"Our generation's Sputnik moment": President Obama calls for 80% "clean" electricity by 2035
In his State of the Union address, President Obama challenged Congress to pass legislation establishing a clean energy standard (CES) that would require that 80 percent of America’s electricity come from “clean” sources by 2035. President Obama signaled that a standard would recognize electricity derived from not only renewables but also nuclear, clean coal and natural gas. Calling the clean energy push “our generation’s Sputnik moment,” the President’s speech framed a CES in the larger context of improving U.S.’s competitiveness in the changing global economy. The focus on clean energy and not GHG emissions also reflects a dramatically altered political landscape than what President Obama faced over his first two years in office. With cap-and-trade legislation off the table, President Obama is reaching out to Republicans by expressing his support for clean coal and nuclear in any energy legislation.
In a conference call today, Secretary of Energy Steven Chu reiterated President Obama’s comments that the U.S. faces a “Sputnik moment” where it must make a concerted commitment in clean energy to compete with China, Europe and other countries. With regard to a CES, Secretary Chu acknowledged that the President’s proposal was “ambitious” but “not over-the-top.” Secretary Chu noted that the details of a CES proposal will be left to Congress and that any legislation will require bipartisan support.
President Obama’s State of the Union address, coupled with Secretary Chu’s press conference, could provide momentum to energy legislation. Despite environmental organizations prior opposition to nuclear, some mainstream environmental organizations like the Pew Center on Global Climate Change and the National Resource Defense Council reacted favorably to President Obama’s CES proposal. The renewable energy industry also praised the President’s comments and argued that a CES can help fuel job growth. Senator Lindsay Graham (R-SC) is planning on working with a bipartisan group of Senators on drafting a bipartisan energy bill that includes a CES. Senate Majority Leader Harry Reid (D-NV) is also indicating that energy policy will be a top legislative priority this year.
Yet prospects for passage of a CES still faces considerable challenges. Senator Richard Lugar (R-IN), a key swing vote on energy legislation, remains undecided as to whether to endorse a CES. He introduced legislation last year that included a similar “diverse energy standard,” but he noted that he is reassessing this standard in light of concerns expressed by utilities. Emboldened conservatives, particularly in the House, will likely be highly skeptical of any mandate even if it were to include nuclear, clean coal and natural gas. Notably, House Energy and Commerce Chairman Fred Upton (R-MI) released a statement after the President’s speech criticizing a call for increased federal mandates. A CES bill could also become a legislative vehicle for contentious debates on other issues like EPA’s GHG regulations and offshore drilling.
To pass a CES, President Obama will need to build and sustain a tenuous alliance of Democrats, moderate Republicans, environmentalists, and utilities, among other stakeholders. The success of the President’s push will depend on his ability to argue that clean energy is essential to “win the future,” as he stated last night, and keep America as an economic leader in innovation and competitiveness.
Four Bright Green Spots in the Budget
As I’ve mentioned before, I’ve been spending a lot of time this year helping clients see how the American Reinvestment and Recovery Act (ARRA) can help support their environmental initiatives.
But last week, when the President sent Congress the fine print of his proposed Fiscal Year 2010 budget, even I had a start: Never before has US government set out to make its spending so green. Not even the stimulus.
Here’s a list of Four Green Bright Spots:
1. Pouring Money Into Water. The Environmental Protection Agency’s funding will increase roughly 30 percent from the $7.6 billion in the fiscal 2009 omnibus to $10.5 billion.
There’s a massive increase for water infrastructure, including $2.4 billion for the Clean Water State Revolving Fund, a low-interest wastewater loan program that helps states construct water treatment facilities. (The fund received just $689 million in fiscal 2009.) The Drinking Water State Revolving Fund would receive $1.5 billion, up from $829 million this year.
2. Carbon Infrastructure. The EPA will dedicate $17 million to the development of a GHG registry for US greenhouse gas emissions. As we’ve written before, this is a necessary first step toward regulating carbon emissions.
3. Oil is Out. Over at the Department of Energy, the proposed spending is flat from last year. Of course, that doesn’t include the nearly $40 billion showered on the department from the stimulus law for alternative-energy and efficiency initiatives. There are significant changes in emphasis on spending, though when it comes to fossil fuels. The budget completely cuts funding for the oil research and development program authorized by the 2005 Energy Policy Act. Finally, a budget that leaves behind the perverse incentives supporting fossil fuels that are costing us so much more than their sticker price.
4. Adaptation Gets Attention. State Department is contributing $600 million to two World Bank funds, one that supports clean technology in the developing world and the other that helps spur adaptation solutions in countries struggling with climate change. Over at Interior, the department is touting $183 million in increases for clean energy and the mitigation of climate impacts on the home front.
I’m sure there’s more to find, but the four points give some sense of this extraordinary bright green spending plan that, if adopted, will change the federal government’s impact on the economy.
