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Five Clean-Tech Actions For President Obama In His Next Term

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"Five Clean-Tech Actions For President Obama In His Next Term"

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by Ron Pernick, via Clean Edge

The election is over and the people have spoken. After months of highly-charged attacks, lively and lackluster debate performances, and never-ending punches and counterpunches, Barack Obama has prevailed as the winner of the 2012 election. It won’t be an easy job. Mr. Obama will need to enable the creation of millions of new jobs, embolden U.S energy, environmental, and national security, and lead our country into a robust economic future – all while dealing with a sharply divided electorate.

Now that the election is over, what steps can the president and new Congress take to ensure our nation’s ongoing clean-energy leadership? Here are five actions for Mr. Obama that, if implemented, we believe would supercharge the U.S.’s clean-tech economy:

1) Open Up Master Limited Partnerships to Renewables and Efficiency

After the energy crisis of the 1970s, Congress created an effective investment structure to support domestic oil, natural gas, coal extraction, and pipeline projects called Master Limited Partnerships (MLPs). These tax-advantaged structures now comprise more than $220 billion in assets, and on average return between five and 12 percent annually to their investors. The president should call on Congress, in a bipartisan manner, to open up these same investment tools to renewables as soon as possible. There’s no reason that fossil fuels should get special treatment, and this effective investment structure is well suited to renewables which have their own built-in annuity streams (electricity generation from a solar, wind, or geothermal installation, for example, could provide a regular revenue stream to investors). U.S. Senator Chris Coons (D-Delaware) has written a bill entitled the MLP Parity Act, which if enacted, could level the playing field and open up critical financing to the renewables sector.

2) Leverage the Nation’s Abundant Natural Gas, Renewables, and Energy Efficiency Resources

The U.S. is blessed with perhaps the most abundant natural gas and renewable sources of any nation on the planet, along with being a global leader in energy efficiency and green building technologies. While the U.S. will continue to use oil and burn coal, the future needs to be built on cleaner, less environmentally destructive, less volatile sources of energy. Based on its unprecedented natural advantage, we believe the U.S. should focus new generation assets on environmentally responsible natural gas, renewables, and energy efficiency-based “negawatts.” To a great extent that’s already been happening, with the majority of new generation assets in 2011 and 2012 coming from new natural gas and wind power plants. The president should further leverage these resources by supporting policies and building bridges between renewables, efficiency, and natural gas interests – and highlighting how these industries can work together to enable true U.S. energy independence and security.

3) Establish a National Renewable Portfolio Standard of 30 Percent by 2030

Nearly 30 states and the District of Columbia have enacted Renewable Portfolio Standards (RPS) that have been one of the most effective tools in supporting the growth of clean energy. California, with one of the most aggressive RPS in the nation, is on target to reach 33 percent renewables by 2020. We call on the president to push for a national RPS of 30 percent by 2030, which would bring this effective tool to the entire nation, while allowing states to exceed the federal target.

4) Rebuild the U.S. Grid to Withstand Major Disasters and Support a 21st Century Economy

In the aftermath of Superstorm Sandy, it’s very clear that our nation’s electric grid is woefully inadequate to meet the needs and requirements of a digital, energy-hungry, and increasingly climate-challenged society. We need to invest billions of dollars (and create millions of jobs in the process) in updating our grid with smart meters, distributed power resources like solar and fuel cells, and backup energy storage built in. And we need to look at burying the most vulnerable utility cables underground so they aren’t constantly subject to high winds and fallen trees. This won’t be inexpensive, but our electric utility infrastructure needs to be upgraded. There isn’t much that the AFL-CIO and chambers of commerce agree on, but they both believe the U.S. must rebuild its infrastructure. The president should make the pursuit of smart, resilient, and secure utilities of the future one of his highest priorities.

5) Phase Out All Energy Subsidies

It’s time to level the playing field and get rid of distorting energy subsidies. While admittedly controversial, this is certainly something where folks on both the left and right can find common ground. Let’s start with subsidies for long-established fossil fuel industries like coal, oil, and natural gas. These entrenched industries simply don’t need government handouts. The estimated $3 billion or so in annual federal subsidies to these industries in the U.S. should be removed immediately. Over the next five to ten years, similar subsidy support should be phased out for renewables and nuclear power. For renewables, a five to ten year phase out makes sense since subsidies are meant to help support expansion of new, fledgling industries. And while the deployment of renewables in the U.S. has doubled over the past four years, they could use a final push. So for now, we should extend successful tools like the wind production tax credit, but have a clear plan to end them within a decade. Nuclear, which has been the most subsidy-dependent of any energy sector, will need five to ten years to see how it might be able to compete in a subsidy-free world. Once all subsidies are phased out, the energy market can compete in a more open and transparent environment.

We believe firmly that clean tech, which represents industrial breakthroughs in energy, water, waste, transportation, buildings, and more, offers one of the greatest opportunities to rebuild our economy, slow the growth of and adapt to climate change, upgrade our failing infrastructure, and create millions of jobs in the process. Voters overwhelmingly support clean-energy initiatives and believe it’s crucial to our nation’s future competitiveness. Governors and mayors on both sides of the political aisle support clean tech and the tens of thousands of jobs it represents to their regions. And clean energy is scaling. Two states, South Dakota and Iowa, already get approximately 20 percent of their electricity from renewable energy, with a host of other states not far behind.

We had an inordinate share of partisan attacks during this election cycle. But now that the election is settled, let’s move on with the business of building a clean-tech nation – with bipartisan support that unleashes American capital, innovation, and leadership. It’s not only up to our 44th president to help make this change happen – but also to business owners, policymakers, investors, teachers, students, and citizens across the country.

As former President Bill Clinton wrote in his review of our book Clean Tech Nation, “It’s up to all Americans, across every sector, to follow through.” It will take an all-hands-on-deck approach to rebuild a sustainable, strong, and resilient economy – and President Obama needs to lead the way.

Ron Pernick is founder and managing director of research and advisory firm Clean Edge and the coauthor of two books on clean-tech business trends and innovation, Clean Tech Nation (HarperCollins, 2012) and The Clean Tech Revolution (HarperCollins, 2007).

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12 Responses to Five Clean-Tech Actions For President Obama In His Next Term

  1. Mulga Mumblebrain says:

    The mention of ‘natural’ gas (not that nasty, polluting, over-hyped and greenhouse intensive ‘Frackenstein’ monster gas) is very regretable. These sorts of lists are often Trojan horses, in my experience, where the good ideas (renewables and efficiency) are forgotten while the secret cargo, crafty Odysseus and his party-pooping Greeks bearing gifts (‘natural’ gas)get all the investment. But I’m a born cynic.

    • Ron Pernick says:

      Just to reiterate — our focus at Clean Edge, in our book “Clean Tech Nation”, and in the above piece is to find high-impact, bipartisan pathways to a clean-energy future. Most of the actions outlined in the article relate to financing and building out renewables and efficiency, not natural gas.
      And we do not support, for example, including natural gas in an RPS (that’s why we don’t support watered down clean energy standards). That said, the U.S. will need to use some fossil fuels in our energy mix for some time to come, and we believe it’s critical to look at ways to do it responsibly. A reliance on renewables, efficiency, and next generation, rapid dispatch natural gas plants for new capacity additions is the best pathway forward.

      • Mulga Mumblebrain says:

        Thank-you for your explanation. I certainly do not doubt your bona fides and good intentions, but, being a cynic, I see including gas as a danger, because the fossil fuel interests are already using the ‘dash for gas’ argument, (in the USA and the UK at least, and probably in Poland and other ideologically receptive ground) to actively undermine renewables. I’m just very well aware that the hard Right still do not accept renewables, as the campaigns against wind power, on spurious ‘health’ and ‘visual pollution’ grounds (the Right is particularly active in Australia, led by the Murdoch apparatus, in this regard)show. The Right are eminently capable of using ‘short-term’ gas extraction as a subterfuge, not to forget the pollution concerns involved in fracking itself. I for one would rather see every cent spent on renewables, efficiency and demand reduction, but, of course, I could be wrong.

  2. Dan Miller says:

    These are mostly fine, but without a price on carbon (via, for example, a Fee and Dividend policy married with a tariff on goods coming from countries without their own fee on carbon), we might as well hang it up and party for the next decade.

    As the PwC report said, we are headed for +11F and it will be hard to stop at even +7F. These are “Game Over” numbers for civil society. So, we need to get serious soon. Feeling good about implementing positive policies that won’t come close to reducing CO2 enough are not a way to preserve the planet for our children.

    And as the first commenter mentioned, promoting fossil fuel natural gas as part of a clean energy agenda is a bit silly.

  3. Addicted says:

    I agree with the other commentators about the natural gas stuff.

    I would have been okay with natural gas ten years ago, before the whole ethanol fiasco.

    Folks agreed to support ethanol as a halfway point between the environmentalists and the polluters, but all it did was slow down real renewable energy development, and discredit other renewables once ethanol collapsed, buying the coal and gas industries more time and undeserved credibility. I fear natural gas is ethanol part 2.

    Can you imagine the ads the coal industry is gonna put out if we make a huge shift to natural gas, and tracking ends up making NYC’s entire drinking water supply non-potable? The coal cos will go on about “see, we listened to the greens and now New Yorkers don’t even have drinking water”.

  4. “environmentally responsible natural gas”

    There is NO SUCH THING!
    Methane is 22x as potent a greenhouse gas as CO2. Methane / ‘natural’ gas mining is as bad for the climate as coal, or worse.

    This is such a myth, sold by the gas companies, and bought by all sorts of people who should have done a little research….on this blog http://thinkprogress.org/climate/2012/01/24/407765/natural-gas-is-a-bridge-to-nowhere-price-for-global-warming-pollution/

  5. AA says:

    Obama proposed a renewable energy portfolio standard four years ago. What makes you think that’s going happen now? Especially after Michigan’s proposed RPS got crushed at the polls?

  6. “3) Establish a National Renewable Portfolio Standard of 30 Percent by 2030″

    Too little, too late. (Sadly.)

    I’m not sure how to proceed, but this won’t do what’s needed to halt the destabilization of our climate and other earth systems.

    We could do it faster, if we were to replace fossil fuel plants with CSP at an exponential rate. If your organization has anyone’s ear, try pushing that.

    And don’t, by the way, try pushing natural gas as the “bridge.” It’s way to late in the game for us to be developing more fossil-fuel infrastructure.

  7. Mark E says:

    Awhile back Joe posted about natural gas electric-generation infrastructure that is ALREADY built and sits idle until there is a surge of demand…..

    I agree we should turn those on 100% and retire the equivalent in coal;

    But should we build ADDITIONAL natural gas electric-generation infrastructure? Hell no.

    ~~
    (((Leave the darn stuff in the ground)))

  8. Dave Bradley says:

    Dude,

    There is no such thing as “responsible” natural gas any more. Of the 25.5 trillion cubic feet/yr (tcfy) of methane used in the US, about 6.5 tcf is fracking sourced, and this stuff has about the same GWG footprint as coal due to leaking methane: http://www.wagengineering.blogspot.com/2012/11/a-fracking-primer.html. There is no more ability to supply nat gas by “conventional” means, so any new gas has to be supplied by expensive fracking means. Fracking now supplies 30% of our nat gas supply, and it is growing as “conventional” supplies get depleted.

    And what about employing the one technique that is actually proven to be both popular and job creating – Feed-In Tariffs. Even the lowest cost renewable on a subsidy-free basis still costs 5 to 10 c/kw-hr to make electricity, and the prices needed for it has to be higher. Most of the wind sourced energy and other renewables in the world has been made possible via FITs. So why not be smart and propose these? After all, if you don’t advocate for what works, you’ll probably get a less effective pricing system that barely works, and only provides trivial amounts of renewable energy and resulting jobs.

    Think big, not wimpy. In 2012, the wind biz will do $25 billion in business. It needs to be doing $250 billion/yr in business to deliver replacements to gas, coal and nukes in a timely manner.

  9. Promotion of natural gas negates the entire piece.

    The carbon benefits are illusory, and the diversion of investment and attention are counterproductive.

    We don’t move forward by going sideways or backwards. And move forward, we must!

  10. Dr.A.Jagadeesh says:

    Include Biofuel from Agave and Biogas from Opuntia and subsequent power generation in the agenda. Already there is big debate on FOOD Vs FUEL. Hitherto Ethanol from Sugarcane and Corn are main Biofuel suppliers. Agave and Opuntia are care-free growth plants and also CAM plants to control carbon dioxide content in the atmosphere.

    Dr.A.Jagadeesh Nellore(AP),India
    E-mail: anumakonda.jagadeesh@gmail.com