RenewNewEngland.com

Rhode Island Unveils Roadmap for Green Economy

Earlier this month, at a forum entitled “Advancing the Green Economy,” Rhode Island leaders introduced a roadmap to further the state’s green economy, focusing for now on four “acceleration initiatives”:  advanced manufacturing, energy efficiency, innovation (and R&D), and wind power (both on- and offshore).  The roadmap identifies “Phase 1” and “Phase 2” activities for each initiative, including defining standards and establishing metrics (such as the number of engineering graduates or energy efficiency jobs).  For example, under the Wind Power initiative, Phase 1 projects include making the Quonset Business Park a hub for both onshore and offshore projects by employing a “business-to-business” marketing and partnership approach, and installing 100 megawatts of onshore wind power.  Phase 2 projects include amending the State’s Renewable Portfolio Standards to require that RECs come from in-state projects, and investing in R&D to produce the next generation of wind power technology.  Importantly for the two other New England states with offshore wind development goals, Rhode Island seeks to “set the East Coast standard for developing offshore wind power” through a demonstration project. 

That demonstration project, of course, is Deepwater Wind's project in Rhode Island's coastal waters, which we have written about previously.  Last June, Deepwater leased 117 acres at the Quonset site to be used for manufacturing, assembly and logistical support for the project.  The Quonset park has received two federal stimulus grants in the past year.  Last week, the Department of Transportation announced that the Quonset Development Corporation would receive a $22.3 million "TIGER" grant for "pier maintenance, rail improvements and road reconstruction" necessary to support producers of offshore wind power.  This follows an earlier stimulus grant of nearly $4 million from the Economic Development Administration to carry out other transportation infrastructure improvements at the site.

Two challenges that the roadmap recognizes face each of the four initiatives are the lack of an adequately trained workforce and uneven or inadequate funding (from a hodgepodge of federal, state, or private sources), and thus as a starting point the roadmap proposes to:  (1) identify the needed skill sets and work through a collaborative of providers (colleges, nonprofits, and industries) to develop certificate and “life-long learning” programs and (2) review the funding gaps (beginning with government-backed funding) and “develop agile practices” to direct funds to the right green place.

While in one sense Rhode Island’s “green roadmap” follows a national trend, it is also notable in its effort to coordinate various programs, align capital resources, and develop complementary training programs to streamline implementation of its goals.  Rhode Island has taken advantage of its small size to engage all the players – government, industry, academia – in a unified, focused course of action around offshore wind.  This focused support, while not without its risks (see, for example Massachusetts' experience with Evergreen Solar), may provide Rhode Island with the necessary infrastructure to become a hub for future offshore wind development in New England.

Has the Obama Administration Really Given Up On Cap-and-Trade?

President Obama’s response to an audience question during his appearance at a Nashua, New Hampshire, high school on Tuesday has been pronounced by the media as the beginning of the end for a national cap-and-trade program.  According to numerous news reports, the President “acknowledged” that controversial cap-and trade could be separated from the Senate energy bill; “retreated” from cap-and-trade (“a maneuver that could kill what once had been one of the administration's top policy priorities”); and “opened the door to disassembling the climate change legislation” currently under consideration in the Senate.  Reading the complete text of his remarks, however, reveals that cap-and-trade is hardly on its death bed. 

First, the statements quoted in the news as signaling a change in priority for cap-and-trade came in response to a long question from an audience member pushing an energy efficiency and technology plan that would “help us to avoid having to do cap and trade and other aspects with environmental controls that are going to have negative impacts on our economy.”  After touting the benefits of energy efficiency and technology at length, the President admitted the controversy over cap-and-trade:

The most controversial aspects of the energy debate that we've been having -- the House passed an energy bill and people complained about, well, there's this cap and trade thing. And you just mentioned, let's do the fun stuff before we do the hard stuff. The only thing I would say about it is this: We may be able to separate these things out. And it's conceivable that that's where the Senate ends up.

While Obama’s response certainly could be read as an invitation to consider a bifurcated approach to moving the energy bill forward, the news reports of cap-and-trade’s death may be, with apologies to Twain, greatly exaggerated.  Following this statement, the President immediately emphasized that market-based incentives to pollution control – cap-and-trade – offer the most realistic and workable solution:

But the concept of incentivizing clean energy so that it's the cheaper, more effective kind of energy is one that is proven to work and is actually a market-based approach.  A lot of times, people just respond to incentives.  And no matter how good the technology is, the fact of the matter is if you're not factoring in the soot that's being put in the atmosphere, coal is going to be cheaper for a very long time. …

And so the question then is: Does it make sense for us to start pricing in the fact that this thing is really bad for the environment? And if we do, then can we do it in a way that doesn't involve some big bureaucracy in a control and command system, but just says, look, we're just going to -- there's going to be a price to pollution. And then everybody can adapt and decide which are the -- which are the best energies.

One day after the New Hampshire speech, the President announced a “Comprehensive Federal Strategy on Carbon Capture and Storage,” which established an interagency task force (co-chaired by representatives from the DOE, and EPA, and including FERC and the Treasury Department, among others) charged with developing a plan that will result in bringing 5 to 10 commercial demonstration carbon capture and storage projects online by 2016.   In this announcement, the President reiterated his endorsement of a cap program: “Ultimately, comprehensive energy and climate legislation that puts a cap on carbon pollution will provide the largest incentive for CCS because it will create stable, long-term, market-based incentives to channel private investment in low carbon technologies.“  The President’s recently submitted budget also assumes enactment of a cap-and-trade program, with a “placeholder” expectation (i.e., unquantified) that cap-and-trade legislation would be “deficit neutral.”

Perhaps Obama’s comment was a carefully planned gesture to the opposition; perhaps the news media made more out of it than was warranted by the context.  It remains to be seen whether the combined effects of "Climategate", the struggling economy, and political necessities doom enactment of a national cap-and-trade program this year.  But worldwide trends, and the experience of states that have moved forward to develop regional programs, support a cap-and-trade approach.  For example, New England (with four other northeast states) has an established carbon cap-and-trade program, the Regional Greenhouse Gas Initiative (RGGI), designed to cap and reduce power sector CO2 emissions 10% by 2018.  Since the first auction in September 2008, this program has raised almost a half billion dollars for energy efficiency and renewable energy programs (with Maine receiving over $15 million to date).  The next auction is scheduled for March 10.