The Great Recession and the Democratic sweep in 2008 returned Keynesian economics to the center of political debate. But Rob Atkinson, founder of the Information Technology and Innovation Foundation, argued in a recent Breakthrough Journalessay that progressive economics, with its focus on economic distribution, had left behind a coherent economic growth agenda. Dean Baker, co-director of the Center for Economic and Policy research, rejected Atkinson's "potshot" in a reply also published in the Journal. The two aired their differences in a debate in Washington, DC. At stake: the future of progressive economics.
David Roberts at Grist.org argues that the "brutal logic" of climate change demands we trade economic growth in the world's developed nations for a little more climate breathing room. Is voluntary economic contraction a viable climate solution?
It is time to take stock of our current climate trajectory, and consider what it means for climate policy. In Part 1 of this week long series, we argued that our current climate trajectory means we must 1) redouble efforts to reduce CO2 emissions as quickly as possible, and 2) we must proactively build resilience to the uncertain impacts of a changing climate. Part 2 in this series examines whether voluntary economic contraction is a key strategy in reducing emissions “as quickly as possible.”
In a recent commentary, Grist’s David Roberts notes that our current climate trajectory puts us on a path to dangerous climate impacts, demanding that we must reduce emissions dramatically over the near-term. His proposed strategy to reduce emissions as quickly as possible constitutes an “all-hands-on-deck mobilization” (including a carbon tax, efficiency standards, subsidies, tech development). He also argues that the time has come to consider “shared sacrifice” in the world’s wealthiest nations: a course of voluntary economic contraction in developed economies (thus reducing fossil energy consumption), while allowing developing nations time to shift from dirty to clean energy.
As we wrote in Part 1 of this series, we firmly agree that our climate trajectory demands that we redouble efforts to reduce global CO2 emissions as quickly as possible. They key question remains: what levers or strategies are central to determining how quickly we can reduce emissions. Is voluntary economic contraction a key climate strategy?
The global market for clean energy products grew to $243 billion in 2010, a year in which China and Germany both captured a greater share of this global investment than the United States. That has led many (myself included) to worry about the erosion of US competitiveness in a set of clean energy technology products--from solar and wind to nuclear and advanced batteries--originally invented in America.
Yet this growing market for clean tech is almost entirely dependent upon public subsidy and policy support. To be blunt: today's clean energy markets are artificial, and without perpetual policy support, conventional clean energy products could not compete in most global energy markets.
Across the globe, cash-strapped governments and recession-hit publics are pulling back clean energy subsidies, revealing the ephemeral nature of today's clean tech markets. In the last year, Spain, Italy, and the United Kingdom have all slashed feed-in tariffs for solar and certain other clean energy technologies. In America, expiring tax credits and fading stimulus investments are set to send federal clean tech expenditures plunging 75 percent from 2009 to 2014, according to our research.
There are a hostof reasons why targeted policies and smart public investments in emerging clean tech sectors are justified. But clean tech business leaders and policymakers alike must be crystal clear: the true economic rewards in clean energy industries will not come from producing technology for subsidy-created markets that vacillate wildly with the public mood and the business cycle.
Without substantial innovation to improve the performance and reduce the cost of clean energy technologies, the promise that the clean energy sector might become economically viable, much less a cornerstone of American economic revival, will never be realized. The real clean energy race is thus to invent, commercialize, progressively improve, and mass-produce cheap and reliable clean energy technologies that can compete on cost not just with international competitors but also with fossil fuels.
In short, the race is to make clean energy cheap and subsidy-independent.
A new report by the Breakthrough Institute and Third Way argues that the United States needs to rethink its approach to manufacturing to incentivize and enhance next generation "advanced manufacturing" and worker training.
Stagnant and out-dated policy debates in Washington are the reason that advanced, high-tech products are mostly manufactured outside of the United States, according to a new paper jointly issued by two think tanks. The report, from the Breakthrough Institute and leading moderate think tank Third Way, argues that American manufacturing could experience a resurgence with a focus on complicated and technology-intensive manufacturing products.
"The Kindle has revolutionized how people read, but even though it was born in Silicon Valley, Amazon makes it in Taiwan," said Director of Third Way's Economic Program and the report's co-author, Ryan McConaghy. "When looking for the precision needed to build the e-reader, Amazon had to look abroad for experienced manufacturers because the technology was no longer available here. It's a huge missed opportunity."
In a detailed piece for the Breakthrough Journal, polymath intellectual Vaclav Smil argues that expanding manufactured exports is key to economic revival, and that there is no reason the United States cannot reverse decline of its manufacturing sector.
Monday's dismal manufacturing report and Tuesday's deal to slash spending have spooked the markets, which fear lower growth. While Obama and the Democrats say they will now focus on increasing jobs, the question is what can actually be done to grow the economy?
For Vaclav Smil, the famously pessimistic polymath, the answer is clear: the U.S. must manufacture its way out of decline.
Smil, virtually unknown in the United States, is no armchair pundit. The author of 32 books on risks, catastrophes and much else, Smil is a legend to energy wonks like Bill Gates and was the first non-American to win an AAAS Award for Public Understanding of Science and Technology.
True, we must reduce low-priority discretionary spending, both defense and domestic; slow the projected growth of Medicare and Medicaid; and restore Social Security to fiscal soundness. But we also need to care for an aging population and invest in the skills, research and modern infrastructure that power economic growth.
Alice Rivlin, founding director of the Congressional Budget Office, former director of the White House Office of Management and Budget, former Federal Reserve Vice Chair, and member of the Presidential Debt Commission.
See also: "Losing the Future?" a Breakthrough Institute staff editorial, April 14, 2011
It's not too late for President Obama to return to the clear path to "winning the future" articulated in his State of the Union. But righting the nation's economic trajectory demands a concerted and consistent effort to help Americans understand and embrace the difference between spending and investment, and to recognize that a growing economy fueled by new innovations, new technologies, and new industries is an essential component of any strategy to tame the debt.
"The first step in winning the future is encouraging American innovation. ... We'll invest in biomedical research, information technology, and especially clean energy technology, an investment that will strengthen our security, protect our planet, and create countless new jobs for our people."
With those remarks at the heart of his State of the Union address - and a 2012 Budget proposal to back them up - President Obama drew a line in the sand and articulated a vision of American economic renewal fueled by key investments in the kind of public-private partnership that brought us the railroads and jet aviation, microchips and the Internet, countless biomedical breakthroughs and a portfolio of clean energy alternatives.
As we wrote in January, "Obama's [State of the Union address] was a rejection of proposals to cut federal spending across the board, as he finally made the case before the American people about why public support for innovation is critical for the country's long-term prosperity."
It was a plan to "win the future" and restore American prosperity that embraced the crucial distinction between government spending - consumptive, transitory, and sometimes even wasteful - and public investment - that small portion of our federal budget that catalyzes the enduring innovation, entrepreneurship, and economic growth that makes this nation strong. We hailed the speech as "Obama's breakthrough" moment.
But that was January...
Today, we're veering closer to a very different vision of America's budgetary future, one that seems to embrace the logic of "across-the-board" spending cuts proffered by Republicans, including decreasing budgets for major national research agencies and clean energy innovation programs.
Budget Deal Cuts Investment in Innovation
Late on April 8th, President Obama's negotiators gave his imprimatur to a compromise to fund the government through the remainder of the 2011 fiscal year that would see federal investments in energy innovation fall by nearly 11% (or $325 million) below 2010 levels while stripping over $1 billion from the budgets of the nation's major non-defense research agencies.
These cuts amount to a veritable funding cliff, when one considers the nearly simultaneous expiration of the temporary investments flowing to innovation agencies in 2009 and 2010 under the American Recovery and Reinvestment Act.
If this is the opening battle in the war to win America's future, it is a clear defeat.
Two more influential voices have joined the growing ranks of innovation hawks on both sides of the political spectrum in urging against cuts in federal investment in science and technology. Noted political commentator Mort Kondrake writes that the GOP budget would "torch America's seed corn," while Duke Energy CEO Jim Rogers writes that Congress should increase funding for energy research to make clean energy cheap.
As the Congressional Republicans continue to push cuts to critical federal investments in innovation, two more prominent voices have joined a growing group of innovation hawks on both sides of the aisle seeking to preserve or even increase federal funding for science and technology.
The first is noted political commentator Mort Kondrake, who wrote recently in Roll Call that the GOP is threatening to "torch America's seed corn" by cutting federal technology investment. Kondrake, a long-time contributor to Fox News and Executive Editor of Roll Call, notes that the Republicans' budget bill would cut funding for scientific research agencies by more than 33 percent, at a time when countless science and technology experts argue that we must increase such investments to spur economic growth. As Kondrake notes, the GOP budget proposal would abandon the long, bipartisan history of federal investment in American innovation:
Republican priorities represent not just a repudiation of President Barack Obama's proposed increases for science -- 10 percent for energy, 13 percent for the NSF, 15 percent for NIST -- but of a bipartisan process started in 2005 to secure a doubling of hard science research.
"Energy Emergence: Rebound and Backfire as Emergent Phenomena" finds extensive evidence and a strong expert consensus that a large amount of the energy savings from below-cost energy efficiency are eroded by demand 'rebound effects,' and that in some cases the rebound exceeds the savings, resulting in increased energy consumption from efficiency, known as backfire. The report contains a comprehensive review of the expert literature.
There is a large expert consensus and strong evidence that below-cost energy efficiency measures drive a rebound in energy consumption that erodes much and in some cases all of the expected energy savings, concludes a new report by the Breakthrough Institute. "Energy Emergence: Rebound and Backfire as Emergent Phenomena" covers over 96 published journal articles and is one of the largest reviews of the peer-reviewed journal literature to date.
In a statement accompanying the report, Breakthrough Institute founders Ted Nordhaus and Michael Shellenberger wrote, "Below-cost energy efficiency is critical for economic growth and should thus be aggressively pursued by governments and firms. However, it should no longer be considered a direct and easy way to reduce energy consumption or greenhouse gas emissions." The lead author of the new report is Jesse Jenkins, Breakthrough's Director of Energy and Climate Policy; Nordhaus and Shellenberger are co-authors.
The findings of the new report are significant because governments have in recent years relied heavily on energy efficiency measures as a means to cut greenhouse gases. "I think we have to have a strong push toward energy efficiency," said President Obama recently. "We know that's the low-hanging fruit, we can save as much as 30 percent of our current energy usage without changing our quality of life." While there is robust evidence for rebound in academic peer-reviewed journals, it has largely been ignored by major analyses, including the widely cited 2009 McKinsey and Co. study on the cost of reducing greenhouse gases.
In a recent column, Innovation Conservative David Brooks calls out both Democrats and Republicans as perpetuating "mirages" for advocating cuts to discretionary spending as deficit reduction measures, and argues that those advocating for increased investments in productive areas need to band together to address entitlements, as growing entitlement spending will impose constraints on those investments in the future.
On Monday, I appeared on an hour-long webinar hosted by theEnergyCollective.com on China and Energy, diving into questions of energy innovation, competitiveness, and the challenge of meeting China's soaring demand.
Carolyn Bartholomew, a commissioner on the US-China Economic Security and Review Commission joined myself and moderator Marc Gunther to dive into the issues at stake.
We discussed how China can be both the world leader in clean and dirty energy, simultaneously leading the world in the production of clean energy technologies and global contributions to climate-destabilizing carbon dioxide and coal consumption; the economic stakes of the global clean energy race and China's rising prowess in clean tech innovation and production; and the huge scale of energy demand in the rapidly developing nation.
Listen to the audio - "China and Energy" webinar, 1/31/11: (length 01:01:10)
In tonight's State of the Union Speech, President Obama will call for increased federal investment in education, science, technology and infrastructure. In doing so, he will join a long list of Republican Presidents who recognized that such investments are key to America's economic vitality and a hallmark of true fiscal responsibility. The question now is whether today's Republican leaders will don this mantle, or will continue to recklessly pursue cuts to America's most productive public investments?
Tonight, President Obama is prepared to call for renewed federal investment in infrastructure, research, education, and clean energy technology in his State of the Union Address, according to his advisers. He is likely to argue that new productive investments in education and technology are central to generating jobs and laying a new foundation for economic prosperity. Indeed, the long, bipartisan history of American innovation is one of federal investment in new technologies--even in tough economic times.
But as Republicans in Congress continue their campaign to cut everything in sight (except for what might reduce the growing federal debt -- defense and entitlement spending), with seemingly little regard for the difference between spending and smart investment, it may be difficult for Obama to enact policies that could seriously address the deficit by growing the economy.
On December 15th 2010, hundreds of leading thinkers, scientists, public officials, and innovators gathered in Washington, DC for the Energy Innovation 2010 Conference to initiate a new conversation on a new energy policy paradigm for the 21st century
For 35 years, government and the market have been trying and failing to get energy policy right. Congress has failed to pass large-scale clean energy and climate legislation, while China and other competitors are moving aggressively to take the lead in new energy technology. And the market has failed to create needed low-carbon technology on its own. Meanwhile, the nation's dependence on oil and coal deepens and global temperatures continue to rise. To address these issues, we need to get past the old energy policy paradigm - and we just may be turning the corner.
On December 15th 2010, hundreds of leading thinkers, scientists, public officials, and innovators gathered in Washington, DC for the Energy Innovation 2010 Conference to initiate a new conversation on a new energy policy paradigm: one that recognizes the central role of innovation in resolving the world's looming energy challenges and boosting American competitiveness. Climate change aside, we can't rely on carbon-based fuels for the next 150 years the way we did for the last 150. And we can't create the transformational energy innovations we need without putting innovation front and center.
"Energy Innovation 2010" merely begins a new national energy dialog that must continue well into the coming years. Breakthrough Institute and our partners will continue to spearhead this conversation as we seek new strategies to address the multifaceted energy challenges facing America and the world.
In case you missed the conference, held before a packed house at the National Press Club, or if you simply want to revisit the top notch presentations delivered throughout the packed day, videos from the full conference can be viewed below.
Starting in the 1970s green groups helped kill new nuclear plants by claiming greater energy efficiency would slash energy consumption. It didn't. Energy demand rose 40 percent more than Amory Lovins predicted. The result? A coal-plant building boom. Time to rethink the role of energy efficiency.
By Michael Shellenberger, Ted Nordhaus, and Jesse Jenkins
If there's one thing everyone knows for certain, it's that energy efficiency reduces energy consumption. President Obama, Steven Chu, Fortune 500 chieftains, Silicon Valley VCs, the U.N. and McKinsey all say it.
Why, then, does ever-greater efficiency go hand-in-hand with ever-greater energy consumption? In this week's New Yorker, journalist David Owen explains this apparent paradox. The essay (excerpted below) is as fascinating as anything written by Malcolm Gladwell. And the implications for energy and climate policy are of great significance.
From hybrid crops to blockbuster drugs, nuclear power to wind power, and microchips to the Internet, government support was critical to the productive public-private partnerships that spawned so many revolutionary American technologies.
This presentation was delivered by Jesse Jenkins (Director of Energy and Climate Policy, Breakthrough Institute) and Daniel Sarewitz (Director, Center for Science, Policy, and Outcomes, ASU; Breakthrough Institute Senior Fellow) at the Energy Innovation 2010 Conference, December 15th, 2010.
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Apple, Amgen and General Electric. Bill Gates, Thomas Edison, and Alexander Graham Bell.
We are all familiar with these genius inventors and titans of industry.
Yet most of us remain unaware of the almost constant presence of a silent partner in American innovation: the federal government.
We might recall something about microchips and the space race, or know that the National Institutes of Health funds research into new drugs and treatments.
But most of us remain unaware of the depth and breadth of government support for technology innovation.
As we gather today to consider how to drive forward the dramatic innovation needed to deliver cheap, clean and massively scalable energy sources to power world, we would do well to pause and take a look back at the United State's long history of limited but energetic public investment in breakthrough technologies.
Where do good technologies come from? The history of American innovation shows that an active partnership between the public and private sectors has been key to developing breakthrough technologies, which have driven generations of economic prosperity. In an updated report, the Breakthrough Institute explores this partnership through a set of case studies in American innovation.
Driving directions from your iPhone. The cancer treatments that save countless lives. The seed hybrids that have slashed global hunger. A Skype conversation while flying on a Virgin Airlines jet across the continent in just five hours.
Where did these everyday miracles come from?
As soon as the question is asked we know to suspect that the answer is not as simple as Apple, Amgen, or General Electric. We might recall something about microchips and the Space Race, or know that the National Institutes of Health funds research into new drugs and treatments.
But most of us remain unaware of the depth and breadth of American government support for technology and innovation. Our gratitude at being able to video chat with our children from halfway around the world (if we feel gratitude at all) is directed at Apple, not the Defense Department. When our mother's Neupogen works to fight her cancer, we thank Amgen, not NIH or NSF.
Facing renewed international challenges to American technological and economic leadership, the United States "cannot cut back on those investments that have the biggest impact on our economic growth," including science, technology and education, President Obama declared at a speech in Winston-Salem, North Carolina this week.
Echoing his Secretary of Energy and chief science and technology advisers (as well as a pairof familiar op eds from 2008), President Obama told audiences in North Carolina today that the United States faces a new "Sputnik moment" - a challenge to American technology and economic leadership akin to the global race to dominate nascent aerospace, computing, and information technology fields during the Cold War Era.
The United States responded to the 1957 launch of the Soviet Sputnik satellite with a series of major investments in science and education, including the National Defense Education Act and the creation of the Apollo Space Program. Maintaining economic competitiveness in the 21st century similarly demands a renewed national commitment to invest in the building blocks of a dynamic innovation economy, the President said.
Remaining competitive in the fast-growing, 21st century clean energy sectors will demand the same world-class talent and highly-trained workforce that helped the United States lead the world in the high-tech sectors of the 20th century.
Today, the race for dominance in clean energy technology sectors pits the United States against the greatest international competition for a key emerging technology field than in any era since the Cold War race to lead in aerospace, computing, communications, and IT fields.
Remaining competitive in the fast-growing, 21st century clean energy sectors will demand the same world-class talent and highly-trained workforce that helped the United States lead the world in the high-tech sectors of the 20th century.
As we wrote in "Post-Partisan Power," a road map for a limited and direct national energy innovation strategy recently released by Breakthrough Institute and scholars at the Brookings Institution and American Enterprise Institute:
The United States cannot hope to rise to this global challenge or confront pressing energy innovation imperatives without a new national investment to train and inspire the next generation of intrepid American scientists, engineers, and entrepreneurs. Today, the United States ranks just 29th out of 109 countries in the percentage of 24-year-olds with a math or science degree.47 Only 15 percent of undergraduate degrees in the United States are earned in science, technology, engineering, or mathematics (STEM) fields compared with 64 percent in Japan and 52 percent in China. Even South Korea -- a nation with a population one-sixth the size of the United States -- graduates more engineers annually.
The situation is particularly dire in energy technology, with roughly half of the U.S. energy industry workforce expected to retire over the next decade. Meanwhile, demand for workers in the renewable electricity industry is expected to more than triple from 127,000 in 2006 to more than 400,000 in 2018. The anticipated, large-scale ramp-up of the U.S. nuclear power industry would similarly require the industry to hire tens of thousands of new nuclear engineers and related positions annually. Yet today, from elementary school through post-doctorate programs, students and educators lack the resources to develop new curricula and educational programs, receive key training, or expand research opportunities to meet this national challenge.
In a recent interview with NPR's Robert Siegel, Breakthrough Senior Fellow Roger Pielke Jr. discusses why cap and trade policy collapsed under the weight of its political and practical limitations. He proposes a new path forward focused on making clean energy cheap, instead of continually trying to make fossils fuels more expensive.
Below is an excerpt from the interview transcript. Click here to listen to the full interview and read the entire transcript:
Despite rising national debts, would national governments be wise to borrow today to fund investments in infrastructure, clean energy, and innovation to be enjoyed by -- and paid back by -- a richer, more well-off generation tomorrow?
Here's an interesting argument from our friends across the pond at the UK-focused Political Climate blog, making the case that despite rising deficit concerns and austerity measures in the UK and elsewhere, borrowing from the future may still actually be an appropriate way to pay for clean energy innovation today:
Against this background, it may sound mad to argue for more public borrowing in order to pay for investments in low carbon technologies and infrastructure, but that is what I am going to do in this post.
Let's start with the rationale. ... The starting point is that in advanced economies successive generations tend to get better off over time. For example, at the depths of the 1930s depression Keynes observed that despite the general gloom, he was confident that 100 years in the future, people might be eight times better off in real terms. And indeed average GDP per capita in the UK is now already about 5 times what it was in the 1930s. By extension, we would normally expect future generations to be better off than us in GDP terms.
... [Furthermore, if] we in this generation mitigate climate change, we will allow future generations to have a higher standard of living than they would have if we did nothing. We are very slowly beginning to do this, with policies being introduced to encourage us to invest less in conventional capital (e.g. fossil fuel power stations) and more in investments that effectively maintain natural capital (like renewable energy).
At the moment we are paying for these more expensive investments through reduced consumption, in the form of higher energy bills. If instead we were to borrow a certain amount of money from future generations (who will have to repay through their taxes) and use this money to pay the extra cost of renewables, carbon capture and storage and so on, then the theory says it should be possible to make both our generation and future generations better off. ...
After decades of underinvestment, the United States faces a $2.2 trillion repair bill to modernize the nation's crumbling network of public infrastructure, from railways to airports and roads to sewers, according to the American Society of Civil Engineers.
With budgets at the state and federal level pinched by economic recession, and a surging Tea Party skewing American politics towards a new spendthrift mentality, America may soon face diminished economic competitiveness and more potentially dangerous failures of public infrastructure.
In the Independent, British commentator Rubert Cornwell offers a clear-eyed perspective from across the pond on "the silent crisis that is undermining America: the creeping decay of its public infrastructure."
Throughout American history, federal investments in areas like science and technology have been a long-term driver of national prosperity under presidents both Democrat and Republican.
Throughout American history, strategic government investments in areas like education, technology, infrastructure, and energy catalyzed the entrepreneurship and innovation that has paved the way for so many of the great American technological and economic successes of the 20th century. In the words of conservative New York Times columnist David Brooks, the American story is one of "limited but energetic governments that used aggressive federal power to promote growth."
[Originally published 10.28.10 in The New Republic.] President Obama's strategy for economic renewal through clean energy was flawed from the start, too over-reliant on cap and trade and public works programs to retrofit buildings for energy efficiency. To succeed, a new industrial economy requires large, sustained investments in innovation and manufacturing like the kinds that built America's information technology and biomedical industries.
An abridged version of this article appears in the October 28, 2010 print edition of The New Republic (and online here, subscription required)
In August 2008, then-candidate Barack Obama traveled to Lansing, Michigan, to lay out an ambitious ten-year plan for revitalizing, and fundamentally altering, the American economy. His administration, he vowed, would midwife new clean-energy industries, reduce dependence on foreign oil, and create five million green jobs. "Will America watch as the clean-energy jobs and industries of the future flourish in countries like Spain, Japan, or Germany?" Obama asked. "Or will we create them here, in the greatest country on earth, with the most talented, productive workers in the world?"
Two years later, the answer to that second question appears to be no. Obama's environmental agenda is in tatters. His green jobs plan has done little to make a dent in unemployment, which persists at close to 10 percent. Obama's signature environmental initiative, cap-and-trade, died in the Senate in July. And, during the first year of Obama's tenure, China massively outspent the United States on clean-energy technology.
The story of how Obama's green agenda came up empty is more complicated than the one conventionally told by Democrats and greens, who imagine that cap-and-trade would have been transformational had Republicans and global-warming deniers not gotten in the way. In truth, the president's strategy was flawed from the start. Cap-and-trade would not have birthed a domestic clean-energy economy -- indeed, it wasn't designed to. Meanwhile, the administration's green stimulus spending was split between short-term, if worthy, investments in green technology, to which far too little money was allocated, and over-hyped public-works projects that would never have delivered the new industrial economy Obama promised as a candidate.
At a time of continued economic distress, America should embrace regional innovation clusters as a new paradigm for collaboration, innovation, and economic prosperity.
As new reports confirm a stark decline in long-term U.S. economic competitiveness, the United States needs a new economic paradigm to refocus economic policy and rebuild its damaged economy. That new paradigm should focus on strengthening America's "regional innovation clusters," according to a new report authored by Mark Muro and Bruce Katz of the Brookings Institution Metropolitan Policy Program.
First defined by Harvard Business School professor Michael Porter twenty years ago, clusters--geographic concentrations of interconnected firms, suppliers, educational institutions and other supporting organizations--have staged a comeback in economic policymaking at different levels of government and are now widely viewed as important to accelerate innovation and therefore economic growth. According to the new study, The New Cluster Moment: How Regional Innovation Clusters Can Foster the Next Economy, clusters offer an attractive new economic paradigm for three particular reasons.
Growing empirical evidence that energy efficient technologies may drive greater energy consumption, not less, demands a new look at the role of energy efficiency in efforts to mitigate climate change.
One of the most curious facts about energy is that economies continue to use more of it even as they use it more efficiently. This strikes us as strange because it has become an article of faith that making cars, buildings, and factories more energy efficient is the key to cheaply and quickly reducing energy consumption, and thus pollution.
But energy experts have never seen this as particularly mysterious. As energy historian Vaclav Smil notes, "Historical evidence shows unequivocally that secular advances in energy efficiency have not led to any declines of aggregate energy consumption." A group of economists beginning in the 1980s went further, suggesting that increasing the productivity of energy would increase economic growth and energy consumption. Efficiency advocates dismiss the evidence of rebound in energy use pointing to direct behavioral changes at the household or business level that are easiest to measure. But the most significant energy rebounds are indirect -- in the production of energy, raw materials, and consumer goods -- not in the "end use" of consumer products.
Below, a leading energy economist, Harry Saunders, explains why energy efficiency does not decrease energy consumption in the way we conventionally understand it. In the process, Saunders clarifies the controversy over his recent co-authored study for the Journal of Physics, which reviews 300 years of lighting history to predict the impact of new solid-state lighting technologies (e.g. LEDs). Against the widespread belief that new lighting technology will reduce energy consumption, Saunders and his colleagues found that they will likely increase it -- greatly expanding the global use of lighting in the process, especially in developing countries. Saunders clarifies some important questions, and explains the basics of "the rebound effect."
With the new study, rebound has firmly moved from the theoretical to the empirical, and the implications of it must now be dealt with by all of us who were counting on efficiency to be an easy way to reduce greenhouse gas emissions.
-Michael Shellenberger, President, Breakthrough Institute
Why Energy Efficiency May Not Decrease Energy Consumption
By Harry Saunders
I recently co-authored an article for the Journal of Physics ("Solid-state lighting: an energy-economics perspective" by Jeff Tsao, Harry Saunders, Randy Creighton, Mike Coltrin, Jerry Simmon, August 19, 2010) analyzing the increase in energy consumption that will likely result from new (and more efficient) solid-state lighting (SSL) technologies. The article triggered a round of commentaries and responses that have confused the debate over energy efficiency. What follows is my attempt to clarify the issue, and does not necessarily represent the views of my co-authors.
A new report by the National Academies paints a grim picture of U.S. economic competitiveness in the 21st century knowledge economy. Major and sustained public investments in education, research, and innovation are key to reversing a long-term decline in global competitiveness.
A new National Academies report released last week confirms what many concerned with U.S. economic competitiveness have warily suspected: America's competitive standing in the 21st century global economy has deteriorated markedly in the last five years.
The outlook has only worsened since the publication of the original report, according to the Gathering Storm committee, which includes leading academics, CEOs, and science and technology experts. For those concerned about America's ability to create lasting, high-paying, high-quality jobs in a time of economic distress, the report's conclusion is disheartening:
"America's competitive position in the world now faces even greater challenges, exacerbated by the economic turmoil of the last few years and by the rapid and persistent worldwide advanced of education, knowledge, innovation, investment, and industrial infrastructure. Indeed the governments of many other countries in Europe and Asia have themselves acknowledged and aggressively pursued many of the key recommendations of Rising Above the Gathering Storm, often more vigorously than has the U.S."
The American Recovery and Reinvestment Act has funded breakthrough innovation and new growth industries that are driving down the cost of clean energy and building the foundation for competitive 21st century U.S. industries, according to a new White House reportreleased today on the impacts of the U.S. stimulus bill.
Yet while the White House report highlights the considerable clean energy momentum established by the Recovery Act, it also inadvertently raises the specter of an impending clean tech funding cliff which risks sending U.S. clean energy industries into deep freeze as stimulus funds begin to expire over the coming months.
Seemingly inspired by the death of cap and trade, over at the Daily Dish Andrew Sullivan has tied together two interesting threads of conversation -- "Waiting on Innovation" and "Why Not?" -- that deal with the issues of energy innovation and energy taxes.
Highlighted in "Why Not?" the Economist's Ryan Avent is on to something when he suggests a $5 per barrel petroleum tax since it could generate about $40 billion in revenue annually. But to suggest, as Avent does, that the tax should rise by $5 each year with the objective of forcing consumers to drive less or purchase more fuel-efficient cars is a strategy that risks falling into the same political trap that ultimately ensnared cap and trade.
Last week I suggested that Julia Gillard, Australia's Prime Minister, was asking for trouble by promising that carbon pricing would transform society:
When will politicians learn that climate policies are a political loser if they require that people "transform the way we live and the way we work"? The vast majority of people simply do not want their lives transformed. Promising that government will transform your life is one way to ensure a rough political road for any policy -- climate change, health care, economic, whatever.
Basically, cap-and-trade introduces uncertainty at an individual level (though it does the opposite for actual investors); in the current economic climate, that scares people into thinking that they will lose their jobs. . . Anything that the public is unfamiliar with adds to uncertainty - and that is precisely what people don't want. Second, green jobs may poll well across a wide spectrum of voters, but that doesn't mean that selling regulation or taxation with a jobs message will work.
To succeed, policies focused on decarbonizing the global economy must not be seen as adding to personal insecurities, better yet, they should add to personal security. This should be a major lesson taken from the failure of US climate legislation.
Not "everything should be on the table" for budget cuts to reduce the deficit, argues ITIF President Rob Atkinson in a recent essay. Despite what "neo-classical inspired budget hawks" may insist, Atkinson points out, all spending is not created equal and slashing budget line items for investments that spur innovation could actually serve to put the U.S. further in the red.
He writes:
What's behind this widespread unwillingness to prioritize investment? Budget hawks fear that sparing one item from the chopping block will only validate the demands of interest groups to exempt their pet programs. In addition, many adhere to a neo-classical economics perspective, which holds that government plays a negligible role in economic growth and should be neutral with regard to private sector activity... But government should be anything but neutral. Science and infrastructure funding is more valuable than farm subsidies. Government support for research in computer chips is more valuable than support for potato chips...
In contrast, an innovation economics approach to the budget distinguishes between spending on consumption and spending on investment. For innovation economics advocates, all spending (either on the tax or expenditure side) should be on the table, and all investment (on the tax and expenditure side) should be off the table...
We need to expand investments in education and training, science and research, technology (including, but not limited to clean energy) and physical infrastructure. In economic downturns, successful corporations don't cut key investments because they know that these investments are vital to gaining market share and competitive advantage in the moderate term. Governments should think the same way.
Arising out of the debates surrounding clean technology and the economic recession, is the nagging question: can the U.S. continue to lead in high tech innovation without domestic manufacturing? Increasingly, it seems, the answer is "NO" -- a response that carries serious implications for clean tech innovation and economic growth in the U.S.
Political confusion surrounding "green" jobs, clean tech, and outsourced manufacturing (largely to Asia) has caused those looking to clean energy as the next U.S. growth sector and those seeking to raise the U.S. out of a growth-numbing recession to lose sight of what has fueled U.S. technological and economic leadership in the past - public support for innovation and large scale high tech manufacturing. Recently, Alexis Madrigal posed the critical question arising from this confusion to the readers of the Atlantic: "Can the US Innovate Without Manufacturing?"
As Breakthrough and numerous high tech leaders argue, the answer is "NO."
By re-thinking how the federal government can foster innovation and competitiveness in clean energy, from education and research to commercialization and production, the United States can once again become a global leader in clean energy technology.
By Jesse Jenkins, Mark Muro, and Rob Atkinson, originally at the New Republic
Having passed the U.S. House of Representatives on May 28th, the America COMPETES Act, America's flagship competitiveness legislation, will soon be debated in the U.S. Senate. The Act was originally passed in 2007 in response to mounting concern that the United States was failing to effectively compete economically with other nations, imperiling the nation's future prosperity.
Now, a new outbreak of anxiety has engulfed the nation's competitive standing particularly as regards the nation's fledgling clean energy industry. Presently, the United States lacks an effective strategy to compete in this high-growth industry, which is expected to surpass $600 billion globally by 2020. Fortunately, the America COMPETES reauthorization offers a key opportunity for Congress to strengthen U.S. clean energy competitiveness.
In a new policy report, the Breakthrough Institute, Information Technology and Innovation Foundation and Brookings Institution Metropolitan Policy Program call on Congress to strengthen clean energy competitiveness through the America COMPETES reauthorization.
Congress first passed this flagship competitiveness legislation in 2007 in response to concerns that the United States was losing its ability to compete economically with other nations. On May 28, 2010, the U.S. House of Representatives passed the COMPETES reauthorization by a vote of 262-150 and the bill is set to be debated in the Senate. The reauthorization comes at a time when the United States seeks new sources of growth in a fiscally constrained environment. The clean energy market is one such growth industry--expected to surpass $600 billion by 2020--but the U.S. faces unprecedented global competition.
In "Rising Tigers, Sleeping Giant," an authoritative report on international clean energy competitiveness, the Breakthrough Institute and ITIF recently demonstrated how U.S. leadership on a number of clean energy competitiveness metrics has declined in the last decade. The United States' historic lead in energy innovation is slipping as other countries implement national innovation strategies. America now lags economic competitors in Asia and Europe in the manufacture of virtually all clean energy technologies. And the U.S. lags its economic rivals in preparing its future workforce with critical science, technology, engineering and math education (STEM).
The new report argues that to regain leadership in the global clean energy market, the United States must prioritize major investments in clean energy technology and embrace bold new paradigms in clean energy education, innovation, and production and manufacturing policy.
"Meeting the aggressive challenges to U.S. clean energy leadership will require both increased funding for critical education and technology programs as well as new ideas for how the federal government can foster innovation in the clean energy industry, from basic research to full-scale commercialization," said Mark Muro, Director of Policy at the Brookings Institution Metropolitan Policy Project.
The Brookings Institution is out with a new policy brief today building on their prior calls for energy discovery innovation institutes (e-DIIs). These regionally-based, collaborative research centers are designed to "serve as the hubs of a distributed research network linking the nation's best scientists, engineers, and facilities." The newest report assesses the potential for e-DII's in the Great Lakes region.
Through such a network, the nation could at once increase its current inadequate energy R&D effort and complement existing resources with a new research paradigm that would join the unique capabilities of America's research universities to those of corporate R&D and federal laboratories.
Brookings' vision for creating an energy innovation network is consonant with a similar concept put forward by the Breakthrough Institute and Third Way in "Jumpstarting a Clean Energy Revolution with a National Institutes of Energy" which called for a national commitment to energy innovation modeled on the National Institutes of Health.
Politicians talking about clean energy jobs like to claim "they can't be shipped overseas." From President Obama's State of the Union to Rep. Ed Markey stumping for the climate bill he co-authored with Rep. Henry Waxman, the promise of new "green jobs that pay well and can't be outsourced" is an all too common refrain.
The only problem with it is that it's wrong on its face.
America is already exporting clean energy jobs -- or seeing them created abroad in the first place. After pioneering wind and solar power, electric cars, and nuclear plants, America turned its back on the public investments in cutting edge technology that catalyzed these innovations, forfeiting cleantech industries to foreign countries who did not make the same mistakes. The cap and trade program at the heart of the climate bill authored by Rep. Markey may help create more clean energy jobs overseas, but it won't bring those jobs back to America. Conventional responses to today's competitiveness challenge won't cut it. Here's what will...
Until clean and cheap energy sources are available for deployment on a massive scale, developing nations like South Africa will remain stuck in the Development Trap: forced to either sacrifice climate and ecological security in the name of development and poverty alleviation or to condemn countless millions of citizens to energy poverty in the name of climate protection. Breaking out of this untenable position is the urgent challenge of the century. It's time to make clean energy cheap.
[Update, 4/9/10: According to E&E News ($ubcr. required), the 24 member World Bank board voted to approve the $3.75 billion loan to South Africa, including $3.05 billion to construct a new 4.8 GW supercritical coal-fired power station and additional funding to construct 100 MW of utility-scale wind power and 100 MW of concentrating solar power with energy storage capability.
The United States' representative on the World Bank board abstained from the vote, and the explanation is the clearest example of the multi-faceted challenges of global development and the ways in which energy poverty and climate change objectives remain largely opposed in the absence of clean, affordable, and rapidly scalable energy technology options. According to E&E:
In a statement released just as the 24-member World Bank board started to debate the Eskom loan behind closed doors, the U.S. Treasury Department issued a statement saying its abstention "reflects concerns about the climate impact of the project and its incompatibility with the World Bank's commitment to be a leader in climate change mitigation and adaptation."
Still, the United States noted, it "recognizes South Africa's pressing energy needs and the lack of near-term feasible low-carbon alternatives."
Environmental groups, including the Sierra Club, roundly condemned the World Bank decision, and chastised the U.S. for not voting in opposition. However, there is no indication that viable alternative plans to expand energy access in South Africa without exacerbating the nation's greenhouse emissions were proposed. ]
South Africa's finance minister, Pravin Gordhan, has an op ed in the Washington Post that illustrates the multi-faceted challenges facing developing nations as they struggle to provide the affordable access to modern energy needed to pull citizens out of poverty. The piece highlights the current tension between such objectives and simultaneous concerns about the environmental and climate impacts of energy development.
With South Africa's economy growing rapidly - it's expanded by two-thirds since 1994, when Nelson Mandela first took office - the nation's demand for energy has grown apace. As Gordhan notes, "Millions of previously marginalized South Africans are now on the grid." And that's a very good thing.
Consider that not having access to affordable, modern energy sources, particularly electricity, means no access to potable, running water; it means having to burn dung and wood and other primitive biofuels to provide cooking and indoor heating; and it means sputtering kerosene lamps as the only source of light after the sun goes down.
The human toll of such energy poverty is incredible. According to the World Health Organization, solid fuel use causes 1.6 million excess deaths per year globally, especially among women and children, while waterborne disease is one of the leading global killers, ending the lives of over 3 million annually - again, many of them young children - who lack access to clean and safe water supplies.
A largely-symbolic freeze on domestic spending is the wrong route to trim the deficit. Along with real entitlement reform and winding down the wars, smart government investments in broad-based economic growth must be the keystone of a three-part strategy to truly balance the federal budget. Take energy as a case in point, where investments now to catalyze competitive clean energy technologies and industries will pay big economic dividends down the line.
With rising anxiety about mounting federal deficits, President Obama declared a freeze on all non-defense discretionary spending in his latest budget proposal. Heavy on symbolism and light on impact, the Administration's proposal attacks all of the areas of the government least responsible for the inexorable increase in federal deficits, while potentially starving key parts of the discretionary budget critical to America's economic prosperity.
Let's be clear: ballooning deficits do pose a real long-term threat to the United States' economic security. Under current forecasts, the accumulated deficit could total $20 trillion by 2020. That could hobble Uncle Sam with interest payments on the federal debt nearly as large as the projected total for all domestic discretionary spending. Efforts clearly must be taken to avoid such an unsustainable - and risky - financial future.
That said, curbing domestic spending is the wrong route to trim the deficit. The President's spending freeze applies to only a small fraction of the federal budget, while exempting both the mounting costs of two wars and the ever-rising bill for the nation's entitlement programs - Social Security, Medicare and Medicaid.
In the last five years, the U.S trade deficit in renewable energy products increased by 1,400% to nearly $5.7 billion, according to a December report issued by the Senate Subcommittee on International Trade, Customs, and Global Competitiveness.
Here's a short (and potent) Friday Factoid to conclude this week:
In the last five years, the U.S trade deficit in renewable energy products increased by 1,400% to nearly $5.7 billion.
That's according to a report on the opportunities and challenges America faces in the production and export of environmental goods, including clean energy technologies, published in December by the Senate Subcommittee on International Trade, Customs, and Global Competitiveness, chaired by Senator Ron Wyden (D-OR).
The graphic below shows the growth in the U.S. trade deficit in environmental goods. Imbalance in the import/export of renewable energy products ("REP" in the key) is the largest contributor to this deficit.
(Click to enlarge)
Product Key:
REP: Renewable Energy Products
CRET: Cleaner or More Resource Efficient Technologies
EMAA: Environmental Monitoring, Equipment
SHW: Management of Solid and Hazardous Waste
HEM: Heat and Energy Management
WWM: Waste Water Management and Treatment
APC: Air Pollution Control
We'll have more on this report and it's implications on Monday. Enjoy your weekend.
Global trade issues continue to put the U.S. in a climate conundrum, presenting perhaps the thorniest negotiating point as world leaders prepare to meet for international climate talks in Copenhagen next week. Indeed, on the eve of the global climate talks, the negotiating positions of the United States and major developing economies, including China and India, appear to remain at loggerheads. Here's why...
The United States may be stuck in the middle of a climate conundrum. A proposal to establish border tariffs to account for the carbon associated with the imported manufactured products, like steel, looks critical to securing the support of key swing Senators interested in protecting the competitive position of American manufacturing. ... Yet ... those same tariff provisions that could win passage of a U.S. climate bill are firmly opposed by China and other developing nations and could both damage Sino-American trade relations and fissure international climate negotiations.
Breakthrough's Yael Borofsky wrote that back in October, and this climate conundrum continues to present perhaps the thorniest negotiating point as world leaders prepare to meet for international climate talks in Copenhagen next week. Indeed, on the eve of the global climate talks, the negotiating positions of the United States and major developing economies, including China and India, appear to remain at loggerheads.
In a letter to President Obama today, nine moderate Democratic Senators, all key swings for climate legislation or ratification of any international climate treaty, reiterated their demands that any international climate framework U.S. negotiators sign in Copenhagen must include comparable action from all major economies and allow tariffs to adjust prices on imports from any nation that does not agree to bindings agreements to reduce emissions "in specific trade- and energy-intensive economic sectors."
"Climate change is a serious and growing threat to the United States and the world," the Senators wrote. "Smart climate change policies would guard against these risks while also spurring clean energy investments that promote economic growth and create good domestic jobs."
"Importantly, however, poorly designed climate policies could also jeopardize U.S. national interest," the Senators warned, "by imposing burdens on U.S. consumers, companies and workers without solving the climate challenge."
To address these challenges, the U.S. should seek to negotiate a new international climate agreement under which, "All major economies should adopt ambitious, quantifiable, measurable, reportable and verifiable national actions" to reduce emissions of greenhouse gases.
Furthermore, U.S. climate policy, the Senators wrote, should include provisions to implement border adjustment tariffs if necessary to help shield domestic industries facing international competition from countries that have not implemented carbon reduction requirements for their industrial sectors.
Here's the key excerpt from the letter, signed by Arlen Specter of Pennsylvania, Sherrod Brown of Ohio, Carl Levin and Debbie Stabenow of Michigan, Tim Johnson of South Dakota, Kay Hagan of North Carolina, Claire McCaskill of Missouri, Amy Klobuchar of Minnesota and Mark Begich of Alaska:
European and Asian high-speed rail manufacturers are courting U.S. government officials in hopes of securing contracts for some of the $8 billion dollars of federal stimulus funds ear-marked for domestic high-speed rail (HSR) projects. Notably absent from the list of companies vying for the cash are American companies. Without the development of a domestic high-speed rail manufacturing base, much of the HSR technology and expertise will continue to come from overseas, with many of the new jobs being created overseas as well.
European and Asian high-speed rail manufacturers are courting U.S. government officials in hopes of securing contracts for some of the $8 billion dollars of federal stimulus funds ear-marked for domestic high-speed rail (HSR) projects.
According to Greenwire, foreign manufacturers are hosting country visits for federal and state government officials to see their high-speed train technologies, as well as dropping not-so-subtle hints that they will build new domestic manufacturing facilities, or expand existing ones, if they are awarded contracts.
States are also feverishly competing for federal funds. According to NPR, forty states and the District of Columbia have already filed applications requesting more than $100 billion for high-speed rail projects. The most ambitious project is a proposed $40 billion, 800-mile HSR network in California spanning from Sacramento to San Diego. Although the Federal Railroad Administration has yet to award any of the $8 billion in government funds to any state or project, companies from Germany, France, Canada, Japan, and China are hoping that early efforts to charm government officials will pay off down the road.
Notably absent from those promoting their HSR technologies are American companies. That's because the United States ceded international leadership in the transportation technology in the 1960s, when Japan became the first nation to construct a national high-speed rail network.
Benchmarking clean-tech competitiveness: A new report by the Breakthrough Institute and Information Technology & Innovation Foundation provides the first comprehensive analysis of competitive positions among the U.S. and key Asian challengers in the global clean energy race.
The report examines the competitive position of each nation in core clean energy technologies, including solar, wind, and nuclear power, carbon capture and storage, advanced vehicles and batteries, and high-speed rail, as well as the government strategies each nation hopes will strengthen its position in the global clean technology sector. The report also offers recommendations for U.S. federal policymakers for regaining U.S. competitiveness.
A Politico poll shows that despite years of environmental campaigns and the debate over pending climate and energy legislation, the public still ranks climate change last among issues that affect the way it votes
Despite years of campaigning, documentaries, increasingly apocalyptic narratives and supposedly landmark climate and energy legislation awaiting Senate consideration, a recent Public Strategies Inc./POLITICO poll shows the majority of the public still ranks climate change last among important issues that affect the way it votes and ranks the economy before all else, even government spending.
According to Politico:
As the nation struggles to climb out of a recession, 45 percent rated the economy as the most important issue in deciding their vote if the congressional election were held today, followed by 21 percent who said government spending, 20 percent who chose health care reform and 9 percent who said the wars in Iraq and Afghanistan. Just 4 percent ranked climate change as the top issue.
This finding isn't new by any stretch. But it is significant news, given the heated debate on climate and energy policy that has passed through the House and is ongoing in the Senate.
Robert Stavins explains why capturing energy efficiency opportunities are actually costly to the economy despite numerous studies that have touted them as a "free lunch" in the effort to reduce carbon emissions
Robert Stavins, Director of the Harvard Environmental Economics Program and a leading proponent of cap and trade, acknowledged in an op-ed for the Huffington Post last week that capturing energy efficiency opportunities is more challenging and costly than many have predicted.
In his recent report entitled, "Too Good To Be True? An Examination of Three Economic Assessments of California Climate Change Policy," Stavins found that three separate studies of the California Global Warming Solutions Act of 2006 - all reporting that emissions reductions targets were achievable at no, or negative, cost to the economy - grossly underestimated the economic burden through errors of omission.
An older but similar study, often referred to as the Five Labs Study (executive summary), conducted by the DOE's Interlaboratory Work Group, also reported that efficiencies to reduce emissions could be captured at no economic cost. These findings, published in the late 1990s, were used to bolster support for the Kyoto Protocol despite the fact that the authors readily acknowledged that the study had not "analyzed specific policies to achieve the cases, identified the political feasibility of policies, or described a pathway to achieve the cases." According to Stavins' critique:
"Those studies were terribly flawed, which was what led to their faulty conclusions. I had thought that such arguments about massive "free lunches" in the energy efficiency and climate domain had long since been laid to rest. The debates in California (and some of the rhetoric in Washington) prove otherwise."
Specific policies, the feasibility of policies, and the effectiveness of policies, asserts Stavins, all have cost implications that are egregious to ignore. By omitting them in the early Five Labs Study and the later California studies that Stavins analyzes in his report, only the cost of specific actions to reduce emissions are accounted for, not the often considerable costs associated with policy implementation.
The UN's World Economic and Social Survey reveals the need for a massive global investment, financed by rich developed nations, to fund a green new deal - one that is focused on mitigating and adapting to climate change by helping developing nations create high-growth economies sustainably powered by clean energy
The 1947 Marshall Plan seems to be referenced whenever it becomes clear that an overwhelming social problem can only be solved through large scale government spending. The results of the UN's World Economic and Social Survey 2009 (WESS) revealed the need for just that type of federal investment in order to manage the global climate and energy crisis. And, according to Reuters, the head of Development Policy and Analysis division at the UN department of Economic and Social Affairs (UNDESA), Richard Kozul-Wright, believes it may be time to call on the Marshall Plan framework, yet again, this time to fund a green new deal.
Regardless of past global policy, the UN's WESS enhances the climate debate leading up to the negotiations set to take place in Copenhagen this December, by pointing out the need for a global investment push in clean energy technology, energy efficiency, transportation, and forest-management. Thus far, much of the debate has centered on coercing developing nations to agree to carbon emissions targets - even as rich nations' carbon "commitments" skew towards symbolism over substance. But as WESS explains:
"[M]itigation and adaptation efforts can move forward effectively only if they are part of a consistent development strategy built around a massive investment-led transformation along low-carbon, high-growth paths."
That means giving up on Kyoto's tired call for empty promises to cut emissions. While reducing global carbon intensity was, and is, a primary goal of climate negotiations, targets are not only too narrow a focus to be a viable solution to the climate crisis, they have been shown to be ineffective. As has been explained by the Breakthrough Institute and most recently by Michael Levi, in Foreign Affairs, the Kyoto Protocol is failing because the too weak carbon emissions targets it set are not even being met by the participating countries.
Wall Street and the wind industry are overjoyed by the uplifting impact of ARRA-backed cash grants, but the boom caused by this short-term stimulus program could be setting the wind sector up for yet another bust without a long-term deployment strategy focused on making clean energy cheap
That's what Ethan Zindler, head of New Energy Finance Ltd, proclaimed to the Wall Street Journal in response to emerging evidence that the government's $3 billion dollar cash grant renewable energy stimulus program is successfully incentivizing private investment in the wind sector.
After falling into the doldrums for the past six-months, the wind industry is roaring back to life thanks to direct public investments enacted in the American Recovery and Reinvestment Act (ARRA), also known as the stimulus bill. A DOE and Treasury-funded cash grant incentive program is helping to grease the pipeline for private investors looking to finance renewable projects, particularly wind farms, slated to begin construction in 2009 or 2010. According to the WSJ, just four weeks into the program $800 million in grants have already been submitted and Wall Street bankers predict that figure to reach $10 billion by the end of 2010.
The cash grant program was created to rescue the clean energy industry, a critical American growth sector, from the malaise of the credit crisis. The tax credits (PTC and ITC) that usually incite clean energy development are worthless in an economic climate where the big financial firms that typically absorb them, on behalf of project developers, are in crisis.
The solution: Congress tucked a two-year cash grant into ARRA worth 30% of qualifying wind, solar, and geothermal project costs, replacing the normal production and investment tax credits. With the money from the program officially flowing since August, the grants are breathing new vigor into clean energy investment, speeding America's economic recovery.
With big players like Morgan Stanley and Citigroup investing $120 million each to finance new wind farms, the wind sector is generating more than clean energy - it's producing clear evidence that public investment really does drive private investment. By covering 30% of a new project's cost, the cash grant program will spur more than two dollars in private investment for every public dollar, successfully leveraging taxpayer money to drive significant private investment in cleaner energy, greater energy security, and accelerated economic recovery.
The projected success of the cash grants, which bankers calculate will lead to 9-15% annual returns per deal, suggests that perhaps, public investment is even more effective at driving private investment than setting an economy-wide carbon price, an oft-suggested strategy to motivate private financing in renewable RD&D.
Thanks to US stimulus funding to nurture strong domestic clean energy markets, European wind giant Vestas is bringing money and jobs into the US as it opens more factories within American borders. But the US must follow the stimulus with sustained, substantial investments in clean tech development and deployment in order to avoid losing future foreign investments--and manufacturing jobs--to China.
It's strange to hear of "insourcing"--the transfer of manufacturing jobs into the United States instead of out--but that's exactly what's happening with Denmark's wind giant Vestas, according to a New York Times article yesterday.
According to the report, a combination of global recession and domestic stimulus spending on clean energy is adding up to a boon for the American clean energy manufacturing industry.
In Europe, Vestas has seen several nations slow down their rates of added wind capacity, and flagging government support combined with financial difficulties has impeded the construction of new projects. By contrast, the United States built 8,500 megawatts of wind capacity in 2008 to Britain's 500, and demand for turbine technology is high. So for opportunities in a more robust wind market, Vestas has begun to look across the Atlantic.
In a continued look at the role of nationalism in the clean energy race, Mother Jones' Kevin Drum applauds the rhetoric behind the clean energy race narrative but raises concerns about over-zealous nationalism and xenophobia towards Asia
A second piece on nationalism in the context of the clean energy race was published on Mother Jones' blog MoJo, and is evidence that the growing body of discourse around this issue has struck a very resonant chord. In the post, entitled "Harnessing Nationalism," Kevin Drum offers poignant, if somewhat veiled, criticism of the rhetoric behind the "clean energy race" narrative.
Inspired by The New Republic's Bradford Plumer, the post starts with a lengthy quote whose primary point is this: the clean energy race is not a zero-sum competition because everyone stands to benefit if China makes a significant effort to reduce emissions by investing in clean technology.
First, as Drum puts it, Plumer's commentary may be an attempt at "intellectual honesty," but honesty doesn't make it completely accurate. True, the whole world will benefit from advancements in clean energy no matter where it comes from, but China is not motivated to compete in the clean tech industry by emissions reductions - it is driven by the potential for economic gain.
As a (rapidly) developing nation, economic development, not emissions targets, is the highest priority. Thus, the race is not about emissions, it is about whose economy stands to benefit from leadership in clean technology.
Drum views the clean energy race through "green" tinted glasses, as well, preferring the "race" rhetoric to the alternative: the apocalyptic narrative that has clearly failed to motivate effective climate change action. Rhetorically speaking, framing the need to reduce carbon emissions as a clean energy race is both more engaging and more productive. As he aptly declares:
If this kind of thing got us to the moon, maybe it can save the planet as well. I say we go along.
The clean energy race, however, is more than just a new and improved framing mechanism or encouragement of America's honed nationalistic tendencies - it is an economic truth. What Drum misses when he writes off the recent proliferation of clean energy articles as hype, is that this issue could both be an effective rhetorical tool as well as a humbling reality.
In a Washington Post op-ed, Nobelist Henry Kissinger calls for the United States and China to avoid nationalism and embrace a new political framework based on cooperation, but would this new paradigm spur clean energy innovation?
When the Breakthrough Institute's Michael Shellenberger and Ted Nordhaus began advocating for a paradigm shift in the global approach to climate change in the early 2000's, they could not have predicted that a paradigm shift of another variety might occur simultaneously. That is: a shift in the balance of global power.
In an op-ed entitled, "Rebalancing Relations with China," published in the Washington Post this week, Henry Kissinger assessed the power shift occurring between the U.S. and China, calling for Sino-American cooperation in lieu of boisterous assertions of nationalistic superiority and hegemonic power.
A Nobel Peace Prize winner, former National Security Advisor and Secretary of State during the Nixon Administration, Kissinger is a known proponent of realpolitik. Although that term typically has a negative connotation in the U.S. and is often associated with power abuse, the word actually refers to a theory of politics grounded in the realistic assessment of power, rather than ideology.
In accordance with this theory, Kissinger's puts forth an ideology-free assessment of the current relationship between the United States and China. China's position as America's largest creditor and the economic crisis, in combination, have served to level the playing field between the two nations. Faced with increasing economic interdependence and China's conflicting interest in reducing that dependence, "ambivalence," Kissinger asserts, "is the inevitable consequence."
In Kissinger's estimation, a new political framework that recognizes China as a global economic power will be crucial to revitalizing the world economy. From this standpoint, there are three ways a Sino-American relationship could play out on the global stage.
Under the economic stimulus, DOE announces $2.3 billion in tax credits for advanced energy manufacturing projects in order to stimulate economic growth, create jobs, and secure American leadership in clean energy
Last Thursday, the Department of Energy announced a boost for the advanced energy manufacturing industry in the form of a $2.3 billion Advanced Energy Manufacturing Tax Credit (MTC). The MTC is authorized under the American Reinvestment and Recovery Act of 2009 (ARRA), otherwise known as the $787 billion economic stimulus package.
Intended to expand the clean energy domestic manufacturing industry, the MTC provides a 30% credit for investments in advanced energy manufacturing facilities that either are new, expanded, or re-equipped. The $2.3 billion in MTCs will stimulate 7.7 billion in total capital investments in new renewable and advanced energy manufacturing projects. By fostering growth of the clean energy manufacturing industry, this investment will enforce and enhance ARRA's larger purpose - boosting economic growth, creating jobs, and securing "American leadership in the clean energy sector" - all while helping reduce greenhouse gas (GHG) emissions.
According to Energy Secretary Steven Chu:
These tax credits will help create thousands of high quality manufacturing jobs in some of the highest growth segments of the economy. This is an opportunity to develop our global leadership in clean energy manufacturing and build a secure, sustained base of jobs for America's workers.
The application process to receive the tax credits began last Friday and the preliminary deadline is September 16, 2009. Applicants will be offered tax credits based on expected commercial viability, and rankings of expected job creation, reduction of pollutants and GHGs, technological innovation, and speed of project implementation.
A recent article in the Christian Science Monitor outlines China's strategy to surpass the U.S in the clean energy race and become the world's next economic powerhouse
Imagining China as a giant green frog seems a little ridiculous, but, as Peter Ford of the Christian Science Monitor reported last week in a piece entitled "China's Green Leap Forward," China's intent to "leapfrog" the United States in the clean energy race is far from ridiculous - it may soon be a reality.
While the U.S. languidly inches forward in clean energy RD&D, China's burgeoning clean and renewable energy industries are growing at an unprecedented pace for a developing nation. Much more than a response to the suffocating pollution clogging the airways of its major cities, the explosion of clean energy technology is part of a national strategy to dominate the industry. As Ford succinctly puts it:
"China price" and "China speed" are poised to snatch the lion's share of the next multitrillion-dollar global industry - energy technology... Indeed, China is pushing ahead on renewable technologies with the fervor of a new space race.
Indeed, China is approaching clean energy with a "space race" mind-set, however, the U.S. has yet to adopt the same sense of urgency. As Americans wait for a Senate decision on the significantly weakened American Clean Energy and Security Act (H.R. 2454), which will invest just $1 billion per year in clean energy R&D and $10 billion for clean energy investments broadly defined, China has already implemented a suite of clean energy policies beginning with the Renewable Energy Law of 2006.
By supporting the growing wind sector with subsidies, tariffs, and an obligatory renewable energy requirement for power companies, China now expects wind manufacturing to grow from 8GW in 2007 to between 12GW and 20GW by 2010. In comparison, the U.S. manufactured just 2.4 GW of wind turbines in 2007 despite having the largest wind market in the world.
Recently, Senator Sherrod Brown refused to accept a climate bill that would simply send both emissions and U.S. manufacturing jobs overseas - inaccurately earning him a label as a "threat" to the passage of federal energy and climate legislation. This week, the Ohio Democrat formally introduced legislation to strengthen America's efforts to both cut emissions and build a prosperous clean energy economy: the Investments for Manufacturing Progress and Clean Technology (IMPACT) Act of 2009.
"We can revive American manufacturing through investments in clean energy," Brown said. "This bill will help our manufacturers retool, put our auto suppliers back to work, and produce clean energy technologies."
The bill would create a two-year, $30 billion revolving loan fund to help small and medium-sized American manufacturers to improve the manufacturing process and increase their production of clean energy parts and systems. The IMPACT Act would also directly invest $1.5 billion over five years to help guide manufacturers into clean energy markets and streamline their implementation of new manufacturing technologies and methods through the Manufacturing Extension Program, a division of the Department of Commerce's National Institute of Standards and Technology.
Thursday, 10 Senate Democrats sent a letter to the President Obama outlining their position on upcoming climate policy. Senators Sherrod Brown (D-OH), Debbie Stabenow (D-MI), Russell D. Feingold (D-WI), Carl Levin (D-MI), Evan Bayh (D-IN), Robert P. Casey (D-PA), Robert C. Byrd (D-WV), Arlen Specter (D-PA), John D. Rockefeller IV (D-WV), and Al Franken (D-MN) voiced their position to make sure that effective climate policy both reduces emissions and strengthens American manufacturing. The letter's signatories want U.S. climate policy to:
Include transition assistance as factories become more efficient and as they retool to make clean energy products in a more efficient way;
Set negotiating objectives around manufacturing that the U.S. can take to the Copenhagen climate negotiations in December;
Establish mechanisms to verify emissions reductions and hold countries accountable for meeting their goals; and
Establish a border adjustment (fee) on goods from countries with less rigorous climate provisions.
The New York Times headline editors were quick to ominously label the letter a "threat" to the passage of a climate bill, but that is hardly the case. This letter was not an ultimatum stating opposition to climate legislation, or even to the Waxman-Markey bill in particular. The letter states the Senator's support for climate action and provides a forum for addressing their clearly stated concerns that if anything, should enable the design of an effective and passable bill. If these critical swing Senators remain "a threat" to climate legislation, it is more due to failure of creative policy design than the evil machinations of industry-funded hacks from coal states. So before we vilify these ten Senators - every one of whom is likely necessary to secure passage of any climate or energy legislation - let's take a close look at what they are actually saying...
"short-term transition assistance in the form of rebates provided to energy-intensive and trade-exposed industries"
While it's unclear whether this is calling for additional emissions allowances for energy intensive industries, the simple fact is that energy is a primary input to our entire economy, making energy costs a major political and economic sensitivity. This is most pronounced in states reliant on coal for their electricity mix and/or reliant on energy-intensive industries for their economy (e.g. the states whose senators signed this letter). That's the simple reality of climate politics. It's long past time to internalize that and pursue good policy design that can still succeed in that political environment. Good climate policy should be able to support manufacturing in the clean energy economy. Let's make sure the details of policy design match the "green jobs" messaging.
In a recent speech at Harvard, energy secretary Steven Chu again supported an agenda to make the US a leading clean energy innovator. But Congress continues to reject strategic policies that would make this a reality.
In a speech yesterday at Harvard's John F. Kennedy School of Government, energy secretary Steven Chu again repeated his declaration that nothing less than a technological "revolution" is necessary to meet America's energy challenge and to ensure the US position as a leading global economic power.
Speaking alongside Congressman Ed Markey, Chu told his audience that future US prosperity depends upon widely deploying renewable energy, developing carbon capture and storage capabilities, and increasing energy efficiency--but most importantly, it depends upon becoming a leading innovator in clean energy technologies.
Chu minced no words when he described this critical juncture for the US in the
global clean energy industry:
"We're faced with the following choices: We can become the leader of a new industrial revolution and lay the foundation of our future economic prosperity ... or we can hope the price of oil will go back to $30 a barrel, deny climate change is happening and let other countries take the lead in energy innovation."
Today, the U.S. Department of Energy announced $377 million in funding to establish 46 Energy Frontier Research Centers (EFRCs) pursuing potentially path-breaking basic and translational research at the cutting-edge of clean energy innovation. Of this funding, $277 comes from the American Recovery and Reinvestment Act (ARRA, otherwise known as the stimulus package) and $100 million comes from the DOE's FY2009 budget. The funding will be sustained over the next five years, with the DOE committing $100 million of its budget to the research centers each year.
"Meeting the challenge to reduce our dependence on imported oil and curtail greenhouse gas emissions will require significant scientific advances," said Energy Secretary Steven Chu as he announced the new funding for EFRCs. "These centers will mobilize the enormous talents and skills of our nation's scientific workforce in pursuit of the breakthroughs that are essential to expand the use of clean and renewable energy."
The majority of EFRCs are based in universities, with several harnessing the skills and resources of the national laboratories, and just three awarded to non-profit organizations and private corporations. Over the course of the program, these centers will employ over 1,800 people in research into four primary realms: Renewable and Carbon-Neutral Energy (including Solar Energy Utilization, Advanced Nuclear Energy Systems, Biofuels, and Geological Sequestration of CO2); Energy Efficiency (Clean and Efficient Combustion, Solid State Lighting, Superconductivity); Energy Storage (Hydrogen Research, Electrical Energy Storage); and Crosscutting Science (Catalysis, Materials under Extreme Environments).
Despite President Obama's call for an energy revolution, it is up to Congress to provide funding. The Department of Energy's Advanced Research Projects Agency - Energy (ARPA-e) made a recent call for research proposals into "high-risk, high-payoff transformational energy-related R&D," for projects that "(1) translate scientific discoveries and cutting-edge inventions into technological innovations and (2) accelerate transformational technological advances in areas that industry by itself is not likely to undertake because of high technical or financial risk."
Over 3,500 research teams submitted proposals for a slice of the available $150 million. As a result, over 98% of applicants we "discouraged" from submitting a full application.
Sure, some of the applications were "undoubtedly unrealistic, fundamentally flawed, written in crayon, or the like," as Andrew Revkin aptly noted at Dot Earth. But with 98% of all proposals rejected, there's got to be another explanation for the high rejection rate as well. Surely at least 5%, 10%, maybe even one third of these proposals are worth further consideration. Remember: this round of project proposals was simply to get into the next round of consideration where ARPA-e program managers would being the real project grant selection process. No, the reason so many proposals were rejected has more to do with the fact that there is simply not nearly enough money to fund all the good, potentially game-changing clean energy ideas out there.
This problem is not unique to this ARPA-e or this round of research proposals. It is a chronic symptom of this country's (under)commitment to clean energy.
In yesterday's Washington Post,
prominent U.S. business leaders John Doerr (from Kleiner Perkins) and
Jeff Immelt (CEO of GE) joined the growing chorus calling on
the nation's leaders to prepare America for the clean-energy race. They
warn that the U.S. is quickly falling behind in "the next great global
industry" -- green technology -- with the risk of damaging America's economic
competitiveness.
Doerr and Immelt's observations mirror recent reporting by the Breakthrough Institute and several major news sources -- including Time, Washington Post, and the Wall Street Journal -- that
show the U.S. trailing Asia in terms of clean-energy investment and
deployment. On the question of which nation is leading the U.S. in the
clean-energy race, Doerr and Immelt don't mince their words:
"We are clearly not in the lead today. That position is
held by China, which understands the importance of controlling its
energy future. China's commitment to developing clean energy
technologies and markets is breathtaking.
Consider: Chinese cars are more than one-third more
fuel-efficient than U.S. cars. China is investing 10 times as much on
clean power, as a percentage of gross domestic product, as the United
States is. China is on track to create 150,000 jobs through the
deployment of 120 gigawatts of wind power by 2020 -- an amount
equivalent to today's global total and nearly five times America's."
Yesterday the U.S. Senate passed the Energy and Water Appropriations Bill (H.R. 3183) appropriating $34.3 billion in energy spending for FY2010. The bill supports Barack Obama's campaign promise to shut down Nevada's Yucca Mountain nuclear waste facility and funds numerous water initiatives set-forth by the Army Corps of Engineers.
Notably absent, however, is any funding for RE-ENERGYSE (REgaining our ENERGY Science and Engineering Edge), Obama's proposed initiative to close the energy education gap by preparing young Americans to compete in the race for clean energy. From Obama's initial proposal of $115 million, the House and Senate Appropriations Committees rejected the program by cutting funding to $7 million and $0, respectively. The bill that passed through the Senate, by an 85-9 vote, contained no mention of the forward-thinking and much-needed education program.
Featured in Yale Environment 360 today, Breakthrough Institute Senior Fellow Roger Pielke, Jr. argues that unrealistic emissions targets are just "magical solutions" - not direct, effective climate policy.
If pressed, most policymakers would concur that symbolism is not the foundation of sound and effective policy. Yet, as University of Colorado Professor and Breakthrough Institute Senior Fellow, Roger Pielke, Jr. points out in his piece featured today on Yale Environment 360, climate policies contingent on carbon emissions targets are often just that: symbolic.
The article was prompted by criticism of Japan's commitment to seemingly small reduction targets, with a significant portion of the finger-wagging coming from the U.K.
The appeal of emissions targets lies in their simplicity. By setting a (usually lofty) long-term goal for reducing carbon emissions, governments appear pro-active in their efforts to deal with climate change. But as Pielke, Jr. repeatedly emphasizes, ambitious targets unsubstantiated by strategies for achieving those goals are not only simple and symbolic, they are misleading.
In lieu of a realistic plan of action and pressured by an untenable goal, governments resort to creative accounting tricks so that their carbon "budget" is balanced. Thus, a nation can be a symbolic climate change hero without actually decarbonizing. The article quotes Stanford's David Victor:
[S]etting binding emission targets through treaties is wrongheaded because it 'forces' governments to do things they don't know how to do. And that puts them in a box, from which they escape using accounting tricks (e.g., offsets) rather than real effort.
According to Pielke, Jr. the UK's recent adoption of aggressive targets provides a definitive example of why they are a "magical solution" to climate change mitigation that unfortunately will not deliver results:
To achieve a 34 percent reduction from 1990 emissions by 2022 while maintaining modest economic growth would require that the U.K. decarbonize its economy to the level of France by about 2016. In more concrete terms, Britain would have to achieve the equivalent of deploying about 30 new nuclear power plants in the next six years, just to get part way to its target. One does not need a degree in nuclear physics to conclude that is just not going to happen.
Decarbonization of an economy, however, is not driven by target-setting or accounting. Using the Kaya Identity as a guide, a simple equation that illustrates how a nation's population, GDP, energy mix, and energy use all contribute to its total carbon emissions, the only real, feasible policy recourse for achieving decarbonization is to drive improvements in the carbon intensity of the energy supply and/or energy efficiency as rapidly as possible. Neither targets nor offsets are a factor in the equation.
Breakthrough Institute believes the clean energy race demands a vigorous federal investment of at least $30-50 billion per year in clean energy. In contrast, Romm ardently supports weaker legislation that would invest just $10 billion per year, less than one quarter of China's planned investments. That may be acceptable to Joe Romm -- but it is no way to win the clean energy race.
Romm asserted that our op-ed "attacks" President Obama and Democratic leaders, when in fact it calls on Congress to support Obama's RE-ENERGYSE energy education program
and urges greater public investment in clean energy to compete with
Asian challengers. Yet Romm never mentioned the central focus of the
op-ed -- RE-ENERGYSE and our efforts to rally support behind it,
including a recent sign-on letter with over 100 organizations
-- and instead criticized us for what he called "willfully misleading
nonsense" about Asian countries' planned investments in clean energy.
Romm also criticized us for asserting that Congress must strengthen
the Waxman-Markey bill with greater investments in clean energy to
compete with Asian challengers and accelerate our transition to a clean
energy economy. Why? Because Romm apparently believes the Waxman-Markey
proposal -- which would invest only $10 billion per year in clean
energy and energy efficiency, less than 0.1% of U.S GDP -- is sufficient to win the clean energy
race. It is not.
"Waxman-Markey would complete America's transition to a clean energy economy, which started with the stimulus bill," reads the title of a prominently featured post
on Romm's website, a claim he has repeated multiple times.
"Waxman-Markey would generate more clean energy action than any piece
of legislation passed by any country in the history of the world!" exclaimed Romm in another recent post as part of his consistent and ongoing cheer-leading for the legislation.
With China, South Korea and Japan all moving aggressively to corner the burgeoning global clean energy market, Asian competitors may dominate the clean energy sector if Congress doesn't act now to strengthen the Waxman-Markey bill with much larger investments in our own clean energy economy and fully support President Obama's energy education initiative, Norris and Jenkins argue.
Monday's op-ed comes one year after Breakthrough proposed a similar National Energy Education Act, calling for an effort on par with the original National Defense Education Act of 1958, which invested billions each year to train and empower the young generation that won the space race and invented the technologies that catapulted the U.S. and the world into the Information Age.
Breakthrough Institute is planning to release a full report on the USA-Asia clean energy race within the next few weeks, so stay tuned.
As President Obama put it in his Congressional address in February:
"We know the country that harnesses the power of clean, renewable energy will lead the 21st century. And yet it is China that has launched the largest effort in history to make their economy energy efficient... New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea. Well I do not accept a future where the jobs and industries of tomorrow take root beyond our borders -- and I know you don't either. It is time for America to lead again."
President Obama is right. However, as Norris and Jenkins warn in today's op ed:
"If America does not take immediate action to bridge its energy education gap - and if we fail to make substantially larger investments in our own clean-energy economy - we will effectively cede the clean-energy race to Asia. A decade from now, we may still find the burgeoning clean-energy economy promised by Obama and Democratic leaders. It will simply be headquartered in China."
You can read the extended version of the op ed below...
A recent study at NYU's Stern School of Business analyzes the returns on government energy R&D investments and comes to the conclusion that geothermal and wind power could, for a relatively low price, become cheaper than fossil fuel electricity in a matter of years.
The study used a well-known method of analyzing technology cycles that predicts learning curves for emerging technologies. This "S-curve" heuristic guesses that the performance of new technologies, plotted against effort (i.e. total money invested) is shaped like an S.
Early in the life of the technology, improvements are gradual as the basic properties are worked out and an effective design is formed. Next comes a period of rapid growth as the now-stable technology captures "process innovations" and economies of scale. Finally, the rate of improvement slows as the technology becomes mature and improvements become hampered by the dominant structure of the technology and its industry - until the potential emergence of a new competing technology with its own S-curve.
Although such an analysis makes some major simplifications, these S-curve cycles are well-documented throughout history in technologies as diverse as disk drives, steam engines, semiconductors, and automobiles (to name a few).
With the S-curve model in hand, the authors of the report sought to determine the curves of some major alternative energy technologies in order to project how much investment is necessary to reduce the their marginal costs.
A group of over 100 universities, professional associations, and student groups joined the Breakthrough Institute yesterday in submitting a letter urging the U.S. Senate to fully support the Obama administration's RE-ENERGYSE initiative.
PRESS CONTACT:
Jesse Jenkins (510-550-8930 x465 or 503-333-1737)
jesse@thebreakthrough.org
Teryn Norris (510-550-8930 x464 or 510-593-3716)
teryn@thebreakthrough.org
A group of over 100 universities, professional associations, and student groups joined the Breakthrough Institute Tuesday in submitting a letter urging the U.S. Senate to fully support the Obama administration's national energy education initiative. The initiative, named "RE-ENERGYSE" (REgaining our ENERGY Science and Engineering Edge), would produce thousands of highly-skilled U.S. energy workers and develop new energy education programs at American universities and K-12 schools.
The Senate is poised to reject the proposal in its FY2010 Energy and Water Development Appropriations bill by cutting the RE-ENERGYSE program's funding to $0 from the $115 million requested in President Obama's FY2010 budget. Mr. Obama announced the initiative in a speech to the National Academy of Sciences in April, stating, "The nation that leads the world in 21st century clean energy will be the nation that leads in the 21st century global economy... [RE-ENERGYSE] will prepare a generation of Americans to meet this generational challenge."
According to the Department of Energy, the program would develop between 5,000 and 8,500 highly educated scientists, engineers, and other professionals to enter the clean energy field by 2015, which would rise to 10,000 -17,000 professionals by 2020. The Technical Training and K-12 Education subprogram would create between 200 to 300 community college and other training programs to prepare thousands of technically skilled workers for clean energy jobs.
The letter, which was distributed to every Senate office on Tuesday, urged lawmakers to fund RE-ENERGYSE at the full $115 million request. "America is in danger of losing its global competitiveness and the [global] clean energy race without substantial new investments in STEM education," wrote the signatories, which included 53 colleges and universities and dozens of student and youth groups. "RE-ENERGYSE... will train America's future energy workforce, accelerate our transition to a prosperous clean energy economy, and ensure that we lead the world's burgeoning clean technology industries."
The 40th anniversary of the US moon landing highlights lessons for the emerging clean energy race. While there are key similarities and differences between the space race of the Cold War era and clean energy race of today, one thing is certain: the need for vigorous and sustained public investment to drive dramatic technological innovation.
This week marks the 40th anniversary of Neil Armstrong's moonwalk, the event which made the US the first and only nation to accomplish one of the greatest technological feats in human history. While space-race aficionados will argue that US-Soviet competition continued beyond the 1969 moon landing, for the layperson, Armstrong's 'small step' marked the end of the space race.
In 2009, the United States faces a new global competition, one that will have far greater implications for the future of our nation and the world: the clean energy race
The dual challenges of climate change and increased economic competitiveness are driving nations to develop new energy technologies that harness earth's abundant renewable resources. This technology is increasingly viewed as central to our economic fortunes with renewable energy and other clean technologies poised to be the next big growth sector. On several occasions President Obama has acknowledged that:
'The nation that leads the world in creating new sources of clean energy will be the nation that leads the 21st century global economy.'
We've heard calls for a New Apollo project for renewable energy before, and I will not discuss the merits of such a scheme here. Instead, on this historic anniversary, I will compare the space race of the Cold War era and the clean energy race of today--both similarities and differences are apparent, and both offer insights into America's current standing in today's clean energy race.
As Congress debates climate and energy legislation, Asia is moving rapidly to win the clean energy race. So warns a new article in the Washington Post that should serve as a wake-up call to America's leadership at the highest level.
Despite Obama's intentions to increase America's international competitiveness, the article reports that the amount and scale of investments in renewable energy programs coupled with ambitious renewable energy use targets are putting these Asian nations on pace to surpass programs set forth by both the U.S. economic stimulus package and the American Clean Energy and Security Act, the massive climate and energy bill recently passed by the U.S. House of Representatives.
Citing Breakthrough's Jesse Jenkins, the article warns:
"If the Waxman-Markey climate bill is the United States' entry into the clean energy race, we'll be left in the dust by Asia's clean-tech tigers," said Jesse Jenkins, director of energy and climate policy at the Breakthrough Institute, an Oakland, Calif.-based think tank that favors massive government spending to address global warming.
Building on the $30b down payment made in their stimulus, South Korea plans to surge ahead in the clean energy race with a $85 billion, five year public investment in clean energy technology and innovation.
This week, South Korea has upped the ante for green public investment as it continues to make swift progress toward becoming a clean-tech economy. Already, a staggering 80% of South Korea's $38 billion stimulus package has been earmarked for green investments.
And today, the South Korean government announced that it will invest $85 billion more over 5 years to encourage the growth of green industries and technologies. That's more than doubling South Korea's recent promise to invest $40 billion over five years in a "Green New Deal," and the equivalent of 2% of the East Asian nation's total GDP. If the United States were to invest a comparable share of it's national wealth in clean energy technology, the sum would total over $275 billion annually.
China's massive public investments in wind and other renewable energy technologies are edging the rapidly developing nation into the lead in the global clean energy race.
By mid-July, China will begin construction of a massive wind farm project in the northwestern Gansu province, at a total cost of US $17.6 billion. It will be China's biggest wind power station yet; according to local Development and Reform Commission official Wu Shengxue, it will reach an installed capacity of 20 GW by 2020. Eventually, the wind power capacity of the area is projected to reach 40 GW.
This development is the latest in what has recently been a major push by the Chinese to expand renewable energy use. Soon, Chinese officials are expected to reveal a new renewable energy stimulus plan of US $44-$66 billion per year over ten years, which will focus much of its resources on wind power. Under the plan, China will be on track to reach 100 GW of wind power capacity by 2020--more than eight times its current level.
By contrast, the American Clean Energy and Security Act invests only $6-12 billion per year in clean energy. As for the US "green stimulus," it includes a one-time clean energy spending boost of $112 billion--just half of China's $221 billion stimulus investment in green initiatives. Here's a sense of scale: If US investments in clean energy were on par with the Chinese in terms of percent GDP, we'd be spending $140-210 billion per year.
"If China is going to put in $440-660 billion [in clean energy development investments this year], how will $190 billion (actually under $130 billion) over 20 years put us in the leadership position?"
In new independent analysis released yesterday, the Southern Alliance for Clean Energy concludes, as Breakthrough earlier analysis has, that the the impact of the now severely-weakened Waxman-Markey renewable electricity standard on U.S. renewable electricity generation will be "effectively zero."
SACE also looks at the likely impact of the efficiency requirements in the now combined efficiency and renewable electricity standard (which the Alliance refers to using yet another new acronym: "CERES") and concludes it falls far short of President Obama's campaign pledge to reduce U.S. electricity consumption 15% by 2020 (below business as usual projections).
Although it may make the Wall Street Journal and Fortune magazine writers uncomfortable, the kinds of market failures that plague energy innovation, combined with a clear public imperative for transformative change, is a recipe demanding more active government engagement with innovation and industry, not less.
Marc Gunther, the excellent Fortune magazine and GreenBiz.com writer and fellow blogger at the Energy Collective, published a piece last week skeptical of the Obama Administration's new push to support the commercialization of advanced batteries in the United States and help accelerate the day when efficient plug-in hybrid electric vehicles are rolling off American assembly lines and parked in a driveway near you. At issue is $2.4 billion in new funding made available by the U.S. Department of Energy to support advanced battery commercialization and manufacturing.
Gunther quotes a Wall Street Journal article that shares his skepticism of this new funding, which will (in their words) "annoint" new technological and corporate "winners" -- something the Journal clearly sees as an unnecessary intrusion of government on free markets. Gunther agrees, writing:
"They've got a point, though, don't they? One unhappy result of all the bank bailouts of the fall is that $2.4 billion doesn't seem like much--hey, Citi alone has collected north of $45 billion, last time I checked--but a billion here, a billion there, and you're starting to talk real money. And if electric cars are going to be as big a business as a lot of people think, then why government investment should be needed at all? Particularly since we have a climate change bill making its way through Congress that will, at long last, if all goes well, put a price on carbon emissions--thereby giving low-carbon energy sources what they desperately need, which is a fighting chance to compete with fossil fuels on something resembling a level playing field. I thought the whole idea behind cap-and-trade (which I strongly favor) is to capture the externalized cost of global warming pollutants, and then let the market figure out how best to reduce greenhouse gas emissions: regulation that would have a light touch but a profound impact.
But no--with Waxman-Markey, CAFE standards, biofuels mandates, subsidies for "green jobs" and the like--the administration is giving us a belt and a couple of pairs of suspenders, too. Much as I admire Steven Chu, the energy secretary, do we really want to entrust him and his staff to decide which battery technologies are likely to succeed and which companies can most wisely spend that $2.4 billion?"
And as much as I respect Marc Gunther, I quickly took issue with this pretty classic set of objections to government involvement in technological development. I wrote this response, which Gunther dubbed "Defending Big Government," and was happy to post at his personal blog and at GreenBiz. It has now been syndicated at The Energy Collective and at Reuters as well. Here it is for Breakthrough readers:
Driven largely by strong economic growth in developing nations, world energy consumption will grow 44% between 2006 and 2030, according to the U.S. Energy Information Administration. Developing nations will demand cheap, abundant energy. The question remains: will it be clean?
World marketed energy consumption is projected to grow by 44 percent between 2006 and 2030, driven by strong long-term economic growth in the developing nations of the world, according to the reference case projection from the International Energy Outlook 2009 (IEO2009) released today by the Energy Information Administration (EIA).
The current global economic downturn will dampen world energy demand in the near term, as manufacturing and consumer demand for goods and services slows. However, with economic recovery anticipated to begin within the next 12 to 24 months, most nations are expected to see energy consumption growth at rates anticipated prior to the recession. Total world energy use rises from 472 quadrillion British thermal units (Btu) in 2006 to 552 quadrillion Btu in 2015 and then to 678 quadrillion Btu in 2030.
The technologies of the Industrial Revolution were invented in Britain because Britain was the only place where it was profitable to adopt them, argues Oxford scholar Robert Allen.
Robert Allen, an Oxford professor, has a new book out with Cambridge University Press titled "The British Industrial Revolution in Global Perspective." Allen has a precis up over at VoxEU which provokes a few thoughts about efforts to spark a new green global economy.
Allen argues that a combination of factors led to the industrial
revolution, among them international trade associated with the British
Empire, an educated and wealthy populace which created a demand for the
fruits of technology as well as the skills necessary to produce them,
and, crucially, cheap energy. Allen provides the following graph,
showing a comparison of energy costs across Europe in the early 1700s.
Driven by record-high gas prices in the first half of the year and the economic crisis that hit in the later half of the year, United States greenhouse gas emissions plunged by the largest amount in decades, according to preliminary data released today by the U.S. Energy Information Administration.
U.S. greenhouse gas emissions, which drive global climate change, fell to 2.8% in 2008 to 5.8 billion metric tons of carbon dioxide equivalent (CO2-e), the lowest level of emissions in any year since 2000. Total U.S. energy consumption also fell 2.2% in 2008, the EIA reports.
The American Clean Energy and Security Act is poised to give hundreds of billions of dollars in free pollution permits to the entrenched interests of the dirty energy past. Will climate advocates rally to ensure the value of the remaining permits is invested to create a clean, prosperous energy future?
As sweeping climate and clean energy legislation is readied for debate in the House Energy and Commerce Committee, detailsareemerging on the deals and compromises struck between the bill's architects, Congressmen Henry Waxman (D-CA) and Ed Markey (D-MA) and the group of reluctant swing members of the committee who hail largely from states reliant on coal and heavy industry.
The "breakthrough deal" struck between Waxman, Markey and the swing E&C Committee Dems will enable a full subcommittee markup of the American Clean Energy and Security Act (ACES) beginning Thursday and likely proceeding through next week (markup = votes on a series of amendments on the proposed bill followed vote to pass the bill out of (sub)committee). The deal apparently involves a series of concessions that either incrementally weaken the objectives of the bill or give free greenhouse gas pollution permits to utilities and heavy industry in order to blunt the impact of the proposed cap and trade program on these sectors of the economy.
Much ink was spilled last week around the release of the banks' stress test, and the reaction was largely negative. In case you missed the debate -- or if you're still looking for clarity -- here are a few key readings:
But very few offered as comprehensive an analysis as Nouriel Roubini at RGE Monitor. For those still trying to make sense of these tests, see his take below (for the full version you need a free account at RGE):
Already packed full of polluter giveaways, Australian Prime Minister Kevin Rudd promised to shelve the implementation of his proposed cap and trade system until July 2011 to quell concerns that it'll impact the Aussie economy. Is this a portent of things to come for cap and trade in the United States?
As we predicted back in March, Cap and Trade is going under Down Undah. Severaloutletsarereporting that Australian Prime Minister Kevin Rudd has promised to shelve the implementation of his proposed cap and trade system until 2011 in an apparent effort to quell concerns that the carbon pricing plan will impact the Aussie economy and shore up support for the controversial proposal in the testy Australian Senate.
To date, Rudd and his center-left Labor Party have already offered numerous industry-friendly concessions, including free allowances for major polluters as part of a so-called "global recession buffer." It wasn't enough to find the necessary votes, so today, Rudd announced even more concessions, including: more polluter giveaways; a delayed start for the program's cap and trade scheme, which won't go into effect until July 2011; and a fixed price for carbon emissions permits of just $10 (AUS) per ton of CO2 for the first full year of the program after that (through July 2012).
The United States will restore its standing as the most innovative nation in the world, President Obama declared at a major speech on science, innovation, and education policy. He pledged an order of magnitude increase in federal energy R&D spending and promised to support a new generation of young scientists, engineers and entrepreneurs as they help overcome pressing innovation challenges, secure the nation's prosperity and restore our economic competitiveness.
The United States will restore its standing as the most innovative nation in the world, President Obama declared at a major speech on science, innovation, and education policy delivered today at the National Academies of Science in Washington D.C.
The President pledged to implement policies that will dramatically ramp up the United States' overall spending (both public and private) on innovation and R&D, bringing it up to three percent of the nation's total economic output (GDP). President Obama also declared that it was his goal to see the nation once again have the highest percentage of college graduates in the world by 2020.
The stimulus bill's $21.5 billion investment in science and technology was the largest investment in R&D in the nation's history, Obama said. He promised that his administration would build on these investments by continuing to expand budgets for key agencies funding science and research (DOE, NSF, NIST), making permanent the federal R&D tax credit to encourage private-sector investment in innovation, and launching a major increase in funding to support the transformative innovation necessary to overcome the nation's energy and climate challenges.
The President's speech was also laden with references to the critical role innovation plays in securing the nation's prosperity and economic competitiveness and said he was committed to expanding science and innovation funding, in spite of (and even because of) the current economic crisis:
"At such a difficult moment, there are those who say we cannot afford to invest in science. That support for research is somehow a luxury at a moment defined by necessities. I fundamentally disagree. Science is more essential for our prosperity, our security, our health, our environment, and our quality of life than it has ever been. And if there was ever a day that reminded us of our shared stake in science and research, it's today.
If we want to pass policies that will truly catapult the United States into a clean and prosperous energy economy, slash global warming pollution, and make clean energy cheap and abundant, we need to pass the "Sherrod Brown Test."
For advocates of immediate and strong climate and clean energy legislation, there's one man we should all be paying close attention to: Senator Sherrod Brown (D-OH).
Senator Brown has spoken eloquently on multiple occasions about the power of clean energy technologies to revitalize the hard-hit industrial communities of Ohio and other Heartland states. Just this week, the Ohio Senator penned an op ed in the Capitol Hill paper Roll Call declaring that the time is now to enact strong climate policy:
"If we care about the world in which we live and the generations that will follow us, then we must no longer dismiss the lethal risks global warming poses to our planet. We must craft an aggressive strategy to combat global warming, and we must do it now. ... Inaction is not an option."
Senator Brown is still on the fence, and as the old saying goes, 'the devil is truly in the details:' if the details of climate and clean energy legislation make it something Senator Brown can support and even champion, then there's a decent shot of seeing the remaining swing Senators jump on board, putting 60 votes within reach. On the other hand, if Senator Brown can't support the proposal because he's not convinced it's in the best interests of Ohio or the nation, then kiss hopes of climate action this year good bye.
It's simple: if we want to pass policies that will truly catapult the United States into a clean and prosperous energy economy, slash global warming pollution, and make clean energy cheap and abundant, we need to pass the "Sherrod Brown Test."
In an editorial today criticizing the most recent Obama team announcement on bank recovery policy, the Wall Street Journal editorial board claimed it has supported bank restructuring for 2 years:
"The sounder strategy -- and the one we've recommended for two years -- is to address systemic financial problems the old-fashioned way: bank by bank, through the Federal Deposit Insurance Corp. and a resolution agency with the capacity to hold troubled assets and work them off over time. If the stress tests reveal that some of our largest institutions are insolvent or nearly so, it's then time to seize the bank, sell off assets and recapitalize the remainder. (Meanwhile, the healthier institutions would get a vote of confidence and could attract new private capital.)"
So the question must be raised: where is the Obama administration getting its advice on bank policy at this point, and how is it continuing to justify its opposition to swift nationalization? Even the Congressional Oversight Committee, in its latest April report, supports restructuring or liquidation of the banks. Geithners and Summers aren't stupid, so the only reasonable answer is politics.
President Obama is well known for bold proposals that have raised expectations, but his administration has shown a tendency for compromise and caution, and even a willingness to capitulate on some early initiatives...
"The thing we still don't know about him is what he is willing to fight for," said Leonard Burman, an economist at the Urban Institute and a Treasury Department official in the Clinton administration. "The thing I worry about is that he likes giving good speeches, he likes the adulation and he likes to make people happy." So far, he said, "It's hard to think of a place where he's taken a really hard position."
Can Obama simply not stand up to the political pressure from bankers pushing against bank restructuring? That's what former chief IMF economist Simon Johnson recently argued in his seminal Atlantic piece, "The Quiet Coup." Or is it largely an ideological problem, particularly with Geithners and Summers?
Nothing is 100% clear, but what's certain is that Obama is performing poorly on this issue, and unless his administration's performance improves soon, it could become the Achilles heal of his legacy. As Robert Kuttner, author of the best-seller "Obama's Challenge" and major Obama supporter, recently concluded an op-ed:
"I fear that these columns have been too polite. They have directed criticisms at Treasury Secretary Tim Geithner and national economic policy chief Larry Summers. Lord knows, they richly deserve the criticism. But let's not kid ourselves. The man they work for is named Barack Obama.
President Obama has promised to run an administration of unprecedented openness. And in some respects, such as the ground rules for spending stimulus funds, he has. But in the most important area of all, the financial rescue, the administration is making trillion dollar decisions relying on the Federal Reserve and a small Wall Street club of advisors, with no transparency or public accountability...
We were promised unprecedented openness. In the most momentous area of policy for getting the economy functioning again for ordinary Americans, we have instead unprecedented secrecy, designed by and for Wall Street. We expected better of Obama."
Congressman Henry Waxman, Chair of the House Energy and Commerce Committee says, "by and large," the revenues from climate and clean energy legislation should be reinvested in clean energy technologies; openly critiques President Obama's plan to return 80% of carbon revenues to taxpayers.
Congressman Henry Waxman says, "by and large," the revenues from climate and clean energy legislation should be reinvested in clean energy technologies, Bloomberg News reported Friday.
The statement is a marked improvement over Congressman Waxman's appearance on PBS' Tavis Smiley show last Monday, when he seemed to indicate that the primary driver of clean energy technology innovation and deployment would be the higher prices on dirty fuels set by proposed cap and trade legislation and made little mention of the critical role public investments in clean energy can and must play in accelerating the birth of a clean, prosperous energy economy.
Like Speaker of the House Nancy Pelosi's prior statements that cap and trade is designed to "pay for some of these investments in energy independence and renewables," Waxman's latest remarks could indicate a growing consensus among House leadership that carbon revenues should be primarily used to spur clean energy technologies and accelerate the transition to a clean, new energy economy.
Congressman Waxman, who chairs the House Energy and Commerce Committee set to draft climate and clean energy legislation over the coming weeks, was also openly critical of President Obama's proposal to send the bulk of revenues raised from a proposed cap and trade system back to taxpayers in the form of middle class tax cuts. Bloomberg quotes the Congressman as saying:
"I don't think that's the best use of it [carbon revenues]," Waxman said. "By and large" it should be spent on green technologies, he said, and part of it could be used to "help consumers with higher energy costs" and hard-hit industries, "especially coal."
The draft climate and clean energy bill circulated three weeks ago by Congressman Waxman and Congressman Edward Markey (D-MA) (who chairs the subcommittee taking the first crack at the bill beginning this week) made little commitment to the public investments necessary to spur clean energy innovation and accelerate the deployment of clean energy technologies. Waxman's statements last week indicate that commitment may be coming soon, as Markey and Waxman begin the real work of drawing up the climate and energy legislation they hope to send to the House floor by Memorial Day.
In a new draft report, the advisory board to the National Science Foundation calls on the government to "develop and lead a nationally coordinated research, development demonstration, deployment, and education (RD3E) strategy to advance a sustainable energy economy."
Much as the Breakthrough Institute has long advocated, the National Science Board calls for a major increase in federal funding to "[s]upport a range of sustainable energy alternatives, their enabling infrastructure, and their effective demonstration and deployment." The report calls for a ramp-up in clean energy "RD3E" activities - research, development, demonstration and deployment as well as education.
While it does not include a specific funding level recommendation, the National Science Board calls on the federal government to "support a national sustainable energy R&D program at a greatly increased and appropriate scale to meet sustainable energy technological and deployment challenges necessary to reduce energy intensity and carbon intensity in a timely manner."
ClimateProgress blogger Joseph Romm flat out ignores (some might say, denies) a wide body of expert consensus on energy innovation, including the positions of Secretary of Energy Steven Chu.
Is it just me, or is ClimateProgress blogger Joseph Romm working hard to marginalize himself as he reinforces an increasingly nonsensical position on energy innovation?
Yet again, Romm has recycled his assertions that no new technological development (beyond very minor improvements to existing technologies) is necessary to tackle the massive global energy and climate challenge. He repeats his efforts to label those who call attention to the scale and urgency of our energy innovation challenge and advocate major investments in energy technology as "climate delayer-equivalents." And Romm does so at the exact same time as he plainly ignores -- one might say, denies -- the wide body of evidence and expert consensus that dramatic innovation to spur both incremental and transformative developments in a whole suite of clean energy technologies is critical if we hope to overcome the climate and energy challenge and preserve a prosperous global society.
Perhaps the most striking indication of how at odds Joe Romm's "breakthrough's are totally irrelevant" position is with expert consensus is this: it directly contradicts the public statements of Secretary of Energy Steven Chu (who Romm lavished praise on when he was selected by Obama).
Japan and Germany, two somewhat unlikely nations, are now world leaders in solar energy installations and are home to booming domestic solar industries. The secret of their success: sustained public investments in both the development and deployment of solar energy technology. Each nation took a distinct path, and lessons can be learned form both.
A solar array installed along a highway near Freiburg, Germany. Japan and Germany, two somewhat unlikely nations, are now world leaders in solar energy installations and are home to booming domestic solar industries. The secret of their success: sustained public investments in both the development and deployment of solar energy technology. Each nation took a distinct path, and lessons can be learned from both.
Two distinct paths led two very different nations--Germany and Japan--to become global leaders in the production and installation of solar photovoltaic technology. Motivated variously by concerns over security, health, climate change and high energy prices, these nations are now home to robust and growing solar industries and solar panels can be found on hundreds of thousands of rooftops across these nations. However, differences in the public policies employed by each nation led to different results: Germany's solar industry is still dependent on subsidized power production costs, while Japan's investments to drive down the costs of solar energy have successfully created a domestic industry that has been independent of federal subsidies since 2005.
Since 1979, the Danish government, through intelligent, sustained public investment, has mobilized the nation in the development of next-generation wind energy. Today, a third of all wind turbines produced in the world are made by Danish firms, and wind power provides twenty percent of the nation's electricity.
Wind turbines, like those deployed across Denmark. Since 1979, the Danish government, through intelligent, sustained public investment, has mobilized the nation in the development of next-generation wind energy. Today, a third of all wind turbines produced in the world are made by Danish firms, and wind power provides twenty percent of the nation's electricity.
At the mouth of Copenhagen harbor, twenty giant wind turbines, arranged in a graceful arc, turn in the coastal breeze. This is Middelgrunden, Denmark's first cooperative wind farm and a symbol of that tiny country's impressive wind energy industry. Middelgrunden's turbines, installed in the late 1990s, were designed by Danish engineers, built and installed by Danish technicians, and generate enough electricity to power 40,000 Danish homes. Perhaps most impressively, the project is owned by over 8,500 cooperative members who share the profits of clean energy generation.
Middelgrunden is a result of Denmark's long and successful collaboration between private industry, individual citizens and, most importantly, strong government support. Since 1979, the Danish government, through intelligent, sustained investment, has mobilized the nation in the development of next-generation wind energy, and the results have been impressive. Today, Danish firms account for one third of the global wind power market and have driven the creation of a booming multi-billion dollar industry. In Denmark alone, 6,300 wind turbines pump energy into the regional grid today, providing roughly twenty percent of the nation's electricity. Wind power accounts for some 25,000 Danish jobs, and in 2007, the industry exported 4.7 billion euros worth of energy technology. Without a doubt, government involvement in the wind sector enabled this Danish success story.
The story of the PC is usually a romantic tribute to the unrestrained genius of lone inventors tinkering in garage workshops. Yet history shows that the active support of the federal government, particularly the U.S. military and space programs, was critical to the rise of Silicon Valley. Indeed, today's personal computer embodies a decades-long collaboration between private innovators and an active government.
An antique Apple II, one of the first commercial personal computers. The story of the PC is usually a romantic tribute to the unrestrained genius of lone inventors tinkering in garage workshops. Yet history shows that the active support of the federal government, particularly the U.S. military and space programs, was critical to the rise of Silicon Valley. Indeed, today's personal computer embodies a decades-long collaboration between private innovators and an active government.
The legend of the personal computer (PC), as it's normally told, emphasizes individual brilliance and initiative. The origins of today's industry titans like Microsoft and Apple are surrounded by romantic images of college dropouts tinkering away in garage workshops. This story is one of independence, of genius allowed to run free and inventions flourishing in the open market. Of course, the government is conspicuously absent here; as Bill Gates has said, "the amazing thing is that all this happened without any government involvement."
The PC legend may be compelling, but like all legends, it has more to do with fiction than fact. While the role of individual innovators can hardly be understated, the active involvement of the federal government - especially the military - was critical to the rise of Silicon Valley. Indeed, today's personal computer embodies a decades-long collaboration between private innovators and an active government.
The purchasing power of the federal government made the microchip an affordable and ubiquitous technology. Government procurement drove the price of microchips down by a factor of fifty in just a matter of years. Consider this: without these public investments in the semiconductor revolution, your iPod would cost $10,000 and be the size of a room!
A modern microprocessor. The purchasing power of the federal government made the microchip an affordable and ubiquitous technology. Government procurement drove the price of microchips down by a factor of fifty in just a matter of years. Consider this: without these public investments in the semiconductor revolution, your iPod would cost $10,000 and be the size of a room!
In 1958, a truly groundbreaking idea was finally realized in the laboratories of Texas Instruments (TI). For years prior, engineers had struggled to design circuits that could drive the increasingly sophisticated electronics of the time. Complex electronic processes required circuits involving many transistors, which had to be painstakingly soldered together, and the connections were unreliable and difficult to produce.
Jack Kilby, a TI engineer, realized that this connection problem - known to the electronics industry as the "tyranny of numbers" - could be solved by making all the transistors in a circuit, as well as their connections, out of a single piece of material. In the late summer of 1958, Kilby carved a complex circuit out of a single piece of germanium metal, and the "integrated circuit" - also known as the microchip - was born.
Other engineers, most notably Robert Noyce of Fairchild Semiconductor, quickly improved on Kilby's design, turning a prototype into a promising new innovation. But the future of the microchip was by no means certain. It took the buying power of the U.S. government to make the microchip into a mass-produced, affordable and ubiquitous piece of technology.
Powered human flight was invented in the United States, but by the First World War, America lagged behind in the emerging field of aviation. By mid-century, government support, ranging from R&D programs to deployment contracts, had restored U.S. expertise in aeronautics and laid the foundations for the modern aviation industry
The Wright Flyer on display in the National Air and Space Museum. Powered human flight was invented in the United States, but by the First World War, America lagged behind in the emerging field of aviation. By mid-century, government support, ranging from R&D programs to deployment contracts, had restored U.S. expertise in aeronautics and laid the foundations for the modern aviation industry.
American names like Samuel Langley and the Wright brothers loom large in the history of early flight. But just a few years after Kitty Hawk, America was already lagging behind other nations in the mastery of aviation. European governments poured resources into aeronautics over the early 20th century, compelled by the military needs of the First World War. In 1913, America ranked 14th in government spending on aircraft development, languishing in the company of Brazil and Denmark. Even as Britain, France and Germany made leaps and bounds in aviation design, Langley's "Aerodrome" lay dusty and abandoned in a Smithsonian lab.
By mid-century, however, the U.S. was well on its way to restoring its place at the forefront of civil and military aviation. U.S. factories were churning out better planes, ever faster and cheaper, and American researchers were pioneering radical improvements in aircraft design. Government involvement, from research support to deployment initiatives, was the critical catalyst for this remarkable turnaround, laying the foundations for America's modern aviation industry.
The single greatest solution to the world's interlinking energy, economic and climate crises is to once again harness America's forces of innovation to make clean energy technology both cheap and abundant. To harness this solution we must take a new look at the process of innovation and determine the best mechanisms to catalyze and accelerate technology development.
"It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply."
Technology is a cornerstone of American prosperity, the primary source of our economic competitiveness, and a constant presence in our everyday lives. From the 19th century's advances in manufacturing and transportation to today's cutting-edge developments in biotechnology and computer science, Americans have been world leaders in creating, producing, and deploying innovative technology. Nobel Laureate Robert Solow's classic 1956 economic model of productivity growth demonstrated that technological progress drove at least 80% of economic growth in the United States between 1909 to 19491, and innovation continues to be perhaps the most powerful engine of our prosperity.
Today, America and the world are in energy crisis. Energy prices are escalating, foreign energy dependency is increasing, global warming continues unabated, and all across the world there are billions of people who continue to live without access to energy. The single greatest solution to these crises is to once again harness America's forces of innovation to make clean energy technology both cheap and abundant.
But to harness this solution we must take a new look at the process of innovation and determine the best mechanisms to catalyze and accelerate technology development. This requires looking beyond both the mythos of the lone American inventor and the market fundamentalist ideology that has dominated American politics in recent decades. Instead, we must look closely at several key American technologies and unearth the historic and seemingly ubiquitous government investments that fueled their development.
In a 2009 report, the Breakthrough Institute illuminates the stories behind the invention and diffusion of ten technologies that are everyday facets of our modern lives and offers a new look at government involvement in technological development.
In a report released in 2009, the Breakthrough Institute illuminates the stories behind the invention and diffusion of ten technologies that are everyday facets of our modern lives and offers a new look at government involvement in technological development.
The conventional wisdom on climate change -- from Thomas Friedman to the country's largest environmental organizations -- is that cap and trade regulation and carbon pricing is the best way to promote clean energy innovation. However, a growing number of experts, including Newsweek's Fareed Zakaria, are challenging this assumption, recognizing the importance of direct, large-scale public investment to achieve developments in clean energy technology. The outcome of this debate and the correct emphasis on public investment and regulation may determine the course of U.S. and global climate policy.
Case Studies in American Innovation presents ten case studies showing that public investment and active government support has been one of the greatest forces behind the nation's technology development and economic growth. Indeed, public investment in the U.S. was largely responsible for railroads, airplanes, microchips, personal computers, and the birth of the Internet -- all of which drove long-term economic development. This evidence not only challenges conventional wisdom on climate policy, but also on national economic policy, which has been dominated for three decades by neoclassical economists.
Democrats should quickly follow President Obama's lead by shifting the focus of climate legislation from pollution regulation to bold government investment in the clean energy economy.
If Democrats want to win on climate policy, they must think fast and move quickly to regain control of the debate. Last week was the opening round of the national climate fight, and the Democratic Congress was nearly knocked out.
It began on Tuesday with the introduction of a major climate bill by Democratic Congressmen Waxman and Markey. The proposal made a fateful choice: it threw out President Obama's "Apollo" plan for investing $150 billion in clean energy and focused instead on meeting the demands of leading environmental organizations, emphasizing cap and trade regulation and a laundry list of electricity and efficiency standards.
Meanwhile, the response to climate legislation in the Senate was swift and harsh, with Republicans deftly maneuvering to secure the political high ground. Senator Thune (R-SD) introduced an amendment to the budget (which as originally proposed had included revenues from carbon cap and trade) declaring that any climate legislation should "not increase electricity or gasoline prices," which quickly passed 89 to 8. Senator Ensign (R-NV) then proposed an amendment stating that climate policy should not result in higher taxes on the middle class, passing unanimously (98-0). These votes effectively put all but a handful of Democratic Senators on the record opposing policies to raise the price of dirty energy -- the central purpose of cap and trade regulation, including the provisions at the heart of the Waxman-Markey bill.
What went wrong? The Democratic Congress made a critical mistake in following the direction of leading green groups like Environmental Defense Fund and the Natural Resources Defense Council. By tossing out Obama's energy investment plan and focusing on carbon pricing and regulation, Democrats allowed Republicans to quickly and easily frame the entire debate around increased energy prices and economic costs. That's a fight Republicans take up with relish -- and one they will surely win.
The Geithner-Summers banking plan has received much criticism (e.g. see Stiglitz and Johnson), but today Jeffrey Sachs issued one of the harshest critiques yet. Basically, the Geithner-Summers plan could allow banks to commit fraud by bidding on their own toxic assets and walking away with huge amounts of taxpayer money. Sachs sums it up here at the Huffington Post:
A new report from McKinsey & Co. warns a second major oil shock looms just over the horizon, ready to hit the global economy hard as soon as it begins to recover. McKinsey's analysts conclude that freeing our nation from oil price volatility will require "aggressive" investments in energy technology innovation, and there's no time to waste
McKinsey's analysts look at a variety of economic scenarios and warn that the global oil supply-demand balance will tighten as soon as the global economy begins to recover, as soon as 2010-2013 (depending on degree of global downturn). At that point, the global supply-demand situation will closely resemble the situation found in 2007 and the first half of 2008, when prices soared to over $140 a barrel, hitting pocketbooks and the global economy hard.
McKinsey predicts that a second oil price shock could cost the global economy $1.5 trillion or more, hitting us hard just as we're trying to stand back up again.
The draft Markey-Waxman climate bill is proof that the green groups leading the climate charge won't fight for investments in clean energy technologies and a new energy economy. Instead, they'll throw these critical investments overboard to preserve precious regulations and an increasingly compromised "cap" on carbon.
As Beltway insiders have repeatedly "reminded" me, this is "just
a discussion draft," and its final form may be much different. But just
looking at what's in this bill so far -- and just as important, what's not -- paints a clear picture of misplaced priorities and a bill in critical need of some "course correction."
Even a cursory read of this "American Clean Energy and Security Act" (ACES) -- and I've read far more of this 648 page bill than I'd like! -- speaks volumes to the priorities of the various parties driving this debate so far - namely the greengroups and big industry players already cutting deals as part of the U.S. Climate Action Partnership. This bill should be proof, once and for all, these leading greens will throw clean energy investments overboard to preserve precious regulations and an increasingly compromised "cap" on carbon.
In the clearest indication yet that a climate strategy requiring a high price on carbon is doomed to political failure, the Senate voted 89-8 to preemptively reject any cap and trade bill that increases consumer energy prices.
Republicans deftly succeeded in calling greens and Democrats on their bluff that cap and trade won't cost anything, winning yesterday an 89 to 8 vote on a resolution stating that any climate legislation must not raise gasoline or electricity prices. The Senate vote is timed to coincide with yesterday's release of a climate bill "discussion draft" in the House (more on that bill from the Breakthrough Blog coming soon).
The implications of this vote are that just eight out of 100 senators believe, and have the courage of their convictions, to openly state that fossil fuel prices should rise to deal with climate change. That is to say, there are only eight senators who agree with Thomas Friedman, EDF, NRDC, David Leonhardt, AEI, and all the others who believe that the most important, and perhaps only thing we should do to combat climate change and drive clean energy innovation is to set a price on carbon.
Economist James K Galbraith takes a close look at the economic and financial crises of today and yesteryear and confirms that when it comes to economic recovery, nothing short of an all out effort will get the job done. Check out his recommendations below...
Galbraith echoes and reinforces many of the criticisms and recommendations Breakthrough has been offering on the economy for the past six months: more public spending (a lot!); nationalize the banks so they can be cleaned up and re-privatized;
and ultimately, spark a new engine of economic growth in the birth of a
new clean energy economy.
Galbraith isn't shy either about criticizing President Obama and Treasury Secretary Geithner for stimulus. It's not bold enough,
it reflects the middle of the road economic consensus (and is therefore too timid), and it reflects a misguided attempt at
bipartisanship. Here's the choice quote there:
Second, the new team also sought consensus of another type. Christina
Romer polled a bipartisan group of professional economists, and Larry
Summers told Meet the Press that the final package reflected a
"balance" of their views. This procedure guarantees a result near the
middle of the professional mind-set. The method would be useful if the
errors of economists were unsystematic. But they are not. Economists
are a cautious group, and in any extreme situation the midpoint of
professional opinion is bound to be wrong.
Breakthrough's director of energy and climate policy, Jesse Jenkins, speaks about climate policy and politics on a half hour radio segment that aired March 27th on KPFA radio in the Bay Area. Jenkins joins Clear Air Watch's Frank O'Donnell to discuss the hard realities of climate politics and outline a policy strategy to make clean energy cheap that can overcome these realities.
Listen to the archived segment as streaming audio here (only available through April 10, 2009):
Obama continues to hone his post-environmental case for an investment and innovation-focused clean energy agenda. Speaking today at the White House, the President again pledged major investments to spur the development of clean energy technologies, a call echoed by Energy Secretary Steven Chu at a separate event today at a national laboratory in New York.
Both speaking to the public today at separate events, President Barack Obama and Energy Secretary Stephen Chu highlighted the administration's plans to make unprecedented investments in clean energy innovation.
Obama also promised a ten-year commitment to make the federal Research and Experimentation Tax Credit permanent in order to encourage greater private sector investment in the kind of innovation that truly drives long-term economic growth.
Investments in clean energy innovation offer the nation's "best strategy" for economic recovery and "the only route to the breakthrough technologies we need" to tackle the nation's pressing energy and climate challenge, says MIT President Susan Hockfield today, speaking at the White House
Investments in clean energy innovation offer the nation's "best strategy" for economic recovery and "the only route to the breakthrough technologies we need" to tackle the nation's pressing energy and climate challenge, said MIT President Susan Hockfield today at a speech delivered at the White House.
Hockfield, an outspokenchampion of clean energy innovation, spoke at the invitation of President Obama, who followed Hockfield's remarks with a speech outlining his plans to make unprecedented investments in clean energy technology and innovation.
"[S]ince World War II, by far the largest and most important source of US economic growth has been technological innovation, much of it springing from federally funded ... research," Hockfield said, echoing much of the work we've done at the Breakthrough Institute to advance public investments in clean energy innovation.
Facing both economic recession and pressing energy and climate challenges, clean energy innovation is critical, Hockfield argued:
"The R&D and technology investments that President Obama proposes have equally profound potential as an economic catalyst. That would be good news in any economy. But today, it provides a lifeline. ...
Not incidentally, these same investments [in energy innovation] also offer the only route to the breakthrough technologies we need to address the daunting challenges of energy security, rapidly accelerating energy demand and climate change."
In January, Teryn Norris and I cautioned about the "Danger of Green Stimulus" and called for "a shift from green jobs to a broader focus on green technology," a called echoed by Dr. Hockfield in the inspirational conclusion of her remarks:
"In hard times, America always invents its way to a brighter future. We have done it before, and we can do it again. For Americans out of work today, new "green jobs" will help. But for tomorrow, we need new green industries. And the only way to build those industries is by investing ambitiously now in basic and applied research."
Couldn't have said it better myself, Dr. Hockfield.
Since this is the thirdtime now we've highlighted Susan Hockfield's spot-on remarks at the Breakthrough Blog, I think it's time she joins Energy Secretary and Nobel laureate Dr. Stephen Chu and dons the (entirely unofficial) mantle of "Honorary Breakthrough Institute Senior Fellow." Read on for her full remarks...
Even with diminishing oil production, even with Obama in the White House, even with climate change, Shell is taking its money out of renewable energy because as of yet, it is simply not bolstering the firm's bottom line. It's that simple, and further proof of the clean energy price gap that must be closed if we want to overcome the global energy and climate challenge.
Shell might not have been a major player in clean tech, having never dedicated more that around 1 percent of its investments to renewable energy, or a paltry 1.25 billion dollars between 1999 and 2006. But as of this week, Shell has decided that it won't be a clean tech player at all. The reason? In the words of one exec, "We do not expect material amounts of investment in those areas going forward." That's according to a story posted yesterday in Reuters.
In other words, even with diminishing oil production, even with Obama in the White House, even with climate change, Shell is taking its money out of renewable energy because as of yet, it is simply not bolstering the firm's bottom line. And if it can't do that, then Shell can't stay in renewables if it wants to stay in business. It's that simple.
In a preview of the coming fight over cap and trade in Congress, Australian Prime Minister Kevin Rudd's carbon pricing plans are under fire from both Right and Left. He's stuck in a political dilemma that should be familiar to carbon pricing proponents everywhere: weaken his plan to secure passage but sacrifice environmental objectives, or strengthen it in line with Green demands and guarantee the plan's political failure. If only there were a way out of this dilemma...
It was with much fanfare and bravado that then-newly-elected Prime Minister Kevin Rudd of Australia announced at the 2007 Bali climate talks that his nation would abandon opposition to climate action and ratify the Kyoto Protocol. Better late than never, Rudd said and bravely declared, "I can unite the world on climate."
To deliver on that bold promise, Rudd directed his ministers to put together a cap and trade program to limit greenhouse gas emissions and put a price on CO2. The outline of an Australian "Emissions Trading Scheme" was rolled out last week with plans to implement a cap and trade program in June 2010 aimed at cutting emissions 5 to 15 percent below 2000 levels by 2020.
Now, the Australian Prime Minister's efforts to put a price on carbon and cap emissions are under fire from both Right and Left, and cap and trade is going under Down Undah.
Shellenberger interviews with Planet Forward TV and argues that rapidly transitioning away from fossil fuels in the 21st century demands large-scale public investment in technology innovation to make clean energy cheap. See the clip here, and look for this new show which premieres at 8 p.m. April 15, 2009 on PBS.
Dalton Conley, sociology professor at NYU and senior fellow here at the Breakthrough Institute, recently published an article in The Nation (to appear in the March 23rd print edition) about the US's continual slide down the UN's global Human Development Index (HDI) rankings. We still rank near the top in per capita income, but Conley argues persuasively that income inequality is the driving force behind the seeming contradiction that a nation can have high income levels and low measures of development. For interested readers, the American Human Development Project has an interesting website that goes into detail about these measures at the state and local level.
Please follow the link above for the article, or you can read it below:
written by David Douglas and cross-posted from Near Walden
Roger Pielke Jr. has an outstanding post titled US Mitigation Math where he shows the general sources and sinks of US energy and resulting GHG emissions. He also throws out some reduction scenarios and concludes that they cannot come close to meeting an emissions reductions goal of 14% below 2005 levels by 2020.
So he closes with a challenge: "... present a scenario combining decarbonization of the energy supply and efficiency gain that has a realistic chance of succeeding in meeting a 14% emissions reduction (below 2005) by 2020."
Since I'm living in a hypothetical world, I'm going to take a couple of liberties. First, I'm going to assume that I've either got access to all of the money on the first day of 2012, or I can get the average amount of $80B/year for a long time to come. Second, I'm going to ignore the physical and temporal realities of implementing my solutions - in my world I've got the full support of the nation and they'll do everything they can to implement these ideas. Finally, I'm going to conveniently ignore the emissions required to implement these solutions.
Solution 1: Buy Lots of Prius's
In this scenario I'm going to buy 25.6M Prius cars at an estimated 45MPG and replace 25.6M gas guzzlers at an average of 15MPG. At 12K miles/year each, we'll save 533 gallons of gas per car per year, and at about 20 pounds of CO2 per gallon, that's about 4.8 metric tons of CO2 per car per year. Grand total savings: 122MMt/year, or a 2% savings from 5991 MMt.
"I challenge readers to present a scenario combining decarbonization of the energy supply and efficiency gain that has a realistic chance of succeeding in meeting a 14% emissions reduction (below 2005) by 2020."
The mathematics of United States carbon dioxide emissions are not actually that complicated. The figure below from the U.S. Energy Information Agency shows that the 5,991 million metric tonnes (MMt) of carbon dioxide emitted by the U.S. came from 3 sources: coal, natural gas, and petroleum (see three inputs in the upper left of the graph).
Each of these fossil fuels, plus renewables and nuclear power make up the total energy consumption in the United States. Energy consumption is measured using a unit call a "quad" which means a quadrillion BTUs (British Thermal Units). In 2007 the United States used 101.4 quads of energy (data). This amount of energy can be broken down by source as follows.
The 15.2 quads of energy from nuclear and renewable sources resulted in negligible carbon dioxide emissions. The amount of carbon dioxide emitted due to each quad of fossil fuel energy depends upon the source, as their carbon intensities differ. For the analysis that follows I use the following values, distilled from the EIA information provided here in .xls.
Coal = 94 MMt Carbon Dioxide per Quad
Natural Gas = 53 MMt Carbon Dioxide per Quad
Petroleum = 65 MMt Carbon Dioxide per Quad
Thus, to calculate total U.S. carbon dioxide emissions simply requires multiplying quads of energy by carbon dioxide per quad and summing across the three fuels. This simple math results in the following:
This total compares quite well with the total of 5,991 MMt carbon dioxide reported for 2007 by EIA (see figure above). We can use this information to ask some straightforward questions about how an emissions reduction target of 14% below 2005 levels (5,095 MMt carbon dioxide) might be reached by 2020.
We can do a bit of hypothetical "stress testing" of these numbers, by asking, in theory, what sort of actions might lead to reaching the emissions reductions target. Before we do this, we do need to make a guess as to 2020 US energy consumption. The EIA projects that energy consumption will grow at a rate of 0.5% per year (calculated from information here). Because GDP growth is expected to be higher than this rate, it already builds in an assumption of gains in energy efficiency. But let's use the EIA estimate, which suggests that US energy consumption in 2020 will be 108.6 quads, of which 21 quads will come from renewables plus nuclear energy, representing a growth of about 40% on top of 2007 values. This leaves 87.2 quads to be produced by fossil fuels.
Here are a few examples of the effects of different hypothetical strategies:
1) What would happen if all coal consumption were to be replaced with natural gas?
Answer: In 2020 total emissions would be 5,110 MMt carbon dioxide, very close to the 2020 target.
2) By how much would renewables plus nuclear have to displace coal to reach the target?
Answer: The target could be reached if coal consumption were reduced by about 42%, and the displaced 9.2 quads of energy were replaced by renewables plus nuclear, implying more than doubling of renewable plus nuclear energy supply, to comprise 30% of all energy consumption.
If renewables alone (i.e., non-nuclear) are to carry the weight of displacing coal, then they would have to increase their role in consumption by a factor of 4.7 over 2007 values. If growth in renewable energy supply is restricted to solar and wind only, then these sources would have to increase their role in consumption by a factor of 80 (that is, e-i-g-h-t-y). The reason for this big difference is that biomass and geothermal provided about 6.4 quads of energy in 2007, whereas wind and solar only 0.4 quads. The Obama Administration's goal of doubling wind, solar, and biofuels production within 3 years may indeed be a worthwhile policy, but it is not consistent with a goal of displacing sufficient coal to reach the 14% 2020 target using wind and solar (and while biofuels have their own complexities as a policy issue, they are not really a substitute for coal in any case).
3) By how much would energy consumption have to be reduced to meet the target assuming no changes in the energy consumption mix?
Answer: Energy consumption would have to be about 85.5 quads in 2020, about equal to 1992 values when the US economy was 35% smaller than in 2007.
Some Comments on the Stress Tests
First, number (1) above is really not desirable if the goal of mitigation policy is ultimately a reduction in emission of 80% or more. The reason for this is that while natural gas is less carbon intensive than goal, it is still carbon intensive. Locking in a large natural gas infrastructure is not compatible with large emissions reductions. Consider that in the hypothetical case that all US fossil fuel needs were to be met by natural gas, then 2007 carbon dioxide emission would have been 5,375 MMt, less than observed in 2007, but not consistent with any low stabilization target.
Second, number (2) is theoretically promising but practically daunting. The following is worth repeating -- for wind and solar to displace enough coal to reach the 14% target by 2020 would require that it increase by a factor of 80 in absolute terms from 2007 production. President Obama's policy of a tripling in wind and solar energy supply in the next three years would leave a need for another increase by a factor of about 25 over the next 8 years if wind and solar are to displace sufficent coal to meet the target.
Third, with respect to number (3), while there is a lot of potential to exploit in increasing energy efficiency, to reach the 14% would require a reduction of US energy use by about 2 quads per year for the next decade. Assuming that policy makers and citizens want economic growth to resume, this is a Herculean task. If you factor in that the EIA estimates to 2020 already include a good bit of efficiency gain in the BAU scenario, the task could be even larger if these assumed gains do not occur or if economic growth happens at a faster rate than assumed.
In reality, of course, none of these "stress tests" would be applied alone; there would be a combination of all three approaches discussed above. However, I challenge readers to present a scenario combining decarbonization of the energy supply and efficiency gain that has a realistic chance of succeeding in meeting a 14% emissions reduction (below 2005) by 2020. I am not saying that it can't be done, but I am saying that I don't see how it can be done. The comments are open, have at it.
Setting an emissions target and timetable, allocating emissions permits, and then saying that the magic of the market will efficiently take care of the task is exactly the answer I'd expect if one doesn't have an answer. Markets can't make the impossible possible, and when they are used in such a manner, often have undesirable results.
Let's stop the use of fossil fuels, let's pass bold national climate legislation, and then let's begin the real job of re-powering our country with green collar jobs created by us, the climate entrepreneurs.
Power Shift brought together the youth climate movement and let us feel how powerful we are. More of us share a strategy of how to move forward and build our power. And we see how far we still have to go in building a clean energy economy and stopping global warming.
We must accomplish the two major goals of passing bold climate legislation and stopping dirty energy. And then we must become the builders of the clean energy economy by starting innovative businesses and working in companies that drive our goals forward.
We are going to pass bold national climate legislation in 2009, and it's going to take a lot of our work to make it happen. Our planet's ecology and energy supplies shorten the timeline to solve our energy problems, but our world's political processes give us an exact number: 41 weeks. The US must go to Copenhagen ready to lead, with all the moral conviction that our nation used to command.
GOP governors are divided on whether or not they will take money from the stimulus coffers that is intended to help shore up state budgets; this division points to a larger political struggle over the future strategy of the GOP
A story about the GOP's governors in Sunday's New York Times paints a picture of the current Republican Party through the prism of the stimulus debate. The future of the GOP could very well be determined by whether it is the centrist or conservative governors who map out the party's next steps:
Republican governors split sharply during the weekend over how to respond to the economic crisis, a debate whose outcome will go a long way toward shaping how the national party redefines itself in the wake of its election defeats of recent years.
The divisions were evident at the annual winter meeting of the National Governors Association here as the Republicans differed both in their approaches to their own states' budget shortfalls and in their attitudes toward President Obama's $787 billion stimulus package.
Many pundits and political reporters have postulated that any revival of the GOP will likely come from the Party's governors, who have the double advantage over their Congressional counterparts of 1) a smaller stage with which to experiment with new policy ideas that are necessary for any Republican rebirth and 2) the blessing of not having to go head to head with Barack Obama--who still commands a stunning level of public support--in the course of their daily work.
This rhetorical shift suggests that Obama recognizes that economic recovery will be a long process that will require sustained action and last deep into his first term.
The New York Timesreports that even as President Obama signs the economic stimulus bill into law today, he and his aids are indicating that the President has not ruled out the need for continued public spending to stimulate economic recovery:
The president said he would not pretend "that today marks the end of our economic problems."
"Nor does it constitute all of what we have to do to turn our economy around," Mr. Obama said at the signing ceremony in the Denver Museum of Nature and Science. "But today does mark the beginning of the end, the beginning of what we need to do to create jobs for Americans scrambling in the way of layoffs."
Obama's press secretary, Robert Gibbs told reporters on the way to the stimulus bill signing, "I think the president is going to do what's necessary to grow this economy." The Times reports that he then added, "[While] there are no particular plans at this point for a second stimulus package, I wouldn't foreclose it."
This rhetorical shift suggests that Obama recognizes that economic recovery will be a long process that will require sustained action and last deep into his first term. The President seems to be beginning to prepare the public for that reality as well.
In a recent talk in the Bay Area, environmentalist Vandana Shiva criticized the Gates Foundation for committing the sin of attempting to fight poverty in Africa through technological transformation.
Question: What is the "greatest threat to farmers in the developing world"? Is it (a) grinding poverty, or (b) global warming, or (c) low farm productivity, or (d) drought?
Well, according to noted environmentalist icon, Vandana Shiva, it is none of the above. Addressing a recent conference of the Slow Food Movement in San Francisco, Shiva claimed that the "greatest threat to farmers in the developing world" was none other than the Bill and Melinda Gates Foundation. Yes, Microsoft founder Bill Gates' Gates Foundation. The reason for such ire? Apparently, it is because the Gates Foundation has committed the sin of attempting to fight poverty in Africa through technological transformation. Through the Alliance for Green Revolution in Africa (AGRA), the Gates Foundation has sought to increase agricultural productivity in Africa through technology. This, some environmentalists believe in their infinite wisdom, represents the "greatest threat to farmers in the developing world"
The American Recovery and Investment Act agreed upon by the Senate and House Conference Committee contains $61.9 billion in energy-related public spending as well as tax credits and bond provisions expected to cost $20 billion over ten years.
The House of Representatives approved the conference report of the American Recovery and Reinvestment Act today, by a vote of 246-186. Not a single Republican joined Democrats in approving this version of the bill, which was the product of long negotiations between leadership in both the House and Senate, as well as a block of centrist Senate Democrats and Republicans who have taken control of much of the debate on the stimulus.
The public investment numbers in the stimulus have bounced around during the countless negotiations, so if you've been following this crazy game at home (all twelve of you), here's our detailed summary, provided without further comment, of the energy-related investments and tax provisions in the conference version of the stimulus.
Assuming the block of centrist Senators remains supportive, this will be the version passed into law by the Senate soon, as early as later this evening. Keep in mind that all spending will be spread out over roughly two years.
The President of MIT invoked innovations in electronics, aerospace and computing, all payed for by federal investment, as industries and growth sectors that provided decades of prosperity for the American economy.
In an op-ed in the Boston Globe today, Massachusetts Institute of Technology President Susan Hockfield championed long term federal investments in technologies and technology-based sectors as an engine of long term economic growth.
Hockfield invokes World War II and Cold War investments in education and fundamental and applied research and development, citing the many technological innovations--in electronics, aerospace, computing and communications and others--that directly resulted from these investments. These innovations, she points out, and created industries and growth sectors that provided decades of prosperity for the American economy. Hockfield writes:
With stimulus plans now in place, Congress and the Obama administration must plant the seeds of longer-term economic growth. Economists broadly agree that more than half of US economic growth since World War II has come from technological innovation, much of it stemming from federally funded, fundamental research. In the late 1990s, for example, US productivity grew at more than 3 percent per year. The revolution in information technology - a direct outgrowth of federally funded research - was pivotal to this extraordinary growth.
Citing the potential for future technological breakthroughs to help America overcome pressing national challenges, she continues:
Finding new energy answers may be the most pressing concern, given the implications of the current energy mix for the economy, national security and climate change. To help unleash an innovation wave in energy technology, the United States must go beyond the priorities of the stimulus package, which aims to create tens of thousands of "green jobs"; it must now invest in the kind of research and innovation that will ultimately spin-off millions of jobs by building a new economy. This includes investing in early- and later-stage research on the most promising technologies; funding new R&D centers to accelerate critical breakthroughs; equipping research labs with state-of-the-art instrumentation for advanced research, prototyping and demonstration of emerging technologies; and training a new energy talent base.
With debate over the stimulus coming to an end, progressives need to begin using the recovery bill as a springboard to advocate for a new model of governance that values sustained federal investments that can yield broad societal benefits and fuel economic growth. It is great that MIT's respected president is moving the discourse around creating a new progressive economic philosophy for forward.
The following is a question and answer question with Breakthrough Institute friend and ally Dr. Dan Sarewitz. Dr. Sarewitz is the co-Director of the Consortium for Science, Policy and Outcomes at Arizona State University. His thinking about how innovation happens, and how government and society can best foster technology innovation makes his insights invaluable to policymakers, engineers and others who seek to transform's America's energy system from its current fossil-fuel dependent form into a clean, low carbon system that utilizes a myriad of new technologies.
Adam: Dr. Sarewitz, your work on innovation policy has forced you to confront some hard truths about the limits of policy in driving technology innovation and deployment. Would you say that we know how to properly draft policy that stimulates the proper technology innovation necessary to transition to a low-carbon energy system in America?
Dr. Sarewitz: In fact we do understand how to stimulate innovation. What we don't understand is how to drive innovation down particular social paths to yield particular society-wide outcomes over particular time frames.
Adam: So setting a goal like "80 percent emissions reduction by 2050"--deciding on an outcome and a time frame--aren't exactly helpful to the job of decarbonizing an energy system?
Not in Europe it doesn't, according to this article in Der Spiegel (thanks RG and BP for the link):
Germany's renewable energy companies are a tremendous success story. Roughly 15 percent of the country's electricity comes from solar, wind or biomass facilities, almost 250,000 jobs have been created and the net worth of the business is €35 billion per year.
But there's a catch: The climate hasn't in fact profited from these developments. As astonishing as it may sound, the new wind turbines and solar cells haven't prohibited the emission of even a single gram of CO2.
We must work hard to turn centrism from a refuge for misers and penny pinchers into a platform for those who believe in good returns on wise investments.
After the American Recovery and Reinvestment Act passed in the lower chamber of Congress with absolutely no support from House Republicans two weeks ago, it was hard to predict what shape the debate would take in the Senate. But with perspective, the course of the Senate debate offers lessons for how we could secure investments in making clean energy cheap, and transform American politics in the process.
Just as it seemed that debate over the stimulus might stall, Ben Nelson, a Democrat from Nebraska, and Susan Collins, a Republican from Maine took the lead in an effort to bring a centrist approach to the bill in order to secure bipartisan support. What came out of this effort is a bill that slashes necessary and fast acting stimulus in the form of aid for state budgets and money for education, among other spending measures, while expanding tax cuts that will help the more affluent disproportionately to middle and lower class Americans.
In an in-depth proposal for new energy innovation, the Brookings Institution calls for an "order of magnitude increase" in federal energy R&D and the establishment of a new network of regionally-based "Energy Discovery Innovation Institutes."
The Brookings Institution officially unveiled a new proposal yesterday calling for "a new paradigm in energy innovation" at an event at the National Press Club in Washington, D.C. The proposal, which was developed for over a year and is one of the most in-depth proposals for new energy R&D out there, calls for an "order of magnitude" increase in federal energy R&D investment and proposes a new model for clean energy technology research and commercialization: establishing a national network of regionally-based "Energy Discovery-Innovation Institutes" (e-DIIs) to serve as hubs of distributed research linking the nation's best scientists, engineers, and facilities and effectively combining the forces of academia, government and industry.
Japan's stimulus missteps reinforce the argument that our recovery program should be focused on modern infrastructure--not traditional public works--in addition to spending on other national priorities such as energy and education.
An article in last week's New York Times delved into Japan's "Lost Decade," - the prolonged period of economic stagnation that hit the nation in the 1990s - and explores what lessons for U.S. stimulus efforts can be learned from Japan's efforts to restart their economy. The article's findings echo some of the argumentsBreakthroughhasbeenmaking regarding the stimulus debate. Japan's stimulus missteps reinforce the argument that our recovery program should be focused on modern infrastructure--not traditional public works--in addition to spending on other national priorities such as energy and education.
The Times story begins with a look at which types of public spending helped Japan grow out of its recession, and which types stifled recovery:
[I]t matters what gets built: Japan spent too much on increasingly wasteful roads and bridges, and not enough in areas like education and social services, which studies show deliver more bang for the buck than [traditional] infrastructure spending.
"It is not enough just to hire workers to dig holes and then fill them in again," said Toshihiro Ihori, an economics professor at the University of Tokyo. "One lesson from Japan is that public works get the best results when they create something useful for the future."
The political consensus surrounding climate policy is collapsing. If you are not aware of this fact you will be very soon. The collapse is not due to the cold winter in places you may live or see on the news. It is not due to years without an increase in global temperature. It is not due to the overturning of the scientific consensus on the role of human activity in the global climate system.
It is due to the fact that policy makers and their political advisors (some trained as scientists) can no longer avoid the reality that targets for stabilization such as 450 ppm (or even less realistic targets) are simply not achievable with the approach to climate change that has been at the focus of policy for over a decade. Policies that are obviously fictional and fantasy are frequently subject to a rapid collapse.
The current shrillness that has been put on display by many politically-active climate scientists and the feeding-frenzy among their skeptical political opposition can be explained as a result of this looming collapse, though many will confuse the shrillness and feeding-frenzy as a cause of the collapse. Let me explain.
What does the report mean by "reduce"? It means that some future emissions that might have occurred will be avoided. Emissions will therefore increase, just not as much as under some other scenario. The difference between that other scenario and the scenario implied by the stimulus package represents a "reduction" in emissions. Yes, you are reading that right.
Republicans have missed a crucial point about the new President's political views--Obama sees bipartisanship as a means for tackling issues facing America, not an end to work towards in itself.
The American Recovery and Reinvestment Act is not sailing through the legislative process quite as easily as many pundits had anticipated. The stimulus received no votes from House Republicans last week, and this week GOP Senators are joining the tumult. The bill has become embroiled in a few debates that are more political than economic, and is certainly demonstrating what President Obama means when he says he wants to bring a spirit of bipartisanship to Washington.
Yesterday, Senate Republicans proposed an incredible array of tax cuts and incentives--some trying to encourage consumers to make bigger purchases like tax credits for car and home purchases, as well as a big increase in plain tax cuts. The GOP has been in the media criticizing the spending aspects of the bill as not being timely enough or just generally less preferable then tax cuts (although it's pretty clear there's a healthy dose of ideology mixed into this economic-sounding argument).
Meanwhile, a bipartisan group of conservative Democrats and moderate Republicans have also come together to try their hands at reshaping the stimulus. The New York Timesreports:
NPR had a story today about the shifting conceptual paradigms of climate change and climate change solutions. Essentially a conversation with Dan Sarewitz, one of the leading thinkers studying innovation and technology policy, the piece gets at some fundamental truths regarding energy, society and the immense challenge of rebuilding the entire global energy system. The entire segment is about 4 and half minutes, and I would recommend listening to the entire thing. From the story:
Using energy "is really the metabolism of modern industrial society," [Sarewitz] says. "And changing that system is not about replacing a few technologies or advancing our level of efficiency along certain fronts."
It means creating a whole new basis for the global economy. Sarewitz is skeptical that politicians can deliberately manage a transformation of that scale, either through legislation or through climate treaties. He says, for starters, measures that will ultimately force everyone to pay more for energy are doomed both economically and politically.
"Politically, what you're asking people to do is to pay a huge upfront cost for benefits many decades down the road that they can't even anticipate or predict. And that is politically an extremely difficult sort of situation to manage," Sarewitz says.
...
"The economic dislocation that would be created by getting to that sort of level would absolutely be immense," he says. "And it's easy to be casual about that or it's easy to pin that kind of argument on conservative Republicans or on the executives of oil corporations, but nevertheless it is absolutely true you would be talking about something that would be destabilizing to global economies."
President Barack Obama has called for a global coalition on climate change mitigation:
To protect our climate and our collective security, we must call together a truly global coalition. I've made it clear that we will act, but so too must the world. That's how we will deny leverage to dictators and dollars to terrorists. And that's how we will ensure that nations like China and India are doing their part, just as we are now willing to do ours.
President Obama's call for nation's like "China and India" to "do their part" is sufficiently ambiguous to allow for some diplomatic interpretations, however, Obama's remarks probably best interpreted as a continuation of the long-standing US position on the inclusion of developing countries in any international mitigation agreement.
In the stimulus, Obama is essentially pledging to simply maintain business-as-usual growth in alternative energy production -- far from the transformative vision of his rhetoric.
By Adam Solomon Zemel and Jesse Jenkins. Also posted at HuffingtonPost
Barack Obama's stance on energy issues is not the easiest to discern. While Obama the orator's language regarding energy has been inspiring - he's eloquently spoken of the need take bold steps and transform America's energy system - it is still not clear that Obama the President's policy ideas are similarly transformative. For a perfect case study, let's look at the seemingly ambitious goal to double renewable energy announced as part of President Obama's stimulus and recovery plan.
Early on, before the Inauguration, Obama gave his address announcing the key components of his stimulus plan. For clean energy, the big punch line was this:
"To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years."
On the surface, this sounds like an ambitious and transformative goal. Doubling alternative energy production in just three years sounds like quite a feat. But, as usual, the devil is in the details, and it all depends on what Obama actually means when he says "double alternative energy production."
Stern seems to acknowledge that the technology price gap creates real problems for driving the deployment of clean and low carbon technologies both in America and abroad.
Last week, reporting on Hilary Clinton's appointment of Todd Stern as chief envoy on climate change, we raised questions about whether or not Stern, a former Clinton administration negotiator at the Kyoto Protocol climate talks, would be able to offer a fresh, new direction at the Copenhagen negotiations this December.
However, it seems that we missed an important piece that Stern last year published in the Washington Quarterly's Winter 08 edition. A picture in broad strokes of how Stern and his co-author William Antholis would construct an international framework for emissions reductions, the report shows how Stern's views have evolved since the Kyoto negotiations. He writes:
"This is no time to indulge in orthodoxies or in the kind of overextended discussion that marked too much of the six-year Kyoto Protocol negotiation."
A strategy aimed at making clean energy cheap in real, unsubsidized returns through strategic investments could generate the kind of growth the economy needs not just for the next 2 but 20 years.
There's an interesting, if frustrating, piece by David Leonhardt in the New York Times Magazine this week on the need for a strategy for long-term growth, not just short term stimulus. In it he makes a critique of green jobs -- and offers up pollution pricing orthodoxy.
"Green jobs can certainly provide stimulus. Obama's proposal includes subsidies for companies that make wind turbines, solar power and other alternative energy sources, and these subsidies will create some jobs. But the subsidies will not be nearly enough to eliminate the gap between the cost of dirty, carbon-based energy and clean energy. Dirty-energy sources -- oil, gas and coal -- are cheap. That's why we have become so dependent on them.
The only way to create huge numbers of clean-energy jobs would be to raise the cost of dirty-energy sources, as Obama's proposed cap-and-trade carbon-reduction program would do, to make them more expensive than clean energy. This is where the green-jobs dream gets complicated."
Some folks are surprised to learn that market mechanisms for carbon trading allow both the buying and selling of emissions permits. Clearly this sort of capitalistic behavior must be stopped if carbon markets are to work. The Guardian has the details:
Britain's biggest polluting companies are abusing a European emissions trading scheme (ETS) designed to tackle global warming by cashing in their carbon credits in order to bolster ailing balance sheets.
The sell-off has helped trigger a collapse in the price of carbon, making it cheaper to burn high-carbon fossil fuels and leading to a fall in the number of clean energy projects. The moves were seized on by environmentalists and other critics who have previously criticised the European Union's ETS for delivering more windfall profits for business than climate change.
The report suggests that $30 billion to computerize health records, expand wireless broadband to rural areas, and create a new smart electric grid--the existing technology investments in the stimulus--would yield 900,000 jobs.
A recent report by the Information Technology and Innovation Foundation, headed up by Robert Atkinson, indicates that the technology investments in the proposed stimulus plan could create close to one million jobs. This report provides a powerful political and economic argument that any available options for technology investment beyond the $37 billion already included should be exhausted as part of the stimulus.
The report suggests that $30 billion to computerize health records, expand wireless broadband to rural areas, and create a new smart electric grid--the existing technology investments in the stimulus--would yield 900,000 jobs. The New York Times wrote about this report on Monday, accurately noting:
"Beyond creating jobs, advocates say, government investment in these technology fields holds the promise of laying a lasting foundation for more business innovation and efficiency, while helping to create new digital industries."
The American Recovery and Reinvestment Act of 2009 passed through the lower chamber of congress today, putting the stimulus on track to be signed into law before Presidents Day Weekend. The entire Republican caucus was joined by 11 Democrats in opposition of the bill, passing with a vote of 244-188.
The voting record represents a setback to President Obama's vision of bipartisan governance. Despite meeting with the GOP caucus in order to field questions and hear concerns, Obama was unable to get any House Republicans to vote for the stimulus. TheHill.com reports:
Despite hinting that they might agree with Obama's initial call for a stimulus bill, Republicans in the end balked, and did so forcefully and unanimously, especially after the addition of more than $350 billion in spending by House appropriators.
It seems that Obama's decision to back off tax cuts that drew initial criticism from Congressional Democrats may have played a role in the complete lack of support from the Republican Caucus.
However, there are signs that a provision that has been added into the Senate's version of the stimulus, an adjustment of the alternative minimums tax, could succeed in garnering the votes of House Republicans when the bill arrives back for a final vote in the House. The tax code adjustment would hold down middle-class income taxes for 2009.
A version of the bill is currently working its way through the Senate, and is expected to garner more bipartisan support in its vote next week.
Read more about Breakthrough's thoughts on the stimulus:
So, for those who care about the future of the climate, that's our test: if we want climate policy passed in the US, we need to convince the "Technology Fifteen" that (a) our policy proposal is actually good for their states' economies (rhetoric aside), (b) the costs of compliance are manageable and contained, (c) it will invest heavily in clean energy technology development and deployment, and (d) it will not disproportionately impact different states.
When it comes to the geography of climate politics, it doesn't break down along the much-ballyhooed "red state/blue state" divide. It's really more about coal states vs. clean states, as John Broder reports in yesterday's New York Times. That's a rift that risks dividing Senate Democrats as climate policies move forward in the 111th Congress.
Will US "Climate Envoy" Todd Stern be prepared to advocate a fresh start on a new international climate framework, or will he dust off his old play book and continue to work towards an ineffective and illusory "hard" cap on emissions and a global emissions trading scheme?
Todd Stern will be named by Secretary of State Hillary Clinton as the U.S. State Department's special "Climate Envoy," news outlets reported today. Stern's climate credentials include a stint as a senior negotiator representing Bill Clinton's White House at the Kyoto Protocol talks, a role he'll likely reprise at the upcoming Copenhagen climate talks this December.
As a high level negotiator at Kyoto in 1997, Stern helped forge an international climate reduction framework that has been largely ineffective (see Michael and Ted's essay, "Scrap Kyoto", here [pdf]). Stern's appointment thus makes one wonder: has the Clinton-era negotiator learned the lessons of the past 12 years and is now prepared to offer a new direction at the Copenhagen talks? Or does Stern's appointment signal that the Obama administration's official thinking on international climate policy is still stuck in the winter of 1997?
Q&A: Ted Nordhaus:
You have written extensively about the impacts of rising social and economic inequality on American culture and society. What would you identify as the key drivers of rising inequality? Dalton Conley:
Wage inequality has increased for a variety of reasons, perhaps the most important being what economists call "skill-biased technological change" meaning that the new economy skews rewards heavily toward folks who have the most hi-end cognitive and emotional skills and credentials (i.e. educational degrees). But total inequality has increased also because of family dynamics: more and more families are two-earner households with high-earners marrying high-earners, thereby doubling (almost) household inequality.
Nordhaus:
Over the last few decades, up until the current recession, America has experienced both consistently high levels of economic growth and rising levels, by some accounts unprecedented levels, of economic inequality. How are those two phenomena related and do you think it is possible to have a high growth economy without rising levels of inequality? Conley:
The rewards of growth have been typically unequally distributed in the U.S. For instance, the last time we experienced inequality levels equal to contemporary ones was 1929, right before the crash. So it remains to be seen what the impact of the current bear market will be. There are, however, examples abroad of societies that have managed to obtain standards of living similar to (or better than) ours without such extreme inequality. Northern Europe comes to mind.
Nordhaus:
What do you think the impact of the current recession will be on social inequality? Are we likely to see declining levels of inequality and if so, what impact would you expect that to have on Elsewhere U.S.A? Conley:
I think inequality may lessen if the evaporation of all this abstract wealth holds fast. However, already public policy has been directed to restoring the old ways. Even if inequality declines, I still think folks will be haunted by economic anxiety. In good times we fear that others are doing better than us in relative terms. In bad times, we fear losing what we have in absolute terms.
Nordhaus:
You write more specifically about the ways in which rising inequality is self reinforcing. The more money affluent Americans make, the higher the opportunity costs of not working become. The resulting greater incentive for affluent Americans to work more, not less, then exacerbates income inequality all the more. Would you expect a recessionary economy in which income inequality was declining to result in a reversal of this dynamic? With the opportunity costs of family time and leisure declining, would you expect affluent Americans to take more time away from work and with their families? What impact might that have on Americans who work in the service sectors to which affluent Americans have in recent decades outsourced so much of their lives? Conley:
I could see a potential upside of more folks living a slower lifestyle--cooking at home more and outsourcing less childcare and other aspects of what was once family life; this might be an upside of a tepid economy. However, the monkey wrench in all this is the fact that we are burdened with enormous household (and national) debt thanks to our recent consumption binge. So most of us--thanks to credit card bills or mortgages that exceed the value of our homes--don't have the option of working less and enjoying simpler pleasures we had forgotten about. We are going to be working for our interest payments and feeling perhaps even more pressure to earn.
Nordhaus:
You write a lot about the ways in which modern life, and particularly the market, has increasingly erased many of the old modernist dualities - work and leisure, public and private, market goods and public goods - mostly in the negative; but aren't there real benefits to many of these trends as well, in terms of the creation of all sorts of technologies and new personal/professional spaces that allow for greater flexibility and control over when, how, and where we work, play, shop, and lived? Conley:
Definitely, but the skills we need to manage these are new. The ability to multi-task--i.e. attend to several streams of interactive data exchange while not losing any of those threads, is perhaps as important as perisistence, brains or other skills that are prized. I am not trying to be judgemental and make some nostalgic claim that things were "better" in the days of yore; rather, I am merely trying to describe a new social landscape that comes with plusses and minuses.
Nordhaus:
You also write about the rise of the intravidual - about the ways in which the collapse of so many of those dualities has led to a fracturing of the self. Is this really a new development? How is this different than Whitman's observation that we "contain multitudes" penned more than a century ago? Haven't we always contained multitudes and multiple selves? Conley:
That may be the case. However, I think back then there was still a clear(er) division between front-stage (i.e. public persona) and back-stage (our private self). Today with Facebook updates (and so on), public cell phone conversations, and the blurring of home and work, this dichotomy has eroded, combining with other dynamics I describe in the book, to lead to a greater--perhaps--fragmentation of our consciousness, I argue.
Nordhaus:
How do the social safety net and the institutions necessary for its provision need to evolve to address America's increasingly complex social and economic arrangements? Conley:
We have to face the fact that the social safety net devised in the 1930s (and even the 1960s amendments) were made in the context of a much less affluent society where household budgets were much more devoted to basic necessities. Today what we "need" is much greater (education, high quality health care, family care and so on) and often relative in nature (better schools -- better than what?). These are much more difficult to provide using the old-school social insurance model.
--- About the book:
Over the past three decades, our daily lives have changed slowly but dramatically. Boundaries between leisure and work, public space and private space, and home and office have blurred and become permeable. How many of us now work from home, our wireless economy allowing and encouraging us to work 24/7? How many of us talk to our children while scrolling through e-mails on our BlackBerrys? How many of us feel overextended, as we are challenged to play multiple roles-worker, boss, parent, spouse, friend, and client-all in the same instant?
Dalton Conley, social scientist and writer provides us with an X-ray view of our new social reality. In Elsewhere, U.S.A., Conley connects our daily experience with occasionally overlooked sociological changes: women's increasing participation in the labor force; rising economic inequality generating anxiety among successful professionals; the individualism of the modern era-the belief in self-actualization and expression-being replaced by the need to play different roles in the various realms of one's existence. In this groundbreaking book, Conley offers an essential understanding of how the technological, social, and economic changes that have reshaped our world are also reshaping our individual lives.
Pelosi's remarks seem to point to a new frame for energy politics which is focused on driving technology innovation and deploying low-carbon technologies.
Yesterday, in an article in House Speaker Nancy Pelosi's hometown paper, the San lFrancisco Chronicle, arguably the second-most-powerful person in the country made a significant break from carbon pricing orthodoxy in remarks she made on future cap-and-trade legislation.
"I believe we have to [pass a cap-and-trade bill] because we see that as a source of revenue," she said, noting that proposed cap-and-trade bills would raise billions of dollars by forcing major emitters to buy credits to release greenhouse gases. "Cap-and-trade is there for a reason. You cap and you trade so you can pay for some of these investments in energy independence and renewables."
This description of the reasons for enacting a cap-and-trade scheme is a remarkable--and laudable--shift in climate legislation discourse. Speaker Pelosi's remarks show an increased understanding of the importance of technology investment in reducing carbon emissions and securing energy independence.
Obama and other leaders beware: these numbers would seem to point to a very uphill battle for any proposal framed centrally or primarily as a "climate bill," ... Perhaps more crucially, any proposal that can be painted as bad for the economy will also most certainly run right into a brick wall of public opposition.
Public opinion on global warming lags far behind the rhetoric and apparent commitment shown by President Obama and other elected officials, according to reports today from Andy Revkin at the New York Times (in print and on his DotEarth blog).
"The latest in an annual series of polls from the Pew Research Center on people's top priorities for their elected leaders shows that America and President Obama are completely out of sync on human-caused global warming," Revkin writes, pointing out that "Mr. Obama stressed the [global warming] issue throughout his campaign and several times in his inaugural speech, mentioning stabilizing climate in the same breath as preventing nuclear conflict at one point."
If lawmakers who care about climate change want to achieve anything meaningful politically this year, they must ask themselves one fundamental question: will it pass the Recovery Test?
According to Talking Points Memo, GOP lawmakers are already laying the groundwork for efforts to delay climate legislation that could be introduced into Congress in 2009. As the GOP's strategy becomes clearer, so to do certain fundamental political truths likely to rule Washington politics for the coming year and beyond.
According to TPM, Republicans are laying seeds of dissent and dissatisfaction regarding Obama's new senior aide for energy and the environment, former Clinton-era EPA head Carol Browner:
"By holding up Jackson and Sutley [Obama's nominees for EPA chief and head of the Council on Environmental Quality], Senate Republicans are doing more than just signaling their discontent that they won't get to question and vote on Browner -- although Sen. Bob Corker (R-TN) suggests to the Times that Browner be called in for a "quasi-confirmation" hearing. They're previewing their strategy to knock down the climate regulation bill that Sen. Barbara Boxer (D-CA), environment committee chairman, will release later this year.
Here's how it might look: After Boxer's climate bill emerges, Republicans would immediately protest the involvement of Browner, a White House adviser who was never fully vetted by the Senate."
If you accept that making clean energy cheap should be the primary objective for climate policy, you become largely indifferent about the revenue stream for public technology investments.
As the prospects for high carbon pricing and cap and trade continue to diminish in the midst of a severe economic recession, some climate advocates are beginning to wonder: is there any alternative? In a recent op-ed we wrote for the Huffington Post, we argued:
Despite Obama's appointments, climate advocates are thus left to worry: is Obama really prepared to expend his political capital championing a policy that will increase U.S. energy prices in the midst of a recession?
Not likely. Until recently Obama voiced support for carbon regulation, declaring at a governors' climate conference in mid-November that his climate agenda "will start with a federal cap and trade system." But since then, as the recession has deepened, he has said little to nothing about cap and trade...
A serious alternative to cap and trade would focus on making clean energy cheap, prioritizing major, sustained public investments to drive down the price of green technologies as quickly as possible. This would require federal investments on the scale of $500 billion over the next decade to support and accelerate each stage of the energy innovation pipeline: research, development, demonstration, and deployment.
Matthew Yglesias, an author and writer at the Center for American Progress, addressed this issue directly in a post yesterday titled "No Alternative," where he argued there is no better alternative to carbon pricing:
Yesterday's Financial Times reported
the results of a new poll that asked people in a number of countries
about what priorities they'd like to see President Obama take on in the
international arena. There is a remarkable degree of congruence across
countries, with (no surprise) the economy in first place everywhere.
Climate change receives considerable support as well, certainly enough
for action to occur. Of course the key question is, what action?
Reading through the section in the stimulus devoted to energy, a glaring lack of spending and the absence of any sort of cohesive guiding framework both give reason for pause.
Barack Obama has finally been sworn in as the 44th President of the United States of America. For once, there is no debate among pundits or Capitol Hill insiders about what Obama's first priority will be as President. It seems like President Obama has been working on crafting an economic stimulus bill since November 5th, and now the real work begins in earnest.
Last week, despite reports from the Congressional Budget Office that our economy will likely face $2 trillion of lost production over the next two years, Obama rolled out a stimulus plan that only spends $825 billion to make up for this gap in production. A summary of the American Recovery and Reinvestment Act, released by the House Appropriations Committee, gives us the first detailed look at how this money will be spent and invested. Reading through the section devoted to energy in particular, a glaring lack of spending and the absence of any sort of cohesive guiding framework both give reason for pause.
Yesterday I commented
with a slightly raised eyebrow at comments made by Steven Chu,
President-elect Obama's choice to head DOE, on the future of coal. Dr.
Chu's comments seemed to reflect a much more conciliatory tone toward
coal as a key part of America's energy future. Today's raised eyebrow
comes after reading some comments by Henery Waxman, (D-CA), new
chairman of the House Energy and Commerce Committee, as reported in the
E&E ClimateWire:
As the coal industry awaits the first global warming
hearing of the House Energy and Commerce Committee today, many of its
members are asking, "Which Henry Waxman will show up?"
As it becomes clear that chasing an illusory "hard" cap on carbon emissions is a losing proposition, green groups must turn to new strategies to address the urgent threat of climate change.
The U.S. Climate Action Partnership (USCAP), a coalition of corporations including General Electric and Duke Energy in addition to environmental groups such as the Natural Resource Defense Council and Environmental Defense Fund, released a "blueprint" for climate legislation today. Essentially a Cap-and-Trade system, the legislative recommendation reads like a sequel to the Lieberman-Warner Climate Security Act.
The report was released today, and already the fallout has perfectly captured the existential moment that the major green groups are experiencing right now in their increasingly urgent efforts to address climate change on a national and global scale.
The defeat of Lieberman-Warner, the oil drilling debate, and global recession have awakened the greens to the immovable political truth that politicians will never enact, and the public will always reject climate legislation that significantly increases energy prices. This truth undermines the power and attraction to cap and trade that has made it the preferred legislation of climate activists for two decades.
It seems that Obama has heeded both Senate Democrats and the many economists who have spoken up, arguing that the President-elect must use each stimulus dollar to create as much wealth as possible.
Rumblings on Capitol Hill indicate that Barack Obama is backing off some of the more controversial - and potentially least effective - tax cuts that he had planned on fitting in to a stimulus bill. Democrats in both houses viewed the inclusion of so many tax cuts in Obama's stimulus plan as an overplay for Republican votes on a critical piece of legislation that could set the tone for the President-elect's subsequent four years in office.
According to the New York Times, Obama now plans to scale back some of the tax cuts and reinvest that money in clean energy incentives:
"After Senate Democrats complained last week that the tax package proposed by the Obama team did not focus enough on job creation or on the energy sector, lawmakers said that the incoming administration had agreed to drop a proposed $3,000 tax credit per new employee and to add more energy-related tax breaks."
As if you needed another sign of the political challenges facing a climate strategy centered around dramatically increasing the price of fossil fuels, here you have Dr. Chu, who understands the urgency of the climate challenge better than just about anyone, apparently recognizing that increasing energy prices during a recession just isn't going to happen.
Confirmations were held today for Energy Secretary-designate Steven Chu, Nobel laureate and director of Lawrence Berkeley National Labs (LBNL). Chu, a clean energy expert, is well known for turning the Berkeley Lab into a center of clean energy and efficiency innovation, forging the Berkeley Lab-British Petroleum partnership, sitting on the Copenhagen Climate Council, and winning a Nobel Prize in physics in 1997.
Suffice it to say that Chu has a deep and nuanced grasp of the many variables and drivers that contribute to global warming and he understands the scale of the challenge as well as anyone. As an administrator at LBNL, Dr. Chu worked to secure increased funding for research in clean energy and efficiency. And as an academic, Chu was able to speak candidly--and in fact, quite bluntly--about energy and climate issues.
Not any more! Dr. Chu has arrived inside the Beltway now, and already his tone is changing...
The graph below shows relative improvements in carbon dioxide emissions for four countries (from the U.S. Energy Information Agency) per national GDP (as measured in PPP terms and reported by Maddison). The data starts in 1991, selected because it is the first year that the EIA reports total emissions for reunified Germany.
The goal of a "stimulus" is to put the economy back on the path it was on before the downturn started. But this should not be the goal of Obama's economic plan--to return us to the time when college grads went to Wall Street to make a quick buck by trading back and forth on dubious mortgages.
Last week, Obama announced his stimulus package, a plan to spend nearly 800 billion dollars on infrastructure projects, modernizing schools and health records, expanding clean energy production, providing much-needed relief for state budgets, and extending tax cuts to 95% of working Americans.
By most standards, this is a big stimulus plan that could do a lot to bolster confidence, increase consumer spending and unfreeze credit. And yet, as Paul Krugman put it last week,
"To close a gap of more than $2 trillion -- possibly a lot more, if the budget office projections turn out to be too optimistic -- Mr. Obama offers a $775 billion plan. And that's not enough.
... The bottom line is that the Obama plan is unlikely to close more than half of the looming output gap, and could easily end up doing less than a third of the job."
The figure below shows the relationship of carbon dioxide emissions from the burning of fossil fuels (with data from the U.S. Energy Information Agency) with global GDP (as measured in PPP terms and reported by Maddison).
Yesterday, Barack Obama introduced some of the basic priorities and projects of the stimulus plan he will work to enact in his first few weeks as President. From traditional infrastructure projects like road and bridge repair to R&D in energy and health sciences, the package includes a wide range of public spending projects. In addition, the package also includes budget relief for state governments, and a $1000 dollar tax cut for 95% of working American families.
A recent poll commissioned by Politico showed that 79 percent of respondents favor Obama's proposal. This makes sense--unemployment is rising, home values are on the decline, and everyone is worried about their savings. But how deeply rooted is public support for a nearly trillion dollar stimulus? The same poll illuminates a degree of cognitive dissonance in the public's thinking about the economy that might undermine long term support for any next steps Obama takes.
In Northern Virginia today, President-elect Barack Obama addressed the nation, introducing a few basic goals and guidelines for an economic stimulus package that could cost as much as a trillion dollars.
Well aware that the large price tag on the stimulus, referred to as the "American Recovery and Reinvestment Plan," Obama included language about setting a foundation for economic growth now in order to return to a place of fiscal responsibility as the economy gets back on its feet. However, Obama was not shy about the need for the government to step in and spend, now:
"It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy - where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit."
On January 21st, immediately after assuming office, Barack Obama's first priority will be passing an economic stimulus package that will provide the economic kick-in-the-pants necessary to avoid the next Great Depression. There's nearly unanimous consensus that a major stimulus investment is needed to stave off economic disaster. How the next administration plans to fit this stimulus into a larger economic revitalization plan, however, is still unclear.
So far, there's plenty of focus on traditional methods of stimulus: tax cuts to spur consumer spending and traditional infrastructure investments to rebuild roads and bridges. Unfortunately, a short-term focus on roads and rebates won't be enough to stave off a new depression or put our economy back on track. Instead, we must focus on investments that can both act as short-term stimulus and improve the long-term productivity of the US economy. And that means investing in innovation.
As Janet Rae-Dupree wrote in the New York Times on Saturday:
The Efficiency Trap will be easy to fall into--it is politically expedient and it lies at the intersection of energy and economic issues that propelled voters to pull the lever for Barack Obama in the first place.
An efficiency stimulus plan seems at first glance to be an unadulterated good: it puts Americans to work, saves energy and money, and cuts greenhouse gas emissions, all with investments that should pay for themselves. But there are reasons to be nervous about the overwhelming focus on energy efficiency by green leaders and Obama's top energy and climate advisors. This narrow focus threatens to distract from the critical work ahead: overcoming the technology gap that exists between the current state (and cost) of today's clean energy technologies and fossil fuels.
An efficiency program will not create the new industries that the American economy needs to increase employment and productivity in the long term. An efficiency program will not create new exports that will bring global capital in to the American economy. And, equally as important as short term stimulus, America needs to have a plan to achieve those objectives as quickly as possible as well.
Obama's primary focus must be on making clean energy cheap -- what Google calls RE<C, renewable energy cheaper than coal -- not on reducing energy consumption.
By Ron Hira Assistant Professor of Public Policy, Rochester Institute of Technology
In introducing Bill Richardson as his Administration's Commerce Secretary, President-elect Barack Obama declared that Richardson would lead the charge to "create millions of new jobs that can never be outsourced." This kind of rhetoric shouldn't surprise anyone since Mr. Obama criticized the practice of companies moving jobs offshore often during the campaign and used it to his political advantage.
Alas, the reality is that Mr. Obama has not backed up his rhetoric with a plan to create and retain jobs here. His proposals on tax deferment and a 1% tax credit for so-called "Patriot Employers" would have an insignificant impact on what is a major structural shift in how the economy operates. And early indications are that Mr. Obama is not going to make either of these proposals, which would face fierce political opposition from companies, a priority. There are no other specific proposals from Mr. Obama that address outsourcing, and it's doubtful that any are forthcoming. His economic advisors are either involved in shipping jobs overseas as CEOs or have supported the practice in policy, think tank or academic positions.
We have to reform our strategy if we're to build the clean-energy Googles, the green-business Amgens, and green-job Dells of the future. We will only do that with government at our side.
Experience is a wonderful thing, but sometimes it leads to the wrong conclusion. We've all heard the chestnut about generals fighting the last war. Today in the cleantech world, the rules of government engagement that we learned from our proving grounds in information technology and biotech are hurting us. We have to reform our strategy if we're to build the clean-energy Googles, the green-business Amgens, and green-job Dells of the future.
When many of us built successful internet and computer companies we we avoided active government engagement. We didn't particularly want government as a partner or customer and certainly not as a regulatory agent. We thought government support was the kiss of death. When we did engage it was usually after our companies were large and profitable and then only after we perceived assaults like regulation, internet sales tax, export controls, intellectual property, and stock option accounting. Even today, if you are a software, computer, or internet startup, you can largely ignore the government other than obeying the law.
It is heartening to see the New York Times leading the way in this shifting discourse while placing public investment in its rightful place as a core solution to climate change.
The New York Times editorial board, including respected environmental writer Bob Semple, broke from its past focus on carbon pricing as the primary solution to climate change in an editorial about Obama's newly announced energy and climate team. The piece praised Energy Secretary-designate Dr. Steven Chu for his views on the climate challenge:
"What sets [Chu] apart is his fierce conviction that innovation is just as important as regulation, and that big energy problems, like climate change and the world's dependency on fossil fuels, will not be solved without major private and public investment in the development and deployment of nonpolluting technologies."
The proposed bailout is an obvious stall tactic that will amount to nothing in the long term unless more dramatic actions to restructure and reinvent the American auto industry are taken.
Last night, the US House of Representatives approved $14 billion in emergency
loans to keep GM and Chrysler on life support into the new year.
Senate Republicans are in revolt though and may block passage without new amendments to allow more dramatic restructuring of the company's debt.
"If we don't have the forced restructuring plans in place, many of us
don't believe that American car companies will come out of this in a
competitive position and the taxpayers' money will be wasted," Senator John Ensign told the Washington Post(R-Nev.). I hate to say it, but I'm forced to agree with Republicans on this account: $14 billion to prop up GM and Chrysler until Obama
takes office is an obvious half measure, a stall tactic that will
merely punt the tough decisions down the line another couple months.
While it may buy us a month or three, the proposed bailout will amount to
nothing in the long term unless more dramatic actions to restructure
and reinvent the American auto industry are taken.
Barack Obama made public today his intentions to appoint Steven Chu, director of the Lawrence Berkeley National Laboratory, as Secretary of Energy and Carol Browner, former EPA Administrator and current transition team advisor for energy and environment, as the administration's new "Energy and Climate Czar."
Breakthrough gives Obama's selection of Dr. Steven Chu a preliminary thumbs up, while the selection of Browner - who seems to see regulations as the primary driver of innovation - raises concerns about the kind of counsel Obama will receive from his new point person on energy and climate change.
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.
"The truth, however, is that Kyoto, as a means to reduce carbon emissions, has been like Monty Python's parrot, long dead, despite all the protestations to the contrary by its salesmen."
Dominic Lawson, columnist for the British newspaper "The Independent," issued a scathing condemnation of the Poznan Climate Talks aimed at renewing the Kyoto Protocol after 2012:
The truth, however, is that Kyoto, as a means to reduce carbon emissions, has been like Monty Python's parrot, long dead, despite all the protestations to the contrary by its salesmen.
You don't have to be a "climate change sceptic" to assert this unwelcome fact. Professor Gwyn Prins, Director of the LSE's Mackinder Centre for the Study of Long Wave Events, has been advocating measures to reduce what he sees as man-made climate change since 1986. He was a lead author on the Third and Fourth Assessment Reports of the Intergovernmental Panel on Climate Change, and on the Advisory Board of Friends of the Earth UK. For some years now, Prof Prins has been warning that the Kyoto approach is hopelessly flawed - and his unpopularity in the environment ministries of Europe has grown, precisely as his criticisms of their approach have been vindicated.
"This would be a bridge, not a bailout."
-Senator Chris Dodd, Democrat from Connecticut and the man in charge of drafting the auto industry bailout bridge package.
Faced with the news that more than half a million jobs were lost last month, politicians in Congress and both the Bush and Obama administrations have been jolted into action on a bill to bailout the auto industry, whose collapse, experts say, could result in more than three million lost jobs.
In testimonies last Friday, the CEOs of Chevrolet and GM said that without an immediate cash infusion they would not make it through the New Year. Ford, while not in such dire straits, still requires a nine billion dollar line of credit to avoid catastrophic collapse.
The US Government Accountability Office released an analysis of the Europe's cap-and-trade program, the ETS, noting that there were more efficient and cost-effective ways to drive the deployment of clean energy than cap and trade and carbon offsets.
Last week the United States Government Accountability Office released its evaluation of Europe's Emissions Trading Scheme, the European Union's cap and trade program designed to control greenhouse gas emissions. The GAO was asked to investigate the effectiveness and outcomes of the ETS in order to inform the ongoing debate on emissions reduction strategies in the United States.
A carbon pricing scheme has two basic purposes: to reduce carbon emissions and to drive private investment in low carbon technologies. However, according to the GAO, the ETS has failed to accomplish either objective in any measurable way:
"Against the background of the tempestuous year just reviewed, the European Union's climate policy steamed serenely on, like the Titanic towards the iceberg."
Towards the end (pdf), Prins summarizes his point about a new direction for an international agreement on climate change:
"Poznan has an opportunity to... put in place the foundations and essential architecture for a radically re-engineered climate policy for adoption at the Copenhagen meeting next...That architecture will not depend upon carbon trading in the present form; it will not lead with emissions targets tied to specific dates (although benchmarks are part of the sectoral strategy for reducing energy intensity); it will not focus upon international legal agreements that are dubiously enforceable, if at all."
Greens have begun to truly embrace investment in clean energy as a major piece of the agenda, but there is also a lot in the report that gives reason for pause.
Last week a coalition of the big green groups released a 400 page report recommending the actions that President Obama should take in regard to climate change. It is the first time that greens have all truly embraced investing in a clean energy economy, which is a positive step; but there is also a lot in the report that gives reason for pause.
Although the report's first recommendation is for a carbon cap and auction, it states that the revenue from this system should be used for investment and not for rebates. At the same time, the report names cutting pollution as a higher priority than the two other goals of the President's economic recovery strategy: "repowering America with clean energy" and "ending our dependence on oil ."
In the end, we'll have a new kind of American auto company - leaner and nimbler, and under a new class of managers - and a new kind of America auto industry.
The executives of General Motors, Ford and Chrysler made yet another trek to Washington DC this week - this time ditching the corporate jets to drive hybrid cars - and once again pled for a federal bailout to prop up their struggling companies. Up to $34 billion taxpayer dollars are apparently all that stands between at least two of the "Big Three" automakers and bankruptcy.
GM's executives told Congress the company will fail very, very soon unless it receives at least $12 billion in loans in the coming months. Chrysler warned they could go belly up by year's end without $7 billion in government aid. Even Ford, which is doing a bit better than its two Detroit brethren, is asking for an open, taxpayer-funded line of credit of up to $9 billion dollars.
All this means its time for Congress and the American public to face two basic facts.
At home over Thanksgiving, the state of the economy was on everybody's mind. It's always interesting hearing people express thoughts about economics. Everyone participates in the economy and deals with mortgages and credit scores and student loans, but very few have had formal training in economics. This leads to a distorted or incomplete view of how the economy functions beyond the individual level. For example, when I was talking with some friends on Friday night, they told me they had spent the day "stimulating the economy."
At first I thought this meant they had spent their Friday passing federal spending projects that created jobs and suspended PAYGO provisions in order to inject capital into the economy. Clearly, this wasn't what had happened. I quickly realized that they were talking about their Black Friday shopping.
The San Francisco Chronicle ran an op-ed by Teryn Norris today calling for major deficit spending on long-term clean energy investments to remake the U.S. economy. These strategic investments will create new industries, infrastructure, technology, and human capital to drive the U.S. economy for decades to come.
Henry Waxman (D-CA) defeated long-time Chair of the House Energy and Commerce Committee, John Dingell (D-MI), winning the gavel of the influential committee in a 137-122 vote of the House Democratic Caucus.
Representative Henry Waxman of California defeated Representative John Dingell of Michigan in the battle for the gavel of the influential House Energy and Commerce Committee today.
Over the past two weeks, the two senior Democrats waged one of the most hotly contested challenges for committee chairmanship in recent Congressional history. Waxman was announced the victor today after a 137-122 vote of the full House Democratic Caucus, ending Dingell's nearly 28 year reign as Chair of the committee, which has jurisdiction over several key issues, including energy, interstate commerce and health care.
With the election of Barack Obama, we are entering a new period of progressive governance in America, but not necessarily a new era of progressivism. Progressivism in this country is still defined by its opposition to conservatism. Opposition is easy. All a movement in opposition must do is deflate the reigning movement's intellectual principles and debunk that movement's narrative. All you have to do is criticize.
But now, as Barack Obama assumes the presidency, the time has come for progressives to create. We must build our own intellectual principles and or own defining narrative. This is the only way for a new progressivism to be born out of this political moment. We must build an identity that is more than "non-conservative."
President-elect Barack Obama's incoming Chief of Staff, Rahm Emanuel, called for major reforms to our nation's health care, financial, and energy systems at the Wall Street Journal's CEO Council today, challenging CEOs to embrace an ambitious reform agenda.
"When it gets rough out there, a lot of business leaders get out of the car and say, 'We're OK with minor reform.' I'm challenging you today, we're going to have to do big, serious things," Rahm Emanuel said, speaking at a forum convened to elicit corporate opinion on the challenges facing the new president.
The soon-to-be White House Chief of Staff said the Obama Administration sees the economic crisis as an opportunity to advance a suite of bold solutions that would put America back on track. "You never want a crisis to go to waste," Mr Emanuel said, before continuing, "and what I mean by that is it's an opportunity to do things you couldn't do before."
Mr Emanuel said the incoming administration would "throw long and deep," taking advantage of the economic crisis to advance wholesale changes in health care, taxes, financial re-regulation and energy. "The American people in two successive elections have voted for change, and change cannot be allowed to die on the doorsteps of Washington," he said.
Without clean, affordable and massively scalable energy sources, the world will be stuck in the Development Trap: we'll be forced to either sacrifice our climate and ecological security in the name of global development or condemn billions of global citizens to poverty in the name of climate protection.
The stark tone of the International Energy Agency's World Energy Outlook 2008 is a dramatic departure from their normally staid and frequently rosy projections about the world's energy future (I presented highlights from the piece in this proceeding post). The report's opening statement that current world energy trends are "patently unsustainable" will no doubt receive the most attention in headlines across the blogosphere and mainstream news. But in this post, I want to delve deeper into the key statement that follows it:
"It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to low-carbon, efficient and environmentally benign system of energy supply."
While the environmental community focuses primarily on the latter of those two concerns, the IEA appropriately recognizes that the future of human prosperity depends on our ability to tackle both challenges: decarbonizing the energy supply and providing ample and affordable energy supplies to power global development.
In short, the IEA confirms what is perhaps the central challenge of the 21st century: developing clean and affordable energy sources to power the globe.
The world's energy watchdog, the International Energy Agency, released their annual World Energy Outlook report today, and it starts out with a bang. The first paragraph of the IEA report reads:
"The world's energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable - environmentally, economically, socially. But that can - and must - be altered; there's still time to change the road we're on. It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to low-carbon, efficient and environmentally benign system of energy supply. What is needed is nothing short of an energy revolution."
Breakthrough Senior Fellow and Climate Science Expert Roger Pielke, jr., published an article in Nature explaining how the Nobel Prize winning Intergovernmental Panel on Climate Change consistently and significantly underestimate greenhouse gas emission predictions. Here he explains how the same inaccuracies show up in the International Energy Agency's World Energy Outlook, released yesterday.
Last spring along with Tom Wigley and Chris Green we published an article in Nature (PDF) arguing that the IPCC had underestimated the magnitude of the mitigation challenge. Today I'd like to illustrate how the IEA's World Energy Outlook, published yesterday, also dramatically underestimates the magnitude of the mitigation challenge.
The figure below is taken from the IEA's publicly-available packet of key graphs (here in PDF). I have annotated it as follows to illustrate how the IEA has significantly underestimated the mitigation challenge.
Forget incrementally improvements in fuel economy. It's time to radically re-invent the American automobile, recapture the competitive edge in automotive technology and ensure that the average car gets 100 mpg by 2020.
With a new bailout for Detroit on the table, there's a lot of talk about getting some "grand bargain" with automakers out of the deal: automakers will agree to some terms, like producing more efficient vehicles, in exchange for the loans.
In fact, the direct loans approved by the 2007 Energy Bill require auto companies to use the funds to retool factories that produce vehicles that get 25% better fuel economy than the average vehicle in it's class. That's a start.
But the real grand bargain, in my opinion, is to bust out of this incremental improvements mentality for fuel economy. We don't need incremental improvements, we need exponential improvements in fuel economy. Here's how it could work...
Breakthrough Institute is hosting an essay competition to answer the question: What will it take to reinvent the American auto industry? We will publish the best responses on our home page, www.thebreakthrough.org. Please submit your op-eds to oped@thebreakthrough.org.
In 2005, with GM and Ford teetering perilously close to bankruptcy, the Breakthrough Institute created the Healthcare for Hybrids proposal with Senator Barack Obama, Representative Jay Inslee, and the Center for American Progress, a plan which would have linked fuel-economy increases to relieving health care costs for U.S. automakers. Today, with the industry again on the brink of collapse, we invite you to join us is exploring a new question for the new era:
What will it take to reinvent the American auto industry?
We will publish the best responses on our home page, www.thebreakthrough.org. Please submit your op-eds to oped@thebreakthrough.org and paste or type your content into the body of the message; please do not send attachments.
This week, we'vebeenwriting about President-elect Barack Obama's powerful mandate to build a new, clean energy economy and revitalize our nation's ailing economy. A new post-election poll from Zogby Interactive confirms that Americans overwhelmingly view new investments in clean energy as critical to revitalizing America's ailing economy.
The poll found that more than three out of four voters - 78% - support clean energy investments to revitalize the economy, with 50% saying they strongly agree that clean energy investment is vital to the nation's economic future.
This is the second post in a continuing series delving into Barack Obama's opportunity to capture this political moment and provide a direction for energy policy and economic growth in the 21st century.Part 1 is here.
As Barack Obama assumes the mantle of President-elect of the United
States of America, we are witnessing an historic realignment of the
American political landscape. With the election of our nation's first
African-American president, record voter turnout, and a dramatically
redrawn electoral map, it seems that anything is possible now.
However, while Obama clearly has a new mandate to lead our nation,
electoral mandates are fickle and even this one could fade in time.
President-elect Obama has just 76 days to prepare for his inauguration.
Then the real work of governing will begin, and what Obama decides to
do in his first 100 days will either cement or erase the wave of
popular support the President-elect rides today.
His job won't be easy. On January 20th, President-elect Obama will
inherit the White House along with a plethora of pressing challenges
all competing for his attention. There will be no time for baby steps,
and President Obama must show bold and effective leadership right out
of the gate. Furthermore, while the economic crisis will remain his top
concern in the short-run, Obama cannot afford to ignore longer-term
challenges and must develop synergistic solutions that can tackle
multiple problems at once.
Thankfully, Barack Obama has stated that building a new energy
economy will be his top priority upon assuming office. If he fully
integrates this effort with his shorter-term economic stimulus plans,
Obama could effectively tackle several priorities - economy recovery,
energy security, and global warming - simultaneously. And getting this
job done right could cement Obama's electoral mandate and pave the way
for a truly transcendent presidency.
Energy policy has never featured more prominently in a presidential
election. Both candidates leaned strongly on their energy agendas
during the campaign, frequently highlighting their plans to increase
America's energy security, reduce energy prices and create jobs.
But while both
candidates agreed that energy was a high priority and rhetorically
supported an "all of the above" approach to new energy sources, the two
candidates proposals actually differed sharply.
Furthermore, Barack Obama
enjoyed the most success when his energy proposals were linked to his plans for economic recovery and couched in the rhetoric of job
creation. That makes Obama's historic victory a
clear endorsement of the President-elect's plans to invest in a new energy economy and argues for further integration of his energy plans into his economic recovery agenda.
Invest in a new energy system that will provide economic growth, increase national and economic security by reducing the amount we spend annually on foreign oil and take steps to mitigate climate change. These types of strategic investments could be the hallmark of Obama's domestic policy.
The election of Barack Obama, an African American liberal with a Muslim middle name, will be remembered for generations as a historic moment in American history. Made possible by the financial crisis and economic recession, President-elect Obama will enter the White House in January of next year with a mandate to take bold action to revive the global economy and put American on the path to economic greatness.
It's hard to believe today, but back in early September, it looked like Barack Obama would lose. Senator John McCain was pulling away in national tracking polls as the chant, "Drill, Baby, Drill!" echoed across the nation. Record high gas prices were the top issue of the campaign, and as Republicans' united around a clear, powerful (yet disingenuous) call for expanded oil drilling, Democrats, including Obama, fumbled for a response.
The recent bailout package passed by Congress, the Troubled Assets Recovery Program (TARP), was meant to restore confidence in the financial system and get money back in to hands of those who need it. Congress meant for the capital injections provided to the banks by the Treasury to be used for lending while these banks untangled toxic assets that were affecting their ability to gauge their own worth.
In a move that may not be seen as surprising to many critics of the reigning financial oligarchy, a recent New York Times piece divulges that many banks are using the initial injections of capital from the Treasury not to buck up the ailing small business sector, but to purchase their stumbling competitors.
For those with the biggest appetites, the free lunch continues! And why should we as taxpayers be surprised by this?
From the New York Times:
"On Thursday, at a hearing of the Senate Banking Committee, the chairman, Christopher J. Dodd, a Connecticut Democrat, pushed Neel Kashkari, the young Treasury official who is Mr. Paulson's point man on the bailout plan, on the subject of banks' continuing reluctance to make loans. How, Senator Dodd asked, was Treasury going to ensure that banks used their new government capital to make loans -- "besides rhetorically begging them?"
"We share your view," Mr. Kashkari replied. "We want our banks to be lending in our communities."
Senator Dodd: "Are you insisting upon it?"
Mr. Kashkari: "We are insisting upon it in all our actions."
And yet, the article continues, unlike Great Britain, which has mandated lending requirements in return for the cash, our own government has stipulated no such return. Instead, they have merely requested it. As a favor.
China's greenhouse gas emissions could more than double by 2020, according to a new report released by the Chinese Academy of Sciences.
Beijing has been reluctant to release official data on greenhouse gas from the nation's fast-growing use of coal, oil and gas. This new study from the state-run institute breaks that reticence and sends another clear reminder that China is where our quest for climate stability will be won or lost.
"To a significant degree, our planet's energy and environmental future is now being written in China," says the study's authors. And the only way that story has a happy ending is if China has access to clean and cheap energy sources to power its sustainable development.
Will greens let the defining opportunity of their movement pass them by, or will they join a broad progressive coalition that is already gaining traction and moving forward?
Over at CAP, Matthew Yglesias has coined the term neo-Hooverite to describe politicians like incumbent Senators Saxby Chambliss and Norm Coleman, or GOP candidate John McCain, who are proponents of reducing the deficit and cutting spending in a time of economic downturn. I completely agree with Yglesias' argument that focusing on a balanced budget in this economic climate is almost completely wrong headed. He captures the argument here:
"But if consumers cut spending at the same time businesses are reducing investment and state and local government are cutting spending and then the federal government also reduces spending well, then, everyone is going to be spending less and less. Which means everyone is going to be earning less and less. And things are just going to get worse and worse."
The financial crisis has caused many economists to reconsider their ideas regarding financial markets and the economy. Megan McArdle at the Atlantic puts it best:
"Economists all over the ideological spectrum are rethinking the lessons we thought we had learned from the Great Depression and the Japanese experience. As it unfolds, we will no doubt be seriously rethinking our model of the relationship between the financial markets and the real economy."
Despite the extension of the clean energy ITC/PTC, the economic downturn has had an especially bad effect on the clean energy industry, affecting its ability to get a foothold in the market.
On October 4th, when Congress passed the bailout, they also passed the clean energy production tax credit and investment tax credit (known collectively as the PTC/ITC) as a sweetener to secure the necessary votes for the bailout. This was a boon for the clean energy industry and its advocates, as the credits had been left for dead just weeks previously.
Keith, a Breakthrough Generation intern, wrote about the importance of these tax credits when the bailout passed:
Liberal consensus is beginning to form around the need to increase deficit spending in 2009 in order to help the economy as November 4th draws closer and large Democratic majorities in both houses look inevitable. Liberals and other leftists might be ready to spend, but what about those moderate Democrats who so often make a name for themselves as deficit hawks?
It has taken astoundingly little time for elite consensus to build around the federal deficit. Those who don't actively advocate deficit spending like Robert Reich have at least agreed that now is not the time to try and shrink the deficit. With the financial sector close to collapse, unemployment rising and credit frozen, it has become increasingly important for the government to continue to spend, not only to extend unemployment insurance, but also for things like the bailout and a second round of economic stimulus.
In fact, some organizations whose core principle is to advocate for a balanced federal budget have even ceded the point:
Back before Wall Street was burning, Main Street was already feeling the heat from another very real economic crisis: the soaring price of oil. The credit crisis and our slowing economy have driven oil prices down and the energy crisis out of our minds, for now. But that doesn't mean the threat - to our economy and our quality of life - is gone. If we ever want our economy to truly recover, we'd be wise not to forget the other economic crisis.
I know it's hard to remember, given the events of the past weeks, but back before Wall Street was burning, Main Street was already feeling the heat from another very real economic crisis: the soaring price of oil.
The credit crisis and our slowing economy have driven oil prices down from historic highs. As stocks plummeted in the past two weeks, so to did the price of crude, falling by more than half, down from it's July record of over $140 to under $70 this week. That's the lowest price in fourteen months, but it's still three times higher than it was just six years ago, and prices are still over $3.00 a gallon across the nation.
Still, as prices at the pump have receded and the focus on the banking bailout bumped "Drill Baby, Drill!" out of the presidential election spotlight, the energy crisis is now out of most of our minds. Unfortunately, that doesn't mean the threat - to our economy and our quality of life - is gone. Oil prices will rise again - they are already inching up again amidst news of a likely OPEC cutback in production - and when they do, they'll continue to drag down our struggling economy. If we ever hope to see real economic recovery, we would be wise not to forget the other crisis that contributed to today's ailing economy.
I'll delve into this more next week, but for now, enjoy the new article in this weekend's New York Times Magazine (online here) by Roger Lowenstein, entitled "What's Really Wrong With the Price of Oil," which takes a close look at the temporarily forgotten but very real threat oil prices pose to our economic wellbeing. Excerpts below the fold...
In 1993, Bill Clinton based his economic policies on the recommendations of Robert Rubin and focused on reducing the deficit. But in 2009, on the brink of recession, Robert Reich's emphasis on public investment might be the order of the day.
The current financial crisis has ended the chapter of Greenspanomics in American history with a resounding boom. With it go many assumptions about the benefits of deregulated financial trading, government inaction in markets, and an overall free trade mentality that has dominated economic policies on the left and the right since Ronald Reagan.
One democratic economic advisor who worked closely with Greenspan was Robert Rubin, who served as Treasury Secretary during both Clinton Administrations. Rubin was a proponent of the power of markets, and helped Greenspan engineer the deregulation of derivative markets in the 90s.
The leaders of eight Eastern European countries said the EU must balance the wish for cleaner air against "the need for sustainable economic growth" at a time of "serious economic and financial uncertainties."
In yet another sign of the political challenges carbon pricing faces in times of economic insecurity, AP reports that leaders from eight Eastern European countries are calling on the European Union to ease up on greenhouse gas reduction targets under the EU's cap and trade program, arguing that it would be too much of a burden on their nation's already stressed economies.
Since all 27 EU member nations must approve a proposal for it to become law, the eight European nations could derail efforts to enact the next phase of the EU's Emissions Trading System. If the EU can't bring these eight nations back to the table, forcing the Europeans to back off on their emissions reduction program, it could be a major blow to the United Nations climate talks scheduled to continue in December in Poland.
As responses to Michael and Ted's LA Times op-ed surface, it is clear that the climate change community is in a state of denial and ignorance about the import of the summer's energy debate, and the challenges and opportunities it has created.
In response to Michael and Ted's op-ed in the LA Times, the New Republic's environment and energy blog, The Vine published a post entitled, "The Green Bubble Hasn't Burst," by Dayo Olopade. This piece misses the thrust of Ted and Michael's argument, and, in an effort to counter it, proves them right.
Working backwards, my first objections with this post come at the end:
"I've argued that the derided June bill [the Lieberman-Warner Climate Security Act], which won 48 votes in the Senate, was clearly a two steps forward, one step back situation, and a good step forward at that."
A clean energy economic stimulus plan could truly be climate advocates' "Trojan horse," as columnist Eric Pooley writes. But NOT if they follow Pooley's advice about how to formulate that plan and advance a full-on, economy-wide Cap and Dividend program next year.
The economy is all that matters now, and climate advocates - and the
next President - would be wise to develop a strategic "Trojan horse" to
advance their ecological goals within the framework of economic
recovery. That's the thesis of "Save the Economy, Save the Planet," an article appearing in Slate last week by Eric Pooley.Â
Pooley gets the political analysis right, accurately diagnosing the
potentially incurable political malady that dooms the chances of expansive
carbon regulation in today's economic climate. But when it comes time
to prescribe the remedy, Pooley is off-the-mark, arguing that a Cap and Dividend proposal is just what the doctor ordered.Â
Sorry, but that's the wrong answer. Unfortunately, Pooley is not alone in his
prescribed solution, and it's time we took a close look at the
obstacles to climate action and see just how far Cap and Dividend gets
us (hint: it's not very far...)
A group of moderate Democratic senators is organizing into a force to be reckoned with on climate legislation. Climate and energy advocates should be advised: climate legislation could be controlled by centrists in the 111th Congress, and real issues around cost-containment and tech deployment are far from resolved.
A group of moderate Senate Democrats are joining forces to take the lead in climate legislation next year. We originally dubbed the group the "Technology Ten" in June, when the centrist Democrats sent a letter (pdf) to Senate Majority Leader Harry Reid and Environment Committee Chair Barbara Boxer indicating their reservations about the Lieberman-Warner Climate Security Act that had just been voted down on the Senate floor.
The groups' concerns revolved around the effect of expansive climate change legislation on energy prices, and hence on energy consumers, businesses and manufacturing and the letter centered around the need for stronger cost-containment measures and greater investment in technology innovation and deployment -- hence the moniker "Technology Ten." That group has now grown to include sixteen Democratic senators, and they are redoubling their efforts to take charge of the global warming debate next year, according to a recent article in E&E Daily (via Climate Progress; $ubs required for E&E Daily).
Given the fact that the new gang of senators represents almost one third of the Democratic caucus in the Senate, the "Technology Sixteen" will be a force to be reckoned with in the coming year.
The financial crisis can be partly attributed to good intentions translating into bad social policy. Will we learn our lesson and rethink the way we conceive of solutions to social problems?
I've spent the past few weeks learning about the financial crisis, but it has felt more like a crash-course in economics and society. One thing that stands out to me is that depending on who you read, and his or her ideological leanings, you will get a different explanation for what caused this crisis. But more often than not, the people writing for "typical-slightly-right-of-center-libertarian.blogspot" and the people writing for "left-wing-trending-socialist-progressive.wordpress" write about all the same causes, but then point to this one thing that made the crisis really bad. Everyone is more than ready to recognize the confluence of variables that caused our current problems, but depending on ideology, one of these variables was obviously wrong and a mistake.
Well, I am taking a stand here and now. As a self-proclaimed progressive (or according to facebook, "pragmatic progressive"), I am choosing to write about one of the causes of our financial crisis that I take the least issue with: trying to create pathways to homeownership for people lower down on the economic ladder who wouldn't be able to otherwise.
Scientific, economic and political realities at the end of 2008 fly in the faces of carbon-price advocates. As 2009 approaches, we must learn how to reduce carbon emsissions in a post-pricing world by learning what killed it in the first place.
Next January there will be a new President and Congress, and the American public will have at least a somewhat better idea of the success or failure of the bailout that passed last week. A multiplicity of variables, from the state of our economy, to the outcome of the election, to the nuclear program of Iran will affect the American political landscape heading into 2009. Over the next few months, tons of organizations and movements will begin to take stock of how these shifting variables might affect their missions and objectives. Few could benefit from this self-evaluation more than groups demanding federal action on climate change. The long time standard of these organizations, cap-and-trade, is becoming increasingly less relevant to today's political world.
The quest for a carbon price by these green groups met abject failure back in June with the failure of Lieberman Warner. As energy prices rise, our economy stumbles and credit shrinks, it seems less and less likely that hard caps on carbon will be a viable political vehicle. Carbon pricing orthodoxy has run headlong into political and economic realities in at least three major ways.
By passing a bill left for dead just weeks ago, today the U.S. House of Representatives decided the country actually ought to keep its burgeoning clean energy industry. But they didn't really mean to. The Production Tax Credit (PTC) for wind, the biomass/solar/hydropower PTC, and solar Investment Tax Credit (ITC) got their one-, two- and eight-year extensions, respectively. But they only got passed by being strapped to today's bailout bill, as a "sweetener" to aid its passage.
So how, exactly, does the key federal policy supporting new energy become just another packet of Splenda slipped into a murky, half-caff bailout bill?
In response to Michael and Ted's op-ed in the LA Times, Joe Romm criticized Michael, Ted and Breakthrough on his blog. This post is an open letter from Michael to Joe Romm, dated October 1, 2008.
Your strategy, as usual, is to shoot the messenger rather than confront the facts. This is what you did when you attacked Nature for publishing Roger Pielke, Chris Greene, and Tom Wigley’s “Dangerous Assumptions” about faster-than-expected emissions increases. This is what you did when the International Energy Agency came out and said that stabilization requires technology “breakthroughs” (their word). This is what you did when you attacked those of us who support adaptation as “delayers.” And this is what you are doing in response to the accumulating evidence that governments won’t raise the price of dirty energy to deal with global warming.
The failure of the bailout is attributable to the head-on, high speed collision of public, sound-bite political electioneering with back-door, complex Capitol Hill policy-making. Worried about the upcoming election and facing voters hostile to the bailout, a majority of Congress took the easy way out and failed to pass legislation critical to the recovery of our economy.
"We're all worried about losing our jobs. Most of us say, 'I want this thing to pass, but I want you to vote for it--not me.' "
-Rep. Paul Ryan, R-Wis.
After a weekend of frenzied negotiations between the Bush Administration and Congressional leaders from both parties, the first Congressional vote on a plan to bailout the financial sector and avoid a meltdown in the global economy failed. The final tally was 205 for and 228 against.
The failure of the bailout vote sent stock prices tumbling yesterday in their worst free-fall in two-decades. The Dow closed down 778 points yesterday, or nearly 7 percent, and global credit markets are in distress.
The bailout being kicked around inside the beltway this week will do little more than maintain the liquidity of financial firms and save Wall Street from collapse. If we want to do more than just correct our current crisis, then the federal government should commit to investing in a new energy system for the country and the people who will build it.
A large chunk of the reason we are in this current financial crisis is that investors were pouring money into the housing market, creating a bubble that inevitably burst. Investors put their money into sectors of the economy that are experiencing growth, and in the early years of this decade, the only sector that was experiencing consistent growth was housing.
The bailout being kicked around inside the beltway this week will do little more than maintain the liquidity of financial firms whose collapse could send devastating shockwaves around the global economy. Any regulation that is further imposed will serve to ensure that financial firms are a little more conservative in their leverage practices and their credit-swapping. However, in a sense, this only brings our economy back to square one.
The impending bailout is proof against market fundamentalism that the government has an active role in the economy. What happens these next few weeks will undoubtedly change the American society for decades. But how will those changes affect a push for investments in clean energy, and more broadly, American politics in general?
Conservatives and market fundamentalists have long criticized Breakthrough's investment-centered agenda by claiming that it is not the government's role to be an active player in the market. In an online debate on The New Republic this past January, Jonathan Adler from the National Reviewsaid that "government has an exceedingly poor record of picking winners and losers beforehand," a trope constantly repeated by conservatives as an argument that the government should not be investing in clean energy technologies. Newt Gingrich, participating in the same debate, entitled his argument "Let The Markets Work," arguing that the best way to transition to a clean energy economy was not through government investment but cash prizes for innovation to stimulate private investment in clean energy. This belief that the government has no role to play in the market has long been a major barrier to federal investments in a new clean energy system for America.
The worst financial crisis since the Great Depression. Collapsing banking giants. An unprecedented $700 billlion bailout for Wall Street. What does all this mean for me, for our energy future, and for the future of the American economy? Breakthrough's writers offer insights...
Breakthrough's ongoing special coverage of the Financial Meltdown:
Thought it couldn't get worse? Think again. Caving to Pressure, Congress Lets Bailout Fail and stock prices suffer their worst free-fall in two decades. Adam Zemel's got the scoop. (9/30/08)
Does the bailout mean the death of market fundamentalism? And what does it mean for our ability to truly invest in the future? Adam Zemel explores Where We Go From Here? (9/24/08)
Paul Krugman, in his most recent column for the New York Times, explains what's going on with our economy and the financial crisis. He divides his description into a 4-part causal chain.
Paul Krugman, in his most recent column for the New York Times, explains what's going on with our economy and the financial crisis. He divides his description into a 4-part causal chain:
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"1. The bursting of the housing bubble has led to a surge in defaults and foreclosures, which in turn has led to a plunge in the prices of mortgage-backed securities -- assets whose value ultimately comes from mortgage payments.
2. These financial losses have left many financial institutions with too little capital -- too few assets compared with their debt. This problem is especially severe because everyone took on so much debt during the bubble years.
The past eight years have seen a remarkable expansion of executive power and the near destruction of checks and balances in federal government. However, when it comes to this current bailout of the financial sector, we are teetering on the brink of a financial meltdown, and the Treasury needed to act to save us from the Great Depression, the Sequel.
Andrew Sullivan, over at the Atlantic, thinks so (my thoughts after the jump):
"In the last few years, we have seen the executive branch declare itself outside the law - in prosecuting a war on terror. The law against torture has been suspended. The balance between the executive and legislative branch has been dismissed by signing statements and the theory of the unitary executive. The executive has declared its right to suspend habeas corpus indefinitely, to tap anyone's phones without court warrants and to detain and torture anyone it decides is an "enemy combatant." In that sense, we have already left the realm of constitutional government in favor of a protectorate outside the law promising to keep us safe (but never from itself).
But this new move to create a de facto dictator for the financial markets, to invest a Treasury secretary with unprecedented powers to buy and sell at close to a trillion dollar level - with no oversight or accountability: this is a new collapse in democratic life and constitutional norms.
These measures are enabling acts of a sort. And they are what Plato feared. I have been derided as a hysteric for my fear about what this administration has done to the constitution and to ancient liberties. My current worry is that I haven't been afraid enough."
Financial meltdown is nearing the end of its first week and Congress is poised to consider $700 billion in emergency legislation. What are the implications for clean energy and climate? Here's my best guess.
1. Automakers will get their bail-out. The automakers want $25 billion, which looks like chump change against the $1 trillion bailout. It looks very much like they'll get it. The question is, what will we get for our $25 billion?
With the election looming and energy policy taking center stage in the run up to November 4th, partisan politics are too heated to advance any real compromise energy bill, says the bipartisan Senate "Gang of 20."
Politico and E&E News both report that the Senate Gang of 10 20 agreed to punt on their "all of the above" energy proposal until after the election. With the election looming and energy policy taking center stage in the run up to November 4th, partisan politics are too heated to advance any real compromise, a spokesman for Senator Kent Conrad (D-N.D.), one of the group's leaders told E&E ($ub req.)
"The thinking here is that the partisanship in Congress is stifling the debate we need to have on this. It is just too close to the presidential elections," said spokesman [for Sen. Conrad], Chris Thorne. Instead, Thorne said, the group plans to release a "statement of understanding" next week and then push actual legislation at a later time.
America's infrastructure is crumbling. But Felix G. Rohatyn and Everett Ehrlich's proposal for a National Infrastructure Bank could rebuild our country's public works. It is exactly the sort of innovative recommendation that our country needs.
The New York Review of Books' most recent issue has a great article called "A New Bank to Save Our Infrastructure," by Everett Ehrlich and Felix G. Rohatyn. It is exactly the sort of thinking we love here at Breakthrough--an innovative recommendation that involves creating an institution that would use public investment to direct private capital towards infrastructure projects. The article opens:
"These are rare times of ferment in one of the most neglected fields of public policy--the nation's infrastructure, or what used to be known as public works, including roads, mass transit, bridges, ports and airports, flood control systems, and much else. We have been confronted with spectacular and tragic evidence of the inadequacy of these facilities in the failure of the levees in New Orleans and in the collapse of the I-35 bridge in Minneapolis. More generally, a recent report by the American Society of Civil Engineers concludes that America's infrastructure overall is close to 'failing' and deserves a grade of 'D.'"
On September 24th, power companies with carbon emitting plants in ten states up the northeast will participate in the first Regional Greenhouse Gas Initiative auction for carbon credits. However, the price of carbon will probably not rise above the absolute floor price of $1.86. This effectively means that the "market signal" which will demonstrate the time to pour money into clean energy industries and technology will never arrive.
On September 25th, power companies with carbon emitting plants in ten states up the northeast (Maryland, Delaware, New Jersey, New York, Connecticut, New Hampshire, Massachusetts, Rhode Island, Vermont and Maine), along with financial institutions, environmental and other groups will participate in the first Regional Greenhouse Gas Initiative auction for carbon credits. This regional cap-and-trade program will go into effect on January 1st of next year, holding carbon emissions to 188 million tons annually until 2014, and then scaling emissions back 2.5 percent every year until 2018.
However, it seems that the forces behind RGGI have learned little from Europe's three year old Emission Trading Scheme. Unlike the ETS, RGGI will be auctioning almost all permits, instead of issuing the vast majority, as the ETS did. However, RGGI has its own pitfalls. The cap of 188 million tons was set in 2004, based on projections by energy experts and political pressure from utilities to keep the cap at or above current emissions levels. However, the projected 188 million tons was based on assumptions that carbon emissions would increase, but after 2006 they actually began to decrease due to more mild weather and a slowing economy.
When Nancy Pelosi's Democratic House passes a pro-drilling bill, you're looking at nothing less than a political earthquake. We're witnessing a fundamental realignment of the energy debate. Energy policy is now about bread and butter issues: jobs, economic growth and energy prices. Can clean energy and climate advocates adapt to the new political landscape?
Republicans successfully capitalized on the changing energy landscape to advance an expanded oil drilling agenda, pushing Democrats back with cries of "Drill Baby, Drill!" and seizing control of the energy debate for the first time since the 2006 election.
Democrats won a tactical victory yesterday, passing a true "all of the above" energy bill out of the House that authorizes expanded oil drilling and creates new renewable energy production requirements for electric utilities. Pelosi and the House Democrats forced all but 15 Republicans to vote No on a pro-drilling bill, calling their empty "we support an all of the above energy strategy" bluff.
But make no mistake: while this was a tactical win, when Nancy Pelosi's Democratic House passes a pro-drilling bill, you're looking at nothing less than a political earthquake. We're witnessing a fundamental realignment of the energy debate.
Yesterday, House Democrats pulled off a tactical victory in the energy debate over Republicans. But it is just that: a tactical victory in a political battle in which the Republicans set all the conditions. Setting a proactive agenda that responds to the electorate and provides a new vision for a new century will establish the Democrats as the party with real leadership for the 21st century. And the way to get started is with energy.
Royalty reform to ensure that oil companies are paying for the land that they lease from the government
Tax subsidy repeals on the "big five" oil companies, along with closing other loopholes to make sure oil companies are paying their fair share
Releasing almost 10 percent of the strategic petroleum reserve to help drive down gas prices at the pump
Extended and expanded tax incentives for renewable electricity and energy generation, energy efficient homes, buildings and appliances, and incentives for plug-in hybrid electric vehicles
Taking royalties from decade old drilling leases and invest in clean energy and energy efficiency technologies
A mandate for utilities to be providing 15 percent of their power from renewable sources by 2020
And, the kicker: expresses the sense of congress that the Renewable Fuel Standard should ensure that every region can be a producer of cellulosic biofuels from a vast array of feedstocks.
All applause for the rhetoric, but the policy agenda Thomas Friedman proposes in "Hot, Flat and Crowded" cannot create the political dynamic needed to create a clean energy economy. Friedman has embraced a narrative of restoring national greatness and blazing new paths -- but he holds fast to the orthodoxy of pricing carbon, a political non-starter in an environment where voters want lower, not higher, gasoline and electricity prices.
The biggest new book of the fall is Thomas Friedman's Hot, Flat and Crowded: Why We Need a Green Revolution, and How It Can Renew America. Here he is in a nutshell:
America is always at its most powerful and most influential when it is combining innovation and inspiration, wealth-building and dignity-building, the quest for big profits and the tackling of big problems. When we do just one, we are less than the sum of our parts. When we do both, we are greater than the sum of our parts--much greater.
I applaud Friedman's grand, inspiring rhetoric, but am disturbed that he has fallen back on the failed policy agenda of green groups.
Wheeler's report is important because it identifies the real barriers to passing legislation focused on regulating carbon emissions in order to address climate change. However, greens and environmentalists are looking through rose-tinted glasses if they think the fight to pass this type of legislation is anything but steep, even steeper than it is made out to be in Wheeler's work.
David Wheeler at the Center for Global Development published an econometric analysis of the Lieberman-Warner Climate Security Act's failure in Congress just a few months ago. The report, entitled, "Why Lieberman-Warner Failed," is an analysis of the June 6th cloture vote to end debate and the variables that could most easily predict each senator's individual yea or nay on whether to bring the bill to a vote over authorization. I read through the analysis and conclusions and overall found a mixed bag with some good conclusions about what is impeding climate legislation, but that underestimated the uphill struggle market-based carbon-regulation legislation would face.
The bulk of the paper is an analysis of the cloture vote, which failed to get its necessary 60 votes by a dozen, while 16 senators were not in senate to vote. Wheeler uses variables such as a state's proportion of power from fossil fuels, median state per capita income, senator's degree of political conservatism, senator's party affiliation, senator's gender, energy sector campaign contributions, and degree of risk from climate change-related disasters to see if any of these variables could predict with accuracy the senator's vote for or against cloture.
With Americans focused on energy prices as never before, a game-changing shift is occurring in the American political climate. The time has come for climate and clean energy advocates to adopt a new strategy and policy agenda. Next year will see the inauguration of a new president, a new Congress, and a new international agreement on global warming. The moment is far too urgent to fall on our swords for a cap-and-trade agenda developed in an entirely different political environment.
All of this paints a very clear picture of where Americans are at: they
are focused on their pocketbooks, grimacing every time they head to the
gas station to fill 'er up.
This new focus on energy prices is a game changer for the world of energy and climate policy.
In a debate at the Cato Institute, Shellenberger and Nordhaus argue that liberals and conservatives don't need to agree about the seriousness of global warming. We can all embrace investment in energy infrastructure, technology, and education for reasons that have nothing to do with climate change.
For 20 years, liberals and conservatives have been locked in a debate about the relative seriousness of climate change. Conservatives have either denied that it was happening or played down its significance, while liberals and environmentalists have tended to see it as ecological apocalypse meriting either extreme personal sacrifice or a supposed cost-free regulatory fix.
That debate is now undergoing a major shift. Conservatives like Jim Manzi, Newt Gingrich and others recognize that humans are affecting the climate and that something should be done about it. Liberals and environmentalists, like Joe Romm and most recently Al Gore, are beginning to recognize the political futility of peddling sacrifice, and have started emphasizing the need to make clean energy cheap. To be sure, both camps are still far apart in their view of global warming, with Romm seeing it as a future hell on earth and Manzi viewing it as little more than a rounding error. But if we fixate on these radically divergent views of the problem we risk missing some signs of agreement over what should be done about it.
All the polling points demonstrates the fact that Americans are ready to start drilling, seeing it as a tangible way to help bring down prices at the pump. Whether or not this notion is true, Republicans continue to score political points hammering the Democrats for standing in the way of a solution that voting citizens support. And, if Democrats want to not only help Americans, but come out as the political winners, it is imperative that Democrats accept drilling, but accept it on their terms, not on Republican terms.
by Jesse Jenkins and Adam Solomon Zemel, Breakthrough Generation
Democratic candidates from Obama on down have said they would be willing to compromise on offshore drilling--if presented with the right compromise. Many see this as a harbinger of energy-related political retreats to come ("if he's ready to open up the OCS, who's to say that Obama won't withdraw support for a cap-and-trade policy when he gets in office"). However, far from simple political posturing, a real compromise on off-shore drilling could pave the way to clean, affordable energy sources for the future, provide long term relief for consumers (i.e. American citizens), and make promises that politicians and the government can actually keep.
All the polling points demonstrates the fact that Americans are ready to start drilling, seeing it as a tangible way to help bring down prices at the pump. Whether or not this notion is true, Republicans continue to score political points hammering the Democrats for standing in the way of a solution that voting citizens support. And, if Democrats want to not only help Americans, but come out as the political winners, it is imperative that Democrats accept drilling, but accept it on their terms, not on Republican terms.
There's a simple relationship between energy and civilization: more
energy means more activity, growth, and prosperity. The defining
challenge of our era is to think responsibly about how we use energy,
as we strive to meet the demands of developing nations, struggle with a
failing economy, and mitigate climate change.
Part of the problem is that we've taken energy for granted. Energy
fuels everything we do. But we've outgrown our youthful years of
abundant oil, as a nation and as a planet. Richard Smalley estimated in 2004
that if the world population were to stabilize at 10 billion people,
they would demand 60 terawatts of energy in order to live prosperous,
secure lives--more than four times what we currently use. At the same
time, the oil that drove America's progress is becoming less and less
viable as an energy source. It is becoming increasingly clear that
the most sophisticated and effective option is not to simply throw more
energy, any energy, at the problem(s). So what now?
Written by Breakthrough Generation fellow Zach Arnold
We're all used to the sense of ecological urgency that accompanies the climate debate. Green activists work with the knowledge that the time for action is limited, as rising emissions push the global climate toward irreversible changes.But there's another ticking clock out there, one that may be about to run out: while the U.S. drags its feet, our competitors abroad are poised to wrest the upper hand in the new energy economy. And as usual, no competitor looms larger than China.
Last week, I blogged about China's wind economy, which is currently expanding at a pace somewhere between mind-boggling and out of control. Yesterday, the Climate Group released some highlights from their upcoming report on China's renewable economy. To wit:
China is already the world's largest producer of renewable energy, with 152 GW of capacity already in place in 2007 (although I imagine that may take into account some mixed-bag projects - e.g., Three Gorges)
As a percentage of GDP, China's annual investment in renewables is second only to Germany
China is set to become the world's largest exporter of wind turbines sometime in the next year
China's largest solar firms have a total value of over $15 billion
China has the world's second-largest installed solar PV capacity (820 MW)
Impressive figures, although of course, they pale in comparison to China's far larger fossil fuel numbers. 820 MW of solar power? China adds that much capacity in coal literally every few days. Nonetheless, what we're seeing now in China are the vital first stirrings of a new sort of energy. Renewable sources are finally coming into their own as substantial additions to the grid, and massive development is only going to speed the advent of clean tech, as turbines and PV panels become cheaper and faster to produce with every new factory that goes online.
I discussed several of the factors behind China's wind rush in my post last week, and most of them apply to clean tech efforts in general (although efficiency regulations, as I discussed, are an entirely different story). With China's strong, pro-renewable government incentives and breakneck pace of development, it's entirely plausible that China will become the world leader in renewables development sooner rather than later, gaining the upper hand in a lucrative and quickly growing global industry - especially considering that China's only potential major opponent is busy bickering over offshore drilling...
The Breakthrough Institute has recently released on what a comprehensive new national energy education policy might look like. We thought we'd provide a little background on how just powerful an investment in education can be.
"Ignorance," Thaddeus Stevens once noted, "is more costly than taxes." Wise words - and indicative of a kind of long-term thinking in which we only seem to engage in fits and starts here in the U.S.
Consider that federal financing of loans for higher education and workforce training is a relatively new development. 2008 marks the fiftieth anniversary of the National Defense Education Act, a bill that authorized $6.7 billion (2008 dollars) to improve access to and quality of education in strategic defense-related fields: science, math, engineering, technology, foreign languages, and area studies.
It's our last chance to tell Congress to extend the critical renewable energy incentives. After all, if we're spending so much time arguing about how to expand supplies of that old, dirty oil stuff, shouldn't America's vast and untapped reserves of clean, cheap domestic renewable energy be something we can all agree to develop?
It looks like Congress has one last shot to overcome partisan demagoguery and pass a bill that funds extensions of the soon-to-expire federal renewable energy incentives. The Senate is set to vote as early as tomorrow on S. 3335, a bill that extends the critical Production Tax Credit and Investment Tax Credit for clean, American renewable energy sources like wind, solar and geothermal energy.
There’s really only one option - bring more price-competitive clean technologies into the global marketplace (surprise!), and put policies in place to facilitate their diffusion into China and elsewhere.
Written by Breakthrough Generation fellow Zach Arnold
Over at the Environment and Energy blog, Bradford Plumer points the way to a great Guardianarticle on the Chinese wind boom. Wind installation there has been surpassing projections for some time, blowing through 6 GW earlier this year, and by year’s end China should lead the world in capacity. By 2010, one wind farm will add 3.8 GW - i.e., one third of total current US capacity - in its first phase of expansion. In other words, T. Boone Pickens has nothing on Chinese entrepreneurs (does anyone?).
Fast Company details the rise of the young eco-capitalists, savvy young environmentalists turning to the market to address global warming. Despite the building momentum behind the carbon-credit market, there is little confidence that the rules currently being written for a U.S. cap-and-trade market will actually reduce overall carbon emissions.
I read a very interesting article this morning by Anya Kamenetz at Fast Company on the rise of the young eco-capitalist. Savvy young environmentalists these days are apparently opting not to be forest rangers but rather saving the world through hedge funds, private equity, and consulting.
The global carbon-credit market is taking off, and to a great extent it's being driven by a new generation - a new breed of socially-conscious Ivy-Leaguer looking to leverage the private sector to address the global climate challenge. "The work," writes Kamenetz, "is prestigious, it's trendy, and it's surprisingly well paid." As one young woman interviewed for the piece notes, "I'm making five times what I ever thought I'd be making as a tropical forester." In the U.S., the carbon-credit market doubled in value in 2005, doubled again in 2006, and tripled in 2007. It's projected to reach $1 trillion in value by 2020.
Given then, the incredible momentum of the carbon-credit market model, and the incredible promise of the people driving it, "It should be cause for concern that not a single person interviewed for this article, on either the investment or the carbon-project side, would assert with confidence that the rules currently being written for a U.S. cap-and-trade market will actually reduce overall carbon emissions."
In the real world, the American polity and the American market are not ready for a tough carbon price. The best way to respond to the climate challenge right now is to massively expand the role of the federal government in researching, developing, and deploying clean technology.
This is a response to Max Epstein's guest post, "In Defense of Carbon Pricing: Why Clean Energy RD&D Isn't Enough." Our response is written by Breakthrough Generation fellow Zach Arnold.
Before anything else, I want to thank Max for his thoughtful post. His arguments have been a big help in clarifying our own thinking.
In my response, I'm going to try to define the problem we're trying to solve, and clarify the differences I see between a carbon price driven regime (as Max advocates) and an investment-led regime (as we're more fond of at Breakthrough). I'm then going to explore the political feasibility of a carbon price, and what a politically sustainable carbon price can and can't do to address climate change. In doing so, I hope to show that, for now, we can't rely on carbon pricing to drive the shift to a clean energy economy.
We've asked our friend, UMD student, and occasional Washington Post editorialist Max Epstein to contribute his thoughts on carbon pricing to the blog. Our response, by Breakthrough Generation Fellow Zach Arnold, is here.
In the wake of the failed Lieberman-Warner Climate Security Act, there has been a widespread reevaluation of whether Cap & Trade is the most effective strategy to avert catastrophic climate change. At first many promoted a carbon tax instead, but recently there has been a call to reconsider the central focus on pricing carbon itself. Following Lieberman-Warner's abrupt death in the Senate, Michael Shellenberger wrote that the new way forward should focus on making renewable energy cheap, not polluting sources expensive. In "Scrap Kyoto," Shellenberger and Nordhaus call for a massive public investment in clean technology research and deployment. Joseph Romm in Nature calls for massive subsidized deployment of existing renewable technology, relegating R&D to the "longer-term effort aimed at a new generation of technologies for the emissions reduction effort after 2040." However, such efforts would be insufficient without a price on carbon as well.
Last Saturday marked the first day that the U.S. spent $1 million per minute on oil. At the same time, the dollar is trading at a record low vis-a-vis the euro. Now, more than ever, it is time for a new American energy.
Last Saturday marked the first day that the U.S. spent $1 million per minute on oil. At the same time, the dollar is trading at a record low vis-a-vis the euro. Storm's a brewin'! According to Jack D. Hidary, chair of SmartTransportation.org and the Freedom Prize Foundation, these "milestones" indicate America's need to invest in a clean energy transportation future.
The NYTimes' Andy Revkin debates Joe Romm who claims the time for R&D has passed. But as Revkin knows, any push to transition to a clean energy future must put money across the board into Research, Development, Demonstration, and Deployment.
Andy Revkin has blogged today on a debate he is engaged in on the threads of Joe Romm's climateprogress.org.
It's almost unclear what they are debating over before I remember that
Joe Romm categorically rejects any calls for public investment in
energy technology R&D as the machinations of climate
deniers/delayers -- or at least as "misguided" efforts.
Romm is probably right that this is the Debate of the Decade as it concerns the best way to transition to
a clean energy system. Revkin posits that we need public investment in
R&D in order to make scalable and bring down the price of clean
energy. Romm himself admits that he has called for R&D for the past
twenty years, but claims that the time when this research would have
helped has passed. It is now time to focus primarily (if not entirely) on deploying the technologies currently on
hand.
Market Fundamentalism has infected both sides of the debate on climate change. It's time to move past the myth of "the Free Market" when it comes to energy technology and recognize the role of government leadership and investment in history's successful innovations.
A paper by political scientist Glenn Fong starts out with a 1998 quote by Bill Gates:
"The PC industry is leading our nation's economy in to the 21st century...There isn't an industry in America that is more creative, more alive and more competitive. And the amazing thing is, all this happened without any government involvement."
Fong goes to on describe the myriad ways the federal government--mostly through its Advanced Research Project Agency (ARPA) --was involved in nearly every aspect of the development of the personal computer, from the human-computer interface (HCI) to the graphical user interface (GUI), to picture icons, to computer networking. Bill Gates, brilliant as he might be, seems deluded about the history of the computer.
Tesla Roadster represents the American quest for excellence: no complaints or mediocrity, but the creation of something that's simply the best. In a car like the Tesla, America can certainly zoom gloriously into the future.
This post is part of our week-long Special Issue exploring ways to sever the link between transportation and oil by electrifying transportation. Stay tuned for more...
The coolest car of the 21st Century doesn't go "vroom!"...
...it goes "whizz!"
Tesla Motors,
an innovative electric car start-up straight from the heart of Silicon
Valley, is now producing its 2008 Roadster, an all-electric sports car
than can go 0 to 60 in under 4 seconds. High-tech and emissions-free,
the Roadster celebrates a future that is not only sustainable, but sexy
and fun. (Sports car enthusiasts may find it disconcerting, however,
that when you hit the gas, the only noise from the engine is an
electrical "whizz!")
As automakers scramble to respond to rapidly shifting customer preference driven by spiking fuel prices, we now have an unprecedented and urgent opportunity to help Re-charge Detroit!
This post is part of our week-long Special Issue exploring ways to sever the link between transportation and oil by electrifying transportation. Stay tuned for more...
Toyota Motor Company announced today it's intention to retool two U.S. manufacturing plants currently building giant, full-size trucks and SUVs to instead build hybrid-electric vehicles. Meanwhile, Ford is expected to reveal more details this month on their plans to retool several plants to build the more fuel efficient models they currently sell in Europe.
As automakers scramble to react to rapidly shifting customer preference driven by spiking fuel prices, isn't it time for the United States government to make investments that help re-tool and re-charge the American auto industry?
As China's car culture comes of age in a post-cheap oil world, will the rapidly developing nation leapfrog to new, innovative transportation technologies like plug-in hybrids and electric vehicles? Do they have another choice?
This
post is part of our week-long Special Issue exploring ways to sever the link
between transportation and oil by electrifying transportation. Stay
tuned for more...
There may be a pretty mournful tune
coming out of Detroit these days, but over in China, everyone's gone
car-crazy. Consider this: in 2000, the private vehicle stock numbered
about ten million automobiles. A McKinsey report out in June projects that ten million cars will be sold in 2008 alone. China is now the second-largest automobile market in the world after the U.S.
China's romance with the automobile is reminiscent of America's back
in the mid-twentieth century: a personal car means comfort,
convenience, and tangible proof of newfound wealth to the millions of
Chinese entering the ranks of the middle class (the New York Times ran
a piece on this phenomenon back in April). The big difference is that China's car culture is coming of age in a post-cheap oil world.
By plugging in to new, clean American energy sources we can re-charge our economy, secure our energy future and win true Energy Freedom. This series of posts explores the power of Electrifying Transportation.
Breakthrough Blog's week-long Special Issue exploring ways to sever the link between transportation and oil by electrifying transportation. By plugging in to new, clean American energy sources we can re-charge our economy, secure our energy future and win true Energy Freedom.
Links to posts in the series are below the fold...
Just think - an electrified Detroit, pumping out the world's best electric cars and manufacturing the solar panels that will power them on top of it. That's the stuff that will get the American economy going.
This post is part of our week-long Special Issue exploring ways to sever the link between transportation and oil by electrifying transportation. Stay tuned for more...
In a city known for hardcore rock and hardcore auto manufacturing,
some serious blues are the music of the week. Detroit, whose top 3 automakers have been closing plants left and right in the face of skyrocketing gas prices, is looking for a quick fix to a 10 year strategical failure. The NY Times grimly reported:
"G.M. is temporarily halting the assembly lines at
seven truck factories in North America before closing four plants
permanently within the next three years... Sales were down 28 percent
at the Ford Motor Company, 18 percent at General Motors and Nissan. Hardest hit was Chrysler, whose sales fell 36 percent after it discontinued some models in a bid to increase profit margins. Ford
says it will build 25 percent fewer vehicles and that it now expects to
lose money in 2009, the year it had set as a deadline for returning to
profitability."
As we begin Breakthrough Blog's week-long series of posts exploring ways to sever the link between transportation and oil by electrifying transportation, Jesse Jenkins drills down into the concept of energy independence and explores what it will really take to secure true Energy Freedom.
Another July 4th has come and gone, accompanied by the usual cries for a new "Declaration of Energy Independence." Continuing a longstanding tradition hearkening back to the 1970s -- the last time both energy prices and American concern with our energy future were as high as they are now -- the punditry and politicos again used Independence Day to declare that the time is now to secure our independence from foreign oil.
Unfortunately, while perennially popular, the tired political narrative of energy independence is stuck in the past, rooted three decades ago in the oil shocks of my parent's youth and resting on a fatally flawed diagnosis of our energy ailments. What we need isn't another call for independence from foreign oil. What we need is a new American energy agenda that secures our Energy Freedom -- one that recognizes that to become truly independent from foreign oil we must free ourselves from oil. Period.
At the latest round negotiations, the G8 nations are at a classic standstill over a post-Kyoto international climate agreement framework. The United States does not want to commit to anything serious unless China and India also do so, and China and India won't move until the United States does. So what will break through the stalemate?
"There is chaos under heaven, and the situation is excellent."
-Duke in Doonesbury, doing a parody of Mao
NPR reports this morning that negotiations at the G-8 over climate
change are stalled. The United States does not want to commit to
anything serious unless China and India also do so, and China and India
won't move until the United States does, a classic stalemate.
The temptation, of course, is to just wait until the next
administration takes office, on the hope they will be more
accommodating in reaching an international agreement and committing the
United States the major cuts in greenhouse gases. Most climate
watchers assume that is why the Conference of the Parties want to wait
until the negotiations scheduled for Copenhagen in December 2009 for
reaching a post-Kyoto climate agreement. But if the negotiations are
just trying to create another Kyoto-type treaty, their wait may be in
vain.
"Any successful program of action on climate change must support two objectives--stabilizing atmospheric greenhouse gases (GHGs) and maintaining economic growth."
The McKinsey Global Institute's Climate Challenge Initiative released a report last week entitled "The Carbon Productivity Challenge." It is a prime example of how to analyze climate change--not solely or even primarily an ecological crisis, but also a social, economic and developmental problem. The conclusions they draw are astounding, and inspiring. In my opinion, the relevancy and appeal of their analysis relies on a fundamental assumption: "Any successful program of action on climate change must support two objectives--stabilizing atmospheric greenhouse gases (GHGs) and maintaining economic growth."
On Monday, Indian Prime Minister Manmohan Singh unveiled a new national climate plan that balances environmental and economic interests. First and foremost, the report highlights a need for increased energy efficiency and renewables. Special attention was paid to solar technology, which has the potential to displace coal and petroleum with India's 250 to 300 sunny days per year. At the same time, however, Singh recognizes that a hard-and-fast emissions cap could cripple his country's economic development. The plan thus avoids limiting emissions in order to sustain a nine percent annual growth rate.
The BLM is citing environmental concerns to put a two-year roadblock in the way of new, solar energy development on federal lands. That's bad news for the solar industry -- and bad news for the American economy.
Just as the time becomes ripe for a major push towards clean, cheap sources of electricity, the Bureau of Land Management threw a two-year stumbling block in the path of solar power development last Friday.
As solar power ramps up--the Bureau has received 130 proposals solar
plants since 2005--the Bureau decided to put a hold on further development, claiming that that an exhaustive environmental impact
report must be completed before solar plants can be installed on
federally owned lands. Meanwhile, the push continues for oil drilling
in protected offshore areas and the Alaskan National Wildlife Refuge (an endeavor that really merits an environmental impact assessment!).
Timed as it is to coincide with the expiration of critical renewable energy incentives,
this new road block is bad news for the solar industry-- and actively
blocking the advancement of new sources of clean, American energy is
bad news for the economy as a whole. Now more than ever, as the
price of oil continues to rise, buoying inflation and economic
insecurity along with it, the transition to new clean sources of
American energy is critical to secure continued economic prosperity.
Government investment -- long-term incentives, an RD&D push, enabling infrastructure and public works projects, and government procurement programs -- can speed solar on it's path towards "grid parity," the point where solar on your roof beats paying your utility bill.
The solar industry is booming, ramping up production capacity and driving costs down steadily towards the mythical "Grid Parity" point - the price point when solar on your roof beats paying your utility bill. That's a game changer and the solar industry is steadily heading that direction.
Dr James Hansen throws down the gauntlet, calling for "100% Cap-and-Dividend or Fight!" This Breakthrough Generation fellow says investing in a clean energy future that will spark lasting economic prosperity AND slash greenhouse gas emissions is what's really worth fighting for.
For more than twenty years, your scientific expertise and public statements have helped many (including myself) understand the relationship between human activity and global warming. I felt a sense of urgency as I read your latest testimony to Congress (PDF) regarding the need to curb greenhouse gases and put us on the path to building a clean energy economy. I can only imagine how frustrated you must be by the inability of Congress to pass meaningful and comprehensive energy and climate legislation. As I read your testimony it was clear that you fully grasp the scale of the energy and climate challenge and desire to implement effective solutions that will tackle it head on.
That's why I felt totally lost when you articulated what you feel is the best way to transform our current energy system. You said, "One hundred percent dividend or fight!"
A new Gallup poll reveals a clear message from Americans: economic concerns and energy prices trump all. That's a message that cannot be ignored by proponents of climate solutions and a clean energy revolution.
Gas station marquees have apparently displaced body count headlines in the minds of Americans. As gas prices skyrocketed over the past few months, concerns with fuel and oil prices have quickly risen to eclipse the Iraq War and secure the second highest ranking on Gallup's monthly "Most Important Problem" poll, released yesterday.
According to Gallup, the 25% of those polled citing fuel and energy prices in June as the nation's top problem is up dramatically from 17% in May and 6% in January.
Despite the rise of fuel price anxieties (or perhaps because of it), the economy and jobs retain the first position in the Gallup list of most pressing concerns. According to Gallup, concern with the economy is about as high today as it has been at
any time since the start of George W. Bush's presidency in January 2001.
The message from Americans is clear: economic concerns and energy prices trump all. That's a message that cannot be ignored by proponents of climate solutions and a clean energy revolution.
A new study in the journal Climatic Change confirms reports that the United Nations Intergovernmental Panel on Climate Change has drastically underestimated the rate of emissions growth.
A new study in the journal Climatic Change confirms reports that the United Nations Intergovernmental Panel on Climate Change has drastically underestimated the rate of emissions growth. The new study points to far more rapid global economic growth, driven largely by China and Asia, as a major source behind far higher global emissions increases. The report comes days after a new study found that China's annual emissions are now 14 percent higher than U.S. emissions.
It is time to stop messing around with a bill that has immediate and hard-hitting effects on our economy, our ability to be an international clean energy leader, and ultimately our energy prosperity.
On Tuesday the Senate failed to pass the Renewable Energy and Job Creation Act of 2008 (50-44).
The bill contained, among other things, critical production tax
incentives for the rapidly growing renewable energy industry. The
Senate may get another chance to vote on the incentives this month, but
their bickering, politicization of the issue and ultimate stalling is
looking more and more like a de facto decision: No to clean energy.
If the renewable energy industry is unable to count on the
incentives for next year they will count them out as they shape their
workforce plans and pace of development. In other words, they'll cut
thousands of jobs and scale back investments as they prepare to weather
yet another expiration of the critical renewable energy incentives.
In a previous post, Michael examines how appealing to xenophobic tendencies has become a fundamental strategy for attacking any issues intended to address the health and welfare needs of the poor. By extension, this piece suggests how xenophobic appeal could extend to attacks on environmental efforts on the diplomatic front. Michael's connection is an important one because we know from history environmental concerns, particularly during times of economic hardship, are easily overwhelmed by the politics of insecurity.
The satisfaction of the material needs of food and water and shelter is not an obstacle to but rather the precondition for the modern appreciation of the nonhuman world
Last week, the New York Times reporter Andrew Revkin blogged about the World Bank's decision to finance a major new coal fired power plant in India. Revkin ended his blog with a question: "Is all of this bad? If you're one of many climate scientists foreseeing calamity, yes. If you're a village kid in rural India looking for a light to read by, no."
Breakthrough Senior Fellow, Roger Pielke, Jr., has a new post up examining the LA Times Alan Zarembo's look at what people are doing to slowly come around to a new way of thinking about weather, climate change and the damage that new and stronger hurricanes can mean for coastal development.
The following was originally submitted to the National Journal discussion "
