R.E.S. - Real Evidence for Success?

In my previous post I described the Renewable Energy Standard (RES). This has been promoted by those in congress that have seen the cap-and-trade effort screech to a halt. This standard would require utilities from each state to draw a certain percentage of their electricity from renewable energy sources (or cleaner energy sources - nuclear or hydro-electric). But a collaborative article titled Renewable Irony in the Huffington Post from Richard Schmalensee (Howard W. Johnson Professor of Economics and Management at the Massachusetts Institute for Technology) and Robert N. Stavins (Albert Pratt Professor of Business and Government at the Harvard Kennedy School) asks an important question. Is this really a better alternative than the cap-and-trade strategy?


They argue no. But they admit it would still be better than doing nothing. But the worry is that with this accomplishment the U.S. may believe it's made enough of an effort to mitigate climate change; when it would actually be omitting 60 percent of the CO2 it emits. 


The authors of the article argue that the RES wouldn't create as many green jobs domestically as we hope. They point to the fact that 40 percent of the green jobs that came out of the stimulus package from incentives for renewable energy were concentrated outside the U.S. in the manufacturing countries. While in 2008 the U.S. led the world in installed wind generation capacity, half of the new installations were accounted for by imports. Bottom line: We need to be the creators of the technology, not just consumers or installers. 


This is where cap-and-trade has an edge over a renewable energy standard. Cap-and-trade gives broader incentives for innovation because it is a more long-term approach. Twenty-eight states, and Washington D.C., already have renewable energy standards (important to reiterate - Or - clean energy standards). So achieving the standard across the country will have an effect, but it won't affect the country "deeper". By this I mean, we won't see incentives to reduce emission for heating buildings, running industrial processes,  or transporting people or goods from a RES.


Bottom line: It will be important to shape the debate for a RES, by its supporters, as a short term solution. Otherwise we will settle for less in the long run.