On Friday, the Environmental Protection Agency (EPA) in Washington formally declared that carbon dioxide and five other greenhouse gases are pollutants that threaten public health. This is an important ruling that empowers the agency to directly regulate emissions of CO2, under the rules of engagement of the Clean Air Act.
The decision comes just a few weeks after a sweeping draft legislation was released by the House Energy and Commerce Committee that — among other things — provides a blueprint for a cap-and-trade system designed to regulate carbon emissions.
The cap-and-trade provision of the climate change bill, formerly known as the American Clean Energy and Security Act (ACES), is raising concerns both from Republicans and moderate Democrats, who fear this added cost will hurt the coal industry. Underscoring the growing opposition was a Senate vote not to fast track climate change legislation.
Although the EPA ruling was widely applauded by environmentalists, the reality is that it will take months, even years, for the agency to draft comprehensive rules to regulate the 7.3 billion metric tons of CO2 the U.S. produces every year. However, on the upside it does pressure Congress to approve a climate change legislation with strong cap-and-trade provisions.
As Time Magazine’s Bryan Walsh pointed out: “As momentous as the EPA’s decision was — the finding stated ‘in both magnitude and probability, climate change is an enormous problem’ — no one actually wants the EPA to regulate greenhouse gases. Not even [EPA Administrator Lisa] Jackson or [President] Obama, both of whom have repeatedly stated that they would much prefer Congress to set limits on greenhouse gas emissions directly, most likely through a cap-and-trade program.”
As reported by Bradford Plumer in The Vine, Congressman Ed Markey, D-Mass., who co-sponsored the ACES draft bill with Henry Waxman, D-Calif., said it best, when he bluntly summarized what was at stake by asking: “Do you want the EPA to make the decision or would you like your congressman or senator to be in the room and drafting legislation? … Industries across the country will just have to gage for themselves how lucky they feel if they kill legislation.”
Despite some positive tremors over the past couple of weeks that indicate the U.S. economy may have bottomed out, we are still far from a full blown recovery as was indicated by data released by Dow Jones’ VentureSource, showing that investment by venture capital firms had taken a nose dive during the first quarter of ‘09. According to VentureSource, U.S. VC firms invested $3.9 billion in companies during the first quarter, a 50 percent decline from the almost $7.78 billion invested during the same quarter last year. The cleantech sector was particularly hit with VC funds investing $189 million in 15 deals during the first quarter, compared to $457 million invested in 24 deals last year.
The days of plenty are clearly over. And while VC professionals, like the rest of the economy, are tightening their belts, investments are still going on, but the amounts are smaller and flowing to companies with stronger fundamentals that offer a clear exit strategy.
That is likely the rationale backing this week’s $700,000 early stage investment from Boston-based Polaris Ventures to Sun Catalytix, a Cambridge, Mass.,-based startup that has developed a “sun fuel” technology.
The Department of Energy also stepped in this week with stimulus money, awarding $41.9 million to 13 companies to develop and deploy fuel cell technology.
As for projects that were able to secure funding before the economic crisis, some are now partially completed and coming online, including BP’s 400-megawatt Fowler Ridge wind farm in Indiana, which started operating this week.
Sempra Generation, which like BP has a large enough balance sheet to support clean energy projects, said this week that it will add a 48- megawatt expansion to its 10-megawatts Copper Mountain solar power facility in Nevada. In Vermont local regulators greenlighted the extension of a wind project and in Indiana, Indianapolis Power and Light, a unit of AES, has launched construction on a 106-megawatt wind farm that it’s jointly developing with EnXco, the U.S. unit of France’s EDF Energies Nouvelles.