Back in 2009, Deutsche Bank Climate Change Advisors (“DB”) published a study tracking 270 major climate policies in 109 countries. The study concluded that successful programs were those that offered investors “TLC” — transparency, longevity, certainty — a comprehensive, stable, and predictable set of rules that infused markets with a sense of clarity and security. The research went on to find that the United States lacked TLC and was lagging behind other countries, notably China and Germany. A more recent DB paper found little to cheer about at the Federal level in the U.S. Referring to the gridlock in Congress on energy policy, the paper noted “…while Congress stumbles, the U.S. stands to fall behind.”
While other countries have adopted strong policy frameworks with integrated plans and clear targets, incentives and mandates, the Federal regulatory regime has been described as a “chaotic patchwork, constantly changing,” with short-term approaches that amount to nothing more than just stop gap measures, with many sun-setting in 2011. A glaring example of this shortsightedness is Congress’ failure thus far to extend the Production Tax Credit (PTC) for wind projects, which expires at the end of 2012.
Given the long lead-time needed for siting, permitting, interconnecting, and financing wind projects, the industry has come to a virtual standstill with only projects certain of qualifying for the PTC moving forward. Other PTCs expire in 2013, and other programs such as the 1603, 1703, and 1705 incentives ended last year. (The recently proposed rule for reducing greenhouse gas emissions from new power plants announced by the Obama administration may restore some credibility in the U.S., but it is too early to tell.)
Categories: Electricity, Energy, Policy
Prometheus Institute 