MAE 124/ESYS
103:
Week 8 Assignment
Power for
America: Choosing provisions for an energy bill
Energy policy gets a lot of headlines, but at the moment there appears
to be no consensus among American lawmakers about how best to direct
energy policy in the US. In the last two years, proposed policies
have run the gamut:
- Mandating renewable energy as a
requirement for selling electricity. The state of
California recently mandated that by 2020, 33% of
electricity sold in the state would need to be derived from renewable
sources. While California's new standards are demanding,
California is
not alone in setting standards. According to an EPA
web site, a total of 33 states have now set so-called "renewable
portfolio standards".
- Providing zero-interest loans
to improve energy efficiency of buildings. Buildings use
roughly 40% of energy in the US, and the newly proposed Energy
Savings Act of 2011 is aimed at reducing this by improving
efficiency.
- A Cap and Trade bill.
Last year, Senators Kerry and Lieberman crafted a bipartisan bill (the American
Power Act) which would have used a Cap and Trade measure to reduce
greenhouse gas emissions by over 80% by 2050. The bill also
contained an interesting array of pork.
- No regulation at all.
This year, the Energy
Tax Prevention Act of 2011 has been proposed to prohibit the EPA
from regulating greenhouse gases.
Just about the only thing that has not been proposed since President
Obama took office is a straight carbon tax, but that does not mean that
no one is thinking about a carbon tax.
If your goal is merely to reduce greenhouse gas emissions, what should
you do? Is the no regulation concept of the Energy Tax Prevention
Act sensible? (Maybe if efficiency pays for itself, regulation
only gets in the way.) Or can a little nudge through a renewable
portfolio standard, a carbon tax, or a cap and trade policy make a
difference? If the plan is to nudge the US economy, then what
would you implement?
Before writing a response to this assignment, please read Paul
Krugman's detailed tutorial-style article entitled Building a Green
Economy from the New York Times last year. (Feel free to do
much more extensive reading if you like.)
Then write a brief (250 words or less) statement. First explain
the distinctions between a carbon tax, a cap and trade policy, and a
renewable portfolio standard. Then justify your own preferred
strategy for reducing greenhouse gas emissions.