It seems Congress may pull one small, glowing ember from the wreckage of the climate/energy bill. The tax bill now brewing in the foul cauldron of the Senate contains a one-year extension of the renewable energy grant program (Treasury Grant 1603, part of the Recovery Act), as forecast on Thursday. It’s in Sec. 707 of this PDF.

To be clear up front, this is a much, much better outcome than the alternative, which would have meant a massive employment and investment hit to the solar and wind industries.

But let’s also be clear that, as policy, this is a sh*t show. It’s no way to run a country.

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In the proximate future, it just means the same battle will unspool again next year. At that point we’ll be in the bitter wake of a fight over the debt ceiling, everyone and their cousin will be mau-mauing the deficit and pushing for spending cuts, Republicans will be in full anti-EPA, anti-green frenzy, and clean energy industries will be back with their hats out again. That’ll be fun.

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Longer term, this is just an insane way to drive a transition to clean energy. Everyone in Congress will tell you that they don’t want to “pick winners” (read: give money to someone else’s constituencies) on energy, but they have steadfastly refused to pass proactive, performance-based energy policies with long time horizons. Instead America limps along, as it has for some 30 years, with energy policy based on tax goodies renewed every year or two, a far shorter period than the investment horizon for big solar and wind installations.

Conservatives are fond of claiming that U.S. businesses are sitting on hundreds of billions in investment assets because of uncertainty over Obama’s policies (as opposed to, say, a lack of customers with money to spend). The irony is, the uncertainty canard is absolutely true for domestic clean energy industries. Congress makes life-or-death decisions about them with punishing regularity, which makes for boom-and-bust cycles, hesitant investors, and an unhealthy obsession with currying political favor. They desperately need predictability.

In my ideal world, clean energy policy wouldn’t be based on tax credits, grants, and the whims of an increasingly dysfunctional Congress. But if we’re going to do them, let’s at least implement them with 10-year horizons, so investment and hiring decisions can be made with confidence. Enough of this pussyfooting around.


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PS: Sec. 708 is an extension of ethanol subsidies. Now there’s a winner very few Congressfolk mind picking.