With Seconds on the Clock, Democrats May Waste Last Chance for Clean Energy Win

With the final seconds ticking down on the Congressional clock, President Obama and Senate Democrats emerged from a White House summit with Republican moderates Tuesday still lacking any plan to score a last minute win for clean energy.

Wasted opportunity

Establishing a price (any price) on carbon pollution through a(n increasingly weak) cap and trade system continues to be the the preferred climate and energy approach of environmental advocacy groups and Democratic leadership. This preference holds despite the fact that for at least three years, that plan has consistently failed to uncover any route to securing the sixty votes necessary for passage in the Senate (a similar bill narrowly passed the House last June).

Heading into the Tuesday morning White House summit, Republicans eyed as key swing votes for any clean energy or climate bill telegraphed clear intentions: cap and trade would be a practical non-starter, but they were ready to act with the President on measures to promote zero-carbon electricity, electric and plug-in hybrid vehicles, and greater energy technology innovation, clean up dirty coal plants, and improve energy efficiency.

The summit offered President Obama a prime opportunity to reset the Senate energy debate by calling a new play: take up the energy provisions Republicans have offered, counter with a more aggressive proposal on similar fronts, and begin earnest negotiations with GOP swing votes to ensure passage of a final bill that could move America towards a clean energy economy before the Congressional clock expires.

Unfortunately, President Obama let this chance to break from the failed and increasingly desperate cap and trade agenda slip by, using the meeting, instead, to reiterate to the assembled Senators - and greens watching from the sidelines - that "he still believes the best way for us to transition to a clean energy economy is ... by putting a price on [carbon] pollution."

In what seemed to be an effort to convince outside audiences that Obama had not given up on cap and trade, rather than a real display of leadership, the President failed to present any clear plan of action or convince new supporters to back the much-diminished ambitions of a utility-only cap and trade bill. Instead, the White House team emerged from the meeting simply noting that, "Not all of the Senators agreed with this [carbon pricing] approach, and the President welcomed other approaches and ideas..."

Senator John Kerry (D-MA), the dogged architect (with Sen. Joseph Lieberman of Connecticut) of the increasingly embattled Senate cap and trade strategy, boldly declared that Democrats were willing to make even more concessions in the quest for permanently elusive GOP cap and trade supporters.

"We believe we have compromised significantly, but we're prepared to compromise further," Sen. Kerry told reporters.

This after Democrats had already stacked their "comprehensive" climate and energy bill full of enough offsets and cost containment mechanisms to render the emissions "cap" non-binding on covered sectors--and after recent offers to scale back the cap to cover only electric utilities, a sector responsible for just about one-third of U.S. carbon emissions...

Running out the clock

Thus, it seems that Democrats are now poised to waste what little time remains this year on what could be described either as an increasingly desperate effort to appease Republicans firmly opposed to what they've dubbed "a nationwide energy tax," or as an increasingly transparent attempt to assure green supporters they are 'fighting hard' for cap and trade in preparation for pinning their inevitable failure on 'those dastardly Republican obstructionists.'

Regardless, this strategy is all but certain to leave America empty handed on clean energy reform.

As oil gushes into the Gulf and global temperatures continue to rise, coming away from this Congressional year with nothing would be the greatest tragedy of all. But if Democrats can put aside their insistence on a wholly-compromised, "comprehensive" cap and trade bill, there may yet be hope for a political and substantive victory.

Republicans signal opening

Last week, Republicans invited to the White House summit emerged from a quick planning huddle to tell reporters that they would press Obama to drop cap and trade and work with the GOP to promote several provisions to advance clean electricity, electrification of cars and trucks, and research and development of low-carbon energy technologies.

The GOP has several "clean energy proposals which we are for and he's for too," said Senator Lamar Alexander (R-TN), who as Republican Conference Chair is at the center of GOP leadership.

After Tuesday's inconclusive meeting, key swing Republicans reiterated that there was still an opening to move forward on clean energy--if Democrats would drop cap and trade.

Senator Olympia Snowe (R-ME) stated:

"As I have long advocated, working toward energy independence is an imperative for our economic and national security. Which is why today I urged the President to seize control of our own energy destiny and, for the first time, establish clearly defined national timetables for clean energy production, benchmarks for oil consumption reduction, and goals for game-changing research - which no other president has ever done, to ensure we actually attain that independence.

The Maine moderate pointed to bi-partisan measures she had sponsored to promote energy efficiency, renewable electricity generation, and research, meanwhile stating that while she supported a limited carbon-pricing program in principle, "today we are in different and perilous economic times," stating that economy-wide cap and trade was something America "simply cannot afford."

Likewise, Senator George Voinovich (R-OH) characterized the White House meeting as "a clear signal to the president, Senator Kerry and Senator Lieberman that the chances of passing their cap and trade legislation are quite slim."

The senator went on to note:

"On the other hand, there seemed to be consensus that Senator Bingaman's energy bill may be a viable path forward in the Senate. While in need of improvement, it has bipartisan support and presents a variety of policy tools to expand domestic clean energy resources and reduce emissions.

Republicans have thus put a clean energy offer on the table constituting a clear path to bipartisan energy progress - focus on measures to boost clean electricity generation, oil reduction, energy innovation, and efficiency.

Scoring the last minute clean energy win

Herein lies the last opportunity for Democrats to score a win for energy reform. To date, Republicans have backed a number of key Senate proposals that collectively offer the foundations for a bipartisan clean energy bill that could achieve actual progress, despite the limited time to act in the crowded Congressional calendar [1 - see notes at end for more detail]:

Clean electricity generation: Republicans have backed both a (modest but first-ever) requirement that utilities nationwide purchase a portion of their electricity from renewable energy sources [2], as well as a more aggressive clean electricity requirement that would make nuclear power and carbon capture and storage at fossil fuels plants eligible alongside renewables [3]. Democrats have an opportunity to counter-offer with a slightly more expansive proposal, calling, say, for 25% of all U.S. electricity to come from new, zero-carbon electricity sources by 2020 and 35% by 2030, then negotiate from there. The end result would be a mandate to transform the U.S. electricity sector, putting American utilities on a path to a low-carbon future.

Similarly, Republicans have consistently championed financial incentives to deploy zero-carbon electricity sources. They, of course prefer nuclear power, but this offer still provides an opportunity for Democrats to counter. Instead of $10 billion to back loan guarantees for just nuclear power plants [4], Democrats could propose a similar (or even greater) amount of funding to capitalize a Clean Energy Deployment Administration capable of using a variety of flexible credit enhancement and financing mechanisms to spur the deployment of numerous innovative zero-carbon energy sources, including nuclear power, but also a suite of other cutting edge clean technologies [5].

Vehicle electrification and advanced biofuels: Senator Alexander has joined with Democrats Byron Dorgan (ND) and Jeff Merkley (OR) to propose a bill aiming to put the U.S. on track to electrify half of all vehicles on the road by 2030 [6]. A perfect bipartisan response to the unfolding Gulf oil crisis, the proposal represents a major multi-billion-dollar push to roll out charging infrastructure, incentivize the purchase of electric and plug-in hybrid vehicles and trucks, and invent and manufacture advanced batteries here in the United States that would do more to reduce U.S. oil consumption than any 10 or 20 cent increase in gasoline prices imposed by a cap and trade bill.

This electrification push could be coupled with financial incentives to spur advanced non-grain biofuels and escalating requirements to produce flexible-fuel vehicles that can run on gasoline biofuels (another Republican-backed proposal [7]). Combine these two measures to promote flexible-fuel, plug-in hybrids that can run on electricity as well and you've got essentially the very same plan proposed by the cogent David Sandalow (now an Assistant Secretary of Energy in the Obama Administration) to win America's "Freedom from Oil."

Clean energy research and innovation: Investment in energy technology innovation has consistently enjoyed bipartisan support, both from policymakers and the public, which routinely rank greater clean technology investment as their top policy response to energy and climate concerns. A doubling of DOE energy research [8], the scale-up of the newly established Advanced Research Projects Agency for Energy (ARPA-E), and the creation of a new nationwide network of clean energy innovation centers [9] or clusters [10] would each be critical components of a robust U.S. energy innovation system capable of driving both the incremental and transformational innovation needed to make clean energy cheap and ensure the next generation of clean technologies are invented and commercialized in America.

Cleaning up the dirtiest coal plants: Financial incentives to accelerate the shut down of the oldest, dirtiest coal plants in America and new air pollution regulations to clean up remaining plants could deliver huge public health gains and probably even greater emissions reductions than any weakened, utility-only cap and trade bill. Both provisions have enjoyed bipartisan support [11].

A "cash for coal clunkers" program could provide such financial incentives to close the old high-polluting coal plants (many of them pre-dating, and thus exempt from, Clean Air Act regulations) and replace them with cleaner power plants (with one level of incentive to replace the coal plant with a state-of-the-art natural gas plant, and progressively larger incentives for zero-carbon alternatives like renewables and nuclear power). Old, dirty coal plants provide just a small share of U.S. electricity but make up a disproportionately large share of U.S. power-sector greenhouse gas emissions and pollutants (with associated health impacts and economic costs).

Similarly, updated requirements to clean up conventional air pollutants - including toxic mercury as well as the smog and acid rain-forming sulfur dioxide and nitrogen oxide pollution - would both incentivize the worst culprits to shut down rather than install expensive new pollution controls, while requiring the remainder of the coal fleet to clean up its air pollution resulting in widespread public health benefits for everyone.

Enhanced efficiency: New efforts to boost the efficiency of American vehicles, buildings, appliances, lighting, and manufacturing have routinely enjoyed bipartisan support. Greater energy efficiency will help the U.S. economy get more economic bang out of our energy usage. Increasing economic productivity is a goal Republicans and Democrats can clearly come together to secure, and they have; wide-ranging efficiency measures have featured prominently in several bills currently backed by key Republicans [12].

Advancing the production of zero-carbon electricity, electrifying the American transportation fleet, catalyzing clean energy research and innovation, cleaning up the coal fleet, and boosting the efficiency and productivity of the U.S. energy system: these measures represent a nearly full list of the key levers needed to drive down emissions and U.S. dependence on coal and oil, all while building stronger domestic clean energy industries. What's more, these five areas are now ripe for bipartisanship and with Republican support, these clean energy measures presents a key opportunity for Democrats to drive America forward this year towards a clean energy economy.

What will the last play call be?

Obama and Senate Democrats now face a clear choice between two options...

They can waste precious time assuring green supporters they haven't abandoned cap and trade and meanwhile, come up empty handed by squandering the political opportunity presented by the oil catastrophe in the Gulf, appearing weak and inept before a public demanding energy reform, and handing another political victory to a GOP all too eager to enter the midterms having denied Obama and the Democrats one of their key policy priorities. More to the point, Americans will wind up without any substantive energy progress this year.

OR

Democrats can come out of the huddle prepared to build off of Republican proposals already on the table by offering more substantial counter-offers on each front: clean electricity, electrifying transportation, clean energy innovation, energy efficiency and even accelerated coal plant retirement. These energy-focused measures attached to a bill responding to the oil disaster in the Gulf would command strong public support, putting Democrats in a position to finally bargain from the high ground, secure stronger provisions, and score a real win on clean energy before the end of year.

Will it be a "comprehensive energy and climate bill?" No. And that's fine!

The inexorably-weakening "cap" and trade bills Senate Democrats seem willing to swallow are far from comprehensive already--and still unlikely to secure any passage this year.

Faced with ending up empty-handed and beaten, it is time for Democrats to bank these real wins now while making it abundantly clear to the public that this bill does not "check the box" on energy and climate for good.

If Democrats do that, they will have led America on the path to energy reform, and can tell the public that they will continue to lead a bipartisan effort to end America's dependence on dirty fossil fuels next year, if voters will back them in the November midterms.

If instead, Democrats insist on wasting these last few seconds on the obviously failing and increasingly desperate cap and trade agenda, Americans are likely to wind up without any substantive energy progress this year, and Democrats are likely to fare even worse at the polls. The ball is in their court.

Originally posted at the Breakthrough Institute

Notes:

[1] With just weeks remaining for floor votes in the Senate before the midterms hit, there's still a Supreme Court justice and a new Afghanistan commander to confirm, Financial Reform bills to conference, a budget to perhaps pass (prospects there don't look great), and on top of that, the White House just announced President Obama would give a big speech on Immigration Reform later this week, touching off yet another hot button domestic policy issue.

[2] The "American Clean Energy Leadership Act" (S.1462, or ACELA) passed the Senate Energy and Natural Resources Committee last June with bipartisan support from four Republican committee-members: Sens. Lisa Murkowski (AK), Sam Brownback (KS), Jeff Sessions (AL), and Bob Corker (TN). That bill would establish a (modest but first-of-its-kind) requirement that utilities nationwide purchase a portion of their electricity from renewable energy sources (15% by 2020). In addition to this requirement, known as a "Renewable Electricity Standard" (RES) or "Renewable Portfolio Standard (RPS), the ENR Committee bill would: establish a new federal agency to provide low-cost financing to spur the deployment of new clean technologies (the Clean Energy Deployment Administration); ramp up funding for Department of Energy R&D; establish new efficiency standards for buildings, lighting, appliances, industry and manufacturing.

[3] This is consistent with the "Diverse Energy Standard" included in the "Practical Energy and Climate Plan" (S.3464). Introduced by Senator Richard "Dick" Lugar (R-IN) and co-sponsored by Sens. Lisa Murkowski (R-AK and Ranking Member of the Energy Committee), and Lindsay Graham (R-SC, who backed the bill after walking away from the climate plan he drafted with Sens. Kerry and Lieberman in April), the bill has arguably surfaced as the GOP's preferred energy platform. In addition to the "diverse" clean energy standard that includes stronger requirements than the Energy Committee bill above (15% by 2015, 20% by 2020, 25% by 2025 ... 50% by 2050) but allows nuclear power and carbon capture and storage at coal plants to qualify for the utility requirement, the GOP-backed bill would: ramp up vehicle fuel efficiency standards and set the first ever standards for medium- and heavy-duty trucks; establish financial incentives for advanced biofuel production (from non-grain sources) and require new vehicles to be flexible fuel (capable of running on biofuels and gasoline); establish stronger building, appliance, and industrial efficiency standards; ; expand loan guarantees for zero-carbon nuclear power plants; and provide incentives for the retirement of the oldest and dirtiest coal plants in the country.

[4] The "Clean Energy Act" (S.2776) sponsored by Republicans Lamar Alexander (TN) and Mike Crapo (ID) and Democrats Jim Webb (VA) and Mark Warner (VA), would encourage the build-out of new nuclear plants with a major expansion of loan guarantees, providing $10 billion in appropriations to be leveraged into roughly $100 billion in loan guarantees. In addition, the bill would provide $750 million in funding to establish new "mini-Manhattan projects" to advance clean energy research.

[5] The Clean Energy Deployment Administration is included in the bipartisan ACELA bill, see note [2] above. A similar provision passed the House in the Waxman-Markey American Clean Energy and Security Act.

[6] The Electric Vehicle Deployment Act (S.3442), sponsored by Democrats Byron Dorgon (ND) and Jeff Merkley (OR) and Republican Lamar Alexander (TN), aims to put the US on track to electrify half of all vehicles on the road by 2030. The $7-10 billion bill would: launch pilot communities across country to spur adoption of electric and plug in hybrid vehicles (funded at $2 billion per year); subsidize the nationwide build-out of charging infrastructure and purchase of electric and plug-in vehicles, including new credits for medium- and heavy-duty hybrid purchases; provide $1.5 billion for advanced battery research and $250 million for related workforce development and education efforts.

[7] Incentives for advanced biofuels production and flexible fuel vehicles are included in the Lugar energy bill, see note [3] above.

[8] The Energy Committee bill, see note [2] above, would authorizing a doubling of applied research programs at DOE, and basic research programs at DOE and elsewhere are on track to double under the America COMPETES Act originally passed with bipartisan support and signed into law by President Bush in 2007.

[9] These innovation centers would be consistent to the "mini-Manhattan projects" proposed by the Webb-Alexander-Warner-Crapo bill, see note [5] above.

[10] Clean energy cluster programs would extend multi-sector, collaborative research efforts to enhance the strength of regional economic clusters and could be a natural and effective extension of the research programs supported by Republicans. See "Strengthening Clean Energy Competitiveness: Opportunities for America COMPETES Reauthorization"

[11] A "cash for coal clunkers" style program offering $11 billion in financial incentives to accelerate the closure of the oldest, dirtiest coal plants comprising 16% (49 GW) of the coal fleet but representing a disproportionate amount of U.S. pollution of both the carbon and conventional varieties appeared in draft legislation sponsored by Senator Dick Lugar (R-IN). The final version introduced as S.3464 (see note [3] above) included a narrower incentive program for coal plant retirement. Republicans Lamar Alexander (TN) and Susan Collins (ME) and Democrats Tom Carper (DE) and Amy Klobuchar (MT) have sponsored the "Clean Air Act Amendments of 2010" (S.2995) which would impose new 'three-pollutant' air pollution requirements on mercury, SO2 and NOx emissions at power plants.

[12] A wide range of efficiency programs are included in both the bipartisan Energy Committee bill, see note [2], and the Lugar bill, see note [3], as well as numerous other bills co-sponsored or introduced by Republican Senators.