So, the flickering chimera of a climate bill centered on a cap-and-trade system finally flickered out last week--perhaps for a long while.

In its wake is left the puny little package of "energy measures" plus oil spill responses cobbled together by Senate Majority Leader Harry Reid (D-Nev.).

Which is really troubling. Instead of an economy-wide carbon pricing system or even a utility sector-only one, the nation will be lucky to obtain from Congress some modest oil-spill response measures, some oil industry regulatory responses, and some incentives for home energy efficiency retrofits and natural gas vehicles. No major energy efficiency standards seem in the offing. No new renewable energy standard seems on the docket. And as to any other of the dozens of powerful ways to begin accelerating the transition to a clean energy economy in which clean energy becomes cheap, well they are not here or at all forthcoming.

So where do we go from here? I will have more to say in the weeks and months ahead about some alternative ways forward, ranging from stronger federal and state regulatory efforts to piling onto cleantech innovation with large R&D investments to using government and especially Department of Defense procurement more strategically to increase demand for low-carbon solutions and accelerate deployment.

However, it bears saying right now that the demise of cap-and-trade only underscores the urgency of locating the significant, dedicated revenue streams needed for clean energy investments, research, deployment, and transition costs.

Some will most regret the loss last Friday of the best chance we may have had for several years to raise the price of carbon emissions and so stimulate new and cleaner behavior across the economy. However, at least equal to that disappointment is the loss of a top candidate for generating the needed innovation revenue—tens of billions of necessary investment money.

In a fiscally-strained season of declining fortunes and reduced options I fear that loss will prove as difficult to handle as any other.