The American Clean Energy Act was approved in the House of Representatives on Friday, June 26, 2009. The bill is some 1,201 pages. At the last minute (Technically 3 am in the morning of the 26 th) a 300 page amendment to the bill was added. At the time of the vote, it is unclear what was the actual version of the bill being voted on. The bill is headed to the Senate. Reid says he will wait until the fall to take action. The Senate will likely dramatically reduce the scope of the bill.
I believe the issue of climate change is serious. I can't profess to know if it is man made, natural, or both (more likely). But, having read this bill (Yes I read the entire thing and the amendments), I don't think congress is taking this thing seriously. We may have "Passed legislation, but not gotten anything done", a congressman once said. As Bob Metcalfe(Founder of Ethernet, 3com etc) says, "When you go to Washington to get stuff, you often get the wrong stuff".
So, the basis of the bill is probably OK. Energy is important. The country voted for change. Using less oil seems like a good idea. The democrats won. We need to do something about the climate. OK. The notion of Cap Trade, and this bill, is in line with the elections. It may impose a tax of sorts. Industry will be disrupted. Someone is moving our "Cheese".
But the 1,201 pages are not about Cap Trade. The bill has numerous provisions like:
- Limiting wattage of outdoor Luminaries (that means lights) and making them so they have different levels of output to deal with demand response
- Limiting wattage on candelabra lights in your home (making them so dim that you will just get lights with more sockets)
- Providing grants for home owners and small business to plant trees to shade their home "Reducing winter time demand for energy from residences and small office buildings by blocking cold winds from reaching such structures, which lowers interior temperatures and drives heating demand."
- Establishing regional councils to educate people on the value and proper care of trees.
- Subsidy for 150% of poverty home owners whose "Purchasing Power" is diminished by the new costs imposed by this bill (Despite the claim that the bill will impose no more than $150 or so of cost on each family)
- Bonuses for retailers, distributors, and manufactures that sell a lot of "Best in class appliances" (To be determined by the feds. So that the feds will be picking whether GE or Sony are the best most efficient appliances, and them bribing Best Buy to sell more of one or the other's goods
- Smoot Hawley for Green, imposing trade restrictions on countries that do not have similar climate policies as the United States
I could go on and on with all the unnecessary addons for this bill. On a more significant subject, there is a whole section of the bill focused on demand response. Demand response is a process of limiting load during the energy demand peak of a hot summer, essentially to make the grid more stable. This really has little to do with CO2 emissions. Perhaps they are advocating demand response in anticipation of a need for a responsive load for inclusion of more variable capacity generation like solar and wind. But this is cart before the horse. I wired my home for Ethernet in 2001, dropping Ethernet lines into every room at a cost of about $600/room. But now I use wireless throughout the house at a cost of a couple of wireless routers ($100/each).
Solar and Wind represent something like 1 or 2% of the energy source in the United States. It is unclear how best these resources will be deployed as they move to larger scale. Betting now on demand response is sort of like mandating everyone wire for Ethernet in 1990 in anticipation of the Internet economy. The bill dictates an approach to solving the energy problem before our engineers and innovators have found the best way to provide better and cheaper energy.
At a macro level, this bill is yet another slap in the face of the Green movement. The extra crap in the bill will just generate animosity to the objective. As everyday people are effected by limitations in what lights they can buy, subsidies to certain citizens, higher costs, etc they will wonder why they voted for the president and this congress. The mass of the bill and its over reach may stir up a backlash against the objectives of the movement. Where will we be then?
Its time for folks to be serious about how they act. There was virtually no legitimate conversation in DC on this bill. It was rushed through to show concern for the planet. But, it ignores the practical lessons of how technology and innovation occur. Innovation occurs in the market place, with various competing pressures. The best green answer will come from innovators seeking to provide competitive cheep and abundant clean energy, that competes cost effectively against existing technology. We have 10 years ahead of us to turn those innovations into scale.
Those who wrote this bill will say, "But we can't wait, we need this technology now". You can't legislate innovation and you can't buy your way into it. If we taxed the nation to death to implement immediate solutions, those solutions will be overtaken by drastically cheaper next generation choices. This happened in the Cell phone market. The US implemented TDMA well before everyone else. The better solution came along, GSM, and took the world by storm while the US dragged its feed on TDMA. Ultimately we switched over to get better service. There was a delay however because we had a 1st generation installed base, and 2nd generation was better and cheaper.
Instead if we fund our innovators well and bring some coherence to market objectives (1,200 pages is not coherent) so they can place their bets, then we can build a next generation architecture, let the market drive down cost, and then drive adoption because the market will have low cost, affordable, clean and abundant solutions.
Congress needs to trust the American innovation engine.
