“A CES would create economic incentives for deployment of clean energy that can help ‘pull’ new technologies coming out of R&D into the market. Importantly, a CES would not pick particular clean technologies, but instead let markets and businesses determine the most cost-effective technologies to achieve the target share of clean energy,” the report states.
Obama’s plan calls for a doubling of electricity from low-carbon sources including renewables, nuclear power, natural gas and power from coal plants that trap carbon emissions (a technology not yet commercialized). It sets a target of obtaining 80 percent of U.S. power from these sources by 2035.
“By ensuring flexibility through a broad definition of clean energy and by allowing trading among utilities, the program is designed to meet the overall target cost-effectively. The administration’s proposal emphasizes the importance of protecting consumers and accounting for regional differences,” the report states.
The report also says a CES would complement the renewable energy standards in place in roughly 30 states. It says the “patchwork” of state renewable power standards “can achieve some, but not all, of the cost-effectiveness benefits of a national standard.”
“Although states have led the way, making significant advances in the use of renewable energy sources, a coordinated Federal action could achieve even greater benefits with lower costs. A Federal standard with nationally tradable credits would ensure that renewable power and other clean energy sources are deployed in those locations where they can be most cost-effective. By covering the whole country and including a wider array of sources, a Federal CES has the potential to accelerate the transition to clean energy at significantly lower cost.”
This post was updated at 4:36 p.m.