all help apprciated

but keep in mind where we are, and where we are headed

most assume that the bill moves left next year

the opposite is likely

Energy Committee is looking to take control of this bill

And Energy will sabotage the vote to bolster its claim to next year, if Energy can do so without fingerprints

Energy's top priority will be to protect fossil fuels and nuke energy, and to kill alternative energy with EXTREMELY small favors

A bad vote this year is probably a pit from which progressives never recover

fix L-W as best you can as fast as you can

there is a bear in the woods (Energy Committee) and it is a ferociious beast

most Grist fans have no idea what world they live in

I have a couple of questions for you.  I don't see the bill, specifically the provisions to which you allude, exactly the same way that you do, but it's also possible that I don't fully understand them either.  

If you are an inventor, and you come up with a fantastic idea for reducing carbon emissions via some new widget - you seem to imply above that you have no incentive to deploy your technology because it's not listed in the bill.  OK, two questions:

 Why not?  Why wouldn't some company, XYZ Industries, who is facing a cap on their carbon emissions, buy the widget from you?  Regardless of what the bill says, all they want to do is reduce emissions, and if they can do that cost effectively, well that's terrific.  So if your idea is a good one, companies will come clamoring for it, won't they?  Am I missing something?  Isn't this the market at work?  

 I seem to read the bill a little differently, and it hinges on a few words.  The first bucket of money you describe above, the Energy Technology Deployment Fund, seems to leave some pretty big windows.  I completely agree re: goals instead of paths, but I don't think they are ruling anything out by saying "sustainable energy technologies" (that's a big category) and "low carbon electricity technologies" (another big category).  Right there you cover most of what is out there, and it seems that you could tuck inventions into either one of those categories.  

If I could add anything, it would be language on efficiency, which I should note many people are going to propose, and frankly is likely to be added.  That, to me, would cover just about everything and leave room for the funding of innovation.

Please let me know if I'm missing something here.

Re 1: You have to follow where the incentives lie.  If I'm an emitter and I'm given an allowance to pollute, I don't have any incentive to buy things from inventor X.  And this is the case for the majority of the allowances in the early years, and in all cases is true for at least 30% of the allowances.  Now look at what happens if I have to pay to pollute.  Under LW, I either pay or reduce my emissions signature - but the allocation is based on my emissions.  I'll get to some of this in a later post, but this is a key part of the problem - namely, that LW is structured so that the regulated sources don't have any good options.  If I burn more than 5000 tons of carbon per year, I either get or buy allowances based on my net carbon consumption, net that which I sequester.  Suppose your great invention lowers GHGs, but isn't retrofittable into my coal plant.  In that case, the coal plant doesn't have any path to pay you to reduce their emissions.  They just pay the feds... and the feds then allocate amongst the picked winners.  So you end up with this extremely complicated regulatory model where the feds name all the losers, name all the winners and then play the role of choke point in the system allocating funds from one to the other.  (And note that a significant fraction of the winners aren't actually GHG reducers - wildlife conservation, estuarine recovery, etc.  All noble goals, but the result is that for every 100 cents of GHG pollution rights purchases, less than 100 cents goes to GHG pollution reduction.)  The core issue is that this is socialist policy, in the classic sense of the term: it assumes that a couple smart regulators can allocate social good better than 1000 dumb actors.  Except that at least the most die-hard communists limited their planning to 5 year horizons.  This one goes for 42!

Re 2: I think I can safely say that government does many things well, but flexibility isn't one of them.  (As a former Senate staffer told me, the great frustration about Washington is that if everyone on the ship agrees you should shift your heading by 90 degrees, everyone gets together, pushes like hell and you end up shifting 3 degrees in the right direction.)  This isn't a criticism of DC so much as of big bureaucracy, and it is true of every state and federal policy I've ever seen that stipulates technological incentives.  Once an R&D/tech development program is in place at the DOE (not to single them out, of course), it creates all it's own inertia.  And so no matter how quickly it becomes apparent that hydrogen/clean coal/etc. is a dumb idea, it will be many years before the program dies.  So too, with these stipulated programs that start with lists of eligible technologies.  Even if the relevant agency has the freedom to amend the list, they can't do it easily, as you immediately create fiefdoms (think of all the program managers for the Super Duper Technology Du Jour funding program, who lobby hard internally to keep their program in place, no matter what the politics say.)  

I am perhaps not being as eloquent as I can, but having spent a lot of time in that world, trust me... it's a mess waiting to happen.

It's a political judgment.  Many folks in DC are aware of the limitations of LW, but the general consensus is that this will be the structure within which GHG regs are developed.  Many groups are bashing LW out of Inhofe-esque evil intent.  Many folks are praising it out of what I can only describe as naive environmentalist fantasy.  (e.g., they say they'll reduce GHGs!  I love it!  Never mind the details.)  And frankly, many others are supporting it out of a belief that this is either the best we can do, or (more perniciously) because they have figured out a way for them to be set up as a pork recipient.

So... to your question of why talk about it: because I am not aware of any significant conversation going on in the middle.  One can accept the political inevitability of LW with respect to the specific legislative bill number without conceding all the details in the present draft.  And for now, it is only a draft, that can still be editted.  So rather than saying the whole thing sucks (or the whole thing rocks), those of us in the responsible end of the environmental community really ought to be talking about the details that don't work, and how to fix them.  And we need to do so before it really does become inevitable.  Because once this is passed, it's going to be really hard to undo.

"most Grist fans have no idea what world they live in"

How much better would it be to simply divert the 10s of billions per year in corporate welfare for fossil, nuclear, and agribizz (ethanol, biodiesel farming) to direct subsidies?  Checks for people who generate and sell GHG-free kwh into the grid.  And save kwh through investment in conservation.

Industry will then meet the demand for the devices to produce and save energy.  They will get there's, but will have to supply what consumers need to make their profits.  Playing field leveled, free market restored.

Legislators need millions of letters from millions of green voters with 5 or 10 buck campaign contributions a piece in them sending this message.  Otherwise the voices and PCs of industry lobbyists, on which this bill was written, will prevail.

The green voters are there, the few bucks a piece are there.  So how to get this going?  Time is growing short into this election.  Now is the time when legislators will listen.  Once they are reelected it will be too late.

http://amazngdrx.blogharbor.com/blog

..and understand what you're saying about both the allocation and the selection of winners.  I would suggest, however, that it's not quite as "black and white" as you make it seem.  There are some technologies that will not get gov't funding that will still be successful.  Will it help to get gov't funding?  Absolutely.  But a good idea is a good idea, and VCs and other folks out there are scouring the marketplace for good ideas in which to invest.  So I think that there will be some support for clever inventors, just not always from the big gov't pool.  

But you make a very good point about the selection of technology.  If I had my way, like you, I would have the bill focus on goals, not the path to the goals.  The use of collected funding for things other than R&D is, my guess, some sort of political math.  I would bet that to get someone's support, they needed to throw in some funding for good ideas like those you outline even if they are not tied to GHG reductions directly.  I have no way of knowing if this is true, it's just my guess.  I suppose I should be pleased that at least the things they chose seem reasonably worthy to me, but you are right - 42 years is a looong time.  

In the end, I think the bill will be edited, at least somewhat, finally passed in 2010, and be in effect in 2012.  And then there will be constant efforts to reshape it over the years.  I tend to be a "don't let the perfect be the enemy of the good" kind of person on these issues, so I'll be pleased to finally get something in the books.  I'm more than willing to keep taking runs at it in the ensuing years.  

Note that the first post in this series though pointed out exactly the point you raise vis a vis the perfect and the good.  My point in this series of posts is to make sure everyone understands exactly how wide a gap there is between the perfect and this bill.  We can then have an informed conversation about whether this bill is good, bad or so-so.  Personally, I think we can do a lot better than this and still not be perfect.j

Also, re: VC funding, you're right that VCs will invest in good technologies.  But they will invest in more of those good technologies if the beneficial GHG impacts of those technologies are factored into their value proposition.  There is no reason L-W cannot be structured to reward these players-to-be-named-later.  But as it is, it does not.  And so the calculus with respect to those VC investments in green technologies remains essentially unchanged with the passage of L-W.  And that, in my mind is about as harsh a criticism as one can make of a bill designed to lower our GHG emissions!

what?

We need to get rid of this pork allocation and replace it with a much simpler set of incentives that define the goal, put an incentive in place for anyone who can meet that goal, and get out of the way.

good idea

but how are you going to get the votes?

That's the beauty of a per kwh subsidy.  Scientists at NREL, for instance, determine the GHG canceling effectiveness of a specific technology, the utility counts the kwhs generated or saved, and the government issues a check for the subsidy.

Investors decide which devices or systems to invest in.  They will know how big a subsidy check to expect when they buy the solar system, wind machine, geo heating/cooling system,  farm biogas power system, and/or plugin hybrid vehicle.

And so will the bank lending them the money.  

Lobbyists will be shut out of the game.  

http://amazngdrx.blogharbor.com/blog

That agreement means a lot, after ranting on this point for months!  Hehey.

I was reffering to NREL, much underfunded as it is, because of their excellent testing of various solar and wind devices.  But I agree some way of keeping the problematic aspects of standard government confusion and corruption, out of the equation,  needs to be found.

I suggested NREL because they seem to be able to rise above it so far.  Maybe with more funding and power they would be corrupted?

Can some way of fair arbitration on which systems are rated scientifically in quantifiable numbers be developed?  I think that NREL has shown it is no EPA (yep EPA is messed up alright!) so far.

I will try to find some examples from their site for you, if you would want to check them out, thanks again.

http://amazngdrx.blogharbor.com/blog

And it's not really about them per se.  My point is the generic one that if you need to stick a government body in the way to quantify your GHG impacts, you're too complicated.  I liken GHG policy (and indeed, most public policy) to incentive compensation plans.   (It's the CEO in me.)  Good plans are really simple.  Bad plans have layers of complexity where some well-meaning CEO/HR director tried to pre-guess every possible way employees would game the plan and stick in oodles of complexity... and then truly learn how innovative their employees are when they watch them quickly identify all the loopholes in their genius plan.

(A friend in the biofuels group at NREL, interestingly enough was the first to make the link for me between public policy and incentive plans.  As he put it to me, "the great thing about making laws is that you immediately see behavior change.  The bad thing about making laws is that until you see the behavior change, you don't really know what it was that you were encouraging people to do.)  

This argues for simplicity, and the biggest problem with all our GHG plans is that they start hideously complicated, and you can smell the gaming coming - and this is no less true if the administration is done by NREL, ORNL, INEEL, any other national lab, or indeed any other branch of the government.  

The heck of it is, it doesn't have to be complicated.  It is really easy to install a meter that quantifies how many kWh, Btus or any other useful energy output you made in a given month.  It's also really easy to put a meter on and figure out how much fuel you burned during the same period.  Presto, we know how much GHG you emitted per MWh.  The only thing we need government oversight for at that point is to provide sufficient oversight & audit to verify those meters & reports.  After that point, government doesn't have to be involved, and we can simply leave polluters free to buy offsets from cleaners wherever they may be.  This is the crux of the output based standard.  

Random quality control spot checks to make sure it's not being gamed.  That should be government's part.  (And of course issuing subsidy checks).

I'm going to cogitate on your comments on the trail Sean.

There has to be a way to get honest science applied to this.  Quantify the GHG freeing aspect of a given device or system.  Can you ask your friend at NREL his opinion on this?

http://amazngdrx.blogharbor.com/blog

ce1907: good idea, but how are you going to get the votes

Sean: That's simply a question of politics.  I'm not a politician, but don't think it's that hard.

Sean: we need a full court press to change directions

Sean:It is sad but true that there is no such thing as perfect legislation, for the simple reason that the democratic process demands compromise.

I'm sorry Sean, but you're all over the place. This might be why you take so many posts to preach the controversy.

From Sean's company's website: Turbosteam (a wholly owned subsidiary) believes successful power projects have a single point of coordination, someone responsible for everything from conceptual design to system commissioning. Turbosteam, therefore, combines the expertise of a consulting engineer, banker, manufacturer, and general contractor to ensure that our projects deliver the optimal value to our customers.
Academically, I see your point where efficiency is concerned. Realistically, I dont think anyone would argue for this more than Enron, one of the original energy traders.