RES and cap and trade - better together

Yesterday, the Senate Energy and Natural Resources Committee held a hearing on a federal renewable electric standard [webcast available here]. Predictably there was some moaning and misinformation that it would too expensive or hard, which Chairman Bingaman correctly labeled "a tyranny of low expectations." I also think the emphasis on energy efficiency and renewable energy in the economic recovery bill shows that legislators are finally getting the idea that these are sources of economic growth. (See this blog post by my colleague, Cai, about a critical renewable energy policy that's still being debated as part of the recovery bill.)

More intriguing was the push back from the ranking minority member Senator Murkowski, who according to this E&E article (subscription required) argued that we should prioritize a climate bill over a RES. "We need to ask ourselves what we are trying to achieve with this program," she said. "Is our aim simply to increase renewable energy production? Or is the goal to reduce greenhouse gas emissions?"

Now an uncharitable read of this might be that the Senator is using the climate argument simply to oppose the RES. A slightly more charitable read would be that she wants a climate bill instead of an RES. However, I'd like to believe that she was making the case that we need both an RES and a climate bill done together and done as fast as possible.

As I discussed yesterday on Public Radio's Marketplace, an RES is a critical part of our renewable energy policy, but as discussed in this NRDC policy brief, an RES is also a critical part of keeping the cost of a carbon cap and trade policy reasonable. Some, like the author of this Business Week article, mistakenly believe that under a carbon cap renewables don't provide any GHG benefits. While it's true that renewables will not reduce the cap, they are necessary to achieve the cap and to protect it from a political backlash that would accompany excessively high prices.

Our cap and trade policy needs a package of "companion" policies that ensure a steady flow of innovation and deployment of low-cost low-carbon technologies. That's why we need to do an RES and a carbon cap and trade bill together.