The future of energy reform may depend on private sector innovations.

Dan Esty LAW ’86, director of the Yale Center for Environmental Law and Policy, spoke to over 50 students Wednesday night at the Yale Undergraduate Energy Club’s second “Power Hour” talk this semester. Esty argued that with Congress gridlocked by partisanship and current initiatives doomed by fundamental flaws, the country needs an innovation-driven energy policy. Two students interviewed after the talk said Esty’s practical approach to the energy crisis was interdisciplinary and impressive.

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“It’s been a difficult couple of weeks for those who are thinking about a clean energy future, and I’m not referring just to the election on the second of November,” Esty said.

The biggest blow to the alternative energy industry is the collapse of an entity that few people have heard of: the Chicago Climate Exchange, Esty said.

The organization was essentially a stock market, Esty said, where emissions allowances were traded between companies. Under a cap and trade program, in which the government sets a limit on carbon emissions by companies, it allowed firms that met their reduction goal to sell their emission allowances to firms that overshoot their limits.

The Exchange is the latest failed attempt to reform energy structure and usage domestically and globally.

The 1992 United Nations Framework Convention on Climate Change and the subsequent Kyoto Protocol in 1997 asked for emissions reductions only from industrialized countries, a move which Esty said was a huge mistake.

“It was a terrible error to let three-quarters of the world off the hook,” he said.

Esty also bemoaned lost opportunities at the Copenhagen Summit of 2009. He said he thinks that while developing countries such as China and India may be willing to reduce emissions, no accord will be reached without concrete commitments from the U.S.

“The U.S. came to the party with no party favors,” Esty said. “[Countries] can’t do a negotiation when a critical big party isn’t ready to play.”

Domestically, with the Republicans re-taking the House of Representatives and threatening to cut off funding to energy reform legislations, Esty said innovation and fundamental change to the energy structure cannot happen without broad bipartisan support.

To address the energy problem, Esty said he believes the focus of future energy policy must be broadened to include economic and national security concerns.

“I would put aside climate change and focus on developing a very strategic and comprehensive national energy plan,” Esty said. “I think what we need to do is to create a vision of the future that has an economic prosperity element to it, a national security and energy independence element, and a public health and environment dimension.”

Andrew Goldstein ’13, the policy chair of the Yale Undergraduate Energy Club, said he thinks Esty’s approach to the energy problem is one of the most realistic he has heard. Goldstein said he was particularly impressed by Esty’s focus on the economic aspects of energy reform and how other arenas can benefit.

Claire Henly ’12 added that she thought Esty’s ideas for policy reform were very practical, especially given a political environment where drastic changes cannot happen quickly.

Esty was Barack Obama’s campaign advisor on energy and environmental strategy and later a member of the Presidential Transition Team.