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The Senate climate debate is on. Yesterday, Senators Barbara Boxer and John Kerry released a discussion draft of their "Clean Energy Jobs and America's Power Act" - aka Kerry-Boxer, or for you acronym fans, CEJAPA (see pronunciation guide at end of post!). Always on top of the climate policy pulse, theEnergyCollective.com team hosted an exclusive webinar as well yesterday, featuring several policy experts and a detailed conversation on the politics and policy of the Senate climate bill. Listen to the webinar archive here
I’ve also been charged with (and happily accepted) the task of briefly summarizing the excellent conversation between myself, Michael Zimmer, an energy expert and lawyer with Thompson Hine LLP, and Manik “Nikki” Roy, Vice President of Federal Government Outreach for the Pew Center on Global Climate Change. Our conversation was also ably moderated by theEnergyCollective.com featured writer, FORTUNE magazine contributing editor, and senior writer at GreenBiz.com, the illustrious Marc Gunther. (You can find bios of the panelists here).We began our conversation by highlighting some of the key features of the Kerry-Boxer bill, and you can find a summary of those provisions and major differences with the bill's House sibling in an exclusive theEnergyCollective.com post here.
While we touched on these key aspects of the Senate bill in the webinar, much of our conversation focused on the politics of advancing a bill in the Senate, and on the critical substantive challenges that stand in the way of a clean, low-carbon global energy system. While Michael, Nikki and I all have different perspectives and priorities for climate and energy policy, we generally found agreement and consensus through most of our conversation. Here’s some of the key points of agreement or discussion from the webinar:
- There was consensus among the panelists that (a) neither the Waxman-Markey bill or the Kerry-Boxer bill is adequate to solve the climate challenge or to spur a clean energy technology revolution on it's own; and that (b) the Kerry-Boxer discussion draft is probably the "highpoint" in the Senate, as tough politics and the search for 60 votes to secure passage of a Senate bill will involve (probably many) more concessions from here on out. Still, the strategic question remains: should the focus be on passing this bill now (regardless of how weak it may get) and build from it as a foundation eventually? Or has this strategy run it’s course, with it now the time to try alternative tacks and policies today to gather momentum, returning to the issue of capping carbon at some point in the future.
- There was also agreement amongst all three panelists that nuclear power would play a much bigger role in the Senate debate and the end bill to both secure political support for passage of the bill, and to help meet climate and energy priorities. Expanded support for nuclear power is a key priority for almost all of the potential swing Republicans (John McCain, Lisa Murkowski, etc), and so may be a big part of the political effort to get to 60 votes. Also, all panelists seemed to agree that given the massive scale of clean/low-carbon energy needed to avert climate change, nuclear power couldn't be written off as part of our energy mix. If it meets some common-sense criteria about safety, waste disposal, decommissioning, and cost, nuclear power will likely play an expanded role in our energy future, for both political and substantive reasons. A focus on nuclear power would also include both efforts to expand use in the U.S., and to commercialize new technologies to secure economic value as a US export product in the future.
- There actually seemed like solid agreement that carbon price signals established by any eventual Congressional climate legislation are unlikely to be a major driver of either the accelerated technology innovation or deployment needed to transform the U.S. and global energy system, at least in 2010-2026 time frame. The clearing price for carbon markets will below, probably $10-20 per ton of CO2 (roughly equivalent to just 10-20 cents on a gallon of gas) and even that modest price signal to end consumers will probably be shielded, at least in large part, by free allowances for utilities and energy companies. Until almost 2030 or beyond, low and relatively ineffective carbon prices will require stronger direct inducements for clean energy technologies, including tax, loan, and credit incentives for new technology and innovation pull through. Michael Zimmer also adds we must watch electric and gas utility revenue decoupling efforts that can more directly promote energy efficiency, as well as transmission planning and Smart Grid efforts to establish key enabling infrastructure for widespread renewable energy deployment.
- There was also agreement that shielding energy consumers, at least for a time, from carbon prices isn't necessarily bad or unjustified. The energy mix in various regions is largely a historic factor and energy consumers depend on and use this supply mix "innocently." Consumers in the Pacific Northwest, for example, are lucky enough to enjoy an energy mix largely supplied by federally-subsidized and constructed hydropower projects built over half a century ago, while folks in the Midwest rely largely on coal-fired power plants due to it's regional availability, many of which were also constructed with public financing during the rural electrification period.
- That also seemed to lead to a further recognition of the power of government financing, incentives and direct investments to shape the course of our nation's energy future - and infrastructure and technology in general (e.g. Interstate Highways, rural electrification, the innovation that led to the Internet, broadband, jet engines, nuclear power, etc.). The same forces of public investment that shaped our energy supply mix and led to the historic supply differences mentioned above could also shape and drive a cleaner energy future. New taxes incentives, loan guarantees, bonds, and government support (like the Clean Energy Deployment Administration included in the Energy and Natural Resource Committee’s energy bill) can help change the mix of energy priorities, issues and fuels for the 21st century while “dead wooding” the decisions and legacies of the past that are now outdated.
- Finally, given the relatively weak carbon price signal over the immediate decade or two, and the critical historic role of public incentives and investment in technology innovation and infrastructure deployment, there seemed to be consensus from all panelists that we need much more direct and proactive support for clean technology innovation, commercialization and deployment through loans, financing support, tax incentives or direct public investments to ensure we have the technologies we need to solve the climate challenge -- and to ensure those technologies and industries take root in America, with the economic benefits accruing here.
I would be remiss if I didn’t note that our esteemed moderator (and carbon pricing advocate/big government skeptic) Marc Gunther probably wouldn’t agree with those last three bullet points. The two of us have had some rather interesting debates on the subject of carbon pricing and the role of more direct government measures to spur clean energy technology (which you can find at the Energy Collective here and here for example). But I was surprised by the consensus among all three panelists on these points, as they would seem to imply some much-needed focus on more proactive clean energy technology policy in the Senate’s version of climate and energy legislation.
Please drop any questions for further discussion in the comments area below and Marc, myself and the other panelists will do our best to answer. Stay tuned as the Senate climate bill unfolds and the conversation continues here at theEnergyCollective.com
*Climate bill acronym pronunciation guide: CEJAPA, the Clean Energy Jobs and America's Power Act. Tougher than ACES for sure (the House bill). According to a Kerry staffer who tweets as @CEJAPA, "I think I'm pronouncing myself "Say-hhhap-ah" - as if I were from the north of Spain. Get the "J" in the back of your throat." There you have it...
