This week the American Wind Energy Association assembled a bunch of energy industry executives to make a pitch to the press for a national renewable energy standard, that is, a mandate requiring utilities to generate certain proportions of electricity from renewable sources by certain dates. They argued that such a standard would create jobs, promote green tech manufacturing in the United States, and catch up with other countries that have been leading the way in renewables. "RES is the way we've done it across the world and across the country," said one participant, observing that 29 U.S. states have adopted renewable energy standards.
The trend is real but the assertion dubious. The European countries that have forged ahead the fastest in renewables--Germany, Denmark, and Spain--have done so not primarily with renewables standards but by means of feed-in tariffs: Any party that generates electricity from a designated renewable source is guaranteed definite returns as of specified dates, every such party is entitled to sell the electricity into the national grid, and the added costs are allocated among all ratepayers. The feed-in tariff has an enormously powerful stimulus not just to production but to R&D as well, in that the more cheaply you can make electricity from whatever renewable you use, the higher the profit you're sure to make.
What's wrong with relying on renewable energy standards instead? One big thing is that an RES encourages projects of dubious worth, which in the long run can backfire, as concerns about excessive costs and inadequate performance set it. RES implementation also depends as a rule on complicated systems of renewable energy credits that rivals, in terms of bookkeeping and administrative overhead, the cap-and-trade carbon systems that are so much in fashion.
Speaking of which, as prospects dim for congressional adoption of a really effective U.S. carbon trading regime, Columbia University's Jeffrey R. Sachs suggests we revisit the whole question of how to approach greenhouse gas regulation. Writing in the current issue of Scientific American, Sachs takes the White House to task for leaving negotiation of a climate bill to Congress and lobbyists. "The result is sprawling draft legislation, hard for the public to understand and replete with hidden and overt financial transfers to vested interests." (Sound familiar?) Sachs proposes instead that EPA should regulate carbon aggressively and that the government should reconsider a national carbon tax after all. (Cap and trade was supposed to be the more politically palatable approach, but if it's not palatable after all, why not adopt a much simpler and much more transparent tax bill?) Above all, says Sachs, "the public needs to hear a plan." The Obama administration has promised to reduce U.S. emissions 17 percent by 2020, but how exactly is that to be achieved?