
By James Davitt Rooney and Peter Rothstein
Jul. 22, 2010 (The Boston Globe delivered by Newstex) --
SENATOR JOHN Kerry and several colleagues are hoping to achieve consensus on an energy and climate bill before the August recess, but prospects remain uncertain at best. Many - including Senator Scott Brown - are understandably concerned about any proposal that could lead to higher costs in an already rocky economy. But the economy is precisely why Congress should level the energy playing field, especially because Massachusetts would disproportionately benefit from a clean energy economy.
The Massachusetts High Technology Council has examined federal energy proposals with an eye toward strengthening the state's competitiveness and job growth and improving energy efficiency, security, and sustainability. Today it joins the New England Clean Energy Council in calling on the Senate to pass legislation to shift the region and country from its dependence on fossil fuels while catalyzing investments that will create jobs in our state.
Between 2002 and 2008 the federal government gave away more than $72 billion in fossil fuel subsidies. President Obama has called for an end to these subsidies, which are a burden to taxpayers and are not required to encourage oil and gas production with oil at $80 a barrel. Moreover, these subsidies benefit fossil fuel-producing states to Massachusetts' detriment and add to the deficit. We are opposed to subsidies that encourage wasteful use of fossil energy while making it more difficult for emerging energy efficiency innovations to compete.
Leveling the energy playing field also requires a price on carbon to move sufficient levels of private investment capital off the sidelines. Senators, including Olympia Snowe of Maine, appear to be converging on a call for a price on carbon beginning with the utility industry. Kerry and Senator Joseph Lieberman earlier called for pricing carbon for utilities, transportation, and heavy industry that would have reduced the federal deficit by $19 billion with an average annual cost to households estimated between a $35 decrease (according to the Peterson Institute) and a $146 increase (according to the Environmental Protection Agency), not factoring in efficiencies or the costs of inaction. While not ideal, the emerging utilities-first approach has merit since that industry is the greatest producer of carbon, accounting for nearly half of greenhouse gas.
The Northeast Regional Greenhouse Gas Initiative, in which Massachusetts participates, proves a carbon price for utilities works. Since the Initiative began in January 2009, electric prices have declined from 18 cents per kilowatt hour to 16 cents per kilowatt hour, while prices have increased in other parts of the country. Meanwhile, $85 million has been raised for efficiency programs, which, according to Environment Northeast, will deliver $353 million in consumer savings and $544 million in gross state product growth.
Massachusetts would be advantaged in a national utility carbon pricing plan since its utilities are already planning for carbon reductions and are less carbon intensive than other states. Meanwhile, greenhouse gas reductions in the transportation sector could be implemented through a combination of higher Corporate Average Fuel Economy standards and investments in the electrification of vehicles and other innovations underway in Massachusetts.
Federal legislation should also direct a significant portion of any allowances earned through carbon pricing into clean energy research and development and infrastructure such as the smart grid, energy efficiency, and deployment of sustainable technologies. A recent Pew study found the Commonwealth ranks in the top 10 in almost all clean economy rankings, including jobs (eighth), patents (sixth), US Department of Energy research awards (second), and venture capital (second). Multiple studies show that pricing carbon along the lines of the original Kerry-Lieberman bill would create two million clean economy jobs over the next 10 years; Massachusetts can capture many of those jobs even under a limited carbon pricing of utilities and lead yet another technology revolution.
By leveling the energy playing field, Congress can unleash the economic potential of clean energy across the nation as well as create jobs for Massachusetts.
James Davitt Rooney is vice president of the Massachusetts High Technology Council. Peter Rothstein is president of the New England Clean Energy Council.
Newstex ID: BGL-1035-47178247
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