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Achieving a New Energy Future: How States Can Lead America to a Clean, Sustainable Economy 8/9/2005 NewEnergyFuture05.pdf

Executive Summary

At the dawn of the 21st century, America faces immense energy challenges, and enjoys boundless opportunities.

The current crisis in our energy system is the result of decades of bad decisions: the decision to unleash an unconstrained boom in natural gas-fired power plant construction during the 1990s that has since contributed to price spikes throughout the economy; the decision to allow aging coal-fired power plants to continue to operate under outdated emission standards; the decision to subsidize fossil and nuclear fuels at the expense of renewable power and energy efficiency.

The effects of these bad decisions are now apparent. Natural gas prices have doubled in recent years, squeezing the pocketbooks of consumers and the profit margins of industry; both of whom have become increasingly dependent on natural gas for heat, hot water and industrial purposes. Old coal-fired power plants continue to spew pollution that threatens public health, while a new generation of coal fired plants has been proposed that would add to America’s already substantial contribution to global warming. The nuclear power plants built in the 1960s and 1970s are coming to the end of their original lifespans, but many are receiving a new lease on life from federal officials, presenting a continuing threat to public health and safety.

Environmentally, our bad energy decisions have made the United States the world’s leading contributor to global warming, threatening the health and welfare of future generations, the ecosystems on which life depends, and America’s standing in the global community. Economically, our decisions have left the United States — historically a world leader in technological innovation — well behind Europe and Japan in the development and deployment of the energy technologies of the 21st century and have tied our continued prosperity to fluctuations in fossil energy prices over which we have little control.

Should we remain on our present course, the energy challenges facing the United States will only grow in magnitude. The depletion of fossil energy reserves, increased demand for energy, aging domestic energy infrastructure, and the acceleration of global warming will continue to pose problems both for our immediate welfare and our nation’s long-term economic and environmental sustainability.

To properly address these challenges, America must transform how it produces and consumes energy. We must do it. And we can. Renewable forms of energy such as wind and solar power are increasingly cost-competitive with traditional forms of energy; indeed wind power is a least-cost option for new power generation in some parts of the country. And new renewable technologies that sustainably tap the natural energy of the earth, water, wind and crops are on the horizon.

America also has vast “strategic reserves” of energy efficiency — a resource that could cost-effectively reduce, or even eliminate, the growth in demand for energy for the foreseeable future, and do so with a net benefit to the economy. New technologies promise to make our homes and businesses more energy efficient than ever before, providing immediate savings to consumers, reducing energy demand at peak periods, and lowering prices for everyone.

Despite the emerging promise of a new, clean energy future, there has been little momentum toward that goal at the federal level. President Bush and many in Congress remain wedded to a future energy vision built around the dirty, dangerous and unstable energy sources of the past at the expense of the reliable, sustainable and clean sources of the future. Congressional efforts to increase energy efficiency and deal with the worst by-products of our overreliance on fossil fuels — such as global warming emissions — have gone nowhere.

America is at a critical point. Continuing to delay a transition to cleaner energy sources will leave the United States even further behind other nations in the development of renewable energy, even more wedded to energy sources that are unsustainable in the long run, and facing an even greater uphill battle in the effort to control global warming emissions.

It is in this atmosphere of challenge, opportunity and political stalemate that state governments have stepped in to take leadership. Across the nation, states have developed innovative tools to encourage a shift to a clean energy strategy. Renewable energy standards for electricity generation; dedicated, ratepayer-supported energy efficiency and renewable energy funds; tighter appliance efficiency standards; and stronger residential and commercial building codes are just a few of those tools.

The momentum for state action on energy has only increased over the past five years. A coordinated, multi-state effort to promote clean energy policy can ensure that that momentum continues — and, in the process, create the conditions for renewed initiative at the federal level.

Such an effort, however, must proceed from a set of shared assumptions, values and approaches. This document sketches out the basics of such a program — highlighting the major energy-related problems facing the United States, suggesting technologies and policy approaches that should be prioritized, and assessing how these approaches would impact America’s energy future.