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New Climate Bill Proof of Misplaced Priorities

The draft Markey-Waxman climate bill is proof that the green groups leading the climate charge won't fight for investments in clean energy technologies and a new energy economy. Instead, they'll throw these critical investments overboard to preserve precious regulations and an increasingly compromised "cap" on carbon.

Marking the starting bell in the long-promised fight over the nation's energy future, Congressmen Henry Waxman (D-CA) and Ed Markey (D-MA) introduced a climate and energy legislation "discussion draft" yesterday.

As Beltway insiders have repeatedly "reminded" me, this is "just a discussion draft," and its final form may be much different. But just looking at what's in this bill so far -- and just as important, what's not -- paints a clear picture of misplaced priorities and a bill in critical need of some "course correction."

Even a cursory read of this "American Clean Energy and Security Act" (ACES) -- and I've read far more of this 648 page bill than I'd like! -- speaks volumes to the priorities of the various parties driving this debate so far - namely the green groups and big industry players already cutting deals as part of the U.S. Climate Action Partnership.  This bill should be proof, once and for all, these leading greens will throw clean energy investments overboard to preserve precious regulations and an increasingly compromised "cap" on carbon.

Let's start with highlights from what's in the bill:

  • Standards and regulations galore, including a 25% by 2025 renewable electricity standard, building efficiency codes, appliance efficiency standards, a utility energy efficiency resource standard, fuel economy standards, a low-carbon fuel standard and industrial efficiency standards.
  • A cap and trade program, which while buried in Title III of the bill is still the core of the ACES draft.  To alleviate concerns that this effort to increase the price of dirty energy will cost too much, the so-called "cap" has plenty of hot air stuffed under it, including a heavy reliance on an unprecedented amount of carbon offsets and provisions that allow emissions permits to be borrowed from the future, increasing the amount of allowed emissions if prices get too high.  With this as the starting point and powerful political opposition to measures to increases energy prices, this "cap" on carbon will almost certainly get even further riddled with holes as the debate continues.
  • The only technology-related spending specified by the bill from the get-go is a one billion a year dedicated fund for the development of carbon capture and storage technology for coal plants.  The coal technology fund is financed by a separate dedicated micro-carbon tax on electricity producers funneled directly to support grants, loans and financing for CCS demonstration projects, modeled on a bill introduced by influential energy committee member and coal-industry champion, Rep. Rick Boucher (D-VA).
  • The bill also "authorizes" spending for plug-in hybrid car demonstrations, support for electric vehicle batteries, and smart grid demonstrations - all critical clean energy technologies.  But in Congress-speak, "authorization" means that until funds are "appropriated" or dedicated from the carbon revenues, there's no telling how much money Congress is really set to invest, leaving me saying "Show me the money!" 

And when it comes to tackling the critical energy innovation challenge, that's it.  There ain't no more.  No long-term strategic investments to develop and deploy the clean and affordable energy technologies needed to power the 21st century global economy.  No effort to spark the transformative technological breakthroughs Energy Secretary Steven Chu has said are necessary.  And nothing resembling President Obama's pledge to invest $15 billion a year from cap and trade revenues on clean energy R&D. 

After years of assuring my colleagues at the Breakthrough Institute that "we want both clean energy investments and a carbon price," these USCAP greens, the most influential green groups setting the climate agenda in Washington today, have shown their true priorities.  With billions of carbon revenue dollars sitting on the table, the green groups leading the climate charge simply walked away and left it there.

How do I know the likes of EDF, NRDC didn't fight for clean energy investments (and if others did, they certainly did not succeed)?  Well let's rewind back to take a look at the last climate bill draft introduced by Congressman Markey, now chair of the key energy subcommittee responsible for shepherding this bill to the floor of the U.S. House of Representatives...


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Called iCAP, short for "Investing in Climate Action and Protection," Markey introduced his ideal vision of a climate and energy bill in June 2008.  As he introduced the bill, Congressman Markey spoke eloquently about the need to "invest in the American economy and in American workers, and launch an energy technology renaissance that will rival the information technology revolution of the past decade."  Markey's iCAP bill promised to use the money from carbon pollution permits to "invest tens of billions" each year to develop and deploy "the cutting-edge low-carbon energy technologies that will power America's future."

So what happened to Markey's investment ambitions?  The United States Climate Action Partnership did.  USCAP is the coalition (or should I say cabal) of mainstream green groups like Environmental Defense and the Natural Resources Defense Council and a dozen or so industry giants, including ALCOA, Duke Energy, Dupont, GE, ConocoPhillips and General Motors, and their fingerprints are all over this discussion draft.  The official summary of the bill openly declares that "the global warming provisions ... are modeled closely on the recommendations of the U.S. Climate Action Partnership." 

In the boardrooms of EDF and the DC offices of USCAP's industry lobbyists, deals have already been cut, deals designed to "preserve" an increasingly compromised effort on the part of greens to increase the price of carbon while giving special treatment to these defenders of the old energy economy.  With friends like these, there's no wonder Ed Markey and Henry Waxman delivered the discussion draft we see today.

At the core of the Markey-Waxman bill is a set of misplaced priorities and objectives.  Rather than embrace the scale of the energy innovation challenge and design policies necessary to spur the transformational innovation needed to overcome it, these green groups (and many who listen to them) have come to believe their own politically-motivated and self-propogated myth that "we have all the technologies we need" to fundamentally and completely transform our massive global energy system to a low-carbon at an urgent pace.  They therefore design the policy in front of us: a weak carbon pricing effort coupled with requirements for improved energy efficiency and a clean energy deployment strategy (namely a renewable electricity standard) only capable of driving the deployment of already mature and relatively affordable clean energy sources like wind power and conventional geothermal. 

If you think all we need is the immature and limited suite of technologies on the shelf today, or if you buy into the market fundamentalist, cavalier assumption that markets will simply deliver the requisite innovation, why would you do anything else?

There's still time for this discussion draft to change, of course.  Unfortunately, many of the inexorable political pressures acting on this bill will only weaken the strategy driven by USCAP's green groups.  The question really remains: will other climate groups, members of Congress, or the White House itself reject this strategy, reassert the right priorities, and demand investments to overcome the energy innovation challenge while truly acting as the engine of the new clean energy economy so often promised?  In the coming months, we'll all find the answer... 

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Jesse Jenkins

Jesse Jenkins is Associate Director for the Breakthrough Institute. Jesse is an energy and climate policy analyst, activist and blogger. Jesse joined the Breakthrough team in June 2008 to co-direct the Breakthrough Generation Summer Fellows Program. He currently directs Breakthrough's efforts to develop and advance new energy and climate solutions to power America's future, secure our energy freedom, and halt global warming.

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