Prepare for Indiana's low-carbon economy

May 18, 2009

Our country is closer than ever to dealing with the challenges of energy security, declining manufacturing and climate change.

Congress is deliberating both a national renewable electricity standard (RES) and a cap-and-trade policy, which puts a market price on greenhouse gas emissions. These will accelerate entrepreneurs' quest to find alternatives to foreign oil, reposition manufacturers to build components for low-carbon energy systems, and strengthen our nation's hand in negotiations with China and India to cut greenhouse-gas emissions.

In the coming weeks, we will look to Indiana Sens. Richard Lugar and Evan Bayh, who have spoken forcefully for a new energy economy to lead their peers in support of these policies. No doubt the transition to a low-carbon economy will bring great challenges for Hoosier businesses, given how carbon-intensive our society is. However, if we take proactive steps, Indiana can emerge as a standout success story.

Indiana seems to be on track in two key areas to prepare for the country's emerging low-carbon economy—university leadership and business leadership—but behind in another: strong state-level public-policy leadership. We see examples of university leadership in IUPUI's Lugar Energy Center, and business leadership in the Central Indiana Corporate Partnership's Indiana Energy Systems Network. A missing piece, however, is strong, bipartisan will to adopt public policies that promote renewable energy and energy-efficiency and low-carbon transportation policies that increase investment in rail and other mass transit.

Indiana nearly made major low-carbon policy advances in the General Assembly this year. With bipartisan support in both the House of Representatives and the Senate, our Legislature seemed poised to adopt an RES and an upgraded net-metering program (which enables customers to be credited on their electricity bill for any excess power from an on-site energy system that they send back to the grid). Ultimately, both bills died, despite strong backing by the green business community.

While Indiana did succeed in adopting a strong commercial energy-efficiency building code this session, our state is now the only one in the Midwest without an RES, and it has one of the weakest net-metering laws in the nation. Public-transit funding legislation also failed, despite enjoying support from business.

While transit-funding legislation may yet live another day in the upcoming special session, we must primarily look to opportunities at the federal level, and the 2010 session:

  • Support a vigorous effort to secure stimulus funding for passenger rail here.

The federal stimulus plan provides $8 billion in funding for high-priority passenger rail corridors, and Indiana has the larg est number of high-priority corridor miles in the Midwest. Our state should work with our neighbors to compete for these federal funds when bidding begins later this year.

  • Promote green-energy technology and transit-funding legislation in the 2010 Legislature.

We need to change our state's energy and transit policies, or Indiana will be at a disadvantage in attracting renewable-energy-component manufacturers and in attracting professionals, who prefer cities with 21st-century amenities, such as modern public transit.

  • Embark on a serious discussion of how Major Moves funds should be allocated.

The current allocation of Major Moves funds is untouchable to some key leaders. However, as the cost of the new-terrain Interstate 69 project increases to nearly $3 billion, Hoosier businesses need to seriously ask if such funds might be better spent upgrading existing highways, such as the alternative I-70/U.S. 41 route, and putting a down payment on a modern rail network, which is economically even more compelling when you take into account how much less carbon-intensive rail travel is than travel on new highways.

We look forward to working with our green business partners and the broader business community to bring about change in Indiana's approach to energy and transportation policy. The economic and environmental opportunities of the new-energy economy await us.

Kharbanda is executive director of the Hoosier Environmental Council.

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