The House Energy and Commerce Committee began markup this week of the American Clean Energy and Security Act of 2009 (ACES), a bill that promises to cap and reduce carbon pollution, create clean energy jobs, and spur technology innovation.
Unfortunately, as our analysis of the use of carbon pollution allowances in the bill revealed, ACES is on course to invest very little of the hundreds of billions of dollars in value created by its cap-and-trade program over the coming years towards those objectives.
Most of the allowance value (74 percent) is dedicated to blunting the impact of the carbon price established by the program on industries and consumers (and securing the critical swing votes on the committee representing these entrenched energy and industry interests).
In contrast, just 12 percent of the allowance value is dedicated to clean energy investments, broadly defined.
At an average allowance price of $5 to $15 dollars per ton of CO2 between 2012-2025, that would amount to clean energy investments of just $3 billion to $9 billion per year, and just $245 million to $745 million for clean energy R&D.
President Obama has repeatedly promised to "Invest $150 billion over ten years in energy research and development to transition to a clean energy economy".
The President's 2010 Budget Outline specifically dedicated $15 billion per year in new revenue generated by cap-and-trade to this purpose. Yet the bill before us, depending on the allowance value it establishes, would invest just one-twentieth to one-sixtieth of the $15 billion President Obama has pledged -- and specifically requested from Congress. Furthermore, this new energy R&D spending may amount to just a 5 percent increase in current federal energy R&D budgets.
Likewise, the total investments in a new clean energy economy, more broadly defined, are an order of magnitude smaller than proposals advanced by the Breakthrough Institute, Apollo Alliance and others have deemed necessary to drive clean energy innovation, create millions of new energy jobs, and jump-start a prosperous, clean energy economy.
These graphs show how clean energy investments made by the ACES bill compare with a range of proposals and current R&D funding levels.
The first graph focuses on clean energy R&D only.
The second looks at clean energy investments more broadly, including investments to demonstrate, commercialize and deploy clean energy technologies, build critical infrastructure, and even spur energy efficiency improvements.
In including investments in carbon capture and storage technology in these totals, I am no doubt being more generous with the term "clean energy" than many of my green colleagues would be, but I include this investment here, just as the ACES bill's authors and champions do. In short, the second graph represents "clean energy investments," broadly defined.
So, do you think ACES clean energy investments make the grade?
Sources and Notes:
 See "First Analysis of Waxman-Markey Cap & Trade Allocation," Breakthrough Institute (May 15, 2009).
 See "Investing in the Next Generation of Energy Technologies," WhiteHouse.gov. President Obama pledges to "Invest $150 billion over ten years in energy research and development to transition to a clean energy economy."
 Forthcoming, May 2009.
 See "Top Energy Scientists Call for $30 Bi Annual Investment in Clean Energy," Breakthrough Institute (December 3, 2007). Call for $30 billion in clean energy technology investments
 See Energy Discovery-Innovation Institutes: A Step toward America's Energy Sustainability. Brookings Institution (February 9, 2009).
 See "Budget and Performance," U.S. Department of Energy.
 See "Detailed Summary of Energy Investments in Stimulus," Breakthrough Institute (February 13, 2009).
 See "R&D in the FY2009 Budget," American Association for the Advancement of Science (March 23, 2009).
 See "New Apollo Program," Apollo Alliance (March 20, 2009).
 See "Fast, Clean, & Cheap: Cutting Global Warming's Gordian Knot," Harvard Law and Policy Review. Breakthrough Institute (January 2008).
(Originally published at WattHead)
Photo: Official White House Photo by Pete Souza