No Carbon Price, No Clean Energy

Obama and Biden can crow all they like about clean energy, but until a price is fixed to CO2 emissions, America's energy habits won't change.

With a blizzard of numbers, Vice President Joe Biden and his boss put out a report Tuesday arguing that thanks to the stimulus bill, a clean energy revolution is at hand.

Put away the party hats and champagne. Behind the self-congratulatory hosannas about solar power loan guarantees, wind power tax credits, battery factories, and high-speed rail lines, there is a very large elephant lounging in the living room upstairs from the Oval Office.

The Obama administration failed to convince a Congress run by large majorities of the president’s own party to put a price on carbon dioxide emissions, the pollution thumb on the scale that reinforces the oil and coal incumbency in America’s energy economy.

A price on carbon would provide investment certainty and a price signal that would goose the market for low-carbon energy technologies that could give oil and coal a run for their money.

Right now, however, America’s energy policy is uncertainty. Uncertainty about a carbon price. Uncertainty about EPA carbon regulations. Uncertainty that the federal government is capable of adopting any coherent policy that can tame the wasp’s nest of security risks, economic vulnerabilities, and environmental hazards tied to energy.

President Obama has excelled at inspiring rhetoric about the promise of cleaner energy, but when it came to the grimy work of drafting legislative proposals, building a bipartisan coalition around a carbon price mechanism, and, when necessary, knocking recalcitrant Capitol Hill heads together, Obama didn’t do much of anything.

Can anyone picture the professorial Obama giving Harry Reid a dose of Lyndon Johnson’s famous “treatment?” No, neither can we.

The president should understand that no matter how much of our hard-earned tax dollars that he and Congress throw at clean energy, the investment will be largely wasted unless there is a price on carbon to level the playing field with fossil fuels and help cleaner energy sources and efficiency technologies advance in the marketplace.

Utilities and other energy-related companies are sitting on billions of private investment dollars waiting for a clear signal that dumping carbon pollution into our atmosphere will no longer be free. They are understandably reluctant to stick their necks out on clean energy as long as the guillotine of low-cost fossil fuels remains in place.

Obama and Biden can crow all they like, but until a price is imputed to CO2 emissions, either through a statutory cap or a carbon tax, the ways that Americans produce and use energy today will carry forward, largely unchanged except at the margins.

That is…until oil price shocks and/or a more volatile climate shake us from our torpor. Then, we will find ourselves sending more dollars overseas to buy cleaner energy technologies from China, which by then will have taken full advantage of our lack of political will and foresight.