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House and Senate Move to Address Climate and Energy: Mixed Bag for Clean Energy

The world of Washington, DC has been on overdrive to push Climate and Energy Legislation this past month. The House of Representatives narrowly passed the 1,000-plus page comprehensive climate and energy bill, the "American Clean Energy and Security Act (ACES)," by a 219 to 212 vote, while the Senate Energy and Natural Resources Committee also pushed out an Energy Bill intended to be part of the Senate Climate package as well. The Senate Energy and Natural Resources Committee approved energy measures that call for 15 percent of the country's power to come from renewable sources by 2021. Not surprisingly, both Bills are a mixed bag.

The Solar Energy Industries Association, the ever optimistic voice in DC, reported the benefits of the House vote on the package as “an historic achievement, it is only the beginning of a long process to enact clean energy and climate change legislation into law.” Some of the most significant solar provisions include:

  • An RPS of 20 percent by 2020
  • Renewable energy and energy efficiency industries receive 9.5 percent of carbon allowances
  • Regional transmission grid planning and federal siting authority
  • 20-year Federal Power Purchase Authority
  • The establishment of a Clean Energy Deployment Administration to aid the domestic development and deployment of renewable technologies including solar.

Kevin Knobloch, president of the Union of Concerned Scientists, echoed SEIA’s views. "We're thrilled that Congress has finally caught up with science and the American people in recognizing the need to switch on clean energy. Our future is now looking more like the Jetsons and less like the Flintstones,” he said.

The Business Council for Sustainable Energy commended the U.S. House of Representatives for its historic vote to pass ACES. “This landmark vote sends a strong signal to capital markets and world community that the US is ready to be a leader in the clean energy economy and in the global challenge of protecting the climate,” said Council President Lisa Jacobson.

A solid coalition of environmental and clean energy and efficiency groups has been meeting to push votes. Coordinated through the Alliance to Save Energy, the group has consistently pushed an energy efficiency first and then renewables agenda, and targeted Congressional districts to pass the House bill.

To the contrary, Mark Sinclair, whose Clean Energy States Alliance works with state public benefit energy grant programs, maintained that the congressional mandates "are very weak and really will not require any additional renewables beyond what states already are doing." Sinclair cited an analysis by the National Renewable Energy Laboratory that says the national mandates being considered by lawmakers would in some cases result in less renewable energy being used by 2030 than what is anticipated under existing state requirements and from incentives from Obama's economic recovery program. "It will be meaningless. It's just a gesture," said Sinclair of the bills before the House and Senate.

By contrast, Obama — both in the presidential campaign and since occupying the White House — has called for a much more aggressive shift to renewable energy. He set a goal of 10 percent renewable energy use by power producers by 2012 and 25 percent by 2025.

Across the ocean, Financial Times had two main commentaries on the energy/environment bill passed by the House  (HR 2998 plus amendment) in which they strongly support greater control over CO2 in general, but had three main complaints about the bill, which I list here:

  1. The sheer complexity of the bill, which, they said, make it "a playground for special interests" — particularly the offset provisions, which were what vitiated the exercise in Europe.
  2. The proliferation of badly designed free allowances, which have the effect of generating minimum useful action in the near term and shifting a large and sudden burden to the next generation;
  3. An excess of "safety valves" — and no simple cap (like $20 per ton of CO2 equivalent) on what emitters have to pay.

Mark Muro, Fellow and Policy Director, Metropolitan Policy Program of The Brookings Institution expressed his opinion on the bill on June 29, 2009.  He said:

Few aspects of the Waxman-Markey cap-and-trade bill matter more than the insufficient degree to which it applies future revenue to clean energy innovation. Quite simply, the American Clean Energy and Security Act (ACES) makes only a modest start toward promoting the technology breakthroughs that will make clean energy cheap, reduce carbon emissions, and create thousands of cleantech jobs. Correcting that shortcoming must become a top priority of lawmakers in the coming months as action moves to the Senate…. The bottom line: Reps. Waxman and Markey did well to install several crucial innovation provisions in the House bill, but the political trades that were required to pass it have left far too little revenue behind for the most crucial use of cap-trade money — investments to catalyze a radically cleaner energy future.

One of the key trades to attract agricultural Representatives was led by House Agriculture Committee Chairman Collin Peterson (D-Minn.) who believes the climate change deal he struck, which among other provisions bars U.S. EPA from calculating the indirect land use changes (ILUC) for five years, may be the only legislative opportunity the lawmaker has to remove the controversial ILUC language from EPA's renewable fuels standard (RFS) proposal (which was a day after EPA released its proposed RFS2 rules). Last month, U.S. EPA included ILUC in the agency's proposed rules for the expanded RFS, much to the chagrin of the biofuels industry, who believe the ILUC requirement should be delayed until there is a generally accepted method for determining the regulation and the modeling involved.

On the recent Senate committee action, Sun Day Campaign Director Ken Bossong issued a News Advisory, “The "American Clean Energy Leadership Act" reported out of committee yesterday by the Senate Committee on Energy & Natural Resources includes a Renewable Electricity Standard that calls for 3% of U.S. electrical generation to come from non-hydro renewables by 2011-2013.  However, according to the latest "Electric Power Monthly" report issued on June 15 by the Energy Information Administration, non-hydro renewables (i.e., wind, solar, geothermal, biomass) already accounted for 3.95% of net U.S. electrical generation as of March 2009 (the latest month for which data has been released).” That finding has geared up many of the clean energy advocates to focus on the deficient aspects of the Senate Bill.

What we can see from the wheeling and dealing in Washington, DC, is that the congressional leadership with the bully pulpit from the White House is successfully driving a Climate Bill. However, the practitioners should not be fooled by the intense action, but rather on the specifics of the language. All of us should be elated by our nation joining the world in setting carbon caps. But we should not stand for provisions that supposedly promote clean energy and don’t.  Even more importantly, we should put clean energy options — energy efficiency and renewable energy — first and not allow them to be afterthoughts or a way to get media attention.

On June 29th, President Obama held a press conference at the White House. He stated, “The nation that leads the world in creating a new clean energy economy will be the nation that leads the 21st century global economy.” Now that’s one position I sure am unequivocal about. 

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