I was planning on sitting out the Nordhaus/Shellenberger debate. But then I thought: Adam, you are not the top-rated Gristmill blogger (see list at left) for nothing. People want to hear from you. So, here’s my take:

The first place Nordhaus and Shellenberger go wrong is their predilection for publicity photos that resemble ’80s album covers.

After that, they get it mostly right. Carbon legislation is good and helpful, sure, but it’s about 30 percent thought-through, enormously complicated, and anything that has a hope of actually getting signed is unlikely in the extreme to be sufficient to the task.

Look at the list of companies that have signed up to the much-ballyhooed Climate Action Partnership. Do you think they are calling for "the federal government to quickly enact strong national legislation to require significant reductions of greenhouse gas emissions" because they think doing so will put them in any danger of having to fundamentally change the way they do business? Their “consensus principles and recommendations” have more wiggle room than Studio 54.

Unless you think carbon capture and sequestration is going to save the day — and it won’t — then we are going to need to transition to renewable energy. (Preemptive note: Yes, energy efficiency is cheaper. Yes, energy efficiency has enormous potential. Yes, I’m familiar with the wedge study. Yes, energy efficiency will improve your dating life and get you into heaven. But unless energy efficiency starts generating electrons, it is not enough, and we are going to need renewable energy.)

So, I believe that S&N’s call for focused attention on renewable energy is basically right and frankly underrepresented in our national energy discussion.

Now, how the investment in renewable energy is to be achieved is another matter. We could ask the federal government to make massive R&D investments with the hope of developing magic bullets.

Or we could recognize that there’s a lot of technology that works great right now, and that a good role for government is to create the market structures necessary for renewable energy to thrive. The energy business is the biggest business on earth, and when the big money is convinced that the market is here to stay, they will put in far more R&D money than we have any hope of getting from the U.S. government.

This is essentially what’s happening right now. Let’s take the solar example. California used to have a solar rebate program that had to be re-upped every year. This did not send the right market signal — no company considering a $500 million investment in a solar manufacturing plant had confidence in the existence of a future market for their product. Once California stepped up with a $3.3 billion, 10-year program of declining incentives and addressed the market barriers (interconnection, net metering, and rate design), they established market certainty — and investments in the solar industry have gone through the freakin’ roof. I just got back from Solar Power 2007. Five years ago, the conference drew 200 be-sandaled people to a dingy ballroom in Reno. This year, they had to cut off registration at 12,500, and conference sessions were a sea of blue suits.

Create a market and the investment will come. Carbon legislation will help, but is not sufficient. Direct support is much better, and — crazy coincidence — there’s a timely issue in play. The most important thing that the federal government can do right now for solar is extend the 30 percent investment tax credit, due to expire in 2008, for eight years. The backstory and how you can help are here.