In early February, Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley announced they would set environmental standards that factor in risks posed by carbon emissions when lending to power companies building coal-fired power plants. The move was yet another indication of the speed at which environmental considerations are moving from social concern to financial reality.
Whether Congress is keeping up, however, is open to debate. President Bush signed the Energy Independence and Security Act of 2007 into law Dec. 19, but the year of political horse-trading that preceded the legislation's passage took its toll.
And the battle's not over. Despite the bombast surrounding the Act's emphasis on renewable resources, there's a strong argument that legislators' need to compromise left the alternative energy industry twisting in the wind.
Production tax credits (PTCs) for alternative energy projects such as wind and solar projects have been around for at least a decade, more or less on an ad hoc basis. Congress has tended to renew the credits either on the eve of expiration or after expiration with retroactive effect. The difficulty is that existing PTCs expire at the end of 2008, and the Energy Act says nothing about extending them.