May 19, 2012

WILL AMERICA do anything significant to slow climate change? Cap-and-trade died in 2010. Clean-energy subsidies are expensive and inadequate to address the sprawling issue of global warming. The Environmental Protection Agency’s new carbon regulations have the same drawbacks.

President Obama’s fuel efficiency standards will help, but they affect only the transportation sector. The GOP presidential primary race, meanwhile, gave no hope for serious policy to cut carbon emissions.

The optimistic can point to one bill in the Senate, from Energy Committee Chairman Jeff Bingaman (D-N.M.). The proposal would require that utilities derive a defined portion of their electricity from technologies that emit fewer greenhouse emissions than coal, the dirtiest fossil fuel. Critically, any electricity technology — wind, solar, natural gas, nuclear or something entirely new — can get credit, scaled in accordance to the improvement it offers. This clean electricity mandate would ramp up over time, requiring that 54 percent of electricity in 2025 come from such sources and 84 percent in 2035. If this sounds familiar, it’s because many states have similar policies in place, though many — including Maryland’s — aren’t as well thought out.

The plan would slash coal use, boosting natural gas, nuclear and renewables. Total U.S. energy- related carbon emissions would decline to 80 percent of the 2005 level by 2035, the Energy Information Administration estimates.

There would be costs. At first, utilities could scale up existing natural gas and biomass facilities, keeping electricity-price increases below 4 percent in 2020. But that figure goes up to 18 percent by 2035. Some regions could see higher price hikes, others lower. Lawmakers considering the idea will have to examine ways to prevent energy-intensive industries from fleeing the country. There is also a lot that a clean electricity standard cannot accomplish. It targets just one sector of the economy — electricity — when there are carbon emissions that can be wrung out of all sorts of activities at relatively low cost.

An economy-wide solution — in which the government puts a price on greenhouse emissions, gets out of the way and lets consumers decide where to cut pollution — is still by far the best anti-carbon policy. Unlike a clean electricity mandate, a carbon tax also would raise revenue, which could help fund energy research, lower the deficit, be rebated to consumers, or all of the above. A well-designed cap-and-trade program could also work. Mr. Bingaman’s clean electricity standard is, at best, an Option C.

Still, Option C is better than the current, barren policy landscape. If Republicans come to their senses on global warming, a clean electricity standard could hold the most political appeal of any big approach to carbon cutting. It is harder to construe as a tax increase, and it explicitly benefits GOP favorites, such as natural gas and nuclear energy, as well as Democratic ones, such as solar and wind energy. After many years of lawmakers proposing less appealing versions of the same idea, there’s now a solid draft on the table.