Climate & Energy

The subsidy tease, part II

Renewable energy incentives were stripped from the energy bill; what should be done next?

This post is by ClimateProgress guest blogger Bill Becker, executive director of the Presidential Climate Action Project. ----- The energy bill passed by Congress last December originally contained a beneficial, if temporary, set of financial incentives to spur the growth of renewable energy technologies in the United States. The bill included a renewable energy portfolio standard (RPS) that would require states to acquire part of their electric power from renewable resources. The RPS would have guaranteed a market for these technologies -- one of the ways to help a new industry establish a foothold in the economy. The energy bill also contained an extension of the Production Tax Credit (PTC) -- a tax break for emerging renewable energy industries that Congress has a history of approving for only a year or two at a time. (See "The subsidy tease, part I".) The PTC and a package of other clean-energy incentives would have been funded by taking back about $12 billion in tax breaks from the oil industry. The trade-off was sensible not only because the oil industry doesn't need the money, but because in some small symbolic measure, the repeal would have helped level the playing field for those young renewable energy industries trying to compete against oil, gas, and coal industries that have been fattened for generations by the nation's taxpayers. When the White House yelled "Tax increase!" and threatened to veto the energy bill, Congress backed off. As a result, many of the energy efficiency incentives contained in the Energy Policy Act of 2005 died on December 31, and others will expire in a few months. They include incentives for efficiency in commercial buildings; tax credits for installing efficient furnaces, air conditioners, water heaters, windows, and other improvements in existing homes; incentives for manufacturers to make high-efficiency refrigerators, dishwashers, and washing machines; the tax credit for residential solar system installations; and a tax credit for plug-in hybrid vehicles.

Why a climate bill in 2008? Part II

Delay makes environmental catastrophe more likely

This is the second in a series; the first is here. We've covered two reasons Environmental Defense is pushing for passage of climate legislation in 2008 -- the politics will be very much the same in 2009, and we don't want to gamble away a good bill on the chance of a perfect one someday. Today I'll look at a third reason: The price of waiting, even a year or two, is simply too high. Carbon dioxide concentrations are higher today than they've been in 650,000 years, and our emissions rate is increasing. It's crucial that we start aggressively cutting emissions as soon as possible. Here's the math. Source: the national allowance account for the years 2012-2020 from the S.2191 as reported out of the EPW Committee. The emissions growth from 2005 to 2013 is assumed to be 1.1 percent (an average of the 2004 and 2005 rate reported by the EPA [PDF]). Scenario one: The Climate Security Act is passed into law this year, and takes effect in 2012. To comply with the emissions cap, covered sources would have to cut annual emissions by roughly 2 percent per year. By 2020, they would be emitting at 15 percent below the starting point in 2012. Scenario two: We delay enacting legislation by two years, holding everything else constant. We pass a cap-and-trade bill in 2010, and it takes effect in 2014. To meet the same cumulative emissions cuts, emissions would have to fall by 4.3 percent per year -- over twice as quickly -- and we'd have to do it year after year until 2020, just to get to the same place. By 2020, emissions from covered sources would have to be cut 23 percent below the starting point in 2014.

Trippin' Lutz

General Motors vice chair is not a climate-change believer

General Motors Vice Chairman Bob Lutz is not only cranky, but willfully ignorant: D Magazine reports that Lutz declared to journalists that global warming is …

Get it right the first time

Carl Pope of the Sierra Club lays out a blueprint for an effective climate bill

The following is a guest essay by Carl Pope, executive director of the Sierra Club. ----- There are moments when a choice of pathways shapes the future -- and makes success either feasible or impossible. In light of the fact that all of the remaining leading presidential candidates call for some kind of action on global warming, and the Lieberman-Warner bill is already working its way through the Senate, almost everyone recognizes that sometime in the next few years the United States will limit the amount of global warming pollution that our transportation system, power plants, factories, and other sources can emit. The most likely mechanism for tackling global warming is a so-called cap-and-trade system, whereby a declining cap is put on total emissions with individual emissions permits being traded amongst emitters. As with most things, the devil is very much in the details. Depending on how it is designed, such a system can be heavily tilted toward the interests of the planet or, as some would prefer, the interests of polluters. Thirty-seven years ago, a similar choice faced the young environmental movement. Congress was about to pass the regulatory foundation of the environmental age -- the Clean Air Act. Environmental advocates sought to require every power plant, refinery, chemical facility, and factory to use the modern pollution control technology then coming onto the market. Industry argued that we should, instead, treat new sources of air pollution differently from old ones -- by making sure the new power plants were very clean and leaving the old ones, more or less, alone -- because old sources would shortly be retired and replaced with newer, cleaner versions. Maine Sen. Edmund Muskie, fearing that industry would block him on other points, acceded. Environmentalists -- including my new-to-the movement, 25-year-old self -- went along. Fast-forward to present day: the carbon industries are lobbying to get a deal done this year that would give away carbon permits free of charge to existing polluters -- bribing the sluggish, and slowing down innovation. And politicians are telling us that while it would be better to auction these permits and make polluters pay for putting carbon dioxide into our atmosphere, creating that market unfortunately gets in the way of the politics. We are being urged to compromise -- to put a system in place quickly, even if it is the wrong system. Given that we only have one chance to get this right before it's too late, our top priority must be to make sure that we do not settle prematurely and sign a weak bill into law in the name of doing something about global warming. With momentum for strong action and a friendlier Congress and White House building every day, it's no coincidence that some wish to settle their accounts now.

Jiminy Cricket this is creepy


When ‘hand wringing’ isn’t enough

If you are worried about Lake Mead drying up, think that reduced snowpack due to climate change might have something to do with it, and are looking for some answers, you could do a lot worse than listen to David Berry of the Western Resource Advocates. I always do, and he's never steered me wrong. See his timely "Clean Electric Energy Strategy for Arizona" (PDF).

The subsidy tease, part I

Congress needs to stop flirting with the renewable energy industry

This post is by ClimateProgress guest blogger Bill Becker, executive director of the Presidential Climate Action Project. ----- When it comes to relationships, Congress is a big tease. Or so it must seem to the energy efficiency and renewable energy industries. Just when they think they're about to go to the altar with the federal government, Congress becomes the runaway bride. Everyone who's anyone acknowledges that energy efficiency and renewable energy are indispensable to America's future. They promise greater energy independence, clean air, steady prices, infinite supplies, a lower trade deficit, and a way to begin minimizing the suffering that will result from global climate change. Due to the urgency of global warming, the future must start now with rapid diffusion of the clean energy technologies that are ready for market. We must also expedite the development of new efficient and renewable energy technologies and the industries that make, sell, and service them. To compete on the same playing field as oil, gas and coal -- our entrenched and heavily subsidized carbon fuels -- the clean energy technologies need federal help, including subsidies. For example, to help embryonic renewable energy industries reach viability, Congress implemented a Production Tax Credit (PTC) as part of the Energy Policy Act of 1992 and scheduled it to expire in 1999, seven years later. Since 1999, Congress has extended the credit for one to two years at a time and has allowed it to expire three times. It currently is scheduled to expire at the end of this year, along with a bundle of other tax benefits to encourage the use of more efficient windows, furnaces, and building insulation. The result of this on-again, off-again subsidy has been boom-bust cycles for wind energy and the other technologies covered by the credit. Each time the PTC is renewed, renewable energy projects begin to blossom. Then, months before the next expiration date, investment stops because of uncertainty. In an analysis of the PTC's impact on the wind industry, researchers at Lawrence Berkeley National Laboratory concluded:

Biofuels and the fertilizer problem

Can a ‘renewable fuel’ rely on mining a finite resource?

While scrolling through news accounts of the recent boom in the agrochemicals industry — yes, that’s how I spend my days — I came across …

Barack's economic policy speech in Wisconsin

Obama lauds green jobs and clean tech in economy speech

Photo: Sam Graham-Felsen In a speech on Wednesday at a GM auto plant in Wisconsin, Barack Obama outlined his economic agenda for the country. He described his stimulus plan, promising to boost green jobs, help the middle class, dole out tax cuts, negotiate worker and environmental protections in upcoming free-trade agreements -- and, to help pay for much of it, end the costly war in Iraq. The environmental highlights of the speech are below (audio available here):