What’s Next for Energy Policy

By Eli Pollak

The 2010 Congressional elections did not change all that much for energy policy. The sun rose on Wednesday, November 3rd, and cap-and-trade was still dead–just as it was in the months leading up to the election.

Still, supporters of sound energy and climate policy may find it hard not to be especially disheartened by the election’s results. The fundamentals of the debate are more divorced from reality than ever: Nearly half of the newly elected Republican House Representatives openly deny the science of climate change (none openly accept it). Indeed, only four members of prospective Speaker John Boehner’s (at least) 240-seat incoming Republican House majority openly accept the scientific consensus on climate change.

Given that denial of climate science is not exactly correlated with feelings of urgency to overhaul our energy system, the outlook for energy policy that addresses climate change, increases our energy security, and helps America compete with China in the clean energy sector is bleak. However, some hope remains.

The best chance for success in the next Congress lies in a strong pivot from cap-and-trade focused bills like Waxman-Markey and the American Power Act (bills that failed even in unacceptably watered-down form) towards a fresh energy agenda. While there are a few narrow areas of potential bipartisan agreement left over from the last Congress, most policies discussed during the last two years are simply too politically radioactive to be viable and too weak to be worthwhile. Policies that invoke (in framing or policy content) the toxic political environment of the last Congress stand no chance of passing a Tea Party dominated House. Successful energy policy will need a new approach.

Fortunately the basis for such a policy agenda already exists. Post-Partisan Power, a new bipartisan proposal by the conservative American Enterprise Institute, the center-left Brookings Institute, and the Breakthrough Institute, outlines a comprehensive set of policies to harness the power of American innovation behind one clear goal: driving down the cost of clean energy.

The political opportunity is clear: by focusing on policies to restore the foundations of American innovation (the source of our economic dominance), the plan shatters last year’s binary energy argument of “‘It’s an energy tax!’ ‘No it isn’t’,” and presents a clear, forward-looking, vision for securing American clean energy dominance.

Battle and race metaphors have a long history of uniting Americans behind a common goal (the Space Race for example), and competitions abound in the clean energy sphere. Whether we are racing China to dominate the clean energy industry, battling the clock to avert dangerous climate change, or competing with every country in the world to secure access to limited fossil fuel resources, there is one shared solution: home-innovated, home-manufactured, and home-generated clean energy.

This proposed battle plan is something Americans (and maybe even their elected leaders) can get behind. The plan proposes to fundamentally overhaul our system for financing clean energy innovation. From the press release:

“The new report calls for increasing federal innovation investment from roughly $4 today to $25 billion annually, and using military procurement, new, disciplined deployment incentives, and public-private hubs to achieve both incremental improvements and breakthroughs in clean energy technologies.”

Here is the good news: government support for innovation and research has a long history of bipartisan political support and (more importantly) providing real, world-changing, results. Remember when we were the first nation to develop the atomic bomb? Or when we put the first man on the Moon and won the Space Race? Used the Internet recently? Better send a thank you note to the Department of Defense. Taken any medicine? Sustained federal investment in the National Institute of Health is responsible for creating the biotech industry as we know it today.

When the government sets a clear research goal (in today’s case low-cost clean energy), and provides the funding and institutional support necessary to unleash the power of American innovation, we the people get results.

And now for the bad news: the incoming 112th Congress may be too broken and politically divided to pass even the most common sense of policies. Increased spending (even if it is worthy and fully offset) will be a tough sell in a climate of deficit fears, and even the mere mention of clean energy may be enough to start John Boehner’s House majority screaming “Socialism!!” (if Nancy Pelosi likes it, it must be evil).

In the longer term, technology innovation policy – as proposed in Post-Partisan Power – is not a true substitute for market pricing of carbon dioxide (i.e. cap-and-trade). Post-Partisan Power’s authors may be loath to recognize it, but a wealth of economic literature supports the reality that America will also need a carbon price in the future to price in fossil fuel’s external costs and level the playing field for clean energy.

However, we must start innovating tomorrow’s clean energy technology today, and Post-Partisan Power provides a clear, politically viable, roadmap for developing the technology we will need to compete with China, increase our energy security, and address climate change. The public support is there (reducing the cost of clean energy technology consistently receives support from 65 to 90 percent of Americans in a wide array of polling); will our elected leaders rise to the challenge? Probably not. What is next for sound energy policy in the 112th Congress is probably nothing, but we can hope. And Post-Partisan Power is a reasonable place to start.

This entry was posted in Articles for Volume 4, Issue 2, Winter 2011. Bookmark the permalink.

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