As the Senate works on an energy bill, the compromise being put up seems to be cap and trade. If congress passed no other provision except cap and trade, it would still be a major victory. Without it or something that operates mechanically similar, it would be preferable if they passed nothing.
Despite the far right's cries of socialism, we are still very much a capitalist country. The fate of energy will ultimately be decided in the markets. All the investments in the world won't make alternative energy economically viable, if it has to compete against an artificial price point.
Republicans will tell you that any tax placed on carbon, will just be shifted to the consumer.
That is the point of all of this!!!
It is such a strange philosophy the free market people have. They are so rigid on social programs and regulation, but they wince at the idea of the actual engine of our economy. It isn't the supply side that drives the economy. It is the consumer.
The purpose of any capitalistic energy plan has to be about providing consumers an energy choice. The system we currently have in place makes that choice for people. It uses government influence to prevent oil from being priced accurately.
An example would be liability caps on offshore drilling. In the abstract sense liability caps are a congressional overreach of power. Without such laws in place it would be at the discretion of the judicial branch to determine damages. We use liability caps to protect industry from the courts. This not to damn the practice broadly, because there are some examples where this is actually a good thing.
Still with offshore drilling, this practice contributes to the false price we pay for gasoline. Without caps in place investors would be very skeptical on oil companies taking risks. They would price out the worst case scenario, and only invest in drilling wells where the liability can be managed.
For clean renewable energy to have fair consideration its greatest asset must be allowed to shine through. Though it may have a higher up front cost it has no liability. Once the system is in place, it also has a smaller maintenance cost. Every kilowatt generated after the costs are met becomes a much higher profit margin. At that point they can either sell for more profit or lower the price per kilowatt to gain market share.
The problem remains the low price per kilowatt or per gallon the consumer pays now. Why would anyone mass produce an entirely electric car, when gasoline is around $3/gallon? If a car gets 30 mpg, an electric car is unlikely to be a better deal. This problem is worsened when you consider the interest on a car loan. The more expensive electric car would charge more in interest than it saved in fuel costs.
The interesting paradox is that mass production itself would reverse that trend very quickly. Each new electric model would lower the initial cost of the technology. Still no consumer will bear that cost, when less expensive options are available.
The problem of course is that the gasoline is not less expensive. If the consumer had to pay the liability costs of petrodollars, gasoline would cost twice as much if not more. The same is true with coal. We don't factor in the long term liability, and instead transfer that cost to the public domain. In effect we are publicly funding a carbon monopoly by picking up the tab for messes they make.
This isn't the case with nuclear power. Uranium has an incredible kilowatt return on investment. Enriched uranium more so. Technologies devoted to reprocessing could further expand that efficiency. The problem with nuclear power is one of liability costs. The government requires owners and operators of nuclear power plants to assume all liability for their product. This makes the initial investment in a reactor much more expensive than a coal of natural gas plant. Despite being a more efficient and cleaner fuel, the offset can't be reached.
Somehow this legislation must finally force carbon energy sources to play fair. If they are forced to factor in the real cost of their products, you will see the private sector jumping to invest in new energy technologies. This along with government investments will start the ball rolling.
Without this piece raw government investment in alternative energy is a waste of money. Until the incentive exists to enter a mass production phase, these government grants will just become science projects at universities.