One of the more interesting subtexts in the ongoing Waxman-Markey negotiations is the irony that as the bill gets closer to garnering the support it needs for passage — through horse trading, earmarking, compromise and watering down — it looks less and less like a positive step for renewable energy advocates to have a federal regime at all.
Thanks to preemption doctrine, whatever does emerge from Congress will likely trump much of what already exists at the state level for energy-environment regulation. Sure, the bill may hold out state autonomy to set higher renewable standards or more ambitious target dates than those federally prescribed, and that kind of dual sovereignty — especially where expressly permitted by Congress — has long been held constitutional. But, for a “progressive” energy state like Massachusetts, there are likely to be direct conflicts with the federal law, and in those cases the state standard (in many cases the more aggressive one) will be preempted.
One can imagine state regulators and green energy entrepreneurs salivating at the prospect of taking the climate fight forward behind the leadership of a leader like Obama in a very friendly legislative environment. And in some ways, they have delivered — look at the stimulus bill as an example.
Still, I wouldn’t be surprised to see the more well-entrenched interests (i.e., utilities) figure out ways to get their hands on a lot of the EE, DSM and demand response monies, and other money made available in both the stimulus and under Waxman-Markey.
The Washington Post touched on the problem for many advocates and regulators yesterday, noting on Waxman-Markey and the Senate’s own energy proposal that “…executives from companies in the wind turbine business are lobbying hard for stiffer renewable energy requirements, arguing that they would be better off with requirements that have already been enacted by 28 states.”
In other words, when you try to craft a bill that can win approval nationally, you’ll wind up with a pronounced flattening affect for states in the Northeast and on the West Coast where they could get – and already have – energy regulatory policies and legislative action that is far more progressive. In legal/historic terms, this is the same “race to the bottom/top” problem that has been fought over every issue ranging from labor law to racial equality to environmental regulation.
Another case of “be careful what you wish for,” as many of the same parties that greeted Obama’s (and the Dems that rode his wave) with a hand, might now be heard to gripe: “hands off!”
8 comments
The current model of the national energy grid is designed for maximum consumption. The model of the national energy grid is not sustainable for a national climate change strategy. We already see the repeating of past mistakes of investments by picking pet projects and having power carried across long distances with geothermal in Queensland. The current business practices of the national grid stakeholders will easily want to make the existing systems more efficient and effective when government policy has designed the system to maximise energy output.
Coupled with these problems of the national energy grid of high levels of distribution inefficiencies is how Renewable Energy Certificates (RECs) and Green Power both of which seemed to be designed for large economic players to benefit from. With Green Power it is lot clear what it is purchases and for RECs how it is counted.
Another level of complexity there seems to be little interest in a distributed energy system from the managers of the energy industry. Added to this is the executive management culture of the Australian power industry that is based on status quo management where the game is to maximise their sunk costs and their myopic strategic thinking.
Hence we do not see much roll out of Renewable Energy like large-scale wind farms.
Michael:
Thanks for reading and posting the comment. Sounds like Australia is looking at many of the same problems with entrenched interests and paradigm shifting that we are seeing play out in the US right now.
Inertia and vested interest are two of the major reasons that I think the developing world offers better opportunities for grid conversion and adoption of renewables than the US. Where capital can be invested in the construction of new infrastructure where there is little extant, the deployment of renewables offers a win-win as it constitutes investment that the country will be happy to have, it is a climate change/environmental boon, and it offers outside funding for electrification strategies.
Is MA really a ‘progressive energy state’? How would the current legislation discussed thwart this progression you elude to in MA?
Thanks
Owen
Owen:
Thanks for reading and posting the comment. I would say Massachusetts is a very progressive energy state: first to deregulate, leader in establishing mandatory RPS, just passed one of the more aggressive decoupling-approaching utility rate models in the country, and a member of the only active carbon trading regime (RGGI) in the US. The possible regressions I see are several: i.e., if the feds pass an RES that sets lower standards and allows for a host of alternative compliance methods, Massachusetts can keep more aggressive policies in place, but they do so at the risk of alienating in-state business who would have to contend with increased artificial cost. There are also direct conflicts with the fed RES definitions that would have to be resolved, for example, Massachusetts has restrictions on current state-level RECs for some otherwise-qualified renewable power that is imported from outside of the NE-ISO. It seems evident that a federal RES would have preemptive impact there.
Also, if Waxman-Markey ultimately passes, it will preempt RGGI and put in place a regime that includes a lot more allocations than in the RGGI auction system. While Mass and other RGGI states have to contend with “carbon leakage” issues right now (see Steven Ferrey’s recent Boalt Hall Ecology Law Quarterly article on the subject for a great treatment of that dilemma), they will now be faced with a carbon trading regime that steps back from even the low cost per ton that RGGI had set in the past auction. For Massachusetts, allowing utilities to emit carbon at a lower cost per unit – and maybe even to monetize those emissions based on very high early baselines – will certainly be a step back in the reduction of emissions.
A couple of thoughts here….
If 28 states mandate 30% renewables, the average percentage per state nationally is 16.8% renewables. If the Feds mandate 20% renewables, then the average is 20%. A net gain. Ultimately, this will come down to whether or not the Federal mandates lead to a net gain in renewables.
My second thought is that this is being treated as though the bill will be cast in stone, and may never be revisited. As technologies and experience with reality give us new tools and strategies, the bill can be revisited and amended. For me, the importance of the bill is that it starts the shaping of a national energy strategy, not that it develops one.
Thomas:
Glad to see someone is reading my stuff. I would also encourage you to head over to my personal blog at http://energyworkscr.blogspot.com for more on the public engagement side of these issues.
I understand your point about getting something out there to start a transition. The Trojan Horse theory is a valid one. The question both on passage for passage sake and on whether a national RES is good both turn on the level of compromise that ultimately defines the bill.
For example, with alternative compliance systems in place for the national RES that would allow as much as 20% satisfaction of standards by demand-side programming, it will be absolutely key how those “demand-side” programs are defined. The bill as it stands now would allow for the governor of the state to decide what satisfies that standard, meaning that there could be some pretty creative interpretations of efficiency applied to as much as 20% of the aggregate renewable deployment required.
Also, if the bill codifies too much in the way of concessions to fossil industries and other interests, even a “good start” could turn into a pair of golden handcuffs that would prevent real adaptation of policy to technology as you discuss.
Bottom line, humbly, I think Obama is overplaying his hand. Energy, health care, and the economy are all mega-issues that need top billing and can’t be fought as a second or third front. If we are going to get real energy reform, it needs to get top billing from the administration and dominate an entire legislative session. That is pie-in-the-sky with all the balls that are in the air right now, so the question you raise is a good one: is something – anything – better than nothing?
To politicians throughout the world on climate change, renewable energy and energy efficiency
Politicians in western countries like Australia, the United States, New Zealand, Canada and some European countries are taking actions to not support carbon trading and renewable energy targets. These actions by supposedly deferring and/ or reducing the level of these targets will place future increased costs on the taxpayer and consumer. Along with this your decision not to support carbon trading and renewable energy targets will dramatically affect the viability of the business models of renewable energy and energy efficiency firms. The decision not to support the legislation in carbon trading and renewable energy targets will take away from businesses and households the right to reduce their carbon footprint.
Can you please answer the following questions?
1. Why as a politician do you believe the evidence for climate change is a conspiracy? That the evidence provided by the Government Scientists is not factual? What criteria have you based your decision on regarding climate change?
2. Have you visited in your own country and elsewhere Government Agencies and Universities who do research on climate change and renewable energy? Are you aware that the US Pentagon of any government agency in the world spends the most on renewable energy and energy efficiency?
3. What is the current value in your country of carbon trading and renewable energy targets in employment and sales?
4. In the 12 months what is the anticipated number of jobs that have been lost due to your decision of deference to this industry?
Is anything better then nothing? Probably not. On the other hand, every journey starts with a single step. We seem to be trapped in a circular argument as regards what technology to replace fossil fuels with, or even if we should. The whole global warming debate is mired between competing camps – yes it is, no it isn’t and it ain’t us. As a father of two daughters, the tone often seems downright family like……
We are going to continue to get stuff like the Waxman-Markey bill until such time as someone can put together a complete energy policy. This bill as it shakes out and is implemented will be useful. For states like California it will turn into the reasoning to not build any more fossil fuel plants. If California and the other 27 states can show it is doable, then we will be in a better position when it comes to round two. And it might very well lead to a true energy policy.
As for Obama overplaying his hand, I am not so sure. As a new president, he has some political capitol. As the issues are highly contentious, moving fast enough to get ahead of the opposition is an interesting tactic. Remember Bill Clinton put together a blue ribbon panel headed by his wife. IF memory serves, it took about 9 months to come up with something, and in that 9 months, the opposition was able to get into position to kill it.
Comments are closed.