David Sweet

The US elections are over and once again there is a resounding call for change in Washington. In the largest partisan swing since 1948, Republicans retook control of the US House of Representatives and narrowly missed capturing the Senate. The three most critical issues were jobs, jobs and jobs in light of an unemployment rate that is, in reality, well into the double digits.

Support for climate change legislation was a huge political liability for a number of incumbents who were voted out of office. The only trace of support for clean air restrictions was the defeat of Proposition 19 in California, which would have legalized the use and production of small amounts of marijuana. Proposition 19 went up in smoke on election day as did any chance of cap and trade legislation to limit carbon dioxide emissions over the next two years and beyond.

The 2012 presidential election campaign now begins and President Obama faces a political landscape that is vastly different from the wave of support that swept him into office. He is not likely to go out on a limb to support climate change solutions that have no realistic hope of passage in Congress, and might derail a chance for a second term in the White House.

However, just because things are bleak for cap and trade, that does not mean that all hope is lost. While it is likely that for the next two years US politics will be like a Beijing traffic jam – mired in gridlock – there may be an appetite for focused measures that can drive efficiency, clean air and jobs. One such measure is an expanded financial incentive in the form of an investment tax credit (ITC) for highly efficient CHP projects.

A 2008 report from Oak Ridge National Laboratory estimated that full deployment of CHP could efficiently provide 20% of the nation’s power, save almost 6 quadrillion BTU (6000 TJ) of energy annually, eliminate greenhouse gas emissions (GHG) by an amount equivalent to removing 150 million cars from the road, and help expand the economy. In a recent WADE study, the impact of an expanded ITC that would incentivise deployment of CHP and help realise the promise discussed in the Oak Ridge study, was analysed. The projected impacts include:

  • An expanded 10% ITC increases CHP deployment by about 20% over a no-ITC baseline (leading to an additional 550 MW between now and 2017).
  • An expanded 10% ITC results in an annual energy savings of 118 trillion BTU (118 TJ) and an annual reduction in carbon dioxide emissions of more than 14 million tonnes, equivalent to removing 2.6 million cars from the road. Investment in the projects represented by an expanded 10% ITC creates over 17,000 highly skilled, well paying jobs.
  • A 30% ITC for highly efficient CHP increases CHP deployment by more than 60% over a no-ITC baseline (1600 additional MW between now and 2017).
  • A 30% ITC leads to an annual energy savings of 162 trillion BTU (162 TJ) and an annual reduction in carbon dioxide emissions of more than 19 million tonnes, equivalent to removing 3.4 million cars from the road. Investment in the projects represented by a 30% ITC creates over 23,000 highly skilled, well paying jobs.
Given that the politics of energy and climate have shifted to the right, technologies and proposals, such as an expanded ITC, that can improve the economy, jobs and the environment have the potential to garner substantial support in the months ahead.

David Sweet
Executive Director, WADE
dsweet@localpower.org

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