Publish Date: August 18, 2021 | Total runtime: 36:15
Guest: Alex Flint, executive director, Alliance for Market Solutions
Host: Todd Snitchler, president and CEO, Electric Power Supply Association (EPSA)
[Intro theme music plays.]
Alex Flint, executive director, Alliance for Market Solutions: I remember one Republican senator saying, “Alex, you’re the first person to talk to me about climate change.” And we’ve found that a lot of members weren’t reading about climate change, they weren’t – they didn’t know a lot about the issues. They weren’t comfortable talking about it. They certainly would not have been comfortable talking about it at a town hall meeting or something else. Over the last four years, I will say we’ve seen a massive change in that…”
Todd Snitchler, host: That was Alex Flint. He’s the executive director of the Alliance for Market Solutions. Alex says it’s critical to reduce carbon emissions. He’s also a lifelong conservative – and says it’s equally critical to grow America’s economy and keep us from heading off the financial cliff.
This is Energy Solutions, a podcast from the Electric Power Supply Association, where we unpack the stories and trends behind America’s changing electric grid.
I’m your host, Todd Snitchler, EPSA’s president and CEO.
While the power sector works every day to innovate, strengthen and make our electric system cleaner, energy solutions also need policy proposals that create a runway for that work – and both sides of the aisle need to agree.
Having served as a staff director of the U.S. Senate Committee on Energy and Natural Resources, Alex knows that’s not easy. But by perfecting and finding consensus around market-based solutions like a carbon price, he’s confident that more conservatives will come to the climate table.
I talked with Alex to hear what matters to conservatives when it comes to improving our environment, America’s economy and our energy security – and why competitive market-based solutions like a carbon price will accelerate the energy transition and could gain elusive bipartisan agreement.
Todd Snitchler: Alex, thank you for joining us. We are delighted that you could be with us today to talk about some important issues that certainly have a substantial amount of the attention of Congress these days, or so it seems. But before we start with the policy discussion, it’s always helpful for people to know who we’re talking with.
And so, if you’d take a few minutes and tell us a little bit about the Alliance for Market Solutions and why it was created and what you advocate for and, and what it’s all about, I think that’d be useful for folks that are ?.
Alex Flint: Yeah, four and a half years ago, a group of us came together. All Republicans, all generally conservative, a lot of us with business backgrounds.
And we thought that the Republican orthodoxy on climate change needed to evolve. At that point, many Republican policymakers were denying the existence of climate change. And those that were comfortable talking about it, weren’t really comfortable with a set of policy responses to climate change. We thought there needed to be a group of Republicans able to have a respectful conversation with other Republicans, among Republicans, about what the correct application of conservative principles should be to this issue.
Todd Snitchler: Now you mentioned a lot of interaction with the Republican side of the aisle, but I suspect you also have conversations with our friends on the other side of the aisle, perhaps are pulling in the opposite direction. So just curious how you interact with both sides of the aisle.
Alex Flint: Well, we exist to help Republicans figure out how to deal with this issue. Increasingly, they recognize that something is going on. They see forest fires, they see increased hurricane intensity and all these other things. They also see polling that this is increasingly important to constituencies that they care about, to their voters.
And when we began, they weren’t having conversations with environmental organizations, and even companies that were concerned about climate weren’t talking to conservative, Republican policymakers about climate. There was sort of a… it was an awkward conversation people didn’t want to have. And so we began saying, “Okay, we are, we are with you ideologically on a lot of things. Let’s talk about this.”
And generally, those conversations were in private. We had, I remember one Republican senator say, “Alex, you’re the first person to talk to me about climate change.” And we’ve found that a lot of members weren’t reading about climate change, they weren’t – they didn’t know a lot about the issues. They weren’t comfortable talking about it. They certainly would not have been comfortable talking about it at a town hall meeting or something else.
Over the last four years, I will say we’ve seen a massive change in that. They are now much more aware of the issues. They are thinking about it from their perspective. They see it in their districts. They are more comfortable talking to constituents who care about these issues. And so we are seeing a really – an evolution in the conversation. I think we’re still at the point where the scale of the problem is hard for policymakers of both parties to understand.
And we’re in the beginning days of trying to reach a consensus of what the policy is. We do speak predominantly with Republicans. Um, Democrats do reach out to us from time to time and say, “How do I talk to Republicans? Which Republicans should I be talking to? Um, explain what Republicans are thinking to us.” There are some sincere efforts on both sides of the aisle to understand what the art of possible is in climate policy space.
So we, we do talk to members of both sides. In the end, we think climate policy has to be stable for decades to address the problem. It has to be durable, and that takes buy-in from some amount of both parties. So we’re very interested in eventually a bipartisan agreement, but right now, Republicans should know that we are Republicans talking primarily to Republicans about climate change.
Todd Snitchler: Yeah. It’s interesting that you use the word durable because that’s part of the EPSA mission. We are trying to advocate for markets that will ensure a durable regulatory framework for sustainable environmental progress. As you note, it can’t be a two-year cycle. Nobody makes a two-year investment decision in the space in which our members operate.
You need to know that there is some degree of certainty. And I think marrying the concepts that you already described with where the business community is trying to get to allows that durability, is a fundamental building block to a successful policy to actually be implemented to make a difference.
Alex Flint: Yeah. And there’s, you know, there’s all sorts of tensions in this conversation. Uh, one of them is there are a lot of people who believe we have to act fast.
Todd Snitchler: Right.
Alex Flint: I’m more of the school that we need to make sure that we act in the right way, that we are directionally correct. That we identify policies that will last for the long –term, that are sustainable over the many decades.
I acknowledge it would be nice to have policies in place today. It would be nice to have acted years ago. But the reality is we haven’t. We need to think forward to where are we going to be in 2030, 2040, 2050, 2100? What’s reasonable? And reasonable from a policy perspective, but also from a market perspective.
I mean, there are a lot of people who are talking about like, “When is net zero in the utility sector going to occur?” And frankly, some people are throwing out dates that I just think are beyond optimistic. I try not to be critical, but there is no way we can transform the electricity sector on the timeframe some people are talking about. And there need to be realistic and credible conversations about – “How fast can the market respond? What are the correct policies? How – which markets – how– which policies work best in the marketplace?” I think frankly, both sides of the climate discussion need to do a better job with dealing with the reality of the challenges that we face.
Todd Snitchler: So you’ve already made it very clear. You care about emissions. You care about reducing emissions and believe that’s a critical issue. We agree with you on that. And you also just noted, which kind of leads into my next question, managing the cost of transition and preserving competition and innovation is important to EPSA members. So can you talk a little more about, you know, how do you manage not breaking the bank for consumers or how do you do this in a way that doesn’t unduly burden consumers, but still achieves those policy objectives?
Alex Flint: There– there are a lot of interconnected things that have to be considered in answering that question. We currently provide about 15 billion dollars a year in tax subsidies for low carbon clean energy technologies. We need more low carbon clean energy technologies. There are people who think we should just expand the tax incentives that we give, but I look behind that and I say “Those are coming out of the general fund of the Treasury.”
We’re currently $28.5 trillion in debt. We’re running on the neighborhood of long-term two trillion dollars a year deficit on three and a half trillion dollars in tax revenue to the U.S Treasury every year. I think the current subsidies are unsustainable. And I think that’s one reason that policymakers only extend them one year at a time. I don’t think they can continue.
And so I look at that and I think they have made a difference in the market, but they are inadequate. And I don’t think they’re sustainable. So I go with a model that traditional economists do, which is to say there is a negative externality associated with power production. That is the greenhouse gases emitted from it. There is a cost of those greenhouse gases. The best way to deal with that externality is to charge a cost, to impose a tax on pollution into the atmosphere. And what that does is it creates an incentive across the economy, not just where policymakers provide a subsidy, but economy-wide for technologies and policies that reduce carbon emissions.
And it also reverses the flow of the Treasury, the money to the Treasury, right? It creates a tax that provides revenue to the Treasury. Now people don’t like taxes. I know that, but we collect taxes, we’re spending taxes on low carbon energy technologies. What I’m suggesting is that we instead optimize the tax code to encourage low carbon technologies.
The modeling that we use shows that that actually costs less over the long-term and that the market response is more efficient because what you do is, instead of deploying favored technologies, you simply create an economic incentive for market participants to reduce their greenhouse gas emissions across the economy.
So I realized that it’s sort of, it’s definitely the economist’s preferred way of doing this.
Todd Snitchler: Sure.
Alex Flint: Eventually, I think it will become the politically necessary way to do it. In large part, because I don’t think we can afford to keep having multi-trillion dollar/ year deficits. I think the idea of the government paying or buying our way out of this problem is unsustainable in the future. And I mean, fairly close future, like in the next couple of years. I don’t think we can keep doing that. And I’m trying to address climate over a multi-decade timeframe.
Todd Snitchler: Sure. You talked about the revenue generally. Have you done modeling, do you know roughly where you think the carbon tax dollar amount? would land and how much money would actually show up in the Treasury? If it’s programs actually developed.
Alex Flint: Yeah. So. Most carbon tax models that really begin to reduce carbon emissions into the atmosphere, price carbon at $35 to $55 a ton. If you put that program in place and you put it upstream – so at coal mines, at well mouths, and other things – and it would affect prices throughout the economy as it drove up the cost of coal and natural gas and oil and other carbon admitting technologies and fuels, that would generate probably about $150 billion a year, $1.5 to $2 trillion over 10 years, which is the window that Congress usually looks at. That’s fairly substantial when you talk about, I mean, otherwise over 10-year window. The government is on course to collect about $35 trillion –, $3.5 trillion a year.
So anything where you’re talking about raising one and a half to $2 trillion a year is a very significant tax policy.
Todd Snitchler: Sure, and I think it’s important to note that EPSA members, many of them, support the carbon price, although they have difference of opinion on which model needs to be applied. And so we’re not certainly endorsing any one policy, but we do think this is the right conversation for us to be having. What’s your view? Do you think there’s a viable path forward for an economy-wide price on carbon that stands a chance of passing the political test – or is that really the crux of the issue, is the lack of political will?
Alex Flint: Todd, I think climate policy is harder to do than a lot of people recognize. I think a lot of people outside of government design their ideal climate policies and they come and propose them to policymakers, and they fail to understand all of the constituencies that the policymaker is hearing from and trying to compare all of the relative interests.
And I think it’s hard enough just in the electricity sector where you’ve got regions of the country that have a lot of hydro, and some that have a lot of nuclear, and some that have a lot of coal, some that participate in RGGI, and some that are regulated, some that are deregulated. I think it’s really hard to put together a national policy, even just in the electricity sector.
And then if you start adding manufacturing and transportation and other things it’s really hard to do. And I think a lot of policymakers, or those who are proponents of policies, fail to understand how really difficult this is. I think in the end, it is very hard to do cap and trade. I think it is very hard to do a purely regulatory approach like under the Clean Air Act. My view is that companies are used to changes in the price of their feedstocks. And that if you’re from the corporate perspective, if you give a corporate owner an option of addressing CO2 through a set of regulations that their regulatory folks are going to do, or through a change in the feedstock that their procurement manager is going to do, same effect in the end, they’re going to take the program that’s managed by the procurement manager.
And another interesting thing happens – if it’s through regulations, their head of regulatory affairs is going to delay the effect of those regulations on their company as long as they possibly can. If it is a change in the feedstock, a change in the good that they are having to buy, their procurement person is going to accelerate their adaptation to that because they’re going to try to gain a market advantage.
So from a climate perspective, my view is regulations actually work to delay transformation. Whereas with market forces people try to accelerate it. And I think that phenomena will make the response more efficient, more permanent and consistent with the way people like to run companies.
Todd Snitchler: Sure. Talk to me a little about what you hear from policymakers on the Hill when you talk to them about the subject?
Alex Flint: Todd, it’s different with almost every policymaker. Um, I think increasingly with the Republicans that I talk to, they acknowledge the climate is changing. It’s really hard for many of them to come up with government responses that they’re comfortable with advocating for, because in general, they believe in small government.
Right now, and at the same time, they feel a political imperative because particularly they see college educated, young, women voters, many of whom are the voters who determined election outcomes, caring about these issues.
And so, I find that it is on the one hand, when we’re talking with them, one-on-one, it’s a very contemplative conversation. Like, “Tell me about this problem. How’s it going to become manifest? What should we be thinking about in responses? What are corporations telling me? What are the big trade associations thinking? What’s EPSA thinking?” As an example.
And I think they are going to move into the answer space. I think many of them aren’t quite there yet. They have proposals like trillion trees and efficiency and some regulatory streamlining, and they know we’ve got to do some permitting reform to build our sector, more transmission and things.
But I think their policy proposals are just beginning to scale up. And it’s going to take some more time to see what they’re comfortable with. Now, when I talk about carbon taxes in particular, um, a lot of policymakers don’t like talking about carbon taxes. They don’t like talking about taxes at all, right?
They remind me, “Alex, this country is founded in a tax revolt in Boston Harbor. We hate taxes, but then, you know, a couple of minutes into that conversation about, but we do, we do have taxes and we need to talk about what taxes we have and if we’re going to deal with our deficits, what are our taxes going to look like? And what sort of taxes do we want to have?”
And I think that there’s a growing comfort with the fact that we’re going to have to address climate and we’re going to have to do major fiscal reform. And it might be that we talk about those two things together.
Todd Snitchler: And thank you for bringing that up. I’ve got about four questions in my head at the same time, but I wanted to kind of talk about that because we’ve talked in the past about where the projections – and I wish we had a visual, but we don’t – but where the projections for the deficit are versus what the actual needs in the Treasury would need to be.
And the gap is substantial as you already know, but as you go out into the out years, 10, 20 years in the future, the gap is so large. It’s almost incomprehensible.
Alex Flint: Oh, Todd. I think when I came and I spoke to your Board, I forecasted annual deficits of a little under a trillion dollars a year. I suspect that chart at that time was showing annual deficits of $600 to $800 billion a year out through 2030, something like that.
We are now looking at forecasts of deficits are around two trillion dollars a year for the foreseeable future. On revenues of three and a half trillion. So, you know, we are – we are spending substantially more than we take in, and we have several trust funds that go insolvent in the near term. A pension rate that’s guaranteed, highway, um, Medicare and Social Security in the early 2030s. So my view, and I’m a fiscal conservative, I believe we are in a clearly unsustainable fiscal path. And I am very anxious that we don’t have the capacity right now to deal with our fiscal issues. And I’m concerned that our fiscal condition may soon start dictating to us what we are able to do from a policy perspective, unless we get our fiscal house in order. The sooner, the better.
Todd Snitchler: Right. And I’m not a financial advisor and I don’t play one on TV, but if your household budget was borrowing 40 percent more than you were actually making, you couldn’t sustain that for very long or you’d be in bankruptcy court. And that’s, that’s not where we want to be as a nation. And certainly, that maybe oversimplifies it a bit, but that’s based on your numbers, that’s kind of the number that’s the, the area or the region that we’re talking about.
Alex Flint: Well, you talk about household finances. I’ll just tell you I have more than 28 trillion dollars more than the federal government does.
Todd Snitchler: [Laughs.] Fair. Good point.
Alex Flint: Now I can’t print money and I don’t have a Federal Reserve, but I think everyone who listens to this podcast’s finances are in better shape than the Federal government’s.
And when I – and so go back to the subject at hand, what that makes me do is when I think about long-term policies for the country, I don’t think we can just spend our way out of our troubles.
Todd Snitchler: Right.
Alex Flint: And in the energy and climate space, that means I don’t think the government can afford to pay to remake the energy infrastructure in this country. I think what we have to do, is we have to figure out how do we create markets that allow the markets to drive it? I think a couple of things. One is the markets can afford to do it more than the government can.
Todd Snitchler: Agreed.
Alex Flint: Markets will be more reliable participants over the long term. And I think the markets will be more efficient. And whatever system it is we were going to build towards, I think the markets can do it more efficiently, which means cheaper, so that means we can instead devote our resources to other parts of the economy that I want to see grow – in part to deal with our fiscal conditions.
Todd Snitchler: Right. And that’s, I mean, one of the things that’s a basic tenet of the EPSA members is the desire for innovation. I mean, innovation is how we end up with newer technologies, lower emitting resources, higher efficiency, better outcomes environmentally, economically. I mean that, that’s a core tenet and that’s exactly what you described about ways to incentivize that behavior.
And you can’t force it. But if you give the market the incentive to come up with the next widget that’s going to enable us to achieve these policy objectives, it’ll do it far faster and at a far lower cost, because I want to be that first mover. I mean, that’s kind of basic, kind of Economics 101.
Alex Flint: And I’ll also tell you, and I worked for in the Senate for 15 years doing energy policy. And I will just tell you that energy markets did things that we never anticipated. We did not expect wind and solar prices to fall as rapidly as they did. When natural gas was selling at 18 bucks in MCF, we never envisioned – even though George Mitchell was telling us what fracking would do – we never thought natural gas prices would go where they were. I never thought nuclear prices would go where that, I thought nuclear prices would be lower than they are right now. So partly the challenge is that the market does shift, and government policies have a really hard time keeping up.
And so what I think we need to do is we need to develop markets that are optimized for what our total interests are. We need affordable, reliable energy, and we need to have it without messing up the environment. I think we create a market that does that, and we let the market go to work.
Todd Snitchler: I’m recalcitrant to say anything after that because that’s encapsulated exceptionally well. So, I’ll ask you to kind of do a little bit of the, um, current parlor game in town, which is what do you think of the current slew of energy proposals? And I say that because there are a number of proposals, both in the House and the Senate, the president and the Administration had put out a proposal to talk about a clean energy standard and any number of other things.
Um, and I’m curious if you think that the energy policy discussion is moving in the right direction?
Alex Flint: Oh, Todd, that’s a great question. Todd, I think the energy issues that we face are very challenging right now. I think that the markets are much more complex than they were when we did the Energy Policy Act of 1992 in 2005 and 2007. Because when we deregulated electricity, we created the – this sort of balkanized system with different regions and it, and frankly it is very complex and hard for all the necessary policymakers to understand.
I think the best knowledge is resident in the committees of jurisdiction. And yet we are seeing proposals like this bipartisan infrastructure policy being put together by members who aren’t necessarily on the committees of jurisdiction.
Todd Snitchler: Right.
Alex Flint: And we have real questions about – how will any agreement reached outside the committees of jurisdiction be melded with the products from the committees of jurisdiction and move forward through the process?
I think the problems are very complex. I think the legislative outlook is very complex. I don’t know if this bipartisan agreement is going to succeed. I will make this observation. I’ve been a part of many bipartisan agreements. My view is that they normally occur at the end of the process when you need a deal to get it done and to the White House for signature.
If you do it early in the process, you then have to, everybody negotiates a deal. They then have to keep that deal together through the Senate, through the negotiations with the House, with the negotiations of the White House. And so you’re going to – they’re going to have to do this deal again and again and again to get it enacted.
And so it’s interesting from just a sort of a game theory perspective of where they are. And at the same time, you’ve got these other dynamics that if we do a bipartisan package, we’re going to take the best of the infrastructure. Save the rest of it for the $3.5 trillion Democrat package. Well, when I was doing these things, you wanted to take the best, put it in the big package, so it gave people an incentive to vote for the big package.
Take all the goodies out, the big packages, the really tough stuff, and that can be a hard sell. And at the same time, I don’t know that we have the appetite for 3.5 trillion dollars in spending. And I don’t say that as a partisan thing. Look at the inflation, look at what the Federal Reserve is doing.
Are we still trying to stimulate the economy with additional borrowed money and spending as part of post pandemic relief, where infrastructure is important? Or do we need to scale back our ambitions? And so I don’t think I’ve ever seen a situation where so many now trillion-dollar balls are up in the air, bouncing off of each other, changing their trajectory.
And I’m not certain how any of it’s going to turn out. This is one of the most dynamic situations I’ve observed doing energy policy for over 25 years in Washington right now.
Todd Snitchler: Yeah, clearly a lot yet to be decided. Do you think there’ll be any momentum that will evolve for a climate focused policy among conservatives?
Because it’s clear that this – one party is not going to be able to jam this thing through. It certainly seems clear to me, at least that that’s unlikely. So is there a way that you think that there’ll be a time for that to grow? And, and is that going to be before we’re completely broke or is that going to be what finally pushes people to get to yes?
Alex Flint: Todd, I don’t know.
Todd Snitchler: Okay.
Alex Flint: You know, I’m an advocate for conservative climate policy. I’m an advocate for a price on carbon. But I honestly, you know, I think your audience is too sophisticated for me to forecast what is going to happen. I will share that one of the things that we’ve done at AMS is we have reached out to conservative parliamentarians around the world.
And we have seen conservatives in other countries, decide that in order to address climate and to respond to changing politics, they need to address this and even become quite assertive in this space. And look at conservatives in the UK, for example.
I think it is quite possible that in time, U.S. conservative policymakers will believe that the most responsible reaction to climate change is to seek to mitigate its impact and could move aggressively into this space with an ethos of responsibility and risk mitigation. A very different sort of application of conservative values than we’ve seen in the last couple of decades.
But for me as a conservative, there is a way to think about obligations associated with climate change, which is to face them straight on and seek the most efficient response to preserve our way of life.
I think that will, can become the overarching conservative response to climate change. But honestly, politics is really difficult right now. And I don’t know when this is going to happen. Given the climate issues that we are seeing, given the fiscal issues, seeing our trading partners move in this direction. I hope we move as soon as possible, but these are tough times right now.
Todd Snitchler: So with that in mind, what, if you were drawing it up, what do you want to see from the private sector or from industry more broadly to try to either assist in the process, or that would be helpful to achieve the objectives that we’ve been discussing now for the last 40 minutes or so?
Alex Flint: Um, my favorite private sector executives, when they come in and have meetings with Republicans, say, “This is happening, our company is responding to this. We would like to see the government be a partner in this. Pull up a chair, sit at the table, participate in this. And we want you at the table because we want whatever solution achieved to be durable.”
And that to me, is becoming a pretty compelling statement that more and more corporate leaders are willing to.
Todd Snitchler: And is that probably the one thing that you need them to understand better is kind of the process about how this needs to work together? Or is there something else that you’d say, “There’s one thing you need to understand, and it’s X.”
Alex Flint: Yeah, I think that is about it. When I worked in the Senate for a long time and people would come in and propose complex policy suites that they had sort of sat off and calculated their own politics of and understood. They thought they had their perfect policy suite.
I used to think, look, I have 23 members of the Senate energy committee. I was a staff director there. I count to 12 all the time.
Todd Snitchler: Right.
Alex Flint: And I’m trying to figure out how to get it, to pass the Senate. And I’m counting to 60 on cloture and 50 on final passage. And then I’m negotiating conference agreements. Don’t come in with packaged political deals. I don’t think it works. I think the politicians do the political deals.
I think what corporate America needs is to come in and say, “Look, this is a problem. This is how it’s affecting us. This is the sort of solutions that work best for us. Do I want my VP for regulations dealing with this, or do I want my procurement manager dealing with this?” I mean, these sort of profound, fundamental answers. The members will then design develop policies that work given the vote counts of the various situations that they face.
And I think corporate America needs to be at the table just as much as the environmental groups are saying, “Let me tell you the consequences of this.” But it’s the policy makers who are going to make the policy. That’s what they do.
Todd Snitchler: Yeah, I think that’s helpful context to be sure. So, as we approach the end of our time together, we’ve talked a lot about a lot of things that maybe don’t leave people feeling warm and fuzzy.
So I’m curious if you’ve got one thing that you’re optimistic about for the future. What would that be?
Alex Flint: Todd, I think the thing I’m optimistic about is I think markets are responding and I think they will respond faster than we expect. I’m particularly intrigued by storage, direct air capture, distributed generation. The transformation in the transportation sector is occurring faster than I imagined.
One of the things I enjoy about being in the energy field is that my expectations get challenged. Things happen that people don’t forecast. And I – I think this is a compelling issue. I think there’s going to be remarkable transformation, and that’s part of what makes this really interesting. I suspect some of the biggest companies in energy will not be in the sector 25 years from now. And I think companies we have not heard of may be the largest players in the energy markets 25 years from now. And that is exciting and interesting and scary all the time.
Todd Snitchler: Yeah, we are living at a time of unprecedented change in the energy value chain. And that’s not just limited to what our members do. I think it’s in the broader energy landscape globally. And so we’re all in for a fasten your seatbelt kind of ride over the next couple of decades. And I think we all are optimistic that we’ll end in a good place.
And so how we get there, it’s going to be the challenge from here to there. So with that, Alex, I do want to thank you for taking time to visit with us. I think your comments have been particularly helpful and insightful as we try to think through some of these challenging issues. There are no simple solutions, but I think you’ve helped provide some real context around how we need to think about these if we want to have a meaningful dialogue that results in durable policy solutions, which I think are all of our goals.
Alex Flint: And Todd, I just want to compliment you and everybody at EPSA for rolling up your sleeves and engaging on this. These are difficult issues. I think they are the issues that we face. I see, I see your impact as I wander the halls of Capitol Hill.
I know that you’re having an impact when you’re up there. So my hat’s off to you. Thanks for being engaged. And it’s been a pleasure. Thanks for the time.
Todd Snitchler: Thanks a bunch, Alex.
Alex Flint: Yup.
[Transition theme music plays.]
Todd Snitchler: As we look for policies that successfully put market solutions to work and achieve big results, I couldn’t let Alex go without asking him about a question I’ve been struggling with for some time.
[To Alex] There was a conservative approach that was applied to SOx and NOx emissions reductions in early 1990s. And it was a market-based solution that delivered results faster, cheaper, and in ways that I don’t think even those who supported the program and proposal thought it would deliver. I know you’re familiar with it, but I’m curious if you think that that type of a program or proposal is somehow or some way replicable in the carbon emissions question.
Alex Flint: Todd, the, the cap-and-trade program for SOx and NOx has conservative origins. And I think can be applied to other pollutants in the energy sector. The failure of Waxman-Markey has left a lot of policymakers reluctant to pursue that. I think it’s difficult to implement a cap-and-trade program. I think the Europeans have, and theirs is moving towards being effective and we all have to watch that.
We also have to watch what the Chinese are doing, because it is possible that they will put in place – not just Chinese – but could one day have global participants in that system. Given how hard climate policy is, I’m convinced that it may be easiest to achieve if we combine the efficiency of a carbon tax with the need for fiscal reform.
So when I got involved in this, I was – I knew how hard climate policy was. I wanted to see if by converging two sets of interests, climate and fiscal, we could better advance a policy. It will be a number of years before Washington policymakers go back and try cap-and-trade again. But if we don’t make progress in other areas, we might be trying a cap-and-trade system at some point.
Todd Snitchler: Thank you, Alex.
Alex Flint: Yep. Cheers.
[Transition music plays.]
Todd Snitchler: While it may seem impossible, we can build a cleaner grid that is reliable and doesn’t break the bank.
Power generators in competitive markets are already racing to build more efficient, cleaner and reliable technology to meet demand.
By enhancing competitive power markets and equally applying a carbon price to all available energy options, we target what really makes a difference for our climate: emissions. Then we point the power of competition to drive companies to innovate.
As Alex explained, it will be a much more budget-friendly – and even an economy growing – path.
Even in places like Capitol Hill, that seems like an idea everyone might be able to agree on.
You can find more information about the latest progress from competitive power suppliers and what policies can help achieve the best policy outcomes – on our website at www.epsa.org.
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Close: Energy Solutions is brought to you by the Electric Power Supply Association. EPSA represents America’s competitive power suppliers, which bring about 150,000 MW of power generation resources to customers throughout the United States. Discover the power of competition at www.epsa.org.