Can’t wait for BuildingEnergy12? Neither could we.

Thankfully, one of our BE12 Gold Sponsors and NESEA Members, Renewable Sales, has volunteered to host a BE-caliber session at their showroom in Holliston, MA, February 16, 2012, starting at 5:30pm. RSVP here.

An evening of networking and expert information …
and it’s free! (And there will be food!)

The evening will feature a discussion “Understanding Risks and Rewards: A Conversation on Community Solar,” facilitated by The Cadmus Group, featuring a case study from the Town of Natick and from the City of Medford.  MA Department of Energy Resources will speak to its solar programs (e.g., SolarizeMass with MassCEC, SunShot Program grant), as well as support that it can and has provided to Massachusetts municipalities.

Here is the essential information:

We hope to see you there!

If you have any questions, please do not hesitate to contact me: rheldt@nesea.org or 413-774-6051 ext. 20

Robert (Bob) Chew, founder of Alteris Renewables, is launching his own renewable energy consulting company! Here is his press release below:

Alteris Renewables founder Bob Chew starts new company
BRISTOL, RI, November 1, 2011 – Bob Chew, renewable energy entrepreneur has launched a consulting firm that provides creative strategies and solutions to clients exploring options in the ever emerging renewable energy field. R.W. Chew, LLC, DBA as R.W. Chew Consultants, based in Bristol, RI, focuses on offering expert guidance using best practice gained from 30 years in the renewable energy field, to individuals, businesses, municipalities, schools and government agencies seeking viable and cost effective energy choices.  “It is becoming increasingly difficult for the average consumer to navigate the growing number of renewable energy technologies and energy efficiency options available today,” states Chew. The design, implementation, and integration of sustainable energy solutions necessitates the need for a long range plan or ‘road map’ that incorporates variables specific to a particular project. There is no one size fits all in the renewable and energy efficiency field. By generating designs, specifications and project oversight, the company functions much the same as an architect in the building industry.

R.W. Chew Consulting is already working with Bryant U. on a grant to help public high schools in Rhode Island determine what energy retrofits and renewable energy technologies can help them get as close to net zero as possible. View the press release shared on the Bryant U. blog.

I also had the opportunity to interview Bob about his new company and his lifelong experience working with renewables.

We wish Bob the very best with his new company, and our sincerest thanks for his thoughts.

Curious about zero net energy and high performance buildings?

Ever wonder how zero net energy is possible?

Interested in net zero/high performance building design and mechanical systems?

Join us November 10th at the Mitsubishi Training Center in Southborough, MA to find out! RSVP HERE.

Our hosts and sponsors Mitsubishi Electric have helped us pull together a fantastic evening.

Registration, networking and hors d’oeuvres begin at 5PM
The talks will begin at 6PM, followed by Q&A

Moderating the evening’s discussion (and also sharing more information about NESEA’s Zero Net Energy Building Award) will be Mike Duclos, a principal and founder of The DEAP Energy Group, LLC, a consultancy providing a wide variety of Deep Energy Retrofit, Zero Net Energy and Passive House related consulting services.

Mike is a HERS Rater with Mass. New Homes with ENERGY STAR program, a Building Science Certified Infrared Thermographer, a Certified Passive House Consultant who certified the second Passive House in Massachusetts, holds a BS in Electrical Engineering from UMass Lowell, and two patents. See more from Mike at the DEAP Energy Group website.

Our speakers are R. Carter Scott, President of Transformations, Inc., a sustainable development and building company in Townsend, MA and William Maclay, founding principal of Maclay Architects in Waitsfield, VT. Both have extensive experience with net zero and high performance building design and the technology that makes net zero possible.

R. Carter Scott will talk about several of his recent zero energy homes built throughout Massachusetts, focusing on how to get to zero on a reasonable budget, including how to get the most out of current incentives for solar electric systems.

Transformations, Inc. specializes in developing and building Zero-Energy communities, building out Zero-Energy communities for other developers, building custom Zero-Energy homes and installing solar electric systems for residential, commercial and building clients. Have a look at his work over on the Transformations, Inc. website!

William (Bill) Maclay will talk about the process for achieving net zero energy in institutional and commercial buildings, sharing his experiences on two of his firm’s recent projects and his approach from design to monitoring will illuminate how to achieve net zero energy and operate at net zero energy.

Maclay Architects is an awards winning architectural practice that specializes in environmental planning, healthy building design, energy conservation and net-zero architecture. Their own offices are solar powered and net-zero, even in central Vermont! Maclay Architects most recent projects can be found on their website.

CEUs are pending through the AIA. AIA accredited sessions are also often eligible for self-reporting for other licenses or certifications.

Here is the essential info:
What: Net-Zero Energy & High Performance Building Presentations, hosted and sponsored by Mitsubishi Electric
When: November 10th, 2011  - starting 5PM (talks starting at 6PM)
Where: Mitsubishi Training Center, 150 Cordaville Rd., Southborough, MA 01772
How? RSVP HERE or contact 413.774.6051 ext. 20, or rheldt@nesea.org

And yes… it’s free. Get excited.

This op-ed piece originally appeared in the Hartford Courant on September 4, 2011

Hurricane Irene, the first major storm to really hit Connecticut in 26 years, was an eye opener for many who have not had experience with events such as the 1938 hurricane, ‘55 flood or ‘73 ice storm. Perhaps the most significant figure is the peak number of in-state electrical outages that, at 830,130, is an all-time record in spite of our paying the highest rates in the nation and having spent billions on new infrastructure in recent years.

Is there a better way? I think so.

Edison’s first electric plant might today be called “distributed generation”, meaning it was small in scale and close to where the energy was used. Distributed generation did not need the large transmission lines we have today and could well be the best method to provide electricity in a reliable and secure way.in the future.

Meanwhile, however, in order to expand their market and take advantage of economies of scale, which increase efficiency and lower costs, utilities have built fewer but larger and more remote plants to serve more customers. This gave us centralized power production where large generators are knit together via transmission lines in a tightly synchronized system.

Technology advanced and, in 1998, deregulation legislation prohibited utilities, such as Connecticut Light & Power and United Illuminating, from owning electric generation plants, which are now owned by private companies. This leaves distribution (small lines) and increasingly transmission (large lines) as the primary means by which utilities can boost profits.

The dark side of this is it perpetuates a heavily centralized grid, making the system less resilient. It can still be compromised by natural disasters, terrorism and cyberattacks such as the Stuxnet worm that incapacitated Iran’s nuclear program. Similar cyberthreats can infiltrate and damage generators and other grid components. This means that extreme caution must be taken before fully deploying new Smart Grid technology, which could open innumerable electric systems to cyberpenetration.

Any holes in grid security have the capacity to make life not only uncomfortable or life-threatening, but to negatively impact the economic output of states. Those that are less-prepared are unattractive to businesses that require high degrees of reliability in an increasingly digital economy.

Critics of decentralization, with its many smaller, redundant, dispersed and diverse sources of power, maintain that the current system performs quite well, noting that some distributed technologies, particularly solar and wind, are expensive and intermittent at best.

They conveniently ignore that some distributed generation is not only becoming more efficient and cost-effective but decentralization can result in reduced line losses, lower greenhouse-gas emissions, create employment, reduce insurance losses and enhance public safety. Besides, not all distributed generation is renewable. Distributed generation includes smaller, conventional power plants such as small combined-cycle gas turbines, microturbines and fuel cells that can all use natural gas and enjoy “economies of scope” through mass production in factories to reduce costs.

Will this transition take place over night? Not likely, as we have invested billions in the current infrastructure that needs to be repaid.

First, we may want to take humble steps to equip high-value/mission-critical applications such as cellphone towers, first responder facilities, gas stations, sewage treatment plants and drug stores with distributed generation. Then we might consider an initiative similar to one in Denmark, which after 35 years realizes 55 percent of its electric generation from combined heat and power, a form of distributed generation. This makes use of two-thirds of energy that normally goes up the stack as waste heat, but with combined heat and power reaches as high as 85 percent efficiency. The Danes have even used power plants, such as one in Kalundborg, as centers of economic development in ecological industrial parks where large portions of the waste heat are used in manufacturing operations ­ or even to grow hothouse produce.

With proper planning Connecticut could even make use of many native energy products but the key to successful implementation will be to compensate utilities with equal or better rates of return so they cooperate in installation of these systems. We have taken similar steps for their involvement in energy efficiency programs since 1988. Only by making the utilities monetarily whole can a secure, reliable distributed generation plan become a reality.

Joel N. Gordes, a West Hartford based consultant, is president of Environmental Energy Solutions and writes about energy and environmental security issues.

Secretary of the Interior Ken Salazar has announced that he will make a permitting decision regarding Cape Wind by April. He has requested public comment on the project before February 12. Comments can be sent here and here.

The long saga of Cape Wind’s permitting efforts has proven to be a classic example of how well intended environmental regulations can be abused and hypocritically turned against very environmentally responsible projects.

The story of Cape Wind should be taught in Law Schools as an example of how the rule of law guaranteed by our constitution and precedent in law at least back to the Magna Carta can been manipulated and abused by politically connected cynics.

Starting in 2001, Cape Wind was subject to an exhaustive four year permitting process coordinated by the US Army Core of Engineers under the National Environmental Policy Act (NEPA) and involving seventeen state and federal permitting agencies. When the results proved conclusively that the project would have no significant negative impacts of any kind, powerful politicians from both parties got the regulations changed so that the water views from their friend’s mansions on the Cape Cod would not be impacted.

A new regulatory process required the NEPA process to start completely over under the purview of the US Department of Interior’s Minerals Management Service. After another four or five years of intense study by multiple agencies, again the project was proven conclusively to have only positive impacts on the environment, on the economy and on our future. The MMS staff and all the reviewing agencies recommended the project be approved.

Recently, project opponents working with members of local Native American tribes have tried to derail the project again claiming that the waters in which the Cape Wind is to be built were once dry land which may contain ancient burial sites and that their religion requires unobstructed views of these sacred waters. It is perhaps telling that these objections were never raised to block marinas, pleasure boats and all sorts of other modern offenses that might blight these sacred views.  And one might also wonder about the religious impact when oil spills have polluted those waters making fuel deliveries to the Cape’s only power plant.

Of course cultural and historic heritage issues are considered fully and very carefully as part of the NEPA review process and should have been raised much earlier. It’s not as if those making these claims were unaware of the permitting process which has now been done twice and which provided them every possible opportunity to intervene in a timely and appropriate manner. What new information is now being brought to bear and why wasn’t it provided earlier? If there is nothing new being presented, then why should the Department of Interior effectively reopen the permitting process to review these matters?

The delay that has already been granted in issuing the permits to build Cape Wind in order to consider these late concerns is the most flagrant kind of abuse of the rule of law that is fundamental to the preservation of our civilized society. If such claims are allowed to derail Cape Wind at this late date, then what is to stop any opponent of any project ever proposed anywhere from hiring a couple of Native Americans after the permitting process is completed to claim the project is on their sacred grounds or blocks their sacred views? What is to prevent anyone alleging any other religious beliefs to assert that anything that they don’t happen to personally like should be stopped in its tracks and claim government protection against whatever may happen to offend their purported religious heritage?

The Constitution grants us all freedom to practice religion as we wish, but not at the expense of the Constitutional rights of others, nor at the expense of the fundamental rule of law in our land.

If we allow the regulatory goal posts to continually shift after a project is proposed, based on arbitrary environmental, religious or any other kind of claims, then we will have all lost the protection of the rule of law that our nation and our prosperity is based on. The corruption inherent in abuses such as that now underway in this obstruction and that which Cape Wind has earlier been subjected to, undermine our freedom and every constitutional protection we are granted as Americans.

Regulators from all the state and federal agencies overseeing this project have done their job very well – twice. From their comprehensive reviews, it is very apparent that the only real issue ever seriously in question is the subjective aesthetic impact of the project.

But the aesthetic question is not a question of Cape Wind vs. a pristine world. The question is far larger than the aesthetic impact of a few wind towers barely visible over the horizon. Like the rest of America, the Cape and Islands need energy. Aesthetic blights from mining, refining, delivery and disposal of fuels for oil, gas, coal and nuclear power plants, and the larger impacts of those technologies on our society, should be given serious consideration in evaluating Cape Wind. The rights, aesthetic concerns and religious sensibilities of those impacted by the entire systems delivering energy to Cape Cod and the Islands must be give equal weight to the concerns of the Cape Wind opponents.

The craziest part of all this is that from the closest shores, Cape Wind will be barely visible just a couple degrees above the horizon, and only on a clear day.

As NESEA’s official organizational position on Cape Wind suggests:

“The choice we face goes far beyond local aesthetics. Will we choose to continue our dependence on polluting fossil fuels from the Middle East? Will we choose a future plagued by international conflict, terrorism and climate change implicit in fossil fuel dependence? Will we choose to forgo a golden opportunity to provide clean energy and good jobs for the region? The real question is whether we will choose a compromised future or the tremendous potential of sustainable prosperity.”

Perhaps those opposing Cape Wind are not willing to make the choices necessary for our nation to remain a free and prosperous. But as a nation, we have real choices to make.

We can choose to get serious about creating clean renewable energy solutions at home and exporting those solutions of peace, hope, and prosperity abroad, or we can continue to waste our treasure and send our troops off to die fighting for oil in places like Iraq. Many Cape Wind opponents say they support renewable energy. But empty words do not solve the problems our addiction to oil has caused. Words alone do not help the families of the brave Americans sent to make the ultimate sacrifice in the Persian Gulf.

Today, wind power is cost competitive with conventional power plants. The wind industry has grown about forty percent each year for over a decade. Wind projects do not cause air pollution or oil spills, and they do not depend on an everlasting stream of imported oil and gas. Cape Wind is as good as any significant solution to our energy needs can possibly be.

A lack of seriousness about developing real solutions like Cape Wind will doom our children to a future enormously complicated by international conflict, climate change, terrorism, diminishing economic prospects and compromised freedom. Our lack of wisdom and vision will cause more brave Americans to die in future wars that could be prevented.

For too long, we have compromised our proud heritage with bad decisions. Our leaders need to face realities that ordinary people see clearly.  We cannot allow our regulatory process to be hijacked and violate the rule of law at the arbitrary whim of a few.

The NEPA process has been followed fully for Cape Wind – twice. The conclusions are absolutely clear.  It is long past time for public officials to act responsibly, put a stop to the cynical games and allow the project to get built.

Building Cape Wind will be a symbol of our commitment to the rule of law and our commitment to a peaceful and prosperous future.

Please make sure Secretary Salazar hears from you.

Cape Wind and NESEA Historical Context:

Back in 2001, as the NESEA Board of Directors was exploring the priorities of the organization, then NESEA Treasurer Tom Hartman brought the discussion into very clear focus when he suggested: “For now, NESEA should have three priorities – Cape Wind, Cape Wind and Cape Wind”

A couple years later I was privileged to chair a subcommittee of the Board drafting the following official NESEA Board position document on Cape Wind, which was unanimously endorsed by the Board, signed by numerous prominent NESEA members and presented as testimony at Army Corp of Engineers hearing in December 2004:

Northeast Sustainable Energy Association Urges Strong Support for Cape Wind

For over thirty years, the Northeast Sustainable Energy Association has been promoting real solutions for a better energy future. In our view, Cape Wind is the most important and positive energy development ever proposed in the Northeast.  We urge you to support Cape Wind.

The US Army Corp of Engineers’ comprehensive three year project review involved seventeen federal and state regulatory agencies and resulted in the Cape Wind Draft Environmental Impact Statement. By all criteria these agencies studied, Cape Wind is overwhelmingly positive, with no significant bird, navigational or ocean ecosystem impacts. They have concluded that Cape Wind will provide significant environmental benefits by offsetting other major sources of pollution, while stabilizing electricity pricing and reliability for the region by reducing dependence on imported fuels. And Cape Wind will help create new jobs and new economic opportunity for southeastern New England.

The Cape Wind turbines will provide the equivalent of seventy five percent of the electrical power needs for Cape Cod and the Islands, while producing no emissions or pollution. From the closest shores they will be barely visible on a clear day, just a few degrees above the horizon.

In an era of rapidly rising world wide demand for energy, we must make real choices.  Wind power is an established and reliable solution. It is the fastest growing energy source in the world.  Wind is the lowest impact and most cost competitive energy source available. Yet some local opponents are still trying to stop Cape Wind. The environmental impact studies have shown their concerns to be generally unfounded. The only issue seriously in question is the subjective aesthetic impact of the project.

Like the sailing ships that brought prosperity to New England with their graceful beauty in earlier times, modern wind turbines are an elegant solution for today. Worldwide, in nearly every locale where wind power is in widespread use, the aesthetics of wind generators find overwhelming acceptance. Locally, in the town of Hull, Massachusetts, a wind machine located right on the shore has been embraced.  A huge majority of the townspeople want to build more.

Nantucket Sound has been polluted by spills from oil tankers bringing fuel to the power plant on Cape Cod Canal.  Other areas have also been polluted in providing power for Cape Cod and the Islands.

Ignored in most discussions of Cape Wind are the real alternatives and the aesthetic impacts of oil, gas, coal and nuclear power plants. Aesthetic blights from mining, refining, delivery and disposal of fuels for these plants, and the larger impacts of those technologies on our society, should be given serious consideration in evaluating Cape Wind. Current energy use patterns will lead to more environmental degradation, international tension and economic uncertainty.

The choice we face goes far beyond local aesthetics. Will we choose to continue our dependence on polluting fossil fuels from the Middle East? Will we choose a future plagued by international conflict, terrorism and climate change implicit in fossil fuel dependence? Will we choose to forego a golden opportunity to provide clean energy and good jobs for the region? The real question is whether we will choose a compromised future or the tremendous potential of sustainable prosperity.

The Northeast Sustainable Energy Association chooses sustainable prosperity, and we urge you to do the same.

The American Solar Energy Society released a report earlier this week that you may find interesting. It shows that tackling climate change can be a major net job creator for the U.S. economy.

According to the report, aggressive deployment of renewable energy and energy efficiency can net up to 4.5 million new U.S. jobs by 2030 and provide the greenhouse gas emission reductions necessary to tackle climate change.

With Congress debating energy policy in Washington D.C., this is the type of information that can really make a difference.

Renewable energy and energy efficient technologies could displace approximately 1.2 billion tons of carbon emissions annually by 2030 – the amount scientists believe is necessary to prevent the most dangerous consequences of climate change.

The report is called, Estimating the Jobs Impact of Tackling Climate Change, and was produced by ASES and top economists at Management Information Services, Inc. based in Washington, D.C.

You can find the report at: www.ases.org/climatejobs

Here’s one of the best parts. According to the analysis, renewable energy and energy efficiency deployment costs would be revenue neutral or better!

That’s because the costs to implement the technologies are offset by savings from lower energy bills, making total net costs near zero.

As Brad Collins, ASES’ Executive Director described it, “The twin challenges of climate change and economic stagnation can be solved by the same action-broad, aggressive, sustained deployment of renewable energy and energy efficiency. The solution for one is the solution for the other.”

The U.S. Senate is starting debate on energy and climate policy.

We should all welcome Congress finally getting serious about these issues. But as with all policy issues, details matter. Unfortunately, the lead sponsors, Senators Kerry and Boxer are starting out from the same controversial and seriously flawed basis as the Waxman-Markey House legislation which narrowly passed over the summer.

As a business owner who has worked successfully in the clean energy field and green building field for three decades, I have serious reservations regarding the Kerry-Boxer “Clean Energy Jobs and America’s Power Act”.

The current political climate in which anyone opposing these flawed solutions is being decried as an obstructionist and “climate change denier” points out how degraded our political climate has become. Such shallow accusations and name calling are completely uncalled for, no matter how prominent the person who engages in it. One isn’t in denial of the problem, just because of opposition to a proposed “solution” which is not a solution at all. Obstructing seriously flawed policy that would create major problems is a commendable public service that we should encourage all Senators to engage in.

The political consensus, that virtually everyone recognizes, is that we will be moving to a carbon constrained world. The questions being debated are not questions of climate science about whether or not to constrain carbon emissions, but rather policy questions of how to effectively and efficiently constrain carbon emissions.

Rather than being “climate change deniers” opposed to clean energy solutions, knowledgeable serious proponents of clean energy solutions know that there are better, less risky and more efficient ways to get to the carbon reduction and clean energy goals of the proposed legislation.

Most critical of the core problems in the Kerry-Boxer bill is Cap and Trade, a multi-trillion dollar financial derivatives market being created for trading limited government permits to emit greenhouse gasses. Such schemes will set back real solutions to our energy challenges and hugely exacerbate our economic problems, while having no meaningful climate impact.

Better climate solutions would increase economic prosperity.  Cap and Trade mechanisms favored in Washington are inefficient and will create huge unnecessary risks and burdens on the economy. The  unintended or at least unstated consequences of Cap and Trade will further consolidate and centralize corporate power at the expense of small business. The unmitigated costs of Cap and Trade further weaken our currently fragile economy.

It is completely inappropriate to create what US Commodities Future Trading Commissioner Bart Chilton predicted will become “the biggest of any derivatives product in the next four to five years”.  The proposed carbon derivatives and unverifiable offsets clearly invites what Friends of the Earth has described as a looming “Sub-prime Carbon” financial crisis. We can’t afford to put our economy at further risk with these idealized speculative schemes that are really just additional huge hand outs to Wall Street masquerading as a green energy and climate solution.

For those who prefer to watch than read, environmental attorneys Laurie Williams and Allan Zabel have supplemented their written critiques of  Cap and Trade with an excellent short video, “The Huge Mistake”.

To buy votes, the Senate bill is even worse than the house bill in at least one fundamental way – supporting nuclear power. No matter what your stance on climate issues, it is hard to suggest it is a real solution to expand the the nuclear industry, with its super toxic and radioactive byproducts lasting thousands of years, providing terrorist targets and fissile materials for nuclear weapons.  The ridiculous economic costs of nuclear power; the lack of any accepted waste disposal after more than half a century of government effort; the huge liabilities of nuclear power that are pawned off to tax payers; the obvious avenues for nuclear power to lead to nuclear weapons proliferation as now demonstrated once again in Iran and North Korea; and the fundamentally immoral legacy of leaving our world littered with plutonium and other dangerous nuclear materials;  is  neither a responsible energy solution nor a responsible climate solution.

Like supporting the spread and proliferation of nuclear technologies, supporting the creation of a speculative derivatives market even huger than the  sub-prime mortgage fiasco and based on even less verifiable underlying assets, is putting at serious risk the prospects of a peaceful and prosperous future. These measures being advocated in Congress are simply irresponsible.

Contrary to the pleadings of numerous environmental organizations , we should ask our Senators to  block passage of the Kerry-Boxer bill and instead insist on responsible debate and votes on the good components worthy of passage.

The Senate should act responsibly and break up these monstrous omnibus energy bills into smaller logical components. Each component should be debated and voted on its merits.

There are very valid solutions for energy efficiency, renewable energy and other matters buried in these giant bills that we all should support. But we can’t support a bill including Cap and Trade schemes or nuclear power.

We should call on the Senate to consider very practical, economically rational  solution to the challenges of  climate policy in the House legislation sponsored by Representatives Inglis, Flake and Lipinski, described below, which has also been advocated here.

Below is an article I recently published in the current issue of the Northeast Sun, the journal of the Northeast Sustainable Energy Association. The article analyzes the Waxman-Markey bill in the House. The same core flaws are also in the Kerry-Boxer Senate bill.  The article also describes the Inglis, Flake and Lipinski legislation – a real solution to our energy challenges:

A Serious Solution For Energy Policy

Every president since Richard Nixon has proclaimed energy policy a national priority. They have all failed to provide any lasting solutions.

We are headed toward failure again. The Waxman Markey American Clean Energy and Security Act (ACESA) passed by the House of Representatives could set back real solutions to our energy problems by decades, while exacerbating economic problems facing our country.

What matters is not intentions but results. Despite the rhetoric, ACESA won’t reduce carbon emission in a meaningful way or create what clean energy solutions need to be successful – a real price on the “economic externalities” of our fossil fuel addiction.

The American Clean Energy and Security Act Has Major Problems:

1)  The Carbon Cap Is Ineffective

The core of the ACESA is a new derivatives market for government permits to emit greenhouse gasses, along with offsets, which provide credit for activities such as planting trees or protecting forests, which mitigate impacts of emissions.

Scientists argue the carbon caps in ACESA are too low to impact climate change, while economists and practical observers suggest they are so subject to manipulation they are unenforceable. By allowing billions of tons of unverifiable offsets, many from international sources, no carbon emission reduction would even begin in the United States for at least a decade if all the offsets provided in the congressional bill were utilized.

2) New Derivatives Market Threatens The Economy

The Financial Times quotes US Commodities Future Trading Commissioner Bart Chilton predicting carbon markets would become “the biggest of any derivatives product in the next four to five years.”

ACESA credits and offsets create a volatile multi-trillion dollar carbon derivatives market that could impact financial markets much like the recent crash in mortgage-backed derivatives. The inclusion of unverifiable international offsets makes markets harder to understand or regulate, inviting market manipulation and fraud.

In the Friends of the Earth report “Subprime Carbon”, Michelle Chan cautions: “today speculators do the majority of carbon trading, and they will continue to dominate as carbon-trading markets grow.”

Unlike existing SOx and NOx emission trading markets, with limited sets of players and clear rules, the proposed carbon markets promise pay for impossible to verify assets to unlimited numbers of players.

In a CNBC video, “The Carbon Challenge”, former Vermont Governor Howard Dean declares, “I am terrified of a Bernie Madoff in the cap and trade business who is selling stuff that doesn’t exist.”

3) ACESA Is The Largest Corporate Welfare Program In History

Their campaign position paper declares: “Barack Obama and Joe Biden’s cap and trade system will require all pollution credits to be auctioned. A 100% auction ensures that all large corporate polluters pay for every ton of emissions they release, rather than giving these emission rights away for free to coal and oil companies.”

Waxman Markey gives away 85% of the permits for free

In his March Congressional testimony White House Budget Director Peter Orszag said: “If you didn’t auction the permit, it would represent the largest corporate welfare program that has ever been enacted in the history of the United States.”

While creating a huge derivatives market for Wall Street, ACESA gives billions in free carbon credits and offsets to coal companies, oil refiners and the utility industry. In “The Cap-and-Trade Giveaway”, Alan Viard suggests: “under a system of free permit allocation, the stockholders of companies that receive free permits would receive windfall gains. A cap and trade system with freely allocated permits is equivalent to a carbon tax in which the tax revenue is given to stockholders.”

In a report on cap and trade, the Congressional Budget Office estimated that some recipients of free credits could see their market capitalization double or triple instantly.

Harvard economist Greg Mankiw succinctly blogged: “Cap and trade = Carbon tax + Corporate welfare.”

4) ACESA Undermines EPA Authority And Successful Policy At The Regional, State And Local Level

ACESA eliminates EPA’s existing authorization to regulate greenhouse gas emissions under the Clean Air Act and prohibits successful state and regional programs like the Regional Greenhouse Gas Initiative. It imposes federal control over matters like building codes, traditionally the constitutional purview of the states.

Successful state Renewable Energy Portfolio Standards (RPS) are complicated by ACESA. The minimum compliance payments in the proposed Federal RPS are too low to spur markets for renewables.  And ACESA allows technologies like waste incineration to compete in renewable energy credit markets with real renewables

5) Massive ACESA Financial And Regulatory Interventions Delay Real Solutions

Along with cap and trade, ACESA involves hundreds of new regulatory and economic prescriptions, distorting markets based on political calculus and favoring entrenched interests. In a guise of offsetting higher consumer prices, billions of dollars of carbon credits are free to utility companies, undermining competitive energy markets. ACESA further encourages failures like corn-based ethanol, disrupting agricultural markets while providing no net energy or environmental benefit. Regulatory provisions micromanage virtually every sector of the economy, stifling innovation.

6) ACESA Fails In Pricing “Economic Externalities” Of Our Fossil Fuel Dependence

The Wall Street Journal quotes President Obama saying in March: “If you’re giving away carbon permits for free, then basically you’re not really pricing the thing and it doesn’t work — or people can game the system in so many ways that it’s not creating the incentive structures that we’re looking for.”

By giving away 85% of carbon credits, establishing ineffective carbon caps and allowing offsets, ACESA doesn’t provide price feedback in energy markets and in the economy generally that are essential for making clean energy cost-competitive.

Volatile price swings undermine investor ability to put a predictable value on alternatives to incumbent energy systems. The speculative derivatives markets inherent in ACESA encourage volatility. The Wall Street Journal reported that in Europe, “prices for carbon permits have whipsawed from a high of 30 euros a ton to a low of 2 euros a ton.”

7) ACESA Undermines Political Viability Of Real Solutions

In a presentation at Dartmouth College, NASA climate scientist James Hansen declared: “Cap and trade is not going to work……in Europe it has been completely ineffective.” His conclusion is confirmed by Euractiv.com reports of European governments proposing new carbon taxes, effectively acknowledging the failure of their cap and trade program.

In their Philadelphia Enquirer editorial “Cap-and-Trade Does More Harm Than Good”, environmental attorneys Laurie Williams and Allan Zabel state:  “The Waxman-Markey approach would not only guarantee a decades-long failure in the United States; it would also undermine U.S. credibility in international negotiations on climate change.”

Ex-Secretary of State George Shultz, speaking to the International Association for Energy Economics suggested of Waxman Markey: “it is going to be so obviously corrupt it is going to discredit the whole idea.” Having negotiated the Montreal Protocol, the most successful international environmental treaty in history, Shultz suggests a straight carbon tax would give the US far more credibility in negotiating climate treaties.

Greenpeace summarizes: “the Waxman-Markey bill sets emission reduction targets far lower than science demands, then undermines even those targets with massive offsets. The giveaways and preferences in the bill will actually spur a new generation of nuclear and coal-fired power plants to the detriment of real energy solutions. To support such a bill is to abandon the real leadership that is called for at this pivotal moment in history.”

ACESA will inevitably increase costs throughout our economy, but does not provide effective mechanisms for average people to cover those costs.  With all of these problems and no credible prospect of meeting its stated goals, if we allow ACESA to pass, it could be decades before voters trust Congress to attempt any meaningful solution to our fossil fuel addiction.

What An Effective Solution Would Look Like – Revenue Neutral Carbon Tax

On January 26, President Obama made his first major policy address on energy. He described our energy challenge clearly: “At a time of such great challenge for America, no single issue is as fundamental to our future as energy. America’s dependence on oil is one of the most serious threats that our nation has faced. It bankrolls dictators, pays for nuclear proliferation and funds both sides of our struggle against terrorism. It puts the American people at the mercy of shifting gas prices, stifles innovation, and sets back our ability to compete.”

A simple carbon tax addresses all the challenges President Obama cites. And if implemented in a revenue neutral manner by replacing payroll taxes or providing direct rebates to all citizens, a carbon tax also addresses the serious economic problems we are facing.

Strong price signals from a carbon tax would shift markets and do not require the risks and inefficiencies of excessive regulation or huge speculative derivatives markets Today we tax work and productive investment while encouraging waste and pollution with subsidies and tax breaks for oil, coal and other entrenched industries. It’s time to think rationally about using this powerful lever of government to discourage what we don’t want, like wasting energy, while encouraging work, job creation and sensible investment.

Williams and Zabel suggest: “While cap-and-trade-and-offsets will enrich special interests and delay the transition away from fossil fuels, carbon fees with monthly rebates could be the centerpiece of an affordable, equitable, rapid transition to a clean-energy future.”

Waxman Markey is not the only energy bill in Congress.

Representatives Inglis (R-SC), Flake (R- AZ) and Lipinski (D-IL) worked across party lines proposing H.R. 2380, The Raise Wages, Cut Carbon Act of 2009. Their bill puts inescapable prices on carbon emission immediately that are far greater then the EPA and Congressional Budget Office estimate Waxman-Markey will provide ten years from now. Instead of Waxman Markey’s hundreds of billions of dollars in corporate welfare, H.R. 2380 would reduce regressive payroll taxes while providing increases to people receiving social security to directly offset the economic impacts of the tax. Congressman Inglis’ suggests website “By reducing payroll taxes and taxing carbon dioxide, we can turn an environmental fix into a decisive, economy-expanding national security fix.”

The Miami Herald reports that that H.R. 2380, “would initially impose a tax of $15 a ton of carbon dioxide on the producers and distributors of gasoline, natural gas and coal, with the tax rising to $100 a ton over three decades.” Such clear policy signals allow businesses throughout the economy to plan effectively and make long-term investments.

Inglis, Flake and Lipinski propose that, “the tax applies to fossil fuels as they enter the economy: at the mine mouth, the oil refinery and the natural gas pipeline. This upstream application of the tax will make it easy to implement and reduce administrative costs.” They suggest, “consistently applying the same tax to all domestic and imported products will keep this border adjustment in compliance with existing WTO agreements.” And they are willing to take political risk and treat voters honestly, publicly predicting that customers of coal-fired utilities would see cost increases of 83.5% in the first year.

In “Show Us The Ball”, Thomas Freidman reports that: “Representative John B. Larson, chairman of the House Democratic Caucus, circulated a draft of a similar bill that would impose a per-unit tax on the carbon-dioxide content of fossil fuels, beginning at a rate of $15 per metric ton of CO2 and increasing by $10 each year. The bill sets a goal, rather than a cap, on emissions at 80 % below 2005 levels by 2050, and if the goal for the first five years is not met, the tax automatically increases by an additional $5 per metric ton. The bill implements a fee on carbon-intensive imports, as well, to press China to follow suit. Larson would use most of the income to reduce people’s payroll taxes.”

Revenue neutral carbon tax solutions offer a rational market oriented solution by putting a real price on carbon emission. They are favored by the vast majority of economists on all sides of the political spectrum. By effectively discouraging petroleum use, such taxes address our trade imbalances and enhance our national security interests while stimulating markets for clean energy, energy efficiency and fuel-efficient vehicles. Plus, these taxes are good economic policy, reducing the penalties on work and job creation in regressive payroll taxes.

We need to dependably get the “economic externalities” of fossil fuels accounted for directly in the real economy. A simple carbon tax is the most effective way to do that.

Make Sure The Senate Hears Us

Willem Buiter, former chief economist of the European Bank for Reconstruction and Development, summarizes the political challenges in “Carbon Offsets: Open House for Waste, Fraud and Corruption”. He notes that politicians “prefer cap and trade because it hides/obscures the fact that for it to work, it must be equivalent to a tax; however, it does not look like a tax and will not show up in conventional tax burden calculations. Also… you can hand out the credits free of charge to your friends (including the heavy historical polluters).…The amounts of money involved are vast and the opportunities for graft, bribery and corruption limitless.

Before suggesting Waxman Markey is about the best we can expect from Congress, in “Just Do It”, Thomas Friedman summarizes the bill well: “It is too weak in key areas and way too complicated in others. A simple, straightforward carbon tax would have made much more sense than this Rube Goldberg contraption. It is pathetic that we couldn’t do better. It is appalling that so much had to be given away to polluters. It stinks. It’s a mess.”

NESEA members are practical idealists. We cannot settle for ACESA as the best Congress can do. We cannot accept politically expedient “solutions” that we know are bound to fail. If we support legislation that does far more harm than good, then we become part of the problem, rather than part of the solution.

Political challenges facing a carbon tax are certainly no more formidable than the practical problems with ACESA. It is time to move beyond political horse-trading to a serious solution. Willams and Zabel argue: “Those who favor Waxman-Markey as a political best-case scenario lack faith in the American people.”

We need government policy that makes environmental and economic sense.  Lets call on our Senators to reject Waxman-Markey and implement a simple carbon tax that puts a significant and inescapable price on carbon emissions – right now.