Thanks Mark. Appreciate the compliments.
The ITC certainly isn't optimized for much at all. Why, for example, should we expect the same 30% tax credit to drive a whole set of different technologies forward, each with different price points, competitors and market conditions? (Answer: we shouldnt!). Clumsy indeed, but to be fair, the ITC is designed to spur "alternative energy" in the energy security and diversification of the energy mix sense, not zero-carbon energy sources.
To the highest degree politically possible, internalizing externalities like carbon emissions will certainly help level the playing field for low-carbon techs. But, as we've been agreed on before (I think), there's no reason to assume the kinds of carbon prices we'd get from Congress are sufficient to make something like Bloom's fuel cell appear. A $20/ton CO2 price would raise the ave. grid rate by about $13/MWh using the figures above, or 1.3 cents/kWh. That's not enough to make the 13-14 cents/kWh Bloom Box competitive in most markets, even if it ran on zero emissions fuels at no greater cost (which it doesn't).
If we want to see a suite of technologies emerge, we need a suite of targeted incentives that allow promising techs to move into the market price and down cost curves, with continued subsidy conditional on continued improvements in price and performance towards the point where the tech is competitive without subsidy at all (hopefully with as many externalities included as possible). I prefer to think of this as creating the conditions for winners to emerge at all - given the huge hurdles facing new energy techs in a market dominated by incumbents - rather than picking winners and losers. A carbon price helps but is far from sufficient in that.