US Energy and Environmental Policy Missing in ActionLocation: New York It's sad to take a hard look
and observe the lack of any effective or comprehensive energy policy over
the last 30 years, since the oil shocks of the 1970s. While energy continues
to be in the headlines, the solutions proposed by both Republicans and
Democrats are piecemeal, self- serving and ineffective. Listening to the
hype of the "greening" of America from the "food for fuels" proponents is
nonsensical. Does America suffer from Attention Deficit Disorder,
experiencing too many distractions to actually contemplate long-term
solutions to complex problems? Solutions require heavy lifting and don't
have the immediate political pay off of a ribbon-cutting ceremony. A green
initiative for wind and natural gas proposed by one self-serving billionaire
doesn't cut it either. The media vortex needs grist for the mill. So, if it
sounds half good, it may be worth a try. This is intellectual laziness. The most important piece of
energy and environmental legislation under the next president of the United
States will be climate change. A legislative mandate that will create the
impetus to deploy more capital in cleantech, renewables and energy
efficiency but will also provide regulatory certainty is essential.
Regulatory certainty (having the rules in place) will provide financial
certainty for investment. Moreover, the price for carbon will create pro
formas in green project finance that will be viable and material to scale
more investment. So, the pieces are now on the table and need to be arranged
to complete the energy and environmental puzzle. The opportunity to scale
technology is global. The marriage to infrastructure is sustainable for
those of you who think that this is another dotcom flameout. The reality is
that Wall Street is preparing for this tsunami of investment despite the
turmoil in the mortgage markets. Over $250 billion has been accumulated by
KKR, Blackstone, Goldman Sachs et al to deploy on the nuts and bolts of
infrastructure. This can be a green infrastructure since technology is
changing and so should engineering business practices. Most importantly, to
a battered U.S. Treasury and deficit ridden state governments, it will be
private sector funded and a net gain for the economy. Cap-and- trade
legislation on greenhouse gas reductions will be a defacto carbon tax, We
still need metrics from the business sector to deploy green capital
effectively and economically—not government. Privatization of infrastructure
will be the way forward. In a recent interview to Grist
magazine, I defined where the five million green jobs are, saying that today
they number in the tens of thousands in financial services and venture
capital for cleantech, renewables, energy efficiency, and carbon trading and
finance. But, in the future, we are going need more engineers, technicians,
construction workers, and others to lay the green foundation to rebuild
America once again. * Incent energy conservation in
buildings coupled with greenhouse gas credits. Buildings represent nearly 50
percent of U.S. greenhouse gas emissions! Policies to promote more energy
efficient materials and utilization of renewable energy will have a
disproportionate impact on nationwide emissions goals. The building sector
should also be allowed to generate greenhouse gas emissions credits from
energy reduction measures. * Create immediately a national
greenhouse gas emissions registry. We can only manage what we can measure,
and a federal registry of emissions from all feasible sources in the economy
provides the backbone of all types of carbon regulation, whether
cap-and-trade or carbon taxes. Starting a registry today can be done in
parallel with debate over legislation in Congress, and will help speed the
rollout of any final climate legislation. Under the DOE is there is a
registry called Section 1605 (b), but it has no teeth and has been involved
in endless policy debates. Make EPA the repository of such a registry, not
DOE. This is just a starter kit and
not exclusive, but we need to start thinking bigger and longer-term and not
hyping nonstarters like CNG vehicles and hoped for breakthroughs of advanced
biofuels. We have to stop pandering to lower gasoline prices when Europe
pays up to $12 per gallon. This can be accomplished today and doesn't have
to wait for a science experiment. Despite all the media hoopla about "being green," the reality is that green is going to cost money. That is a fact. But for a cleaner environment, better health benefits and job creation, I don't think you could find a better bargain. The next president and Congress must find their voice on a coherent long-term energy and environmental program that is sustainable! That means looking beyond the next two-year and four-year terms of election cycles. Energy projects typically take four to seven years to deploy. The problems require long-term solutions with a comprehensive plan, not the piece-meal sound bites of today's debate. UtiliPoint's IssueAlert(SM) articles are compiled based on the independent analysis of UtiliPoint consultants. The opinions expressed in UtiliPoint's IssueAlert articles are not intended to predict financial performance of companies discussed, or to be the basis for investment decisions of any kind. UtiliPoint's sole purpose in publishing its IssueAlert articles is to offer an independent perspective regarding the key events occurring in the energy industry, based on its long-standing reputation as an expert on energy issues. © 2004, UtiliPoint International, Inc. All rights reserved. |