Peanuts for Clean Energy
Senator Barbara Boxer has released a new summary of what the dominant global warming legislation in the Senate -- Lieberman-Warner's Climate Solutions Act (CSA) -- will do. Most importantly, the summary shows what it won't do: fund clean energy.
CSA won't make a big investment in clean energy. Of the $5.6 trillion the bill's framers say the legislation will raise through auctioning pollution allowances (permits), a measly seven percent -- about $10 billion per year -- will go to clean energy research, development and deployment. I'm defining "clean energy" broadly to include carbon capture and storage.
By contrast, about $16 billion per year (11 percent of the total) will go to the fossil fuel industry, and 45 billion (about a third of the total) will be rebated to consumers.
What will $10 billion buy? Almost nothing.
By way of comparison, a new nuclear plant, or a new coal-fired power plant that captures its emissions costs (carbon capture and storage, or CCS for short) about $2 billion. Scientific American's "Grand Solar Plan" would cost that amount every year for 40 years.
That's why most experts say what's needed is more like $30 to $80 billion per year.
The assumption being made by the bill's framers -- Lieberman, Warner, Boxer, et al. -- is that they can just increase the price of fossil fuels enough to make clean energy expensive. If carbon dioxide receives a price of about $30/ton, then low emissions energy alternatives like wind, solar, nukes, and CCS will become relatively cheaper. If the price rises too much above that, a new "Carbon Market Efficiency Board" will issue more allowances, bringing down the price.
The problem is that is that if carbon dioxide is priced at that amount, most clean energy sources won't be cost competitive. Even Joe Romm says that CO2 priced at that level won't bring on CCS or efficiency. And if you raise the price of CO2 much higher, you'll face a powerful consumer (and voter) backlash. The result what we've called "global warming's Gordian Knot" -- a knot that CSA fails to cut.
I don't necessarily have a moral problem with handing over truckloads of money to either industry or consumers if I thought it would result in clean energy revolution. But that's not what the CSA's truckloads of money will fund.