Yesterday evening, climate and energy reform died in the Senate. All that remains is a nearly skeletal package responding to the BP oil spill, a few minor incentives for conservation, energy efficiency retrofits, and the development of natural gas trucks. Neither an economy-wide cap-and-trade system, nor the utilities-only compromise, is to be found in the proposed legislation. Even more stunning, a renewable electricity standard and an energy efficiency standard, long considered the centerpieces of any compromise excluding cap-and-trade, have also been scrapped.
While a comprehensive climate bill is dead for the summer, and probably for the year, the intense compromises over the last few months hinged on elements of climate legislation that will likely come up in the future. TAP recently talked to Dave Foster, the executive director of the the BlueGreen Alliance. Foster explained the wisdom of the utilities-only compromise, the importance of a well-designed renewable electricity standard (RES), and the critical role all these policies could play in job creation and the long-term economic health of the country.
The overwhelming opposition to cap-and-trade helped lead to the idea for a utilities-only cap-and-trade policy. What do you think the environmental and policy costs of that are versus the possible political advantages, and do you think that's a wise compromise strategy on the part of the Democrats?
The extraordinary thing about climate-change legislation is that we're talking about setting in motion the levers to solve a problem over 40 or 50 years. So my own perspective has been that no one piece of legislation is going to do that. At a point like this in the legislative process, I think it's virtually impossible to not get a little disoriented by trying to use the 50-year measuring stick against the progress that's made in laying the first few stones of the foundation. So I'm inclined to think progress is extremely important, and it should be measured incrementally.
The RES in Sen. Jeff Bingaman's bill, which had been seen as a possible compromise standard, was slammed by a lot of groups and activists for being too lenient -- only 15 percent by 2021. Is passing it even with too weak a standard, simply to get that regulatory structure in place, the kind of incremental, long-term perspective we should have for this?
In the case of an RES, we've created a kind of hodgepodge, de facto federal standard through the 29 states that have passed their own RES. So it's important to push beyond what Bingaman has proposed doing, simply because we need to build on the foundation of the states, as opposed to doing something at the federal level that may undercut some of the progress that's already been made.
Do you think that the tougher the RES is, the more job creation we'll get in the clean-energy sectors to offset whatever jobs may be lost in the traditional fossil-fuel sector?
The real questions are how do we meet America's energy needs by ramping up our production of clean energy, and what will be the job benefits of that?
Companies don't like investing money when they see that the market conditions may change in one year or two years. They want to know that there's some level of market certainty extended out 10 or 15 years. That's especially true with the secondary job creation in renewable energy, which is in the manufacturing sector. People don't want to make investments in factory capacity that'll take 15 to 30 years to recoup if the market for renewable electricity in the United States is so unstable that you can?t tell if installations are going to steadily increase over the next 10 years, or simply over the next one to two years.
We can also create hundreds of thousands of jobs in energy-efficiency services if we pass regulation such as an energy-efficiency resource standard, that drives retrofitting of commercial and residential buildings, and again sets in motion the investments to create manufactured products for both buildings and the delivery of energy services. If we have clear, long-term targets in place, then the private-capital investment will happen. And that's essentially the same kind of mechanisms that have created jobs in the fossil-fuel industries. We've created a set of market signals and regulatory frameworks that reward private capital for investing in fossil-fuel industries.
In both the Bingaman bill and the House bill, the renewable-electricity standard is actually a combined standard whereby a portion of it can be met with increased energy efficiency as well as renewable energy. A lot of [analysts say] that's problematic. What are the practical consequences or inherent dangers of mixing the two?
Well, the reason why advocates of the renewable-electricity standard, and in many cases the efficiency standard, want to keep them separate is to not diminish the effect of one or the other by the interplay of the two. If you have an RES of 25 percent, and then say that 5 percent can be met through efficiency, you essentially have an RES of only 20 percent. And that provides a smaller market, less certainty of growth, and less willingness on the part of private capital to invest, and a less clear direction on where to invest. So that's the logic of keeping them separate. You provide clearer market signals by not confusing the two issues.
Do you think an RES of 25 percent is ever do-able, in terms of the current politics?
Well, in terms of the current politics of the U.S. Senate, many people would argue that almost nothing is doable. It's the great embarrassment of American politics that, instead of having the capacity to moderate and seek common ground, the Senate has turned into a political killing field for the ideas that America needs to take under serious consideration. And I think American politics is such that that will sort itself out. It's a little hard to see in the summer of 2010 how that's going to happen, but my own guess is that if we look back in five years at this period, in which the use of the filibuster became more and more abused, we?ll see the Senate was forced to rewrite its rules. I think the American people are going to grow extraordinarily impatient with this kind of dysfunctional behavior. And I imagine that there'll be a significant push to change things in January when the new rules are written.
Do you foresee any problems progressive should be concerned with in the other sections in the legislation?
I think we've missed the clearest demand that the American public has had, which is, "Give us a job-creation strategy." And by failing to make jobs the cornerstone of what energy legislation is directed at right now, we're making it much harder for the American people to grasp the importance of this and its relevance.
