Even if substantial new funding for research materializes, however, it won’t create market demand for these technologies. Creating demand is a particular strength of well-crafted cap-and-trade legislation, provided it establishes strict enough limits on emissions, because it creates clear, long-term costs of carbon emission, giving utilities an incentive to invest in low-carbon power plants. Mark Griffith of Black and Veatch says that in spite of current pessimism, U.S. cap and trade could still be possible in a couple of years. As for what’s possible over the next twelve months, one mechanism for creating demand that might be politically acceptable is a nationwide renewable electricity standard. This would mandate that utilities either get a certain percentage of their electricity from renewable sources or implement measures to reduce electricity consumption. To make such legislation more likely to pass, President Obama has discussed including nuclear power plants—which many Republicans favor—as part of the renewable energy mandate, Muro says. Although the mandate could increase power costs by forcing utilities to use more expensive technologies to generate electricity, it would not require direct spending from the government.
The military is another potential source of demand for new technologies. The military wants to cut back its use of petroleum and replace it with biofuels and with other renewable power sources such as solar panels, to make military bases less dependent on civilian electrical grids and soldiers in the field less dependent on vulnerable supply lines. But Victor cautions that in the next few years the military will serve mostly as a market for proven technologies, not new ones.
Although specific policies and regulations can promote new technologies and reduce greenhouse-gas emissions, one big disadvantage of not having overall legislation setting clear national limits on emissions is that it makes it difficult to negotiate the international climate-change agreements that are needed to cut growth in global emissions, Victor says. In particular, EPA regulations, which are based on existing laws and are not contingent upon Chinese reductions of emissions, are “ineffective as a bargaining tool to get China to act,” he says. A new cap-and-trade law, however, could be written to take effect only if the Chinese also reduced emissions, thereby giving them a new incentive to do so.
Now that the current Congress has failed to enact cap-and-trade legislation, it may be too late to avoid some of the worst effects of global warming. “There’s a strong case that we’ve dithered much too long,” Victor says.