Fossil Fuels' Free Ride Is Over

WASHINGTON, DC, November 30, 2007 (ENS) - A diverse group of investment bankers, energy executives, government officials and clean energy advocates has agreed that the environmental cost of producing energy should be factored into its price, and that Congress must develop energy policies that move away from fossil fuels.

At the American Council On Renewable Energy's fourth annual conference, which opened in Washington on Thursday, money managers on Wall Street, self-described conservatives, a Bush administration official, and energy company BP spoke as one, declaring that fossil fuels have gotten a free ride in emitting greenhouse gases, and that the day of reckoning is long overdue.

The conference is focused on influencing energy and environment policymaking at the national and international levels.

Katrina Landis, vice president of BP Alternative Energy said she is "looking forward to a world with an industry wide carbon price."

Landis, whose employer is one of the world's leading sellers of fossil fuels, said she favors a cap-and-trade system of selling emissions credits over a carbon tax.

Speaking at the conference hosted and sponsored by the House of Representatives, Landis agreed with many of the other speakers in calling on the Congress to craft more sustainable policies.

She supports a federal renewable portfolio standard that would require the purchase of a set percentage of renewable energy because "stopgap policies tend to increase cost."

The current process of one-to-three year incentives is frustrating consumers and producers of clean energy, she said.

Legislators should create bold programs for incentivizing the use of renewable energy such as California's solar initiative because "the effective policies have been the agressive ones," said Landis.

Congress is now moving forward with what House Speaker Nancy Pelosi calls "historic energy legislation that will reduce our dependence on foreign fuels and promote energy efficiency."

"We have made significant progress toward completing this package and hope to have a final agreement next week," Pelosi said Thursday. "This energy package will lay the groundwork for the Congress to move forward next year with comprehensive action to address climate change."

SunPower PowerGuard rooftop solar electric system. (Photo courtesy NREL)

Emerging nations cannot follow the United States' current path, he said.

Adapting a quote from Indian political and spiritual leader Mahatma Gandhi in a way that compared British imperialism to today's environmental challenges, Vaithesswaran said, "If every Chinese person used energy like an American" by driving an SUV, than "how many planets would we need" to sustain ourselves?

"We have to pay an honest price for energy," says Vaithesswaran, who supports free market economics.

He recommended that Congress create a revenue neutral carbon tax that would create as much revenue in the market as it extracts. Vaithesswaran did not recommend subsidies for cleaner energy such as biofuels, but instead called for an end to pro fossil fuel tax policies.

"It's not about adding subsidies but about leveling the playing field," said Vaithesswaran, who recommends taking away the multi-billion annual federal oil and gas subsidies.

Clean energy advocates should convince elected officials that promoting cleaner energy is not a risk to industry but an opportunity, said Janet Sawin, a senior researcher and director of the Energy and Climate Change Program at the Worldwatch Institute.

We "need to convince political leaders that renewable energy is about creating job opportunities," she said.

Sawin said that 2.5 milion jobs have been created worldwide in renewable energy.

Renewable energy is not only good for the environment, it is also good for investors, said John Cavalier, vice chairman of investment firm Credit Suisse.

He said the investment community is already planning for the cost of carbon emissions to be added to energy companies in the future. The "smart money is betting on a federal renewable portfolio standard," Cavalier said.

Cavalier said the United States is spending $1 billion per day in carbon-emitting oil, with much of it being spent on imported goods that take money out of the economy. Producing clean energy from wind and solar creates American jobs while also cleaning up the planet, he said.

By 2016, annual global investments in clean energy will be $750 billion, according to Cavalier. He said that there would be more investment if politicians could assist in creating stable demand for renewables.

Cavalier explained that many investors are not investing in clean energy because they "refuse to invest in an industry that depends on subsidies that are at the whim of [politicians]."

Renewable energy is a good bet for investors because the stock prices are less volatile than the rest of the market, said Michael Liebreich, chairman and chief executive of the clean energy investing information service New Energy Finance.

Politicians should stop treating clean energy as a "marginal industry" as it is becoming a key economic driver, he said. In 2007 approximately eight percent of all energy investment went to renewable energy, a figure that Liebreich expects will rise to 15 percent.

Caring about the planet is no longer polticially divisive was another key theme during speeches and conversations at the two-day conference. Instead of placing blame and trying to make it a partisan issue, Democrats and Republicans should find common ground in developing appropriate courses of action, speakers said.

Andy Karsner, an assistant secretary of energy at the U.S. Department of Energy, said that politicians and industry have clmate change "problem identification in spades, but not enough problem solving."

While defending the Bush adminstration for its recent progress on renewable energy - citing the President's "addicted to oil" mantra - Karsner called for more action on fuel economy and renewable fuels to reduce oil consumption and greenhouse gas emissions.

Karsner said the government's decoupling the price of oil from the price of renewable energy in purchasing energy is a "significant watermark," and encouraged more people inside and outside of the political process to become "agents of disruption."

He said that fuel economy options for vehicles - such as biofuels and hybrid motors - should be as ubiquitous and as readily available ad mud flaps."

This policy conference serves as a run-up to ACORE's next event, the Washington International Renewable Energy Conference, WIREC 2008, in March, which will use the policy recommendations of this meeting to suggest more specific goals.

For more information, visit the American Council On Renewable Energy, ACORE, at: http://www.acore.org/phaseii/2007

Copyright Environment News Service (ENS) 2007. All rights reserved.