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Cap-and-trade is dead because the public finally caught on that it is a stealth energy tax, a big reason being that it makes coal - the most economic electricity fuel in many markets - uncompetitive.
That's exactly what a Clean Energy Standard (CES) would do. "Clean" essentially means "anything but coal.” Instead of pricing the carbon emissions from coal, as a cap-and-trade program does, a CES simply prohibits coal from competing with other energy sources for a specified portion of the nation’s electricity market.
Yes, I know, coal with carbon capture and storage qualifies as “clean,” but carbon capture is unlikely to be commercially viable any time soon. Thus, a CES would effectively ban some – perhaps most – investment in new coal capacity. Just like cap-and-tax, a CES would demoralize the coal industry and scare off potential investors.
I haven’t seen Sen. Graham’s specific proposal. From the descriptions, however, a CES is very much like the Renewable Fuel Standard (ethanol mandate) and the Bingaman-Brownback Renewable Electricity Standard (RES). In each case, politicians tell industry what to produce and how much. All such schemes bear an eerie resemblance to the production quota featured in Soviet five-year plans.
Sen. Graham is correct about one thing – a CES is more internally consistent than an RES. If your goal is to build a low- or zero-carbon energy system, then it makes no sense to leave nuclear energy out of the quota. Indeed, nuclear power probably has a lower carbon footprint than wind and solar have, because nuclear does not need to be backed up by coal or gas-fired generation when the wind doesn’t blow and the Sun doesn’t shine.
Although Graham’s proposal would do much mischief if enacted, I am happy to see it drain political support from its more prominent cousin, the Bingaman-Brownback RES. My advice to both sides is, “Let’s you and him fight!”