A bill to combat global warming passed through a U.S. Senate subcommittee Thursday morning, but not without controversy.
The proposal passed, 4-3, with a few changes, including limiting funding for advanced automobile technology to vehicles that get at least 35 miles per gallon (see a Hill Heat transcript here).
But America's Climate Security Act has generated debate over the bill's omission of specific clean technologies and the inclusion of big money for coal and cars.
If passed, the act, introduced in the Senate Oct. 18 by Sens. Joseph Lieberman, I-Conn., and John Warner, R-Va., would set a cap on the greenhouse-gas emissions that companies can produce. It would also set up the trading of emission allowances and allow companies to save and borrow emissions.
The senators predicted those policies would lower emissions as much as 19 percent below 2005 levels. That prediction has led to tepid support from environmental organizations such as Natural Resources Defense Council, Environmental Defense, The Nature Conservancy and the National Wildlife Federation. The bill now will head for the Senate Committee on Environment and Public Works.
In addition to calls for a more comprehensive system for carbon trading, criticism among environmentalists has centered on the high subsidies the bill may provide for two industries that have helped fuel global warming -- cars and coal -- and the absence of funding for specific clean technologies.
According to a report from the environmental organization Friends of the Earth, the bill creates subsidies of more than $324 billion to the coal industry over a 38-year period for carbon sequestration in coal plants.
Those figures led Sen. Bernie Sanders, D-Vt., a member of the Senate's Committee on Environment and Public Works, to issue a strong rebuke Tuesday.
"This is an extraordinary sum of money to an industry," Sanders said in a statement, "given the reality that there is currently not one advanced coal plant in operation that is sequestering all or most of its carbon emissions, and there are serious questions about the long-term environmental and cost effectiveness of that technology."
Sanders said that in addition to the coal subsidies, the bill provides $232 billion to the automobile industry, and said he is concerned that the bill does not mention specific clean technologies.
"Our reading of the bill indicates that there is no mention ofsolar wind or geothermal," Sanders said. "This is a rather extraordinary omission, given that wind is the fastest-growing source of energy in the world, and that California, Germany and many other entities are making huge progress in solar energy."
Despite Sanders' statement, Friends of the Earth said the bill does allocate approximately $522 billion to "zero- and low-carbon energy technologies.” The bill states that new energy sources that emit no carbon dioxide or no more than 250 pounds of carbon dioxide per megawatt-hour are eligible under that category.
In the subcommittee hearing, Sanders proposed an amendment that would have divided the $522 billion equally between solar, wind, geothermal and carbon-sequestration technologies. The amendment failed, and Sanders -- along with Sens. Johnny Isakson, R-Ga., and John Barrasso, R-Wyo., -- voted against the bill.
Barrasso, who opposed Sanders' amendment, said it would have diverted money to renewables when he wants to direct funding to coal. Sen. Max Baucus, D-Mont., said there already are enough incentives for renewables in other legislation.
And Lieberman said while he is "very sympathetic" to renewables, directing such a significant portion to them would be a mistake.
"As we worked to fashion a compromise, there are very different opinions," he said. "Some members don't want us to mention nuclear. One member on the committee is opposed to putting money into wind. It was our judgment not to define which technologies get the money."
Baucus isn't the only one questioning whether cleantech subsidies are necessary.
"The cap-and-trade program included in the bill should itself create great opportunities for the cleantech industry," said Manik Roy, director of congressional affairs for the Pew Center on Global Climate Change, an environmental think tank that strongly supports the Lieberman-Warner bill. The Pew Center is looking at the Friends of the Earth analysis of the bill and plans to issue a response to the subsidy figures soon, he said.
Roy argued that market demand created by provisions in the bill will naturally spur spending toward clean energy, whereas coal-sequestration and auto-industry technologies would be less likely to emerge without the hand of government.
Some cleantech investors and analysts have said that there's already a glut of funding for cleantech, and that venture capital, private equity and public markets are offering more than enough funding to bring new ideas to market. According to New Energy Finance, for example, investors ended last year with more than 25 percent of their funds still unspent because there weren't enough worthy startups to meet demand.
"I think that the government's role is to establish rules in the marketplace that will achieve public-policy goals, and let private industry figure out how to do it," said @Ventures principal Matt Horton a few weeks ago in a conversation about subsidies.
On the other hand, big money for the coal and auto industries isn't exactly popular within the green-money crowd. Many prefer a moratorium on subsidies for all.
"If you want a level playing field, it's not going to help to give these random solar-technology companies $5 million or $10 million here or there," said Greenchip Stocks analyst Jeff Siegel regarding the general issue of government subsidies for cleantech. "It's better to get rid of giving fossil fuel industries a billion here or a billion there. Let the market take control."
Adding fuel to the fire, some within the cleantech community say supporting coal and auto efforts to reduce carbon emissions may be a necessary evil.
"Carbon sequestration is not a good solution, and it's much better to look to energy that's clean in the first place," said Robert Wilder, who manages clean-energy indices. "But anything that significantly or seriously addresses climate change has to look at coal, because more than half of energy comes from coal. If you can get the coal industry and the auto industry to turn around, that's where you'll get the most traction."