Jan 26 2010

How to Promote Clean Energy Innovation

Posted by: Jonathan Marshall

Clean energy enjoys huge political support. Climate change legislation, by contrast, is on life support. What critics don't realize is that putting a price on carbon emissions is the surest way to drive investment in energy efficiency, renewable energy, smart grids and other clean tech innovations.

Concerned by fierce opposition to climate legislation from vocal critics, some members of Congress have called for sidelining the climate bill and focusing only on a new energy bill to promote "innovation and new technology."

That would make every politician's life easier. But as Sen. John Kerry, D-Mass., has noted, innovation doesn't come from thin air--it needs the right market environment:

If you separate climate from energy reform, you slow your ability to create those clean jobs because every market expert tells you those energy reforms can't take hold unless you price carbon. Unless you do something comprehensive you're just going a more expensive, less effective route and you'll keep trailing other countries. 

Senate Majority Leader Harry Reid, D-Nev., gets it as well. As he told a recent gathering of the geothermal industry, "Most importantly, Congress needs to send the market a clear signal on the costs of global warming pollution to drive far greater investments into geothermal and every other form of renewable energy and energy efficiency." 

Businesses have been saying the same message, loud and clear. In a recent ad signed by dozens of major companies, including PG&E, corporate leaders warned that "today's uncertainty surrounding energy and climate regulation is hindering the large-scale actions that American businesses are poised to make. We need strong policies and clear market signals that support the transition to a low-carbon economy and reward companies that innovate."

The same logic has also motivated major automakers to call for higher gas taxes, so consumers will buy smaller, more fuel-efficient cars, including hybrids.

Let's face facts. It will be many years, if ever, before renewable energy and clean nuclear power are as cheap as coal-fired power. Not until the price of coal reflects the environmental damage it inflicts will alternatives stand on their feet without massive government subsidies. That's why legislation to stabilize the Earth's climate is so critical to creating the right climate for new investments in clean energy.

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