Energy executive envisions a plan for taking action on climate change

John W. Rowe

is chairman and CEO

of Exelon Corp.

Mark Twain once observed, "Everybody talks about the weather, but nobody ever does anything about it." When it comes to climate change, it's time for Washington to stop talking and do something about it.

Climate change is a difficult issue in a town that typically has an attention span measured from one public opinion poll to the next. While continuing primaries haven't decided who will be the next president, they have cleared the way for action on climate change. Of the remaining candidates, U.S. Sens. John McCain, Hilary Clinton and Barack Obama are all outspoken proponents for action.

But the truth is, we need not - and should not - wait for a new president.

Many in Congress, Democrats and Republicans alike, have recognized the need to act and have put forward meaningful legislation to limit carbon emissions. President Bush could even seize the opportunity to help shape a pragmatic solution.

Time is not our friend, and we must begin the long journey of creating a cleaner low-carbon economy. The usual D.C. approach - doing too much too late - will not work.

In my view, there are three essentials to a decisive and prudent response to climate change:

Comprehensive government policy.

First, we need enactment of a mandatory, economywide cap-and-trade system for carbon emissions. This is where the rubber meets the road in the climate-change debate. Without carbon regulation, climate action is just climate talk. Such a system should have a transition safety valve so that our economy is not thrown overboard from the shock of it.

Also, governments at all levels need to adopt more stringent efficiency standards for buildings, equipment and appliances. We also need increased federal investment in research and development, tax incentives for renewable energy and carbon sequestration at power plants, and loan guarantees for the first new nuclear plants. And the federal government must make good on its 30-year commitment to find a repository for used nuclear fuel.

Market-driven innovation and investment.

Even more than government regulation, meaningful action on climate change requires economic transformation and competitive markets to drive investments in energy efficiency, natural gas and nuclear energy, innovations in renewables, and carbon sequestration. The Energy Information Administration indicates we will have to invest $400 billion in new electric generation by 2030 if we are to address climate change.

That cannot occur if we are obliged to invest in expensive, unproven technologies and then are not allowed to recover our investment because of regulations aimed at keeping energy prices below their natural market price. We need to let the marketplace, supported by regulation designed to reward low-carbon innovation, dictate investment decisions and investment rewards.

We must also come to terms with nuclear energy. Nuclear power today supplies the vast majority of U.S. low-carbon electric energy. Existing plants are safe and efficient, and the next generation promises to be even safer and more efficient. We will need at least 25 to 30 new reactors by 2030 if we are to succeed in limiting greenhouse gases.

Industry leadership.

The energy industry must lead by example and reduce its own carbon footprint, and we must help our customers better manage their energy use.

Five years ago, Exelon became one of the first energy companies to endorse climate regulation. We need other energy companies to do the same. We are taking enormous steps to reduce our own carbon footprint and that of our customers. We have just announced a goal to reduce, displace or offset the equivalent of our entire carbon footprint by 2020. Peco is now actively working with Pennsylvania policymakers to put Pennsylvania in the forefront of energy-efficiency programs in the country.

The energy industry must also drive the building of new, economic, low-carbon generation. A realistic cap-and-trade system, and continued federal support for research and development, including federal loan guarantees for new nuclear, will help. But most of all, we need the continuing commitment of regulators to allow competitive markets to do what they do best.

Although the challenge is daunting, we can, as a society, meet this challenge just as we've met similar monumental challenges throughout history. But it'll require more than talk. We need smart regulation. We need an honest and realistic commitment to low-carbon energy sources, including nuclear. And we need to allow the marketplace, through its innovation, job creation and economic development help us build the low-carbon future we all desire.

And then maybe we can, indeed, do something about the weather.