Policy Design Features for a National Clean Energy Standard

In the United States, the electric power sector is the second largest source of greenhouse gas emissions behind transportation. Reducing electricity emissions is a priority for advancing economy-wide decarbonization because the power sector is relatively easier and more cost-effective to decarbonize than other sectors and emitting sources from other sectors—including, notably, motor vehicles and buildings—will also likely have to be electrified to a large degree to mitigate climate change. A clean energy standard (CES), sometimes also called a clean electricity standard, is a policy that requires increasing amounts of qualifying “clean” energy sources over a certain time period.¹

The core concept of a CES is similar to a renewable portfolio standard (RPS), though typically a wider array of electricity sources qualify. Both RPS and CES policies have been successfully implemented at the state level.

Though the basic concept of a CES is straightforward, several details of the policy require careful consideration. Because this is a dynamic area of policy development in Congress, our organizations have engaged in dialogue over many months regarding key policy issues, questions, and priorities for a national CES. This document reflects perspectives on a CES policy framework in which compliance with the standard is demonstrated through clean energy credits. We started from our common understanding of the urgency of climate action, the need for durable policy solutions, our shared interest in cost-effective, technology-neutral approaches that encourage innovation and ambition, and our commitment to just and equitable energy transitions for all parts of the country.

We offer our ideas in the following six categories of policy design for a national CES moving through the regular order legislative process. We do not intend for this to be a comprehensive or prescriptive list, but we do consider these topics to be foundational to any national CES policy discussion.

• Clean energy target, trajectory, and emissions outcomes
• Baseline (starting point) for the standard
• Coverage and point of regulation
• Qualifying clean energy resources and credit tracking
• Consumer protection and implementation provisions
• Critical enabling and reinforcing policies

^{1 Most CES policies to date are based on a target percentage of clean electricity supplies (can be referred to as a “ratebased” CES). Another approach to a CES is based on a target reduction in electricity sector emissions (called a “mass-based” CES). There are calculation methods to convert between a rate-based target and a mass-based target, so these approaches are not necessarily mutually exclusive.}