It was fair to expect some pointless corporate socialism to buy out the Conservatrons in the Energy Bill, and it does have some worthwhile provisions such as updating the grid and changing the antiquated daylight savings regime. The nickel and dime tax breaks for sustainable energy are nice; however, they do nothing to change the energy status quo. A Renewable Portfolio Standard (RPS), assuming it was properly constructed, would have begun to incorporate sustainable (I prefer sustainable to renewable) energy into a meaningful portion of the nation’s supply.
The RPS in the senate bill would have forced each utility to garner a modest (the EU is already shooting for 22% and, all told, we have better geological resources for this then they do) 10% of its energy output from sustainable sources (generally wind, solar and geothermal) by a set date. If structured properly this would have been accomplished through tradeable credits. In this way a utility in, say, Michigan in January could have traded most of its 10% requirement to a utility in Arizona where there would be ample solar energy to account for some of Michigan’s 10% on top of its own. In this way the most efficient sources would have been utilized first and, assuming that it is advantageous to sell credits (in other words, the Arizona Utility could say, hey we’re producing 12% of our energy from solar sources, now we are going to sell the 2% extra credit to a utility that can only make 8% this month and make a profit) it would have created an actual market incentive for RD&D of sustainable energy and lots of high-tech (research) and blue collar (maintanence) jobs – as opposed to the 2 billion dollars that the Energy Bill will pay oil companies to do seismic tests for offshore oil wells regardless if states want exploration there or not.
To be fair the RPS does have one disadvantage, if a utility has to buy most of its green quota then the people it serves will not see the benefits from the green energy. But hey, that’s capitalism – real capitalism I mean. If their customers are unhappy about it then, by golly, there is an incentive for that company to invest in developing a form of green energy available in its area.
In a poorly strucuted market that does not internalize the downwind externalities of convetional energy sources and compounds this problem by lavishing them with underserved subsides green energy will never account for more than around 1% of America’s total capacity. An RPS would have put economic momentum behind a meaningful amount of green energy. It certainly would not have solved America’s energy problems, but it would have put a real dent in them and created an atmosphere that encouraged innovation. Instead, just like hybrid engines, we will be buying this technology from foreigners; specifically, Denmark, Germany, Japan and yes, China.