Commentary: America Sits Out the Race

Right now the U.S. Senate is conducting a master class on the perils of legislation by rearview mirror. On July 27, when Majority Leader Harry Reid unveiled the "Clean Energy Jobs and Oil Company Accountability Act," the two most powerful clean energy provisions were missing: a cap on carbon emissions from the electric power sector and a national Renewable Electricity Standard (RES), which would require utilities to generate at least 15 percent of their electricity from renewable sources by 2021. For years, business leaders from General Electric's (GE) Jeff Immelt to venture capitalist John Doerr have warned that if America failed to pass a comprehensive climate-and-energy bill, the country risked losing the clean energy race to China—sacrificing the jobs of the future in a timid, ill-fated effort to preserve the jobs of the past. Now those warnings are coming true.

Clean energy advocates were angry but not surprised on July 22, when Reid said he was pulling the plug on the carbon cap. Powerful utilities were withholding support. President Barack Obama wasn't trying to forge a compromise. And key Democratic senators had no appetite for a bill that might cause a modest, short-term increase in electricity prices—potentially endangering some 20th century manufacturing jobs—even if it helps create many more 21st century jobs by making clean energy competitive with coal. The disappearance of the renewable energy standard, however, was a shock. Both the House and Senate have passed RES bills in the past, yet it has never become law. With elections looming, this may be the last chance for years to set the rules of the road for energy investment.