5 Focus Areas of the President’s Clean Energy and Climate Agenda
This is a guest post from my friends Katherine Hamilton, Jeff Cramer, and Patrick Von Bargen at 38 North Solutions (one of my best resources on energy policy developments in Washington). I get updates from them on emerging energy and related policy news, and I am excited to be able to share their follow up to the State of the Union here as I thought this was a great summary of the President’s energy focus.
Following up on the President’s largely unexpected statements on climate policy in his inaugural speech, the 2013 State of the Union highlighted accomplishments to date on clean energy deployment and GHG reductions, and outlined five focus areas for his second term climate and clean energy agenda. We have included our prognosis for each of these areas.
1) Challenging Congress to pass legislation addressing climate change through “market-based solutions,” referencing Republican John McCain’s past support for his own cap and trade bill, last introduced in 2007, and threatening executive action to regulate carbon through the Clean Air Act.
Prognosis: Dems in both Houses are expected to introduce climate legislation, perhaps as a Clean Energy Standard (CES) that the President has promoted in the past and that was introduced in Senate Energy and Natural Resources in the last Congress; perhaps through introduction of a carbon tax that has the dual purpose of raising revenues; perhaps through a smaller package of provisions like Master Limited Partnerships for renewables or innovation incentives for clean technology. EPA will also continue regulating greenhouse gas emissions through its Clean Air Act mandate.
In any case, the climate conversation has been revived and there may even be a “wild card” idea to surface in the debate. For example, Congress could strike an “energy grand bargain”, passing significant and long-term statutory provisions that would reduce greenhouse gas emissions in exchange for scaling back of EPA rule-making in those areas.
2) Proposing a “Race to the Top” for energy efficiency. Mimicking the Department of Education’s effort to spur competition amongst states for federal funding, the President called for a “doubling of energy productivity by 2030″ through offering federal incentives for states that meet higher energy efficiency standards.
Prognosis: Energy productivity is a concept that has bipartisan support. While Congress is loathe to spend additional funds given the debt issue, new authority for this type of program – details TBD — could be given the Department of Energy which would then need to find funds within existing programs. Given the ability of the SunShot program to leverage federal dollars with state initiatives, this policy could definitely get some traction on the Hill and be a boon for businesses in the energy efficiency space. The Administration and Congressional supporters will likely sell the package as a major economic driver and job creator, citing recent studies on the value of energy productivity for economic growth.
3) Doubling down on manufacturing programs and incentives, forming three new manufacturing hubs, and calling on Congress to fund 15 more.
Prognosis: Congress has traditionally backed basic research in energy technologies; the hubs, such as the DOE Energy Innovation Hub for Batteries and Energy Storage, housed at Argonne National Laboratory, bring together many research institution and national laboratories with industry to combine expertise and find economies of both substance and scale. It is hard to imagine 15 more of these getting funding given the need to reduce budgets, but they could certainly be identified and authorized and perhaps bring private investment to the table.
4) Calling for continued funding and support for programs and provisions that have helped to reduce dramatically the costs of solar, wind and other renewable energy technologies.
Prognosis: While the Administration will fight for additional funding for these programs, it is hard to imagine Congress will appropriate significant additional funds in this economic climate. Instead, we think creating incentives that are based on performance goals and opening new market opportunities through the tax code or regulatory process might have a better chance. If the Congress does indeed tackle comprehensive tax reform, we think the Administration and Congressional champions on both sides will fight to keep clean energy provisions in the mix. There is of course the potential for new ideas to emerge in the debate as well around productivity and innovation.
5) Proposing the creation of a new “Energy Security Trust” to support research of technologies to reduce U.S. dependence on oil in the transportation sector, including biofuels, electric vehicles, and natural gas vehicles.
Prognosis: Energy security also has bipartisan support, although it has been the mantra of nearly every President since the 1970′s oil embargo. Continuing to implement CAFE standards will likely have the greatest impact on fuel efficiency. We could envision a multi-agency initiative where funds from programs are combined to support this effort. Congress would be likely to at a minimum hold hearings to discuss policy related to energy security and independence.