The climate and clean energy bill that narrowly passed the House has three problems related to cost containment (CC) that the Senate should — and I expect will — address:

1. Fence-sitting Senators (and industries) worry that its CC provisions aren’t hard-nosed and specific enough to protect the public and businesses from carbon prices that get too high too fast, possibly driven by speculators.
2. Progressives worry that its CC provisions are already too strong and that some proposals floating around to strengthen CC would environmentally weaken an already weak bill.
3. The major CC provision in the bill — the strategic reserve — is so opaque that it is understood by a handful of people at most and none of them are U.S. Senators.

I’m going to try to take the best of all the current CC proposals and propose an alternative that I think might actually be appealing to all sides, what I’m calling “price collar plus.”

Two weeks ago, the Brookings Institution — which I’d view as center-right on the energy and climate issue now that David Sandalow has left — proposed a traditional price collar in Politico, “Time for a price collar on carbon.”  To their credit, they did suggest this was a way to “rein in offsets” but offered no specifics on how to achieve that important end.

The benefit of a price collar to Brookings:

By preventing the policy from being either unexpectedly lax or unexpectedly stringent, a price collar protects both investors in green technologies and households and preserves strong incentives to abate.

The House climate bill already has a price floor for the auction, which starts at $10 a ton in 2012 and rises 5% plus inflation every year thereafter.  I believe most everyone understands the need for a rising price floor — giving some certainty to businesses about investment decisions they make, say, in biomass cofiring or natural gas fuel switching.  The floor in Waxman-Markey is, by almost every independent analysis, on the low side in the sense that the CBO and EPA and especially the EIA project the price for a CO2 allowance in 2020 will be above the floor — in EIA’s estimation, double the floor price.

The fossil fuel industry, of course, funds economic analyses that project incredibly high allowance prices to scare people into opposing the bill entirely.  If their analyses were anywhere near accurate, the floor in the House bill would be utterly irrelevant.  I’d love a higher floor, but since it has already passed the House, we’re probably stuck with it.

A price collar, of course, requires a ceiling to go with the floor.  Brookings explains:

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The stack of forged letters opposing clean energy reform on behalf of the coal industry is growing. Rep. Tom Perriello (D-VA) has revealed that he not only received forgeries purporting to come from black and hispanic groups, but also senior citizen and women’s advocacy organizations as well. Yesterday, Perriello’s office told reporters that in addition to the five NAACP letters and one Creciendo Juntos letter forged on behalf of the American Coalition for Clean Coal Electricity (ACCCE), “two other letters were forged to appear as if they had been sent by the Jefferson Area Board for Aging, a Charlottesville agency, and the American Association of University Women.” Perriello, who cast his vote in favor of the American Clean Energy and Security Act despite this fraud, discussed the scandal on Rachel Maddow:

Obviously, anything like this, where someone is claiming your letterhead and then claiming your position is just outrageous. They also did JABA, the Jefferson Area Board for the Aging, which is one of these great service organizations in our community that helps our seniors. And for them to get dragged into something like this really is, I think, a blow to folks in the area. But it’s also just a turn-off again to these sorts of corporate-lobbying tactics.

Watch it:

Neither JABA nor the American Association of University Women did any lobbying on the American Clean Energy and Security Act, and both organizations first learned about the fraud today. Since the scandal broke last Friday, ACCCE has placed the blame on its contractors, the Astroturf specialists Hawthorn Group and Bonner & Associates. However, ACCCE has known and kept silent about the fraudulent campaign against the clean energy legislation since June, even as the two other members known to have received fraudulent letters, Reps. Kathy Dahlkemper (D-PA) and Chris Carney (D-PA), voted against the bill.

Rep. Ed Markey (D-MA), the chair of the Committee on Energy Independence and Global Warming, today sent a letter to ACCCE requesting information about its role in the affair, including the full details of all of the fraudulent letters sent on its behalf:

The deliberate inaction prior to the House vote and the extended silence after the vote — some 40 days after ACCCE knew what had happened — raises serious concerns.

President Obama announced 48 new advanced battery and electric drive projects that will receive $2.4 billion in stimulus funds.  You can read details here.  The awards cover:

• $1.5 billion in grants to U.S. based manufacturers to produce batteries and their components and to expand battery recycling capacity;
• $500 million in grants to U.S. based manufacturers to produce electric drive components for vehicles, including electric motors, power electronics, and other drive train components; and
• $400 million in grants to purchase thousands of plug-in hybrid and all-electric vehicles for test demonstrations in several dozen locations; to deploy them and evaluate their performance; to install electric charging infrastructure; and to provide education and workforce training to support the transition to advanced electric transportation systems.

For a full list of award winners, click HERE.  For a map of their locations, click HERE.

Obama is always at the leading edge of progressive messaging, so I’ll excerpt the energy portion of his remarks in Wakarusa, Indiana today below:

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Our guest blogger is Stacy Morford, managing editor for SolveClimate.com.

The electric utility industry has been one of Congress’s top campaign contributers for years. Already in the still young 2009-2010 election cycle, it has contributed $2.4 million to congressional campaigns. During the 2007-2008 election cycle, when the Senate rejected the Lieberman-Warner climate bill, the industry gave $20.6 million.

As the Senate debate ramps up, the top ten Senate recipients of electric utility contributions so far this cycle have staked out positions on the Waxman-Markey American Clean Energy and Security Act that range from skepticism to virulent opposition.

Byron Dorgan (D-ND): $70,200

Dorgan, a member of the Senate Energy and Natural Resources Committee, is the top recipient of campaign cash connected to electric utilities so far in the 2010 election cycle. He’s leery of the cap-and-trade approach, and he sees a future still powered by fossil fuels. His home state happens to have vast coal reserves. Dorgan wrote in a recent opinion article in the Bismarck Tribune that to protect the environment and make the nation less dependent on foreign oil, the U.S. should:

Establish caps on carbon that are accompanied by both adequate research and development funding and reasonable time lines for implementation to develop and commercialize technologies that will greatly reduce the CO2 emissions from the burning of fossil fuels.

Lisa Murkowski (R-AK): $60,000

Murkowski is the ranking Republican on the Senate Energy and Natural Resources Committee. She criticized ACES for not promoting nuclear and oil and gas development. When her committee took up its own energy bill earlier this year, she pushed for a lower renewable energy standard of 15 percent by 2021, opening the Florida coast to oil drilling, creating a green bank that could heavily benefit nuclear development, and providing ample funding to Alaska’s natural gas pipeline project.

Richard Burr (R-NC): $55,449

Burr, a member of the Senate Energy and Natural Resources Committee, believes in an “all options on the table” approach. He supports energy efficiency and renewable energy development, as well as continued oil exploration. He also believes nuclear “can and must be part of the energy solution if our country wants to achieve meaningful reductions in greenhouse gas emissions.” Read more

The fate of the next 50 generations may well be determined in the next several months and the next several years.  Will Congress agree to a shrinking GHG cap and the clean energy transformation?  If not, you can scratch a global climate deal.  But even if the bill passes and a global deal is achieved — both will need to be continuously strengthened in coming years, as the increasingly worrisome science continues to inform the policy, just as in the case of the Montr©al Protocol on the ozone-depleting substances.

In short, the fate of perhaps the next 100 billion people to walk the Earth rests in the hands of scientists (and those who understand the science) trying to communicate the dire nature of the climate problem (and the myriad solutions available now) as well as the ability of the media, the public, opinion makers, and political leaders to understand and deal with that science.

And so what could be more timely — and disquieting — than a book titled Unscientific America: How Scientific Illiteracy Threatens our Future?  The book is by Chris Mooney, whose science blog was a major inspiration for me to pursue blogging, and scientist Sheril Kirshenbaum.

While it notably and presciently disses former TV meteorologist Watts for his unscientific obsession with pushing weather data in the climate debate (see “Unscientific America, Part 1: From the moon-landing deniers to WattsUpWithThat“), climate-saturated CP readers will be happy to know that very little of the book actually focuses on global warming.

Rather, this short, highly readable book is a survey of the sorry state of scientific understanding and communication in this country, ending with some proposals for improving the situation.  Here are some of the interesting/depressing factoids from the book:

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Mexico Aims To Bring CO2 Cut Plan To Climate Talks

Mexico aims to put a detailed offer to cut the growth of its own greenhouse gas emissions on the negotiating table at global climate change talks in Copenhagen this year, a senior environmental policymaker said.

“If Mexico can bring a plan for cuts through 2020 to the table with a detailed description of what will be mitigated it would set a positive precedent for the other big emerging economies,” said Adrian Fernandez, the president of the National Ecology Institute, in an interview on Monday.

The plan will likely offer significant cuts in expected emissions growth from Mexico, which currently accounts for 1.5 percent of global emissions, by proposing projects like improving efficiency of power plants or reducing deforestation.

At Old Manufacturing Sites, Renewables Rise

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Watch eSolar’s launch live here at 10 am PDT.  CEO Bill Gross will be joined by David Meyers, Executive Director of The Wildlands Conservancy, and leading clean energy experts Dan Kammen of UC Berkeley and Google.org’s Dan Reicher (my boss from DOE days) .

Below is a fascinating video from a recent episode of National Geographic‘s World’s Toughest Fixes:  “In this episode, discover the engineering feats behind the development of the eSolar Sierra SunTower power plant.”

Of course, concentrated solar thermal power (CSP) aka solar baseload is indeed a core climate solution.

I asked the company whether future systems will have storage — no reply yet.  CSP with storage is going gangbusters elsewhere (see “World’s largest solar plant with thermal storage to be built in Arizona “” total of 8500 MW of this core climate solution planned for 2014 in U.S. alone“).

Here is more detail on eSolar from its press release:

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Seth Borenstein, the AP science writer I admire greatly, has a long piece explaining that Cash for Clunkers is a very cost-ineffective way to save CO2.  Duh*.

“As a means of reducing greenhouse gas emissions, this “cash for clunkers” deal is probably among the least cost-effective uses of federal dollars one could imagine,” as I wrote back in May.

*BUT as a stimulus that saves oil while cutting CO2 for free — it has turned out to be a slam dunk, far better than I had expected.  Indeed, Borenstein points out that “America will be using nearly 72 million fewer gallons of gasoline a year because of the program.”  At $3 a gallon — hardly what the price is likely to average over the next decade — that is $216 million a year in gasoline savings.

So the billion dollar program pays the taxpayers back in oil savings in 5 years.  That means the CO2 savings are for free!

So quoting a cost of more CO2 saved at more than $100 a ton misses the point, I think.  The primary purpose of the program was NOT CO2 savings.  It certainly wasn’t the primary reason the Center for American Progress put a (tougher) version of the idea forward back in November (see here).  We saw it as an economic boost with efficiency and environmental gains (not just CO2 but urban air pollution).

And it isn’t how Obama described the program last week when he thanked the House for passing a $2 billion increase in funding:

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When House Democrats wrote their global warming bill this spring, they relied on a carefully crafted agreement reached by some of the country’s biggest electric utility companies that appeared to bridge decades of dispute among users of coal, natural gas and nuclear power.

Surprising many longtime observers, liberal Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) incorporated a proposal from the Edison Electric Institute that helped determine how to slice up emission allocations potentially worth billions of dollars between power companies with a wide variety of fuel mixes.

But headed into this fall’s Senate debate, CEOs from some of those same power companies are fighting to keep their coalition together. They face blistering dissent from at least eight Midwestern electric utilities with dominant coal portfolios — companies that say they never signed off on the original deal and are now worried that the climate bill includes an allocation formula that will be too expensive for their customers.

So begins a long story in E&E Daily (subs. req’d) on one of the big, but little told stories of the compromise that gave us House passage of a climate and clean energy bill.   The key point is that a deal was crafted that got utilities representing the overwhelming majority of US ratepayers to support the bill — or, in other cases, at least to not lobby against it.

I suspect this will not be a bill-killer in the end and that most of the original deal will survive with some tweaking — since the disgruntled utilities aren’t big and therefore could presumably be appeased with a pretty small shift in allocations.  But for those who are interested in this important albeit complicated subject, I will excerpt the E&E story at length below with comments:

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Among the phrases you really, really do not want to hear from climate scientists are: “that really shocked us,” “we had no idea how bad it was,” and “reality is well ahead of the climate models.” Yet in speaking to researchers who focus on the Arctic, you hear comments like these so regularly they begin to sound like the thumping refrain from Jaws: annoying harbingers of something that you really, really wish would go away.

So writes Newsweek‘s Sharon Begley in one of the most thoughtful climate pieces ever to appear in a major national publication.  She makes the very case I did in my recent post (except without the hyperlinks — the Achilles Heel of MSM science writing).  For more on the International Polar Year, see The IPY: “Arctic sea ice will probably not recover” and their website.

The Begley piece is so outstanding — and so rare — I’m going to reprint it below:

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Related Posts:

• Memo to media: When the EPA ignores internal non-expert comments filled with falsehoods cut-and-paste from anti-science deniers, that isn’t “suppressing a report.” And why have you completely ignored a major scientific report revealing what a sham that “EPA report” is?
• Exclusive: Watts offers ‘inanity defense’ for his effort to censor Sinclair’s video, saying he was “doing him a favor.” Sinclair replies, “His reaction pretty much confirmed that my psychological profiling was dead on.”
• The video that Anthony Watts does not want you to see: The Climate Denial “Crock of the Week”