September 17, 2008
In "Vine" Veritas? (No.)
Last week in response to Michael and Ted's piece in The American Prospect, Bradford Plumer at The New Republic's "The Vine" wrote a piece called "Should We Forget About Carbon Pricing? (No.)" The post, which mischaracterizes the stances Michael and Ted take in the Prospect piece, also propagates the myth of successful emissions reductions in Europe.
"Ted Nordhaus and Michael Shellenberger have yet another essay arguing that environmentalists should abandon all hope of trying to cap or tax carbon emissions, and instead focus solely on subsidizing clean-energy sources if they want to avert drastic global warming.
...Simply having the Energy Department dole out $50 billion per year to clean-energy producers (as Nordhaus and Shellenberger suggest) will pale beside the amount of private-sector money that will flow to alternative energy and efficiency improvements if carbon is priced properly."
This characterization of S&N's positions in The American Prospect and the Breakthrough Institute in general is a strawman.
Plumer suggests that all S&N support is 50 billion dollars worth of clean energy subsidies every year. This is in direct contrast with what is written in the Prospect:
"The opportunity today is to make large and sustained federal investments to radically drive down the costs of clean-energy technologies, along with investing in the enabling technologies necessary to broadly deploy them. The government should invest $50 billion a year in building the new infrastructure and promote alternatives -- including carbon capture and storage, and solar, wind, nuclear, geothermal, and tidal energy -- in a competitive environment where the success of these projects can be judged rationally."
S&N endorse investments to bring down the cost of clean energy through promoting alternatives--not just subsidizing "green tech" firms but moving the newest potential technologies from the laboratory all the way to commercialization and helping emerging technologies by buying down their costs through direct procurement. In addition, the piece calls for investments in the enabling infrastructure that would make clean energy cheap, abundant and accessible--a unified smart grid, battery and storage tech, and a charging infrastructure for plug-in hybrid electric vehicles.
In addition to what is in the Prospect, Breakthrough staff have published op-eds in two national newspapers calling for a National Energy Education Act that would train a new generation of engineers and innovators and help with workforce development for the clean energy sector. There is no suggestion here of simply increasing the Deparment of Energy budget to blindly subsidize clean technologies. Breakthrough will be articulating our policy recommendations for the next administration over the next two months.
Plumer also asserts:
"But of course a flawed carbon cap won't work very well. Most policy experts are quite aware that Europe's initial foray into cap-and-trade was rife with missteps, and, as a result, emissions didn't drop as rapidly as expected. But the EU has been working to try to fix the system..."
The understatement that Europe's carbon emissions didn't drop "as rapidly as expected" seems to suggest that Europe's emissions have dropped at all. In fact, Europe's emissions, discounting Britain and Germany, have increased by 12 percent. And the reason these two countries have seen reduced emissions has more to do with union busting and the collapse of the USSR than the ETS.
Even as Europe's emissions have increased, they are still on target to meet mitigation goals thanks to the Clean Development Mechanism, the system that allows European countries to purchase carbon offsets in developing nations. But, as Gwyn Prins and the US Government Accountability Office recently wrote, the dubious and inefficient nature of these offsets undermines the effectiveness of the CDM, and, by extension, the ETS. And, even as talks continue in Poznan for how to enact more stringent caps and auction permits starting in 2012, Europe is planning to break ground on close to fifty coal-fired power plants in the next few years.
That is not to say that a carbon price does not have its place. Breakthrough supports a modest price on carbon that embraces cost containment in order to keep energy prices low for consumers and raise revenues for investment. Proposing to raise energy prices during a recession is a recipe for disaster, as Canada's Liberal Party can attest. For Canada's federal election last October, the party campaigned on a revenue neutral carbon tax, planning on giving Canadian's dividend checks from the money raised. However, as the economy soured, so did the popularity of carbon taxes and the Liberal Party wound up losing 26 seats in Canada's parliament.
But in the midst of recession, this sort of price is not just bad politics, but also bad economics. Beyond the political damage of attempting to implement a carbon price, attempting to tax or price carbon during this recession would be terrible for the economy. Higher taxes would only further slow the economy, speeding up the cycle of decline as credit shrinks and businesses make further cuts.
What it all boils down to is a question of priorities. Greens have been prioritizing a price on carbon for twenty years and legislation has barely moved an inch. Greens do themselves a serious disservice by continuing to advance the same decades old policies every time the political landscape changes. When the situation changes, you adapt to it, not continue a failed strategy in the hope that chances have improved. A broad progressive coalition is building around the principle of public investment for the public good. By continuing to embrace market fundamentalist methods of carbon mitigation, greens could miss their chance to be part of this coalition which could shape the course of the Obama administration.