How Congress Threatens to Undermine the Clean Energy Future: Sidelining Renewables

The new Greenpeace report Business as Usual describes "five maximum points of danger" in the House and Senate climate bills. SolveClimate is reposting each of those arguments over the course of the week.

Dear Mr. President,

What is especially dangerous, and frankly Orwellian, is that the American Clean Energy and Security Act and the Clean Energy Jobs and American Power Act both provide insufficient and grudging support to clean energy.

What state governments and private enterprise are doing to promote the adoption of clean energy already surpasses what the federal government is now proposing to do.

In other words, even the clean energy provisions of the bill support the status quo, the continuation of business as usual. It is farcical that both bills have the words “clean energy” in their titles. They should instead be encouraging the rapid development and deployment of clean energy — the way we once encouraged a first lunar landing.

President Obama, you told the UN General Assembly that the U.S. “will move forward with investments to transform our energy economy, while providing incentives to make clean energy the profitable kind of energy.” The climate bill undermines that aim.

A look at some raw numbers provides the most obvious evidence. Research and development for all clean energy technologies — solar, wind, geothermal, biomass and all others — will be supported with $47 billion worth of carbon credit allocations between now and 2030. That might work out to about $10 billion of support for each kind of clean energy — less than half a billion dollars a year — a paltry sum.

At the same time, the American Clean Energy and Security Act (ACES) provides more than $60 billion of support for carbon capture and sequestration (CCS) development — a single technology that aims to make dirty coal clean. If the technology can be made economically viable — and that remains an open question — it would not be ready for deployment at scale for another 15 to 20 years.

On nuclear power, the House bill includes massive loan guarantees that will benefit nuclear power by reducing the cost to borrow money to build nuclear power plants, loans that Wall Street won’t touch. The draft Senate bill goes one step further, declaring nuclear a “clean” energy source, not unlike propaganda from the nuclear industry. Bowing to pressure from the pro-nuclear lobby, the bill states that “nuclear energy is the largest provider of clean, low-carbon, electricity.” All indications are that nuclear will be given more handouts and lifelines to garner votes for the Senate bill.

The imbalance in the levels of support for clean versus dirty energy is a glaring indication of where Congress is throwing its weight. One result of this imbalance is that the pace of clean energy deployment will decline over the next 15 years and the use of coal-fired electricity will increase over the same time period, if the pending legislation becomes law. It doesn’t sound like truly clean energy will become the profitable kind of energy anytime soon.

Over the last 10 years, Germany has actually figured out how to do what you wish to do in America. The Germans have used government policy to really support clean energy development so that renewable energy use, which in 2000 comprised 6.3% of total electricity supply, had risen to 14% in 2007. In just seven years, government policy had encouraged more than a doubling of the clean energy sector.

Germany created a new engine of development within its old industrial economy and that has meant 300,000 new jobs for its citizens. On a per capita basis, Germany now has eight times as many jobs in the wind and solar industry as the U.S. does. As a percentage of GDP, the clean energy sector in Germany is almost three times greater than in the U.S.

That kind of economic performance is what has allowed Germany to aim to reduce its greenhouse gas emissions 40 percent below 1990 levels by 2020. That’s double the EU commitment of 20 percent, and 10 times greater than the meager commitment of 4 percent below 1990 levels that the House passed in the American Clean Energy and Security Act.

It is worth noting that it is not particularly sunny or windy anywhere in Germany, especially when compared with the deserts of the American Southwest or the windy expanses of the Great Plains.

How did Germany — with all its clouds and cold — do it? The government deployed a policy mechanism called a feed-in tariff. Essentially, it guaranteed producers of renewable energy a mandatory price for the more expensive power they generate. In addition, local grid operators were required to provide grid access to renewable energy producers and to transmit the clean power on a priority basis.

It was a national clean energy subsidy, financed by a modest rate increase spread across the entire population, a tariff that steadily declines and disappears completely over 20 years. It is a policy that indeed provides incentives to make clean energy the profitable kind of energy, and it has worked.

A few cities and states in the U.S. have adopted feed-in tariffs, but in pending U.S. legislation, the policy mechanism of choice for encouraging clean energy development is the Renewable Portfolio Standard.

Twenty nine states plus the District of Columbia have passed mandatory Renewable Portfolio Standards or goals and five more states have passed voluntary standards or goals. Nominally, the ACES bill Combined Efficiency and Renewable Electricity Standard requires 20% of the U.S. electricity supply to come from renewable sources by 2020.

In 2007, renewable energy accounted for 9.4% of total U.S. electricity supply. Existing organic growth of business as usual in the clean energy sector will be enough to surpass the target in the pending legislation. According to ICF International analysis contracted by Greenpeace, after exclusions for small utilities, credit for energy efficiency instead of new renewable generation and loopholes for nuclear power, carbon capture and storage and existing hydro, the real renewable requirement is less than 10 percent, a goal that the states alone will achieve with current RPS policies.

Is this the best that American Clean Energy and Security Act and the Clean Energy Jobs and American Power Act can do?

Mr. President, the weak support for clean energy is another point of maximum danger that needs your urgent attention.

The report Business as Usual was written on behalf of Greenpeace by SolveClimate founder David Sassoon.

See also:

How Congress Threatens to Undermine the Clean Energy Future: The Clean Air Act

How Congress Threatens to Undermine the Clean Energy Future: Weak Carbon Caps

How Congress Threatens to Undermine the Clean Energy Future: Protecting Coal

How Congress Threatens to Undermine the Clean Energy Future: Handouts and Offsets

Greenpeace Warns Obama: Congress is Undermining the Clean Energy Future

Deutsche Bank: Absence of US Clean Energy Policy Will Send Global Capital Elsewhere

White House, Job Creation Keys to a Stronger Renewable Energy Standard

Renewable Energy: 'An Opportunity America Can't Afford to Miss'

ACES Low for the Solar Industry?

(Charts: Greenpeace; NREL)

• ‹ previous
• up
• next ›