Planet Gore

The world’s second-oldest profession

Duke Energy is a leading rent-seeker in the global warming debate, actually coming out in favor of a carbon tax. Owning significant nuclear assets as Duke does, one can see the logic behind seeking this competitive advantage, which might also be obtained in the form of goodies handed to them straight from the state under a cap-and-trade scheme as well, so long as nuclear operators were allocated credits for their production as if they burned coal, gas or more likely some mix (as they at least implicitly acknowledge, see below). They then sell these freebies on the market and, if they feel very continental about it (and don’t operate in regulated markets), do what the EU windfall-profit-reaping utilities do and tack on the price to the customers’ bills to the extent they use them instead by burning hydrocarbons (as will the companies to whom they sell the credits) because, after all, these things had value and if I use them up, well, then it’s only fair. But, what with the green lobby opposed to such gifts, the safer bet is in their push for the more straightforward carbon tax. I suspect their hand-wringing over global warming might ebb should the proposal be an energy tax, instead. But I’m a cynic.

Anyway, I’m a shareholder, and reading through their annual report, “Changing minds. Changing habits” (ugh), I see the following:

“There is growing consensus that some form of regulation will be forthcoming at the federal level with respect to greenhouse gas emissions (including CO2) and such regulation could result in the creation of substantial additional costs in the form of taxes or emission allowances.”

Oh, do tell. But, please, don’t tell me these allowances, which no lawmaker has the courage to announce would be sold or auctioned off vs. given away, will be a cost for Duke. Duke’s customers, sure. There’s a lot more material there. Difficult to know where to start otherwise.
Notice however it cites the potentially costly federal program they see as imminent. And, as we shall see, are seeking. Elsewhere they note that “[s]everal Northeastern states and California are in the process of developing their own mandatory greenhouse gas emission reduction programs; none of which will impact Duke Energy’s operations.” The implication in this context would seem to be “this won’t cost us”. What they are saying, however, is that “we aren’t in a position to profit from these”.
Sorry. That’s the deal. As we shall see.
Then comes:

“Duke energy supports the enactment of US federal legislation…[that]…preferably would be in the form of a federal-level carbon tax or cap-and-trade. Duke Energy, believing that it is in the best interests of its investors and customers to do so, is actively participating in the evolution of federal policy on this important issue.”

So, distilled:
Some states are doing a certain thing, which won’t cost us but also from which we will make no money.
We would like the whole country to do it.
It could result in the creation of substantial additional costs.
This is in the best interests of our shareholders. And customers.
So we are trying to design it.
My first reaction from this distillation is that nowhere do they mention what’s in it for them. Even in the annual report, explaining that this could be quite costly…though they do nod to the fact that they are lobbying for increased costs to customers from which one can extrapolate that they are looking to turn a buck off of…er, doing the right thing.
Now, of course, one way to look at this is that a corporation has taken it upon itself the obligation of creating a better world through lobbying for changes in the tax policy. This is a modern version of what we call “corporate social responsibility”, not just creating jobs and wealth, not even just larding out earnings to pressure groups and pet projects. But seeking to engineer society through policy. What’s good for GM is good for America and all that.
However it is also inescapable that they see how this begs for additional costs to be imposed on their customers. And, after all, neither Duke nor the other rent seekers are going to pick up the tab for their desired world. But you’ll thank them later.
And so I repeat: each and every rent-seeker should be publicly polled, by lawmakers I should hope, as to their interest in federal “global warming” legislation that isn’t in the form that they have positioned themselves to benefit from. Let’s say, the Btu tax that Al Gore and his pals behind the current energy rationing movement initially sought. If there is resistance, then I am sorry to report that the tears for their climate fears are of the crocodile variety. This is simple execution of the world’s second-oldest business plan: make money off of governmental policy favors.


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