Even as the health care bill grabs headlines, details are beginning to emerge about a new energy and climate bill being pieced together in Washington by trio of U.S. senators. According to Energy Washington, an eight-page outline of the bill includes provisions for something called a "cap-and-refund" approach to reducing carbon dioxide emissions.

That's a alternative to the "cap-and-trade" system proposed in a climate and energy bill that pass the House last June. The Senate version of the bill has gone nowhere, prompting John Kerry (D-MA), Joseph Lieberman (I-CT) and Lindsey Graham (R-SC) to work on a new approach. The cap-and-trade system has been effectively branded as an energy tax by those who oppose it. But a cap-and-refund approach might be more appealing. Under such a system, utilities and other emitters would buy allowances for emitting carbon dioxide, with the number of allowances capped to ensure emissions will be gradually reduced over time. Then the proceeds would be mailed out to Americans in the form of refund checks. (It's a system featured in legislation already proposed by Senators Maria Cantwell (D-WA) and Susan Collins (R-ME)).

It's likely that not all of the proceeds will go directly back to the people. As much as half could be directed to fund energy research and other government programs.

Both cap-and-trade and cap-and-refund systems can be market-based, allowing emitters to trade allowances and offering them flexibility to cut emissions in whatever way is cheapest. Economists such as Robert Stavins, at Harvard University, say that such market-based systems would be cheaper than renewable energy mandates, which restrict emitters to using renewable energy such as wind and solar when other technologies could be cheaper (such as capturing and storing carbon dioxide).

The Senators haven't formally proposed the bill yet, but it there have been indications it could be unveiled by April 15th.

Transonic Combustion's fuel injection system. Credit: Technology Review.

A conference put on by the new Advanced Research Projects Agency for Energy (ARPA-E) this week was packed with companies exhibiting intriguing approaches to clean energy. I'll be looking into some of them in more detail in upcoming stories, but here's a few that caught my eye.

Transonic Combustion, based in Camarillo, CA, has developed a gasoline fuel injection system that can improve the efficiency of gasoline engines by 50 to 75 percent, beating the fuel economy of hybrid vehicles. A test vehicle the size and weight of a Toyota Prius (but without hybrid propulsion) showed 64 miles per gallon for highway driving. The company says the system can work with existing engines, and costs about as much as existing high-end fuel injection.

American Superconductor, of Devens, MA, is developing massive 10 megawatt wind turbines that are only possible with the use of extremely lightweight superconducting generators. (Today's turbines typically generate around 2 to 3 megawatts.)

A group out of Michigan State University is developing a natural gas electricity generator for use in hybrid vehicles. The goal: give natural gas cars the same driving range as conventional gasoline cars, making way for their wide adoption.

Oscilla Power, based in Salt Lake City, UT, plans to start testing a novel wave power generator. Wave power is notoriously difficult to harness because of the damage waves can cause to mechanical systems. Oscilla has found a way to use an inexpensive iron-aluminum alloy to generate electrical current, without the need for any moving parts.

Palo Alto Research Center (PARC), spun out of Xerox PARC, is developing a new form of refrigeration that could be three times as efficient as existing forms. It's based on thermoacoustics, a technology that works for cooling at extremely low temperatures (such as for liquefying gases), but hasn't been used for cooling at room temperature (what you need for household refrigeration). The company thinks it's found a way around previous limits to the technology.

Dubai, one of the emirates in the United Arab Emirates, has been all over the news lately because it announced that its investment arm, Dubai World, won't be able to pay its massive debts in time. That might lead some to wonder whether a prominent UAE project, Masdar City--a city that will produce no carbon dioxide emissions if it works as planned--will be affected.

It probably won't. Masdar City is backed by not by Dubai, the most famous of the UAE emirates, but by the emirate of Abu Dhabi. Although less visible internationally, Abu Dhabi is actually far larger and richer than Dubai. Abu Dhabi also has most of the UAE's oil reserves, while Dubai has largely exhausted its oil and relies on real estate and other investments. So while Dubai is hurting, Abu Dhabi is doing okay.

If Masdar is hurt, I think it will be indirectly. Some experts worry that trouble in Dubai could lead to a freeze in credit markets beyond the UAE, which could hurt real estate investment generally. Although Abu Dhabi is providing funding for the basic infrastructure for the city, much of that project is supposed to be financed by outside investors, who might be reluctant to invest given a tough financial climate.