Competitive Markets Can Help Achieve Climate Bill Goals

Markets unleash “ingenuity” and send the proper price signals for investment.  So says Senator John Kerry, D-MA, on the stump to drum up support for a tri-partisan climate change bill he is developing with Senators Lindsey Graham, R-SC, and Joseph Lieberman, I-CT.  Kerry is a strong advocate of creating a market-based program to limit emissions of carbon dioxide from the burning of fossil fuels.  He pointed to the 1990 Clean Air Act amendments, which created a similar market-based program to cost-effectively limit acid rain-producing emissions of sulfur dioxide from power plants. “It works,” Kerry said succinctly of such market-based environmental programs.

The COMPETE Coalition welcomes Senator Kerry’s pro-market commentary, and invites him and his staff to review a joint statement by COMPETE and the Environmental Defense Fund underscoring the importance of competitive electricity markets for electricity as a complement to any market-based program to reduce greenhouse gas emissions. 

“Markets have proven to be the most cost efficient and effective means to deliver goods and services to consumers and will bring the same benefits to help achieve the policy goals of federal climate legislation,” the joint statement to Congress says.  “Market forces will ensure that investments are made in the right places with cleaner, more efficient and innovative technologies. For that reason, we believe that well-structured competitive electricity markets offer the most benefit to consumers, our economy and the environment.”

Sounds very similar to Senator Kerry’s comments about markets driving “ingenuity” and marketplace pricing offering signals “to unleash venture capital.”  COMPETE welcomes the growing chorus of those recognizing the value of markets in driving good environmental outcomes.  Electricity markets have been a laboratory in demonstrating how price signals and competition drive economic and environmental benefits.

Joel Malina | March 8, 2010