Inquirer Editorial: Time to clear the air

You hear a lot these days about how mindless government policy stifles innovation in the private sector.

But in West Virginia's coal country, the opposite has happened. The lack of government rules has prompted a private company to stop work on a promising antipollution technology, which sets a dangerous precedent that utilities across the nation may follow.

American Electric Power has dropped its effort to capture carbon dioxide from a huge coal-fired power plant, even though a pilot project was successful.

The company said Thursday it can't justify spending money to scale up the expensive CO2 control project, because it won't be allowed to recover the antipollution costs through the rates it charges for electricity.

State utility commissions have indicated they won't let utilities charge the extra costs to ratepayers, because there is no law that requires reducing CO2 pollution. It's up to the federal government to provide clear direction.

It would be nice if utilities out of the goodness of their hearts took action to reduce greenhouse-gas emissions before the law requires it. But unless it's legally required, spending money to do so is not a "necessary and reasonable" expense that utilities can legally bill to ratepayers.

American Electric Power and other forward-looking utilities see greenhouse-gas pollution limits as inevitable, and to their credit they are trying to get ready to comply.

But until they know what the rules will be - either tradable emissions caps or a tax on carbon pollution would work - there's not enough incentive to develop the necessary technology.

The federal government did offer to share the cost of the American Electric experiment, with up to $334 million. Still, private matching money was needed, and company chairman Michael G. Morris said uncertainty about federal climate policy made it hard to attract private investment.

Here's a case where the government's failure to do anything is actually inhibiting innovation.

This particular antipollution solution - capturing CO2 released when coal burns and pumping it underground, where it's supposed to remain forever - has its critics. The process burns up a lot of energy, and the CO2, if it ever escapes in large concentrations, can suffocate people.

Reducing the man-made flood of greenhouse gases into the atmosphere is a huge challenge. It will require a wide range of solutions. Finding what works will take a lot of experimentation, some of it expensive, and there will be failures along the way.

As the American Electric case shows, some in the private sector are ready and willing to pursue solutions, but government has to resolve the uncertainty about what the greenhouse-gas pollution rules will be. The sooner those rules are set, the better.