Utilities seeking financing for environmental upgrades should look to the markets for debt and equity, rather than trying to securitize those costs.
A “clean” bill on carbon tech won’t stay clean for long.
The most obvious connection is timing. In the wake of the Lieberman-Warner mess, the Boucher bill looks like a slam-dunk by comparison. Its voluntary industry-referendum approach provides attractive cover for legislators who want to claim credit for addressing climate change, but not the blame for taxing coal out of the market and driving up energy prices.
However, other players in the energy debate seem unlikely to sit by and watch an R&D funding mechanism emerge that excludes their technologies. They will insist on expanding the Boucher fund’s mandate—as they should—and that will complicate the debate. The longer the debate goes on, the more players will get involved, and the less chance the bill will have of being enacted.
Nevertheless, the Boucher bill represents an important step forward in the climate-change policy debate. By proposing an R&D fund created from the carbon surcharge, the approach would direct resources where they belong—on developing technologies to solve the GHG emissions problem. When lawmakers and the industry are ready to focus on a full range of solutions—rather than just those that will rescue the threatened coal industry—the groundwork laid by the Boucher bill might provide a workable path forward.
Or it might produce nothing but another legislative stalemate.