Monday, September 27, 2010;
DEMOCRATS' PLANS to put a price on carbon -- a good idea -- died over the summer. So last week a handful of senators led by Energy Committee Chairman Jeff Bingaman (D-N.M.) announced that they would offer a bill that would establish a so-called renewable electricity standard (RES), which would require that utilities derive 15 percent of their power from sources such as wind and solar by 2021. Republican Sens. Sam Brownback (Kan.) and Susan Collins (Maine) joined in. More co-sponsors may sign on, giving the policy a chance of attracting the 60 votes that it needs to avoid a filibuster. Green groups that once questioned the wisdom of such a weak RES -- as proposed, it probably wouldn't require much more than what many state governments already demand -- are getting behind the effort, too.
With both a carbon tax (our preference) and a cap-and-trade scheme politically out of reach, smart regulation could be better than nothing. But if the government is going to set rules, why not a technology-neutral carbon reduction standard, under which utilities would be required to reduce the carbon they emit per megawatt by adopting cleaner generation technologies? The government interest is in reducing climate change; the goal therefore is low-carbon electricity generation. If nuclear power, which produces no carbon, can help reach that goal, why should government aid only wind and solar? And why not include natural gas, which emits about half as much carbon as coal, in some way?
Backers of the proposed RES counter that the point is to help a carefully defined set of energy sources that are truly renewable -- unlike nuclear, which requires fuel and produces waste -- and that face trouble attracting capital because of uncertainty about market demand in the medium and long terms. But that's the sort of thinking that leads to ever more distorted energy markets in which dozens of government interventions have complex, sometimes unwanted effects and obscure the central goal. Lawmakers should put their carbon-cutting policies in terms of carbon reduction and stop trying to decide who wins and who loses.