Federal Clean-Tech Policy is Theater of the Absurd

Since its first year in 2005, the annual Clean Tech Investor Summit conference, hosted by Clean Edge and IBF Conferences, has always followed closely on the heels of President Bush’s State of the Union address. From “America is addicted to oil” one year to an aggressive new renewable fuels standard proposed in another, Bush’s words have always provoked a fair amount of discussion and debate among the clean-tech investors and executives gathered in Palm Springs, California.

This was not the case at this year’s fourth annual Summit (held Feb. 6-7). On clean energy and greenhouse gas (GHG) reduction, the 2008 State of the Union address brought empty rhetoric, tired clichés and almost no new concrete policy initiatives. All in all, a pretty lame performance by the “chief executive” of the world’s largest economy, and largest energy user, on the most important economic imperative of our time: the transition to running on a much cleaner energy mix. And Congress hasn’t been much help, either.

Last month, my colleague Ron Pernick wrote that his watchwords for 2008 are “Wait for the next administration.” I don’t disagree with that. But with a few notable exceptions such as (long-overdue) CAFE standard increases in the Energy Bill passed last year, federal policy on clean tech seems to have gone from an annoying laissez-faire, lack-of-leadership approach to outright hostility, bordering on the ridiculous, against meaningful policy action.

This administration and its Capitol Hill allies never met a tax cut they didn’t like and didn’t want to make permanent, yet they oppose the renewal of the all-important federal production tax credit (PTC) for wind, geothermal, and biomass and the investment tax credit (ITC) for solar. Fiscal conservatism and belt-tightening are one thing, but current federal policy entered the theater of the absurd when the PTC extension, which was dropped from the Energy Bill when Republican Senators objected, couldn’t even make it into the ballyhooed $168 billion tax-cut stimulus package passed by the House in January and the Senate this month. As long as we’re doling out tax cuts to battle a recession, why wouldn’t we want to stimulate a clean-tech industry that creates thousands of new jobs, brings economic boosts like wind farms and production facilities to distressed areas, reduces foreign-oil dependence, boosts U.S. competitiveness with Europe and Asia, and attracts entrepreneurs and investors from around the world?

Oh yeah, and helps reduce GHG emissions too.

“To build a future of energy security,” Bush said, “we must trust in the creative genius of American researchers and entrepreneurs and empower them to pioneer a new generation of clean energy technology.” Well, fine. So how does it empower the entrepreneurs of California to have their EPA administrator, over the technical and legal-strategy objections of his own staff, refuse to let the state reduce tailpipe emissions — a regulation that would help spawn new technologies ranging from advanced batteries to biofuels? And what incentives do electric utilities have to clean up coal, operate more efficient plants, and pioneer new clean technologies when you oppose both a national renewable energy mandate and a mandatory carbon cap-and-trade system?

Is it that federal incentives for clean energy are politically unpopular? To quote Saturday Night Live star Dana Carvey’s impersonation of caustic talk-show maven John McLaughlin: WRONG! A January survey by Zogby International, yielding the type of poll results usually reserved for questions like “Is the sky blue?” found that 85 percent of Americans agree that “the federal government should continue existing incentives to encourage greater use of renewable energy technologies.” Just 12 percent disagreed — that’s even lower than Rudy Giuliani’s showing in the Florida primary.

On the international stage, the United States’ clean-tech leadership performance has been even more absurd. The United Nations’ Bali climate talks in December produced the memorable and rather embarrassing scene of a delegate from Papua New Guinea drawing cheers from the crowd when he said to the U.S. representative, “If for some reason you’re not willing to lead, leave it to the rest of us and please get out of the way.” Last month, the 2008 Environmental Performance Index by Yale and Columbia Universities ranked 149 nations on GHG emissions, air pollution, water quality and other factors. The U.S. rolled in at 39th, below such paragons of environmental stewardship as Russia, Panama, and Albania. And just before the Bush administration hosted climate talks in Hawaii last week, White House environment official James Connaughton said “these will be iterative discussions, which the initial goal will be to lay out a variety of options without holding any country to a particular proposal.” Wow, how inspiring.

Like Ron Pernick, I too am waiting for the next administration – and in the meantime, being encouraged by meaningful, aggressive, and notably bipartisan action at the state and local level. But 12 months is still a long time to watch GHG emissions rise, solar and wind power companies and investors sweat bullets about tax-credit extensions, and the U.S. slip further behind global competitors in both clean-tech commitment and climate leadership stature. I wish that show could leave town a lot sooner.

Clint Wilder is Clean Edge’s contributing editor and co-author of The Clean Tech Revolution. E-mail him at wilder@cleanedge.com


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