, result in layoffs in Kentucky’s manufacturing base as well as result in massive job layoffs in those industries that are most adversely affected coal, steel, aluminum smelters and other energy intensive industries.
Proponents of cap and trade legislation say the pay-off is worth the costs. Increased costs for coal burning power plants would open the stage for alternative energy industries, such as wind and solar power. The theory is that while jobs in the coal industry would decline, job opportunities would increase in industries that produce alternative energy sources or that provide ways to save energy.
The Membership Breakfast will be Tuesday, Sept. 1, at the Bob Evans Restaurant in the Wedding Plaza, North Mayo Trail, Pikeville. Cindy May Johnson, East Kentucky Broadcasting, will be the master of ceremonies and moderator for the event which will begin at 8 a.m. Admission is $10.
For more information or to RSVP, contact the Chamber at 606 432-5504 or info@pikecounty chamber.org.