November 12, 2008
Obama Energy Promises Not Matched by House Energy Bill
By Michael Shellenberger and Ted Nordhaus
Since he launched his campaign for president in 2007, President Barack Obama has promised legislation that would deliver more clean energy jobs through the creation of new and larger clean energy industries, like solar and wind manufacturing, to drive future economic growth. On Tuesday and again yesterday, Obama claimed that climate legislation to be voted on as early as tomorrow in the House of Representatives legislation "will create a set of incentives that will spur the development of new sources of energy, including wind, solar, and geothermal power."
But analyses by the Environmental Protection Agency, the Union of Concerned Scientists, the Breakthrough Institute, and others show that the Waxman Markey climate legislation will not significantly grow the number of clean energy jobs or industries. The EPA analysis released on the same day as Obama's speech shows that the deployment of renewables could be less than without the legislation. An analysis of the renewable energy standard (RES) provision of the legislation by the Union of Concerned Scientists, whose model of various RES exemptions is the most thorough, finds that the legislation could actually require less renewables deployment than projected to occur under the U.S. Energy Information Administration's conservative business-as-usual forecasts. And EPA says the impact of the legislation on gasoline prices ($0.13 a gallon in 2015, $.25 in 2030) will be too small to motivate consumers to drive less or buy smaller cars, or provide incentive for the automotive industry to produce more fuel efficient and technologically advanced vehicles like plug-in hybrid cars.
While the White House web site still promises $15 billion annually for clean energy R&D alone, the House climate legislation would invest just $800 million to 1.4 billion in R&D. Total investments in clean energy, defined broadly, are likely to be just $6-9 billion annually between 2012-2025, in contrast to the $30-60 billion annually that will be transferred to utilities, coal-fired power plant operators, oil refiners, natural gas distributors and heavy industry under the bill, and the $15-30 billion annually that would flow overseas to pay for international offsets if they are utilized at the full levels permitted by the legislation.
Leading energy experts on Thursday sent a letter to President Obama and members of Congress calling for a massive increase in money set aside in the climate legislation for energy research and development. Quoting President Obama's statements calling for a vibrant national clean energy industry, the scientists write that "Large public investments in technology innovation have been critical for establishing America's leadership in the aerospace, computer, Internet, and pharmaceutical industries -- and they will be critical to establishing America's leadership in clean energy."
The legislation will be voted on at a time when China, Korea, and Japan are all investing large sums to create domestic clean energy industries. China will invest $300 -- $600 billion over the next 10 years in solar, wind, nuclear power, high speed rail, and electric cars. South Korea, with an economy 1/10th the size of the U.S., has pledged to spend $40 billion over the next four years on renewable energy programs. And Japan, which already leads the world in hybrid engine and solar panel technologies, has pledged to cut its domestic reduction of carbon emissions, already among the lowest in the world on a GDP per capita basis, a further 15% through the deployment of renewable energy technology. The three nations meet in August to develop a strategy to combine China's low-cost manufacturing the Korea and Japan's engineering know-how.