US House Votes for Energy Law: Time for an Energy Revolution?
Joshua Green | The Atlantic | June 2009
Barack Obama's
entrance into the White House awoke all manner of hope for a fundamental
turnaround in US energy policy. Yet this is not the first time that the world
has looked to Washington in hope that the US would finally show the world how
to be free of the fetters of fossil fuels. This was in 1977, as Jimmy Carter,
shortly after assuming office, installed solar panels on the roof of the White
House and declared the dawn of a new energy age. But Carter couldn't see it
through. Can Barack Obama, three decades later, help a "Green Economy" finally
come to fruition? The first step, at least, has been made: his long-anticipated
environment and energy law was passed by a slim majority just a few days ago.
Obama made it clear at the beginning of his
term that climate change and sustainable energy policies demand short- as well
as long-term strategies. In the short term it is necessary to guard renewable
energies from the economic collapse. Above all investment banks and hedge funds
have profited from the tax incentives put in place by President Carter for
renewable energies. Tax credits reaching into the hundreds of millions of
dollars are available for financial investments in large infrastructure
projects, credits which can then be
applied against profits that would primarily be earned in other fields (such as
mortgage-backed securities). In such a manner Lehman Brothers, Wachovia and AIG
came to be some of the most important lenders on the market. Since the
beginning of the financial crisis, collapse has been lurking for the entire sector.
To fill in the gaping holes in the financial system, the US government offered
subsidies amounting to 32.7 billion US dollars. Another 134 billion was granted
through credit guarantees in order to stimulate new investment. The most
notable element of the political energy initiative is, however, that the US
Department of Energy itself will explicitly invest in trend-setting "cleantech"
enterprises. With the stroke of a pen, President Obama has made a federal
agency the world's largest venture capitalist.
One
of the most important components of Obama's long-term strategy is the proposal
to set national standards dictating a minimum amount of renewable energy to
comprise the total energy supply. At present many states already have such
legal guidelines on the books, such as Texas, which produces more wind energy
than Europe's number one wind-energy-producing country, Denmark. A further
proposal, and perhaps the most significant, is the taxation of CO2
emissions - something along the lines of a cap-and-trade system. Both legal
initiatives are integral parts of the environment and energy law, which is now
waiting for a vote in the Senate. Among other things, the law will enforce
efforts for a more promising market for renewable energy. No matter what the price,
the law must foil any possibility of another radical reversal of energy policy
in the future - as symbolized by Ronald Reagan's act of removing the solar
panels from the White House roof, indicating his renunciation of any form of
alternative energy.
This summary was prepared by the Atlantic Community editorial team from "The Elusive Green Economy" published here by The Atlantic
Wed, Jul 8th 2009, 12:59
Andrey Chubyk, Centre for Global Studies “Strategy XXI”, Silver Contributor (62)