American Electric Power 2008 Corporate Sustainability Report

2008 Corporate Sustainability Report 37 Climate Change WHERE AEP STANDS ON CLIMATE CHANGE national emissions offsets, such as methane capture and destruction from landfills and livestock waste and international deforestation protection. • Allowance allocations to electric generators and other sources based on historical emissions. This might include, if absolutely necessary, a small number of allowances (i.e., less than 5 percent) to be auctioned or set aside for public purposes. • Incentives for early voluntary actions or investments made to reduce emissions. • Long-term public and private funding to develop commercially viable technology solutions, such as carbon capture and storage. • Elimination of legal and regulatory barriers to the use of low- or no-carbon technologies or processes (e.g., carbon capture, nuclear, wind). • Regulatory pre-approval of utility cost recovery for effective energy efficiency and demand-side management (DSM) programs. • A price ceiling (safety valve) on CO2 allowances to limit the economic burden on emitters and on the economy as a whole. Companies with compliance obligations can buy emission allowances from the federal government at the safety valve price. • An appropriate trade measure to equalize the conditions of global trade should other countries fail to reduce GHGs. Cap-and-trade is widely considered the most effective system to reduce GHG emissions, although debate continues about whether permits should be allocated or sold at The world is poised to make the most dramatic change in energy production since the Industrial Revolution. Our collective response to climate change is creating a transformation that will lead to profound consequences for all sectors of the global economy. As one of the largest consumers of coal in the Western Hemisphere, AEP recognizes the urgent need to balance the growing demand for electricity with the imperative to protect the environment for future generations. The scientific community, led largely by the Intergovernmental Panel on Climate Change, has provided scientific evidence that human activity has contributed to global warming. AEP is helping to lead the discussion nationally and internationally to find a reasonable, achievable approach and enact federal energy policy that is realistic in time frame and does not seriously harm the U.S. economy. We also are developing advanced coal technologies so that coal can continue to be the important energy resource it is today. We support the adoption of an economywide, cap-andtrade greenhouse gas (GHG) reduction program that allows us to provide reliable, reasonably priced electricity to our customers and that fosters the international participation that is necessary to make meaningful progress. At AEP, we believe that cap-and-trade legislation should include: • A cap that applies to all sectors of the economy and covers all GHGs. • A framework that maximizes flexibility and minimizes cost. • Phase-in of reduction requirements that matches available technology. • Unrestricted use of real and verifiable domestic and inter- Carbon capture technology similar to this, being tested at a Wisconsin Energy plant, will be installed at a western power plant. AEP was a founder of CCX in 2003. CCX’s CEO is Richard L. Sandor, who has been a member of AEP’s Board of Directors since 2000. Because of the relationship between AEP and CCX, Mr. Sandor is not considered an independent director under New York Stock Exchange rules. T Carl Consalvi, station operator, Northeastern Station, Oklahoma Climate Change

Table of Contents Feed for the Digital Edition of American Electric Power 2008 Corporate Sustainability Report

American Electric Power 2008 Corporate Sustainability Report Contents Leadership, Management & Strategy A Message from Michael G. Morris A Message from Dennis E. Welch About This Report Environmental Performance Work Force Issues Public Policy Climate Change Energy Security, Reliability & Growth Stakeholder Engagement Glossary GRI Table of Contents

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