WASHINGTON, DC, US, April 25, 2007.
The United States should adopt a federal renewable energy portfolio standard of at least 15% of electricity generated by 2020, according to a bipartisan group of top energy experts.
Adoption of a national RPS, a cap and trade proposal to address climate change, increases in fuel economy standards, approaches for storage of nuclear waste and development of advanced coal technologies are recommended by the National Commission on Energy Policy in its report, ‘Energy Policy Recommendations to the President & the 110th Congress.’ The NCEP includes energy officials from industry, government, labour, academia and environmental and consumer groups.
“The United States must implement specific policies to increase clean energy production if it is to achieve its broader energy policy and environmental goals,” says co-chair John Rowe. “While the Commission believes it is necessary to place a price on carbon emissions and to increase production of renewable energy, these measures alone are not sufficient to encourage new production.”
At least half of the total pool of allowances available under a cap-and-trade program should be directed to the transition to a low-carbon economy, including funding for advanced energy technologies and carbon sequestration projects should be eligible for incentives, including bonus emissions allowances at least equal in value to incentives currently provided under the renewable energy production tax credit.
The NCEP recommends a series of other policy changes, including a five-year (rather than two- or one-year) extensions of current federal production tax credits for renewables, to promote longer-term investment. “Government should re-evaluate ethanol subsidies and tariffs in light of current fuel mandates and rationalise existing policies to direct a greater share of public resources to more promising options, such as cellulosic ethanol; biobutanol; and clean, high-quality diesel fuel from organic wastes.”
Steps should be taken to ensure that U.S. policies aimed at reducing oil dependence “do not promote environmentally unsustainable fuel alternatives” and direct federal expenditures on energy-technology research should be doubled while specific funding for cooperative international efforts in energy research should be trebled.
“On renewable energy, the primary national-level policy currently in place to promote electricity production using wind and other renewable resources remains the federal production tax credit,” while a “more recent and extremely important development has been the proliferation of state programs that require utilities to provide a minimum percentage of electricity from renewable resources.” Policies to promote renewables have been adopted by 23 states, “generating growing momentum for a national level program.” A federal RPS should apply to all retail electricity providers, not just electric utilities, and “complement but not pre-empt state programs and recognise credits that are used for compliance with state RPS requirements” by creating an additive requirement on top of state RPS.
Federal support should be technology neutral and treat all renewables equally, and provide credit for early action to avoid penalising utilities that have invested in green power prior to enactment of a federal RPS. It should allow for national trading, and include express provisions assuring retail electricity providers of cost recovery and a fair rate of return for approved renewable energy investments undertaken to comply with a federal RPS.
The National Commission on Energy Policy was formed in 2002 by the William & Flora Hewlett Foundation, The Pew Charitable Trusts, John & Catherine MacArthur Foundation, David & Lucile Packard Foundation, and the Energy Foundation.
