PSEG's Izzo Says 'Cap-and-Innovate' Best Way to Combat Climate Change

In a commentary published in the Washington Post, Ralph Izzo, chairman, president and CEO of the Public Service Enterprise Group, said that the cap-and-trade approach will bring about energy innovation. Izzo said the key to the process will be understanding the playing field: "My company has a clear responsibility to combat climate change--and we're ready. Utility executives are used to making multibillion-dollar investments with time horizons of 40 years or longer, but to make these investments, we need to know the rules. We must be told that there will be a price on carbon, and we need to know how it will be set."

To achieve the goal of a clear playing field, Izzo said that the proposed cap-and-trade process should be called cap-and-innovate: "Setting a price for carbon emissions won't just build momentum for an international climate accord; equally important, it will give companies an economic foundation for investments in energy efficiency and clean energy, unleashing the innovation that only a well-functioning market can provide."

Izzo said Congress must act to mitigate the call to continue to delay action: "Some say it is too expensive, even though the best estimates place the costs of a comprehensive greenhouse-gas-reduction strategy at a tiny fraction of the world's economic output per year. Some say global warming isn't occurring, despite overwhelming evidence to the contrary, from melting glaciers to the disappearance of vast stretches of Arctic sea ice. Some say progress is impossible, because nations such as China will not shoulder their share of the burden--but this ignores the things that these countries are doing to improve their environmental practices and to invest in wind, solar and other green technologies."

Cap-and-innovate should be the first step, Izzo said, because "we will become less dependent on foreign energy. We will create green jobs. And we will foster technological innovation that can be applied elsewhere. But if we do nothing, not only will we face ecological catastrophe, we will likely suffer economically as well. We will remain excessively dependent on foreign oil, and we will lag in the emerging global green economy. Addressing climate change won't be free, but the cost of not taking action will be far greater."