And as they make the transition, the electric power industry -- the world’s most carbon-intensive industry -- must disclose to investors more details about how it’s reducing greenhouse gas emissions as it makes its way down the path toward low-carbon fuel sources.
The nonprofit asked 249 of the world’s largest utilities about the information they report to investors in terms of emissions, fuel mix, reduction plans and potential risks. The CDP received responses to its questionnaire from 53 percent of utilities it contacted, which, although anemic, is an improvement from the last such survey in 2006, when just 44 percent of utilities responded. U.S. rates increased from 48 percent in 2006 to 67 percent in 2008. The CDP received responses from just three Chinese companies, one Indian and no Russian utilities.
Most companies failed to release information on the critical factor of generation fuel mix, which can give investors insight into how much utilities will be exposed to future climate regulations. Those with a portfolio of carbon-intensive fuel, such as coal, will likely face greater exposure to regulations that those with less-intensive fuels.
A mere 16 percent of electric utilities have set and disclosed absolute emissions reduction targets, according to CDP.
“This raises the question of how much utilities are willing to pay to cut their emissions -- or pass costs onto customers -- as emissions trading schemes and/or carbon taxes come into play,” Doug Cogan, the lead author of the report (PDF) and director of climate risk management for RiskMetrics Group, which wrote the report, said in a statement. “Improved disclosure on forecasted capacity and production would help investors to better assess exposure to such carbon limits at this pivotal time in national and global climate regulation.”
Among the most carbon-intensive North American utilities are American Electric Power and TransAlta Corp. Entergy Corp. and FPL Group are among the least intensive in the U.S.
"Power plant" -- CC licensed by Flickr user melancholic optimist.