Translating Energy into Climate Legislation

Despite the “doomsday” predictions of a future of legislative deadlock by many news pundits, this election presents a significant opportunity for a new energy bill to become law for several reasons.

First, Congressional leaders, both Republican and Democrat, have an electoral mandate to show their constituents legislative progress. In contrast to issues such as immigration, healthcare, bank reform, and “Don’t Ask, Don’t Tell," energy legislation is one of the few topics that provides an opportunity for compromise. President Obama has shown a willingness to compromise on issues such as off-shore drilling, evidenced by his announcement to allow limited drilling in April 2010. Likewise, it was under the Bush administration in 2008 that Congress passed the Investment Tax Credit (ITC). The ITC has been the single most important piece of federal legislation in promoting renewable energy. Thus, both sides of the political spectrum have shown some movement toward the center.

Furthermore, big businessess are increasingly backing a comprehensive federal climate policy. Companies that have spoken out against the U.S. Chamber of Commerce because of inaction on climate policy include: Apple, General Electric, Pacific Gas and Electric, Exelon, PNM Resources, and Nike. Although this is admittedly a small portion of the Chamber of Commerce’s membership, this directly indicates companies' growing interest in climate change and perhaps more importantly, growing interest in passing comprehensive federal regulation to remove the complications of dealing with a complicated network of different state regulations.

Until recently, the states have driven the U.S. renewable energy industry, through successful state-level regulations, tax breaks, and incentives. While this patchwork of policies has helped grow the U.S. renewable energy industry, it has also cost multi-state utilities and corporations because of the inherent inefficiencies of complying with a series of differing regulations. The recent tide of new conservative lawmakers elected to state office ensures that the foreseeable future will be full of uncertainty on existing and pending renewable energy policies. However, with the state-level pendulum swinging back to the right, from its center-left position, the stage is set for large businesses to back a national policy. Companies such as Pacific Gas and Electric (PSG&E) in California and New Jersey based Public Service Electric and Gas (PSE&G) have launched renewable investments that total in the hundreds of millions.

These factors create an opportunity for an energy — albeit not climate — bill to pass in 2011. The Republican platform will probably take its shape from the House’s “American Energy Act,” which has provisions for additional natural gas and off-shore drilling, as well as nuclear development and “clean coal.” The success of an energy bill in actually doing something to mitigate climate change will rest in Democrats' ability to successfully insert provisions for strong investment in renewable energy into any such legislation.

Given that in 2009 renewable accounted for only 7% of America’s electricity generation, I would argue that we need to develop natural gas and nuclear energy. However, for any bill that passes to be considered a success, it must incorporate a robust and powerful mechanism for developing renewable energy in the U.S. and gradually phasing out fossil fuels. The American Energy Act does not do that.

Photo Credit: Wikimedia Commons

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Johann Scheidt

Johann Scheidt is a founding member of Esound Energy, a renewable energy consultancy and project developer. Prior to launching Esound, Scheidt worked with Fotowatio Renewable Ventures, one of the world’s leading solar developers and financiers. A graduate of Connecticut College, Scheidt holds B.A. degrees in Government and Environmental Studies. He has also resided in Berlin, Germany where he was employed by a multi-national law firm and furthered his studies on legislative analysis, risk assessment and environmental policy. A strong proponent of the power of technology to drive social, economic and environmental sustainability he also enjoys cooking and eating.

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