Dan Reicher, googleDan Reicher, Google’s director of climate changePhoto: Steve Rhodes via FlickrGoogle wants a price on carbon and wants it now — both for lofty reasons like combating global warming, but also because it could be good for business. 

As the Senate inches closer to climate legislation that could give the Internet giant what it wants, I checked in with Dan Reicher, the director of climate change and energy initiatives at Google to see what surfing the web had to do with reining in greenhouse gases

Turns out, the answer is technology. Reicher — a former Department of Energy assistant secretary who now directs Google’s investments in clean energy — believes that exposing the hidden costs of dirty fuels will set off a rush of investment in new energy innovations. He says carbon pricing is an “essential signal we have to get to.” Right now, “money is sitting there to make significant investments,” he says, but the cash flow is sidelined because the incentives aren’t there. 

Once they have to pay the true price of carbon combustion, the calculus for companies would change, making it fiscally prudent for them to conserve and make cleaner energy. All of a sudden it would make sense to invest in figuring out how to consume less power, or in new technologies that cut emissions at the source. And that would mean a huge new market for innovations that would help them do that. 

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The same would go for individuals — under carbon pricing, households save if they reduce their electricity loads, and we’d expect a spike in demand for cheap energy efficiency technology as folks seek to reduce their monthly bills. Reicher gives us a compelling vision full of smart grids that know when your fridge needs to defrost and when your car’s battery can turn you a profit by selling spare juice. 

Google is particularly interested in this low hanging fruit of energy efficiency which Reicher says “grows back” as we switch from incandescent to compact fluorescents and now to LED. At each step we save more energy and promote more innovation, making the area particularly ripe for investment dollars.

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Google is thinking about the big global picture. Reicher told me that, “in general terms, a carbon price will do a lot to advance the competitiveness of these technologies that offer serious climate reductions, help for our energy security, increase our domestic fuels, and can create all sorts of jobs.” 

But the search-engine-plus is also thinking about its own bottom line. It’s already got products on the market that help consumers save electricity. The Google Power Meter helps you monitor and reduce down your BTUs online-showing you the cheapest and easiest ways you can cut back on juice. For example, your toaster might be sucking up $8 worth of power per year when it’s not even in use. If it is, Google will let you know so you can unplug it. 

As Reicher puts it, “putting a serious price of carbon will both get us closer to the serious energy reductions we need to make but also accelerate the domestic development and adoption of these technologies.” It’s that last part that’s good for business. When government holds up its side of the “triangle of technology, policy, and finance” that Reicher says is essential for green development, it spurs the private investment and innovation that keeps businesses strong. 

That’s where Congress comes in. The most important policy is carbon pricing. That’s what will change the economic fundamentals, augmented by other programs — like energy efficiency standards and government revolving loans to bring new ideas  to the market. The technology and finance sides are ready and able; but we’ve been waiting for too long for the policy piece that can complete the puzzle. 

Google hopes the Senate will act quickly to jumpstart what it thinks will be an economic bright spot in the current downturn. Reicher doesn’t really care how it’s done, saying there are “various ways to get to a carbon price.” Whatever packaging it comes in, a price on carbon will ultimately be good for that company and many others.