Despite President Obama’s assertions in his State of the Union address and an ever-increasing coalition of corporations, utilities and clean energy advocates rooting for Congress to put a price on carbon, any new law that would provide some certainty to energy planners is not going to happen any time soon. More likely is that businesses will have to juggle the uncertainty perhaps well past 2011.

This has to be frustrating for companies that want the competitive advantage of crafting and executing low-carbon strategies. For companies such as Nike, HP, Exelon and PG&E, the longer Congress waits, the more time their competition can catch up. More importantly, the harder we’ll have to work to catch up with countries and companies in the EU and Far East who could be light years ahead of the U.S. by the time Congress acts.

For the rest of this year’s legislative calendar in Congress – already shorted by the mid-term elections in November – the hearings, proposals and politicking can only aspire to assemble more pieces to the puzzle.

There is little doubt that parts of the puzzle that can survive into the next Congress have to substantially accomplish at least these five objectives:

1. set a clear, economy-wise price on carbon with a market-based approach to buying and selling emission credits;
2. ease the way for the U.S. economy to transition off of coal;
3. give a large portfolio of climate-friendly technologies the opportunity, at least on paper, to articulate a role they can play, never mind the costs;
4. redirect most of the emission-relate revenues back to consumers; and
5. be revenue-neutral to the Federal government.

To garner the votes needed just to get a bill out of the Senate means that next-generation nuclear power and carbon-capture-and-storage technologies will be funded at significant levels. It also means that clean energy advocates probably should not aspire to a renewable electricity requirement in states that don’t already have one of more than 15% or so. And even then the definition of what is “renewable” may lean more toward “alternative,” as Pennsylvania already does.

One of the newer bids to frame the strategy for reducing carbon emissions is from Senator Maria Cantwell, a Democrat of Washington state. Her Carbon Limits and Energy for America’s Renewal (CLEAR) Act would have every fossil fuel producer or importer (coal mining companies and oil and natural gas producers) participate in a monthly auction to bid for carbon permits for each ton of fossil carbon they are placing into U.S. commerce. Three-fourths of the revenues from these auctions would be refunded directly to every American on a so-called “equal per capita” basis each month.

Under Cantwell’s vision, no Wall Street traders or speculators would have access to the auctions and therefore would not be able to manipulate carbon prices or supply.

All this said, the next major energy bill will likely focus not on reducing carbon emissions but on creating jobs, jobs and more jobs in the always attractive — somewhat illusive — “clean energy” space. Mind you, some of even the already-passed House energy-climate bill conceivably could be copied and pasted into such a bill. Think solar PV and hot water heater installers; the next generation of nuclear engineers sorely needed to succeed those retiring from their plant owners, design engineers and assembly-line workers at domestic geothermal equipment, fuel cell, wind turbine and solar module manufacturing plants sprouting to meet Made-in-America mandates.

In an election year, jobs are a lot easier to agree on than how to put a price on a ton of carbon.

~JP

Are renewable energy advocates mis-firing when it comes to communicating economic, environmental and other benefits? The January 17, 2007 podcast on RenewableEnergyAccess.com provides a sobering assessment, including one from Michael Shellenberger, co-author of the new book Breakthrough: From the Death of Environmentalism to the Politics of Possibility.