The Public Policy

Whose Clean Energy Standards?

Answers for Sens. Bingaman and Murkowski.

By 3.24.11

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Living in a home with four kids and two dogs, one child's "clean" can mean "unacceptable" to an adult -- think barely visible shower scum or machine-washed plates without phosphates.

And necessary energy levels and types mean different things to different people: A back-to-nature maiden who practices what she preaches needs much less than a multitasker who watches her LCD TV while researching on the Internet and listening to her iPod.

And as we know from years of observation of political discourse, one man's "standard" is another's moral abhorrence.

Put them together in a "Clean Energy Standard" (CES) and you ask for real trouble.

But that's not stopping Sens. Jeff Bingaman of New Mexico and Lisa Murkowski of Alaska, who on Monday -- as Chairman and Ranking Republican respectively of the Senate Energy and Natural Resources Committee -- issued a "white paper" that solicits comments on what should constitute a CES. You might remember that in his State of the Union address last January 25, President Obama proposed that the federal government impose an 80 percent standard by the year 2035.

In the past Bingaman and others have proposed a national Renewable Electricity Standard, which would have required electric utilities to generate a specific percentage of their power from "alternative" sources such as wind, solar, biomass, or other impractical technologies. So the president wants a mandate that requires four-fifths of utilities' total electricity production to come from what a future law would define as "clean energy" by 2035.

Thirty states presently have Renewable Portfolio Standards (RPS; some call them Alternative Energy Portfolio Standards). Most are fairly specific in their definitions of what qualifies as acceptable in their schemes, but each has its own percentage targets and dates. You can view specific states' requirements via an interactive map at American Tradition Institute.

But expanding the mandate to a "Clean Energy Standard" worsens an already costly, ineffective policy. ATI and others, in conjunction with the Beacon Hill Institute at Suffolk University in Boston, have analyzed RPS's in several states and found they universally drive costs for electricity up, because they force utilities to replace efficient power generators like coal with inefficient sources such as wind or solar. For example, ATI's Colorado study determined that the state's utility customers would pay $11.8 billion more for electricity between 2011 and 2020 because of the state's RPS.

Recognizing the unlikelihood of a national cap-and-trade law and Bingaman's repeated attempts at a national RPS, ATI also commissioned Beacon Hill to do a study on potential national mandates of 15 percent, 20, percent and 30 percent by the year 2021 (Bingaman co-sponsored a bill last year that called for the 15 percent national RPS). Under the ambitious 30 percent scenario -- a likely intermediate goal that would be required to attain President Obama's target -- the U.S. economy would take a hit in the trillions of dollars.

The white paper questions that Bingaman and Murkowski ask only complicate matters. Because the president was vague on what a Clean Energy Standard would look like, Congress is left to navigate the rippling waters between what environmentalists and alternative energy rent-seekers want defined as "clean." Free-marketers need not advise, but I will do so anyway based upon reality, instead of the fantastical answers the Senators are likely to get:

Q. Is the goal to reduce greenhouse gas emissions, lower electricity costs, spur utilization of particular assets, diversify supply, or some combination thereof?

A. None of the above, because it cannot do any of the above. Instead it will set up uninformed government meddlers as authorities to dole out favors and tax breaks to undeserving technologies that have capable lobbyists as the only thing going for them.

Q. Depending on the goals, is a CES the right policy for the nation at this time?

A. It doesn't matter what the goal would be. A CES establishes bureaucrats and lawmakers as decision-makers, rather than individuals who can determine the form of electricity that best meets their power and environmental needs. A CES would be an economic disaster (see ATI study mentioned earlier).

Q. Should any states or portions of states be specifically excluded from the new program's requirements?

A. You mean a Cornhusker Kickback-type exclusion, which undoubtedly some Senator wanting to protect constituents from higher energy costs would seek? No.

Q. Should the definition of "clean energy" account only for the greenhouse gas emissions of electric generation, or should other environmental issues be accounted for (e.g. particulate matter from biomass combustion, spent fuel from nuclear power, or land use changes for solar panels or wind, etc.).

A. I don't know -- ask the environmental experts who can't even agree on what is clean and green.

Q. Should partial credits be given for certain technologies, like efficient natural gas and clean coal, as the President has proposed?

A. Depends on if you need to buy them off too in order to pass a bill.

Q. Is there a deployment path that will optimize the trade-off between the overall cost of the program and the overall amount of clean energy deployed?

A. If there is, do you think the government is capable of determining that ideal path?

Q. Should there be a banking and/or borrowing system available for credits and, if so, for how long?

A. So you want to bring back cap-and-trade?

Q. How might a CES alter the current dispatch order of existing generation (such as natural gas-fired power plants), which has been driven by minimization of consumer costs, historically?

A. Depends on how much you want to keep spending to subsidize expensive energy losers like wind and solar.

Q. To what extent does a CES contribute to the overall climate change policy of the United States…?

A. Not at all -- do you have any proof, or even scientific (I use that term as loosely as climate alarmists do) projections that it does?

I trust that these answers have been helpful, if not for Sens. Bingaman and Murkowski, then for you, faithful readers. May Tea Party principles prevail.

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About the Author

Paul Chesser publishes CarolinaPlottHound.com, a news aggregator for North Carolina, and is a contributor of articles, research and investigative reports for both national and state-level free-market think tanks.