Have I mentioned lately that I love this man?
100% auction of cap-and-trade credits. This is a home run, a real act of standard-setting boldness (the kind that Obama always promises but rarely delivers). The green community should immediately use it to push Clinton and Edwards into making the same commitment, insuring that it’s the new baseline for any cap-and-trade program. Smart investment. The revenue from auctions will be considerable, up to $50 billion a year, and Obama’s smart about putting it to work, dividing it between energy R&D, protections for low-income workers, and market deployment of existing clean tech. A focus on efficiency. Clearly Obama gets that efficiency is the easiest route to emission reductions, and he’s got a set of thoughtful, detailed initiatives to make it work.
An auction-based cap-and-trade system is functionally equivalent to a carbon tax, but as Matt Yglesias points out it allows the government to set the national emissions level it wants, which a traditional carbon tax doesn’t do. It’s about as good as emissions-reducing proposals get.
As part of the smart investment plan, Obama would create a government venture capital firm to encourage green R&D. It’s an alternative energy subsidy with a market-based twist. On crack:
Barack Obama will create a Clean Technologies Deployment Venture Capital Fund to fill a critical gap in U.S. technology development. This Fund will partner with existing investment funds and our National Laboratories to ensure that promising technologies move beyond the lab and are commercialized in the U.S. The risks and associated costs of commercializing a new energy technology often prevent critically important technologies from ever seeing the light of day. The gap between the lab and the marketplace is sometimes referred to as the ‘Valley of Death,’ because many technologies enter but few ever make it out the other side because of the prohibitive costs of building the first commercial-scale facility that processes that energy source. Currently, U.S. venture capital funding is doing an effective job promoting research and development stage, but far too often, technologies invented here in the U.S. such as wind turbines, solar panels, and compact fluorescent bulbs are commercialized overseas and then sold back to American consumers.
The Clean Technologies Deployment Venture Capital Fund will be modeled on the highly-successful Central Intelligence Agency In-Q-Tel program. In-Q-Tel is a non-profit, independently-managed venture capital fund led by seasoned venture capital professionals to develop new intelligence technologies for the CIA. The first five years of In-Q-Tel funding led to 22 new technologies being used in 40 government programs.
And the efficiency proposals are both intuitive and bold:
Phase out Traditional Inefficient Light Bulbs: For over 125 years, Americans have used the same incandescent light bulb technology, which consumes much more energy for the same results as newer lighting technologies. Barack Obama supports the effort led by Senate Energy and Natural Resources Chairman Jeff Bingaman (D-NM) to update federal lighting efficiency standards to ensure that new lighting technologies are phased into the marketplace. As president, Obama will implement legislation that phases out traditional incandescent light bulbs by 2014. This measure alone will save American consumers $6 billion per year on monthly electricity bills and will save 88 billion kilowatt hours of electricity per year. By 2030, this change will result in greenhouse gas reductions of nearly 28 million tons of carbon.
Invest in a Digital Smart Grid: Like other pieces of infrastructure, such as roads and bridges our energy grid is outdated and inefficient, resulting in $50-100 billion dollar losses to the U.S. economy each year. The 2003 East Coast blackout alone resulted in a $10 billion economic loss. Like President Eisenhower did with the interstate highway system, Barack Obama will pursue a major investment in our national utility grid to enable a tremendous increase in renewable generation and accommodate 21st century energy requirements, such as reliability, smart metering, and distributed storage. Obama will invest federal money to leverage additional state and private sector funds to help create a digitally connected power grid. Creating a smart grid will also help insulate against terrorism concerns because our grid today is virtually unprotected from terrorists. Installing a smart grid will help consumers produce electricity at home through solar panels or wind turbines, and be able to sell electricity back through the grid for other consumers, and help consumers reduce their energy use during peak hours when electricity is more expensive. Obama will direct federal resources to the most vulnerable and congested areas and rural areas where significant renewable energy sources are located, as well as work toward national transformation of our energy grid in partnership with states and utilities.
And Obama is alone among the major candidates in recognizing the limitations of corn ethanol:
Corn ethanol is the most successful alternative fuel commercially available in the U.S. today, and we should fight the efforts of big oil and big agri-business to undermine this emerging industry. But it represents only a drop in the bucket of our energy demands and making ethanol from corn has some significant limitations. Today we produce about 5 billion gallons of corn-based ethanol per year while we use about 140 billion gallons of gasoline. Even if we are able to double — or even triple — production of ethanol from corn this will still offset only about 10 percent of our gasoline demand. There are also real concerns about bringing set aside lands into corn production as well as concerns about an increase in the use of pesticides, water use and upward pressure on the cost of food for people and livestock alike.
His cellulosic ethanol proposals are fantastic:
Mandate All New Vehicles are Flexible Fuel Vehicles: Barack Obama believes that all new vehicles sold in the U.S. should be flexible fuel vehicles (FFVs), which means they can run on biofuel blends like E85. Obama will work with Congress and auto companies to ensure that all new vehicles have FFV capability by the end of his first term in office.
Increase Renewable Fuel Standard: As a leader in the effort to establish the nation’s first Renewable Fuel Standard, Obama understands firsthand the importance of continuing to increase the supply of biofuels in our national fuel supply. Obama believes it is imperative that Congress adopt the Senate-passed proposal to increase the RFS to 36 billion gallons by 2022. As president, Obama will seek to surpass these targets and establish a requirement to produce at least 60 billion gallons of biofuels, including cellulosic ethanol and biodiesel, by 2030.
To summarize, Dave Roberts:
Overall, I’m pleasantly surprised — even shocked — at its quality. It’s a deft mix of good politics and strong, substantive policy.
And Brian Beutler:
It’s extremely good. Exceptional in some places, slightly nebulous in others, perfectly in line with expectations in yet more, but also perfectly in line what we should expect from good public servants at this point, and certainly more than I expected from Obama.
Between this and Edwards being denied the SEIU endorsement, today’s a good day to be an Obama supporter.