A Positive Discussion of Clean Energy Standard Marred by Talk of Preemption
Posted May 18, 2012
Yesterday, Senator Bingaman led a committee hearing on the Clean Energy Standard (S.1426), legislation that would increase production of renewable energy like wind and solar power, and energy efficiency along with other energy sources like nuclear and natural gas. It would work by requiring utilities to get an growing percentage of their electricity over time from “clean” energy sources.
NRDC has strongly supported the concept of a Federal standard that would responsibly expand renewable energy and energy efficiency and have found a lot to like in Sen. Bingaman’s promising CES. Among its benefits – it would significantly reduce carbon pollution from the electricity sector, incorporate a carbon metric to incentivize cleaner electricity sources, increase renewable energy above existing expectations, and have a small impact on electricity costs.
Unfortunately, during the hearing, several senators called for using passage of the CES as an excuse to preempt critical air pollution standards found in the Clean Air Act. Sen. Bingaman further indicated an openness (subscription required) to the concept following the hearing.
This should be a non-starter for a number of reasons.
First, it would poison the politics of the CES, unnecessarily forcing CES supporters to oppose the bill, and making the entire enterprise aggressively partisan and toxic.
Second, there is no need to preempt air pollution standards for the CES. The 42 year history of the Clean Air Act has relied effectively on a combination of performance standards and broader air quality management programs. There is no redundancy between the CAA, which requires minimum performance standards for certain types of polluting sources, and concepts like the CES, which set industry-wide objectives over a longer time frame. One example of this is the highly successful national program for vehicle carbon pollution and fuel economy. That program successfully harmonizes not just two, but three, separate programs: the Energy Policy and Coordination Act, the Clean Air Act, and California's clean car standards
Assuming that pre-emption isn’t included, the CES can be good policy, providing a stable and healthy market signal that allows investors to fund new renewable energy projects, domestic manufacturers to retool factories to build clean energy technologies, and American entrepreneurs to build a new generation of leading global companies. This will create hundreds of thousands of new jobs for engineers, constructions workers, manufacturing workers, and many others. (see the E2 Clean Energy Jobs newsletter for recent announcements of clean energy jobs being created across America).
As we detailed in an earlier post and above, the CES uses a carbon metric mechanism to award credits to energy sources based on their carbon-intensity. This approach addresses our need to fight heat-trapping gases like carbon pollution in a technology neutral way. Modeling efforts from the Energy Information Administration (EIA), World Resources Institute (WRI) and Resources for our Future (RFF) have all shown a significant reduction in carbon pollution from a CES, as well as an increase in renewable electricity generation and a reduction in energy demand beyond existing business as usual forecasts, and a limited impact on electricity prices.
There are, however, in addition to the obvious need to avoid pre-emption, areas for improvement in the current version of the CES. Better safeguards are needed for both biomass and natural gas (both energy source that would be included as clean energy options and both of which have the potential to be decided not clean if not sited and sourced carefully). Additionally, while the CES provides funding for energy efficiency programs, the CES would be improved with the inclusion of an energy efficiency standard, that similarly required utilities to save energy over time.
For more details on these issues, please see our earlier post. NRDC remains a strong supporter of policies that encourage clean, renewable energy and energy efficiency, and looks forward to engaging further with this legislation.