Jim Pierobon is vice president – policy & market development at Standard Solar, Inc., a developer, integrator and installer of solar electric systems based in Gaithersburg, Md. He is a former chief energy writer for the Houston Chronicle.
Now that the dust is settling from Scott Brown’s U.S. Senate victory in Massachusetts, it’s becoming clear that the political momentum to pass a comprehensive energy and climate change bill has flatlined.
Let’s face it, despite President Obama’s call in yesterday’s State of the Union address for America to lead the world’s clean energy economy, it is unlikely that a law to make such an economy a reality will actually be considered until at least 2011, when the 112th Congress convenes. That’s despite a growing chorus of voices from corporations, utilities and clean energy advocates rooting for Congress to price carbon rather than relying on the Environmental Protection Agency’s (EPA) regulatory gauntlet to reduce carbon emissions.
The legislative uncertainty has got to be frustrating for companies longing for the competitive advantage that long-term, low-carbon strategies would offer. Nike, Hewlett Packard, Exelon, and Pacific Gas & Electric, have all come out in favor of cap-and-trade. The longer Congress delays passing clean energy legislation, the more time their competitors have to catch up. Perhaps more importantly, the harder the U.S. will have to work to catch up with countries and companies in the European Union and Asia who could be far ahead of us by the time Congress acts.
For the rest of this year’s legislative calendar in Congress, already shortened by the mid-term elections in November, the hearings, proposals and politicking — at least on the Senate side — will assemble more pieces of the climate change legislation puzzle.
Any legislation that can survive into the next Congress will have to accomplish at least these five objectives to help keep U.S. companies competitive:
1. Set a clear, economics-driven price on carbon with a market-based approach to buying and selling emission credits;
2. Ease the way for the U.S. power sector to transition off coal;
3. Include new technologies such as next-generation nuclear reactors clean coal in the technology portfolio;
4. Ensure that consumers benefit from trading of emission credits;
5. The legislation has to be revenue-neutral to the federal government.
To Garner enough votes to get a bill out of the Senate will mean including provisions supporting controversial policies such as the development next-generation nuclear power and carbon-capture-and-storage technologies. Clean energy advocates may also need to back off of efforts pushing for renewable electricity requirements in states that don’t already have them — over 15% of states currently have renewable portfolio standards mandating that specific percentages of a state’s electric generation portfolio be from renewable resources. As negotiations proceed, we may even see the word “renewable” replaced by “alternative” to make it easier to include technologies other than wind, solar, biomass, and hydro in carbon reduction and energy plans. Pennsylvania already uses the word in the title of its clean energy program.
One of the newer bids to frame the strategy for reducing carbon emissions is from Senator Maria Cantwell, a Washington State Democrat. Her Carbon Limits and Energy for America’s Renewal (CLEAR) Act would have every fossil fuel producer or importer (coal mining companies and oil and natural gas producers) participate in a monthly auction to bid for carbon permits for each ton of fossil carbon they place into U.S. commerce. Three-fourths of the revenues from these auctions would be refunded directly to every American on a so-called “equal per capita” basis each month.
Under Cantwell’s vision, no Wall Street traders or speculators would have access to the auctions and therefore would not be able to manipulate carbon prices or supply.
All this said, in this election year, a Senate version of the House Waxman-Markey climate change and energy bill will likely be more of a cleantech jobs bill, and not a bill to cut carbon emissions. Mind you, there are some job incentives provisions in Waxman-Markey that could conceivably be copied and pasted into a Senate bill. The bill mentions solar PV and hot water heater installers, the next generation of nuclear engineers needed to succeed those retiring from their plant owners, design engineers and assembly-line workers at domestic geothermal equipment plants, not to mention fuel cell, wind turbine and solar module manufacturing plants sprouting to meet Made-in-America mandates.
But what about cap-and-trade? Not likely in an election year. Jobs are a lot easier to agree on than how to put a price on a ton of carbon.
– Jim Pierobon