This past week I and several senior cleantech private equity investors were invited to DC for meetings with Administration and legislative staff to discuss climate and energy legislation. We were there to provide input in meetings with Valerie Jarrett and Austan Goolsbee at the White House and also to connect with DOE staff and the staff of several Senate offices that are working on various alternative climate bills.
I've participated in such swings through DC in the past, but this one was particularly educational, and I thought I would pass along a few takeaways in case they're useful intel for any readers, since these things have a significant impact on the industry, no matter what side of the climate / energy debate they're on (note that these are just one man's impression of where things stand in regards to national climate and energy policy, I can't promise my impressions are right or even shared by my fellow investors in these meetings):
1. Climate and energy legislation (CEL) is "next"... maybe. By all appearances, the Obama Administration is gearing up to start making a push on this once health care is done, and as of tonight that appears to be the case. However, there's also financial reform, economic stimulus/ jobs, schools, and a host of other issues that will also press for attention. While climate and energy have been getting a lot of rhetorical attention from the Administration (they were quick to cite numbers about the number of times the President has talked about it publicly), it's clear that the White House's "A-Team" has been focused on health care instead of anything else for the first year-plus of the Administration. But the early signals so far are that the next big push for this high-level group will be CEL. We'll have to wait and see. If we learned anything from watching the health care reform effort, it's that nothing is going to get through the current legislature unless the Administration gets actively engaged and even puts out their own legislative suggestions. My impression from meetings at the White House is that they are now gearing up for such a role, but are still very much in the early stages. In short, when you start seeing top Administration advisors on the Sunday talk shows talking about CEL, that might be the advanced signal that they're actually going to start pushing it.
2. It probably won't happen this year. Had a positive meeting with staff involved with Kerry-Lieberman-Graham, the emerging front-runner for CEL. Not to say everyone we met with was a fan of that proposal, and in fact there was criticism that the language hasn't been released yet. In this one meeting with someone actually involved in writing that bill, it came through that the effort is real and thoughtful and that there's a lot of work going on behind the scenes ahead of any language being released. However, in that same meeting, in trying to figure out a pathway where the bill could jump through all the necessary hoops and get passed this year... Well, it was possible, but to my ears highly improbable, to expect anything to happen before midterm elections. So my guess is most of the CEL discussion this year will actually be positioning ahead of a push in 2011. Of course, that'll be after the elections, so who knows...
3. "Revenue-neutrality" is going to be key to any proposal that moves forward. Regular readers will know this is something I've pushed on this site in the past. We met staff from 3 different senate offices, each of which were working on separate competing versions of CEL -- all three of which included some type of dividends back to taxpayers from the government revenues from credit auctions or from a carbon tax (as opposed to all the fees going straight into other government spending programs). So I'm gratified personally to see that the idea has some legs.
4. Expect "death by a thousand alternatives" in the CEL debate. In addition to Kerry-Lieberman-Graham, there's also Cantwell-Collins, and we confirmed the rumors of Murkowski's staff working on a revenue-neutral carbon tax idea. And none of them are going away quickly, it was clear. Plus, Waxman-Markey did pass last year of course, setting up the same kind of Senate-House conflict down the road that marked the health care reform debate.
I hope that's a helpful download for anyone wondering what's going on in terms of CEL in Washington, DC. Many thanks to the good folks at the Clean Economy Network for arranging the day, and to the team at the Administration that invited us to provide our input.
