Despite robust growth and recent improvements in price and performance, a boom in US clean energy technology ("clean tech") sectors could now falter as federal clean energy spending declines sharply, according to a new report published today by some of the country's top energy analysts.
To both sustain clean energy growth and put the United States' clean tech sectors on an accelerated path to subsidy independence and global competitiveness, analysts at the Breakthrough Institute, Brookings Institution, and World Resources Institute counsel a thorough revamping of American clean energy policies to prioritize innovation and cost declines.
The rewards for smart policy reform now are enormous: with global energy markets hungry for clean, affordable energy technologies and clean tech markets continuing to mature and improve, this is exactly the time for America to secure its leadership in clean tech.
Economist: I think you are way too optimistic that investments in technological innovation funded by a low carbon tax can lead to accelerated decarbonization of the economy. That is why I favor a high carbon price.
Me: But isn't the point of the high carbon price to stimulate innovation? The question is thus how to stimulate or motivate that innovation. I think a high carbon price is politically impossible, which is why I argue for starting low with investments in innovation as part of the package.
Obama's focus on energy innovation and the regulation of conventional pollutants, rather than climate science and carbon pricing, is part of a growing climate centrism that could hold bipartisan support on addressing issues related to climate change.
In his 2011 State of the Union address, President Obama tacitly acknowledged how politically toxic climate change had become by not mentioning it once. His move angered many environmentalists who insisted there could be no significant action without a full-throated defense of the climate science against skeptics.
But one year later, President Obama's shift can be understood as part of a new climate centrism, one focused less on climate science and carbon pricing and more on energy innovation and the regulation of conventional pollutants like mercury. In his 2012 address, Obama briefly mentioned the divisiveness of climate change as a segue to touting his energy policies.
Polls show that Obama's call for continued energy innovation funding was one of the most popular elements of his speech. Meanwhile, the EPA's new mercury regulations—which will result in the shuttering of some of America's dirtiest coal plants—have long been more popular with Independents and Republicans than carbon regulations.
These policies have a growing number of supporters on the right. Last week, John Tierney of the New York Times pointed to a new study in Science that touted the climate benefits of dealing with non-carbon pollutants:
After looking at hundreds of ways to control these pollutants, the researchers determined the 14 most effective measures for reducing climate change, like encouraging a switch to cleaner diesel engines and cookstoves, building more efficient kilns and coke ovens, capturing methane at landfills and oil wells, and reducing methane emissions from rice paddies by draining them more often.
A "no regrets" climate strategy: cutting non-CO2 contributors to climate change may be the fastest way to slow warming, while yielding significant, near-term co-benefits.
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 examined why voluntary economic contraction is a not a viable strategy for reducing emissions “as quickly as possible.” Part 3 explained why implementing a robust clean energy innovation strategy is the key way to making clean energy cheaper than fossil fuels, thus enabling the rapid adoption of low-carbon energy sources and drastically reducing CO2 as quickly as possible. Part 4 discussed why adaptation through innovation is central to preparing for the impacts of a warmer world. Finally, Part 5 discusses how reducing a set of non-CO2 pollutants and greenhouse gases can make a significant, near-term dent in warming and buy time to decarbonize the energy system.
As we have argued previously in this series, averting as much dangerous climate change impacts as possible hinges on our efforts to drive innovation and make clean energy cost competitive with fossil fuels. The cost of decarbonization is the key moderating force affecting the pace of carbon dioxide (CO2) reductions, and innovation is the key to lowering these costs and accelerating climate progress. However, CO2 isn’t the only powerful contributor to global warming, and scientists have identified opportunities to make a significant, near-term dent in warming by tackling other greenhouse gases and pollutants.
While we cannot effectively manage human impact on the climate over the long-run without decarbonizing the global energy system — a task that hinges on the energy innovation efforts described in Part 3 of this series — in the short term, we would do well to seize opportunities to reduce non-CO2 emissions, particularly those with immediate co-benefits (e.g. profitable byproducts, improved public health, or better agricultural yields) that align incentives for rapid action.
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 examined why voluntary economic contraction is a not a viable strategy for reducing emissions “as quickly as possible.” Part 3 explained why implementing a robust clean energy innovation strategy is the key way to making clean energy cheaper than fossil fuels, thus enabling the rapid adoption of low-carbon energy sources and drastically reducing CO2 as quickly as possible. Part 4 discusses why adaptation through innovation is central to preparing for the impacts of a warmer world and buying us time to drastically cut emissions.
The door is closed to mitigating away all of the potentially dangerous impacts of climate change. We’ve simply waited too long to take sweeping action and provide a cheap and viable clean energy substitute to fossil fuels. In Part 1 of this series, we discussed that even so, the key objective of climate mitigation efforts is still the same – we must drastically cut emissions as quickly as possible (and Part 2 and Part 3 discussed how).
Yet the warmer world we have locked ourselves into does inform other policy choices. In particular, building our resilience to extreme weather and increasing our adaptive capacity is now equally as important as mitigation and should be treated as such. Advocating for adaptation and mitigation is nothing new – in fact it’s common place. The argument here is that adaptation must now be a cornerstone of all climate policy choices – domestic or otherwise.
When it comes to climate adaptation policymaking, a lot of work needs to be done, as it’s still a topic that has been largely ignored by U.S. decision makers. In fact, the most immediate hurdle is for decision makers to stop paying lip-service to the need for an adaptation policy and begin aggressively implementing real resilience efforts.
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 examined why voluntary economic contraction is a not a viable strategy for reducing emissions “as quickly as possible.” Part 3 explains why implementing a robust clean energy innovation strategy is the key way to making clean energy cheaper than fossil fuels, thus enable rapid adoption of low-carbon energy sources and drastically reducing CO2 as quickly as possible.
As we wrote in Part 1 and Part 2 of this series, our current climate trajectory and global political economy dictates that the only way we can limit potentially dangerous climate change impacts, above the dangerous impacts we’re already locked into, is to redouble efforts to reduce global CO2 emissions as quickly as possible. To rapidly decarbonize the economy requires greatly accelerating the replacement of fossil fuels with low or zero-carbon clean energy substitutes. Implementing the right strategies to do so raises numerous stark policy choices and issues.
The most fundamental issue is that energy is largely a fungible commodity – the electricity coming out of your wall socket doesn’t have any immediately tangible differences whether it comes from a coal plant or a wind farm. The only immediate difference is cost. This key reality means that the rate of adoption for new clean energy technologies is largely moderated by two principal levers:
(1) The level of public tolerance for paying for the cost of cleaner energy in the form of higher energy costs, subsidies, or reduced economic welfare; and
(2) The cost competitiveness of clean energy compared to fossil fuels.
Recognition is setting in that the current trajectory of global emissions will almosts certainly lead us to a world of dangerous climate impacts. Is this a game changer for our climate policy strategies?
Significantly limiting humanity’s impact on the global climate is quite simply an enormous task. Unfortunately, thanks to budget austerity and federal gridlock, any hope of implementing sweeping U.S. climate/energy policy has been optimistically pushed back to 2013 or beyond (though some incremental improvement is possible). And even the most hopeful observers of the recent global climate negotiations in Durban find little real progress towards reducing emissions. Now more than ever, it is time to take a hard look at where we stand and figure out how to match our policies to our climate goals.
Amongst climate scientists and advocates of climate policy, a growing recognition is taking hold that the current trajectory of global emissions will almost certainly lead us to a world of dangerous climate change impacts. For some, this means coming to terms with the fact that holding total global warming to less than 2°C, a commonly adopted “line in the sand” drawn by many climate advocates, has become nigh-impossible.
As a number of scientific articles have shown, most recently by Kevin Anderson and Alice Bows in the Journal of the Royal Society, limiting the world to 2°C warming most likely requires peaking total global carbon emissions in the next 5-10 years followed by immediate reductions to near-zero by 2050 (see Anderson and Bows emission trajectory options here, via David Roberts, and by David Hone here). It is now fairly obvious that the lack of global progress on decarbonization has likely pushed this timetable out of reach, prompting some recent soul searching amongst many climate advocates (the two of us included).
Is this realization a game changer for climate policy? Yes and no.
Because automobiles are bigger and more powerful than they were three decades ago, major innovations in fuel efficiency have only produced minor gains in gas mileage, another clear example of rebound effects at work.
Automotive engines steadily improved in efficiency by roughly 60 percent from 1980 to 2006, according to a new study by MIT economist Christopher Knittel. That means we could already be driving cars that get an average of 37 miles per gallon (MPG), well above today's average of 27 MPG. The catch, points out Reason's Ronald Bailey: we'd have to be driving cars with the same average weight and power as the average car on the road in 1980.
Instead, consumers took the majority of the improvements in engine efficiency over the last three decades to enjoy larger and more powerful cars (e.g. increasing their use of energy services) rather than reduce energy use, according Knittel's paper, published in American Economic Review.
As Reason's Bailey notes, "This seems an example of the energy rebound effect in which increased energy efficiency encourages people to use even more energy; in this case to fuel bigger and peppier cars."
If vehicle weight and average power had held constant from 1980 to 2006, Knittel estimates that vehicles today would be roughly 60 percent more efficient than they were in the '80s. Instead, average fuel economy of new vehicles sold in the United States improved just 15 percent over this period.
The reason is clear: consumers chose to take these improvements in engine efficiency as a major increase in average vehicle weight, which rose 26 percent, and a doubling of average horsepower, which rose 106 percent from 1980 to 2006.
"Most of that technological progress has gone into [compensating for increased] weight and horsepower," notes Knittel.
Before adjourning to watch yule logs and eat holiday hams, Congress actually managed to pass a 2012 budget bill. ITIF's Matthew Stepp provided us with an early analysis of the bill's impact on energy innovation funding. Funding for key Department of Energy (DOE) innovation offices are up by a modest 2.5 percent relative to the 2011 budget, with impacts on specific programs summarized in the table below...
The Fiscal Year 2012 budget dedicates $768 million to the DOE Office of Nuclear Energy, a nearly 6 percent increase from FY2011 levels. As with overall funding for DOE innovation offices, the 2012 budget thus halts and begins to reverse the declines in federal energy innovation funding initiated in the 2011 budget, which saw nuclear energy funding fall 15 percent (or $132 million) from 2010 budget appropriations.
Oblique strategies appear to be working to reduce CO2 emissions. New rules from the EPA to limit emissions of the neurotoxin mercury and other toxic and carcinogenic pollutants from the nation's coal-fired power plants represents a small, but real, step forward toward a cleaner, healthier, and lower-carbon energy system.
The Environmental Protection Agency unveiled new (and long-overdue) regulations today to rein in mercury and other toxic pollutants from coal and oil-fired power plants. The new mercury rules, designed to save lives and protect children from the potent neurotoxin, are likely to trigger the closure of many of America's oldest, dirtiest coal-fired power plants over the next decade.
If and when the new rule takes effect, it will be the first time the federal government has enforced limits on mercury, arsenic, acid gases and other poisonous and carcinogenic chemicals emitted by the burning of fossil fuels.
Lisa P. Jackson, the E.P.A. administrator, said that the regulations, which have taken more than 20 years to formulate, will save thousands of lives and return financial benefits many times their estimated $11 billion annual cost. ...
Mercury is a potent neurotoxin, harming the nervous systems of fetuses and young children and causing lifelong developmental problems. Other pollutants covered by the new rule, including dioxin, can cause cancer, premature death, heart disease, and asthma.
Power plants generally will have up to four years to comply, although waivers can be granted in individual cases to ensure that the lights stay on. The EPA estimates that utilities will be forced to retire plants that currently provide less than one-half of 1 percent of the nation's total generating capacity.
In this sense, the EPA's new pollution rules appear to be another example of the ongoing success of "oblique" strategies to reduce climate-warming greenhouse gas emissions. While the new rules may only force the closure of 0.5 percent of the nation's electricity generating fleet, those plants will be among the least efficient and most carbon-intensive power plants in the nation. The coal-fired power plants most likely to be retired in the face of new pollution regulations emit at least twice as much CO2 per kilowatt-hour of electricity as the national average.
This is a small step forward on climate, but a real one, strongly justified on public health grounds alone, even before any climate benefits are considered. The new rules will eliminate "up to 17,000 premature deaths" per year, along with thousands of heart attacks, asthma attacks and emergency room visits, according to EPA estimates.
By Matthew Stepp, Clean Energy Policy Analyst at the Information Technology and Innovation Foundation and 2010 Breakthrough Generation Fellow." Originally published at the ITIF Blog.
The FY2012 Omnibus Appropriations bill, passed through the House and Senate conference committee last week, provides a small 2.5 percent increase in DOE energy innovation investment-related Offices and programs compared to FY2011. The budget includes key investments for new Energy Innovation Hubs, next-generation small modular nuclear reactor (SMR) RD&D and licensing programs, as well as a boost in funding for ARPA-E. Compared to the roughly $800 million cut to energy innovation investments in FY2011 and the additional cuts sought in the House version of the appropriations bill, the FY2012 budget provides renewed, albeit modest, government support for developing affordable and viable clean energy technologies.
To be clear, the 2012 federal budget still falls short of FY2010's peak in energy innovation investments made through the Stimulus and represents only 72 percent of what the President requested for next year. It's vital that more work is done to increase public investments in clean energy innovation, as the government must play an energetic role in supporting the development of next-generation technologies. However, the FY2012 budget does take steps to stabilize, and in some cases boost, high-impact clean energy investments (Figure 1, below). Below are a few of the highlights:
In a new report from the Breakthrough Institute Energy and Climate Program, we document the challenges facing American energy entrepreneurs seeking to commercialize advanced energy technologies to enhance US energy, economic, and environmental security. Innovative public policy solutions are needed to support private sector innovation and overcome the "valleys of death" that trap too many promising advanced energy ventures.
The United States faces an urgent national imperative to modernize and diversify its energy system by developing and deploying clean, and affordable advanced energy technologies. Domestically, developing new energy supplies and ensuring affordable energy prices will bolster American competitiveness and economic growth. Reducing the cost of advanced energy technologies is the key to finally ending a dependence on volatile global oil markets that holds the American economy hostage, compromises our foreign policy, and bleeds more than a billion dollars a day out of the US economy.
Abroad, the military has already begun deploying innovative clean energy technologies to reduce the high cost, paid in both lives and money, associated with transporting fossil fuels across war zones. Moreover, the impending risks posed by climate change compel the accelerated improvement and widespread deployment of low-carbon energy technologies. Countries around the world are already recognizing the critical need for new advanced energy technologies and are positioning themselves to lead the next wave of energy innovation.
Global energy demand is rising steadily, straining the ability of conventional energy systems to keep pace. For security, economic, and environmental reasons, the global energy system is thus modernizing and diversifying. Developing and developed nations alike are seeking new forms of advanced energy technologies that reduce dependence on foreign nations, insulate economies from volatile energy markets, and are cleaner and thus less costly from a public health perspective. Supplying this $5 trillion global energy market with reliable and affordable clean energy technologies thus represents one of the most significant market opportunities of the 21st century.
Despite this clear energy innovation imperative, the United States and the world remain overly reliant on conventional fuels and exposed to the price volatility and persistent public health impacts that reliance entails. The necessary course of energy modernization remains impeded by the high cost and barriers to scalability of today's clean energy technologies. These are barriers that only innovation can overcome.
However, two obstacles currently block the progress of energy innovation, obstacles which can only be addressed through effective public policy. Due to pervasive market barriers, private sector financing is typically unavailable to bring new energy innovations from early-stage laboratory research to proof-of-concept prototype and on to full commercial scale. This leads to two market gaps that kill off too many promising new energy technologies in the cradle. These gaps are known as the early-stage "Technological Valley of Death" and the later-stage "Commercialization Valley of Death." This pair of barriers is endemic to most innovative technologies yet is particularly acute in the energy sector. As a result, many innovative energy prototypes never make it to the marketplace and never have a chance to compete with established energy technologies. These valleys of death particularly plague capital-starved start-ups and entrepreneurial small and medium-sized firms, the very same innovators that are so often at the heart of American economic vitality.
In effect, the current lack of public policy to address this pair of barriers acts to protect today's well entrenched incumbent technologies from full market competition, while hamstringing American entrepreneurs and innovative ventures seeking to develop and deploy advanced energy technologies. The implementation of creative policies to effectively deal with the Technological and Commercialization Valleys of Death will foster vibrant competition in the energy sector and help drive technological innovation and job creation throughout the economy as a whole.
In the past, the United States has driven immense and far-reaching technological transformations. As the pioneering global innovator of the 20th century, the United States built the world's largest economy because of the ingenuity and creative enterprise of its entrepreneurs and citizens. Each step of the way, proactive public policy has played a crucial role in driving American innovations, from railroads and jet engines to microchips, biotechnology, and the Internet, unleashing long waves of economic growth and shared prosperity. New and advanced clean energy technologies afford the same opportunities to the United States today--if public policy is shaped in a way that allows American innovators to thrive once again.
Energy Secretary Steven Chu will appear today before the House Energy and Commerce Subcommittee on Oversight and Investigation to answer questions on the DOE Loan Program Office. While there are important questions to answer regarding the role of government in technology investment and energy innovation, these questions are unlikely to be the main subject of today's hearing.
What was the original purpose of the Section 1705 loan guarantee program, and what was the expected impact on federal budgets and taxpayers?
In 2009, Section 1705 was added to the DOE Loan Programs Office (LPO), established by the bipartisan Energy Policy Act of 2005. The program was originally appropriated $6 billion in federal funds to provide reserves to cover expected losses on a portion of the loans issued by the agency. This $6 billion would be leveraged to offer a significantly higher loan guarantee volume, unlocking substantial debt finance that would be supplied by private banks. The original $6 billion in funding was raided by Congress to provide funds for the Cash-for-Clunkers program in 2009, however, and ultimately 1705 ended up with a $2.5 billion pool to cover expected loan losses.
Congressional investigators should prioritize clean energy commercialization solutions over political grandstanding and focus on identifying key lessons from the experience of the Loan Programs Office. Congress should put these lessons to immediate use to reform federal involvement in clean energy commercialization and establish a new Clean Energy Deployment Administration.
Step right up to see the latest chapter in the ongoing political circus surrounding the bankruptcy of solar manufacturer and federal loan guarantee recipient Solyndra. Today's main attraction: Secretary of Energy Steven Chu's long-awaited appearance before the eager Republican members of the House Energy and Commerce Committee.
Key questions remain about the ill-fated solar manufacturer's dramatic demise earlier this year. Unfortunately, investigations on the Hill long ago veered into the realm of political point-scoring, rather than a serious inquiry designed to improve federal support for nascent and nationally-critical clean energy technologies.
Taking a step back from the circus on the Hill, let's make two things very clear.
First, the global energy system is modernizing and diversifying. For an array of motivations from public health and climate change to security and economic growth, today's economies demand a 21st century suite of clean and reliable energy technologies to supply the $5 trillion-and-growing global energy market.
Second, the DOE Loan Programs Office was never particularly well equipped to effectively address the "Commercialization Valley of Death"--the persistent lack of risk-tolerant capital that plagues American innovators and entrepreneurs working valiantly to improve the nation's energy, economic, and environmental security.
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."
Now, new studies .. are again suggesting that modern efforts to improve energy efficiency could lead to big rebound effects; they're touching a nerve and prompting debate in energy and climate circles. Governments and think tanks have launched studies of the paradox, and stories in the New Yorker and New York Times have even suggested that energy efficiency, far from being a savior, could actually be bad for the environment. "The stakes are actually pretty high," says Roland Geyer, professor of industrial ecology at the University of California, Santa Barbara, and coauthor of a recent review of the rebound literature.
Dr. Geyer is right: the stakes are quite high.
As Breakthrough Institute documents in our comprehensive review of the academic literature on energy efficiency and rebound effects, "Energy Emergence" (February 2011), most climate mitigation strategies and national energy policies assume that significant gains can be made in reducing greenhouse gas emissions and national energy imports at little to no cost or even positive economic gain, chiefly by pursuing "below-cost" energy efficiency measures -- improvements that more than pay for themselves through energy savings over time. The International Energy Agency, for example, counsels global policy makers that energy efficiency can accomplish more than half (58 percent) of all global greenhouse gas emissions reductions needed by 2050 in order to put the world on track to a stable climate (see image at right).
Yet rebound effects mean that for every two steps forward we take towards climate mitigation via below-cost efficiency measures, we take one or more steps backwards through rebound effects. And conventional climate mitigation scenarios, including the IEA's and IPCC's, ignore or incompletely and improperly consider rebound effects in their analysis.
If we follow such a course, and ignore rebound effects, the globe will be dangerously over-reliant on energy efficiency to reduce greenhouse gas emissions. Even if rebound effects erode just one-third to one-half of the initially expected savings, the globe could fall 20 to 30 percent short of needed emissions cuts, if the IEA's mitigation plan is followed. Further, such a shortfall means the time available to devise additional remedies is reduced, increasing the urgency of the clean energy supply-side challenge.
Wednesday's news that California solar manufacturer and DOE loan guarantee recipient Solyndra will be declaring Chapter 11 bankruptcy has government critics grumbling about clean tech boondoggles and failed government programs and has analysts worried about the ability of American clean tech companies to compete with subsidized Chinese solar exporters.
Amidst this week's dismal news that U.S. job growth is at a standstill, KQED's Forum hosts Breakthrough Institute Director of Energy and Climate Policy Jesse Jenkins to discuss Solyndra's failure and the future of U.S. energy and manufacturing policy. Listen to the program below...
In an all-to-predictable swipe at new fuel economy standards currently being negotiated by the White House and the auto industry, the arch-conservative Heritage Foundation invokes rebound effects as the latest reason to oppose increased auto efficiency:
When it comes to greenhouse gas emissions, The Atlantic's Megan McArdle notes that fuel efficiency standards will reduce carbon dioxide emissions, "but not by as much as advertised, because more fuel efficient cars make driving cheaper, so people will do more of it. This 'rebound' effect robs about 25% of gains, and also means more congestion, and more wear-and-tear on roads." The rebound effect also takes away some of the estimated cost savings and oil reduction.
Let's ignore for a moment the rich irony inherent in the Heritage Foundation expressing any concern about the efficacy of auto efficiency standards in cutting carbon emissions...
Rather, let's focus on the economic implications of rebound effects, which Heritage gets exactly backwards here. If improved vehicle efficiency triggers a rebound in demand for the energy services derived from personal transportation, that rebound represents an unequivocal improvement in economic welfare at the individual level and a sign of improved productivity and growth at the economy-wide level. Last we checked, Heritage was all for economic growth and improved individual welfare.
A pragmatic strategy to restart stalled global climate efforts through the pursuit of energy innovation, climate resilience, and no regrets pollution reduction (Report Overview)
Climate Pragmatism, a new policy report released July 26th by the Hartwell group, details an innovative strategy to restart global climate efforts after the collapse of the United Nations Framework Convention on Climate Change (UNFCCC) process. This pragmatic strategy centers on efforts to accelerate energy innovation, build resilience to extreme weather, and pursue no regrets pollution reduction measures -- three efforts that each have their own diverse justifications independent of their benefits for climate mitigation and adaptation. As such, Climate Pragmatism offers a framework for renewed American leadership on climate change that's effectiveness, paradoxically, does not depend on any agreement about climate science or the risks posed by uncontrolled greenhouse gases.
The new report brings the Hartwell framework into an American perspective, and it is authored by a broad group of 14 international scholars and analysts representing a diverse range of political and ideological positions -- from the conservative American Enterprise Institute to moderate Democratic think tank Third Way and the liberal Breakthrough Institute.
Climate Pragmatism is the third paper released by the Hartwell group, an informal international network of scholars and analysts dedicated to innovative strategies that uplift human dignity through mitigation of climate risk, enhancement of disaster resilience, improvement of public health, and the provision of universal energy access. Previous publications include The Hartwell Paper (May 2010) and How to Get Climate Policy Back on Course (July 2009).
Climate Pragmatism also builds on the limited and direct energy technology innovation strategy outlined by the Breakthrough Institute along with scholars at the American Enterprise Institute and Brookings Institution in the October 2010 policy report, Post-Partisan Power.
As the report's authors explain:
The old climate framework failed because it would have imposed substantial costs associated with climate mitigation policies on developed nations today in exchange for climate benefits far off in the future -- benefits whose attributes, magnitude, timing, and distribution are not knowable with certainty. Since they risked slowing economic growth in many emerging economies, efforts to extend the Kyoto-style UNFCCC framework to developing nations predictably deadlocked as well.
The new framework now emerging will succeed to the degree to which it prioritizes agreements that promise near-term economic, geopolitical, and environmental benefits to political economies around the world, while simultaneously reducing climate forcings, developing clean and affordable energy technologies, and improving societal resilience to climate impacts. This new approach recognizes that continually deadlocked international negotiations and failed domestic policy proposals bring no climate benefit at all. It accepts that only sustained effort to build momentum through politically feasible forms of action will lead to accelerated decarbonization.
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.
Phasing out the United States' entire nuclear power supply by 2030 would increase the country's carbon dioxide emissions by at least 5% and as much as 13%, depending on what mix of power plants replace the aging nuclear units. If the United States phased out the twenty-three nuclear power plants with the same design as Japan's troubled Fukushima Daiichi nuclear complex by 2030, carbon dioxide emissions in the United States would increase overall by at least 1 percent.
As the crisis at the Japanese Fukushima Daiichi nuclear complex continues to captivate global media attention, President Obama's domestic energy plans, which have long-included a push for the construction of new nuclear reactors, are beginning to be called into question. Two days ago, Senate Democrats demanded a broad review of the safety of the country's nuclear plants, with nine Democrats even seeking to delay legislation to allow the construction of a new plant in Iowa.
The Energy Information Administration (EIA) predicts that, by 2030, nuclear power will supply about 18% of the nation's electricity, as compared to roughly 20% in 2011.
Below, we illustrate the consequences for overall United States carbon dioxide emissions if the United States phases out its entire nuclear fleet. Three scenarios project the effect of replacing lost generation either entirely by coal generation, entirely by natural gas generation, or by an equal split of both.
If nuclear power were to be completely taken out of the United States' power supply by 2030, United States carbon emissions would rise by at least 300 million tons over baseline scenarios. Carbon emissions would increase by at least 5% and as much as 13% across the entire economy, while power-sector emissions would soar by 12% to 33%, depending on the mix of replacement power.
The lowest value corresponds to a scenario in which the nuclear plants are replaced by new natural gas-fired units, perhaps the most likely scenario given recent discovery of plentiful new natural gas supplies in North America.
In the latest in DC's battle over the federal budget, the Senate Democrats released on Friday their plan to fund the government through FY2011, which would make substantial cuts in federal energy innovation across DOE agencies.
While ultimately keeping energy innovation-related spending at a higher level than would the House's Continuing Resolution (CR) (passed two weeks ago), the Senate's plan decreases budgets for each of the DOE's offices involved in energy-innovation as compared to FY2010 appropriations, in sharp contrast to the proposed increases for energy innovation related spending through President Obama's proposed FY2012 budget.
(click to enlarge)
*ARPA-E received $400 million in ARRA funding, to be spent over FY2009 and FY2010, or $200 million per year on average. No additional funding was provided for the agency in regular FY2010 appropriations.
**The estimates for Fossil Energy R&D used in this post refer solely to the Fossil Energy R&D program, rather than Fossil Energy Program as a whole, as Fossil Energy R&D is where energy innovation investments are concentrated.
***For exact figures, see chart at the end of this post.
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.
Although fossil energy sources receive far more federal subsidy than renewables, when compared based on the share of U.S. energy consumption provided, renewable energy sources receive over seven times more subsidy than fossil fuels.
Here's your latest edition of Friday Factoids, (this one a smidgen early)...
A while back, I posted some quick math reminding readers that while pushing to end subsidies for mature, centuries-old fossil fuel technologies is a pretty smart policy, it on it's own will be far from sufficient to make clean energy cost competitive. The global figures come from the International Energy Agency's latest World Energy Outlook and reveal that worldwide, renewable energy sources receive more than twice the subsidy than fossil fuels, when compared based on how much of global energy demand they supply.
Here's a summary of the global figures:
Fossil energy:
Total subsidies (2009) = $312 billion;
Share of global energy consumption provided (2009) = 83 percent;
Subsidy per percentage of global energy consumption provided: $3.8 billion
Renewable energy:
Total subsidies (2009) = $57 billion;
Share of global energy consumption provided (2009) = 7 percent;
Subsidy per percentage of global energy consumption provided: $8.1 billion (Note: excludes conventional hydropower and biomass)
Compared on a per unit of energy provided basis, renewables therefore receive 2.1x more government subsidies than fossil fuels.
Today, we'll add in the U.S. figures, which advantage renewables even more. That's because globally, much of the subsidies provided for fossil fuels are provided in either developing nations or in oil rich Middle Eastern nations, which make it easier for their citizens to purchase fuels through government-funded subsidies for consumer purchases (rather than subsidies for fossil fuel producers; see IEA for more on that).
For the United States:
Fossil energy:
Total subsidies (2002-2008, cumulative): $72.4 billion;
Share of U.S. energy consumption provided (2008): 84.6 percent;
Subsidy per percentage of U.S. energy consumption provided: $0.9 billion.
Renewable energy:
Total subsidies (2002-2008, cumulative): $28.9 billion;
Share of U.S. energy consumption provided (2008): 4.3 percent;
Subsidy per percentage of U.S. energy consumption provided: $6.7 billion. (Note: excludes conventional hydropower)
Compared on a per unit of energy provided basis, renewables therefore receive 7.4x more U.S. federal subsidies than fossil fuels.
Data source: subsidies for Environmental Law Institute, energy cosumption from U.S. Energy Information Administration, "Annual Energy Outlook 2010." Note that subsidy figures are cumulative for the seven years from 2002 to 2008. The per unit subsidy figures for the U.S. should therefore not be strictly compared to the global figures above.
Clearly, ending all subsidies for fossil and renewables alike would not 'even the playing field' for renewables, as some have argued. These figures indicate that fossil energy would still retain quite a distinct price advantage.
Even if we cut all subsidies for fossil fuels, then, we'll need accelerated innovation to fully close the price gap between new renewables and incumbent fossil energy. (For more on that price gap, see a previous installment of our Friday Factoids series here).
China is on a roaring path towards single-handedly swamping any hopes of climate stability. The nation's current climate pledges appear lackadaisical rather than ambitious and just as likely to trigger significant rebounds in energy use than real CO2 reductions. The only way to avert potential climate catastrophe is to de-link economic growth from carbon emissions by fueling China -- and the world -- with clean, affordable, and massively scalable energy technologies. Our current menu of technological options is dangerously short, and there's no time to waste: we must make clean energy cheap, and fast.
I've said it before and I'll say it again: when it comes to the global climate challenge, as goes China, so goes the world.
Driving that aphorism home, co2scorecard.org, a not-for-profit project that closely tracks global greenhouse gas emissions, now reports that China's CO2 emissions increased by 906 million tons in 2009 -- the second largest annual increase for any country in recorded history. China's soaring emissions were enough to completely offset the drop in emissions wrought by the economic havoc plaguing much of the Western world (see graphic below).
China's unprecedented surge in CO2
As Goes China, So Goes the World: Soaring CO2 emissions from energy use in China drive global greenhouse gas trends (click image to enlarge; source: co2scorecard.org)
Over the last decade, China's annual emissions of climate destabilizing CO2 jumped by 5 billion tons per year. According to Shakeb Afsah, President and CEO of co2scorecard.org, that's "the highest [increase in annual CO2 output] for a single country in recorded history, representing an average annual emissions increase of almost 12%--more than four times the rate observed [for China] the previous decade."
To put this unprecedented 5 billion ton increase in annual CO2 emissions in context, Mr Afsah and colleague Kendyl Salcito note that during the 14-year long post-war boom period of 1959-1973, during which U.S. CO2 emissions rose each year, America's annual output of CO2 jumped by only 2 billion tons.
This set of frequently asked questions accompanies a new Breakthrough Institute report, "Energy Emergence: Rebound and Backfire as Emergent Phenomena." That report surveys the relevant academic literature and finds extensive evidence that a large amount of the energy savings from below-cost energy efficiency are eroded by demand 'rebound effects.'
On February 17th, Breakthrough Institute released a new, comprehensive survey of the literature and evidence concerning the rebound effects triggered by many energy efficiency improvements.
"Energy Emergence: Rebound and Backfire as Emergent Phenomena" explains why energy efficiency measures that truly 'pay for themselves' will lower the cost of energy services -- heating, transportation, industrial processes, etc. -- driving a rebound in energy demand that can erode a significant portion of the expected energy savings and climate benefits of these measures.
This new set of Frequently Asked Questions explains rebound effects, how they operate, what kinds of energy efficiency improvements trigger bigger or smaller rebounds, and why coming to terms with the full scale of rebound challenges the heart of many contemporary climate mitigation strategies.
A: Increasing the efficiency of an energy consumptive activity will lower the cost of the services derived from that activity - that is, it will change the price of the "energy services" derived from the fuels, such as lighting, transportation goods or services, heating or cooling, industrial processes, etc.
Economic actors respond to price changes in two general ways:
Increasing the utilization of that energy service to increase outputs or incomes. For example, a low-income resident may now heat his or her home more often or heat more areas of the home after weatherizing their home, because it is now far more affordable to heat. (In economics speak, this involves 'elasticities of demand,' or the responsiveness of demand to changes in the price of goods and services)
Re-arranging the factors of production or goods and services consumed to substitute now-cheaper energy services for other goods or services (maintaining the same level of output or income). For example, a more efficient heat plant may enable a chemicals plant or metals smelter to raise temperatures in industrial processes to extract high quality product from poorer quality inputs (substituting energy for materials) or to reduce process times (substituting energy for labor). (In economic terms, this involves 'substitution elasticities,' or the ability of firms or consumers to take advantage of lower prices to productively re-arrange the production inputs or consumer goods they utilize).
Both of these dynamics are "rebound effects," a term for any economic mechanism that leads to a rebound, or increase, in demand for energy following an improvement in energy efficiency that lowers the effective cost of that energy service.
There are other rebound effects as well (for a quick description of each, see the summary here). Our report, "Energy Emergence" surveys more than half a dozen distinct rebound mechanisms, some of which are fairly direct (like the two above), others that are more indirect (like the impact of money saved through efficiency measures as it is re-spent in the economy on other goods or services that in turn require energy to produce). Still more effects are only visible in the aggregate, at the macro-economic scale, as economies respond in a variety of ways to widespread improvements in energy efficiency.
A: No, not always. Although in some cases, it is possible that efficiency improvements will "backfire," driving a rebound in energy that fully compensate for the initial energy savings, increasing energy demand overall. While backfire is by no means the norm, it is possible in some cases (we'll explore conditions that are likely to lead to backfire in a later question).
As "Energy Emergence" concludes, "Rebound effects are real and significant, and combine to drive total economy-wide rebound in energy demand with the potential to erode much (and in some cases all) of the reductions in energy consumption expected to arise from below-cost efficiency improvements."
Think of it this way: rebound effects mean that for every two steps forward we take in energy savings through efficiency, rebound effects take us one (and sometimes more) steps backwards. We may still move forward, but not as much as we initially expected.
A: Rebound matters because the magnitude of rebound effects determines how effective below-cost efficiency improvements are at contributing to lasting reductions in total energy use and therefore greenhouse gas emissions.
Energy efficiency has frequently been cited as the single greatest contributor to emissions reduction and climate mitigation strategies, by everyone from the International Energy Agency and Intergovernmental Panel on Climate Change to consultants like Amory Lovins' Rocky Mountain Institute and McKinsey to efficiency advocates and environmental NGOs. The IEA counts on efficiency for roughly half of the emissions reductions needed in their "Blue Map" climate stabilization scenario (graphic below), for example, while President Obama told reporters in 2009 that with efficiency, "we can save as much as 30 percent of our current energy usage."
So we're counting on energy efficiency to do quite a bit of "climate mitigation work," so to speak.
The problem is that all of these estimates are based on an assumption: that energy efficiency reduces energy demand in a linear, direct, and one-for-one manner. An X% gain in efficiency leads to an equivalent X% reduction in total energy use.
But the economy is anything but direct, linear, and simple, especially when responding to changes in the relative price of goods and services. When a good or service or input to production gets cheaper, consumers and firms use more of it, find new cost-effective uses for it, re-invest any savings in other productive activities, and the economy overall gets more productive overall, driving economic growth and activity.
That's the rebound effect, and it means that we can't assume that improving energy efficiency by 20%, for example, will reduce energy demand by 20%.
If we don't accurately and rigorously account for rebound effects, we risk over-relying on energy efficiency to deliver lasting reductions in energy use and greenhouse gas emissions, and we will fall dangerously short of climate mitigation goals.
A: Rebound effects differ in scale, depending on the type of energy efficiency improvements we're talking about, and where in the economy we look. In very few cases are rebound effects "very small" or insignificant.
Dozens of academic studies have examined the empirical evidence, conducted modeling inquiries, and otherwise tested the scale of rebound effects. While there is much more work to be done to determine the precise scale and impact of rebound effects in different circumstances, the conclusion is that rebound effects are significant and cannot be ignored in energy and climate analysis and policymaking. See the following three questions for summaries of the scale of rebound in different circumstances...
A: In rich, developed nations, if we improve the efficiency of end-use consumer energy services, like cars, home heating and cooling, or appliances, the literature indicates that direct rebound effects alone are typically on the scale of 10-30% of the initial energy savings. Additional indirect and macroeconomic effects may mean total rebound erodes roughly one quarter to one third of expected energy savings in these situations.
Rebound here is smallest in cases when demand for the energy service in question is already saturated (that is, we use as much of it as we would care to use), and highest in cases where the cost of the energy service is a key constraint on fulfilling demand for that service. For example, if a wealthy homeowner already reliably heats all the rooms in his or her house to 70 degrees, he/she wouldn't increase the thermostat to 77 degrees just because our heating system got 10% more efficient. But if a poorer household can't afford to turn the thermostat up, or only heats one room of the house with a small space heater, because the house is too drafty, then if the house gets weatherized and more efficient, that household is likely to use more energy to heat their home. In general, end-use consumer efficiency improvements in rich, developed economies will still lead to a net savings in energy, although rebound effects shouldn't be ignored even here.
A: No, rebound effects are almost certainly larger in poorer, developing nations.
For efficiency in end-use consumer energy services in developing nations, direct rebound effects alone are likely to be much higher than in richer nations, on the order of 40-80%. Rebound is higher here because demand for energy services is far from saturated, demand is far more elastic (responsive to changes in price), and the cost of energy services is often a key constraint on the enjoyment of energy services. This is important, because growing demand in developing nations is the principal driver of energy demand growth worldwide.
We should be very careful in generalizing our experiences or intuitions about rebound effects in rich, developed nations to the larger bulk of the global population living in developing economies. As Lee Schipper and Michael Grubb wrote in 2000:
"[I]n low-income economies, energy and energy costs are often a constraint on economic activity. ... In short, the shadow of Jevons lurks [in developing nations] for precisely the same reason that more efficient use of coal [in Jevons' Britain] did not save coal: the combined effects of different rebounds are very important when energy availability, energy efficiency, and energy costs are a significant constraint to activity and therefore energy use."
Since expanding the supply of energy services is a key constraint on economic activity in developing nations, the macro-economic impact of efficiency improvements in developing economies is also likely to be more significant, helping developing economies grow faster (and thus consume more energy).
A: While more study of rebound effects for efficiency improvements at producing firms (e.g. industry and commerce) is needed, the literature to date indicates that direct rebound effects may be on the order of 20-70% for these sectors, with additional rebound due to indirect and macroeconomic effects.
Rebound effects in firms depend principally on the ability of firms to rearrange their factors of production (labor, capital, energy, and various materials) to better take advantage of now-cheaper energy services. This is especially true for new productive capacity. If long-term substitution is high, rebound effects can be substantial. In addition, output effects contribute to rebound for energy intensive firms with a high elasticity of demand for their products (that is, where consumers are very responsive to changes in the price of their products and demand more product as the price falls).
Improvements in energy productivity at firms can also contribute to greater economic activity and growth, driving up energy demand overall. In general, rebound effects are higher for efficiency in productive sectors of the economy than for end-use consumer efficiency. This is notable, because two-thirds of the energy consumed in the U.S. is consumed in the productive sectors of the economy and "embedded" in the non-energy goods and services purchased by consumers.
A: Yes. At the economy-wide, macro-economic scale, the aggregate impacts of widespread energy efficiency improvements can lead to substantial rebound effects, as producers and consumers respond in turn to various cascading changes in the price of goods and services, the pace of economic growth quickens, and market prices for fuels may fall, driving a further rebound due to market price effects. Since these economic responses are complex and varied, economic modeling is most often used to estimate the scale of macroeconomic rebound due to aggregate efficiency improvements.
A number of 'Computable General Equilibrium' models (see page 34 of the study) generally show rebound at the scale of a national economy of 30-50% or greater, with a surprising number predicting rebound greater than 100% (aka 'backfire'). These studies look at national economies and thus ignore global, macro-economic impacts beyond national boarders, which can add additional rebound in energy consumption.
'Integrative modeling,' a more detailed approach utilized by energy analysts at Cambridge, found that if the world adopted all of the "no regrets" energy efficiency policies suggested by the International Energy Agency, then rebounds effects would erode more than half of expected savings (52%) in the long-term. There are also several reasons to think this is may be a conservative estimate (see pages 39-40 of the study).
At the macro-economic, global scale most relevant to climate change mitigation efforts, then, rebound effects can be substantial, and erode much (if not all) of the expected energy savings and climate benefits.
A: Rebound is likely to be particularly acute and is most likely to trigger backfire (rebound >100% of initially expected energy savings) in the following cases:
If the supply of energy services is a key constraint on economic activity and growth (as it is in much of the developing world), then improvements in energy efficiency are likely to trigger acute rebound or even backfire. In a world where roughly 1.6 billion people lack access to electricity and 2.5 billion rely primarily on primitive biomass (e.g., wood and dung) for cooking and heating, huge pent-up demand for energy services persists and the availability of energy services will be a major determinant of future rates of economic growth and progress. This in turn indicates potential for very large rebounds for efficiency improvements in developing nations.
When more efficient (and thus lower cost) energy services open up new markets or enable widespread new energy-using applications, products, or even entire new industries to emerge. We dub this dynamic a 'frontier effect' in our report, because in these cases, the 'production-possibility frontier' for an energy-using technology expands significantly, opening up unforeseen opportunities for substitution and potentially significant impacts on economic activity and the composition of the economy. In such cases, backfire is the most likely outcome.
Backfire due to this 'frontier effect' dynamic is most likely to arise for 'general-purpose technologies' that have a wide scope for improvement and elaboration, have potential for use in a wide variety of products and processes, and have strong complementarities with existing or potential new technologies. Examples of 'general-purpose technologies' could include steam engines, electric motors, lighting, gas turbines, semiconductors and computing technologies, lasers, robotics, radio transmitters, and perhaps many others. Backfire is most likely to result after energy efficiency improvements in these general-purpose technologies. (See p. 47-8 of the report.)
These emergent 'frontier effect' dynamics may prove particularly challenging for energy analysts to forecast or account for in modeling efforts, as they necessarily involve unforeseen and unpredictable applications of new and improved technologies. This means that forecasts of rebound can easily underestimate eventual rebound due to frontier effects triggered by sustained efficiency gains.
When energy efficiency improvements not only improve the productivity of energy, but also result in simultaneous improvements in other factors of production, such as labor or capital (a 'multi-factor productivity improvement'), an outsized impact on economic output and significant rebound in energy demand can arise.
Very large rebound or backfire is likely the norm in cases of 'win-win' efficiency opportunities, where energy-saving technical changes simultaneously improve the productivity of other factors of production, multiplying the impacts on output, economic growth and energy demand.
For example, in a 2005 paper, efficiency consultant Amory Lovins writes:
"Improved energy efficiency, especially end-use efficiency, often delivers better services. Efficient houses are more comfortable; efficient lighting systems can look better and help you see better; efficiency motors can be more quiet, reliable, and controllable; efficient refrigerators can keep food fresher for longer; efficient cleanrooms can improve the yield, flexibility, throughput, and setup time of microchip fabrication plants; ... retail sales pressure can rise 40% in well-daylit stores ... Such side- benefits can be one or even two orders of magnitude more valuable than the energy directly saved. ...[I]n efficient buildings, ... labor productivity typically rises by about 6-16%. Since office workers in industrialized countries cost ~100x more than office energy, a 1% increase in labor productivity has the same bottom-line effect as eliminating the energy bill - and the actual gain in labor productivity is ~6-16x bigger than that."
While the multi-factor productivity improvements Lovins describes greatly improve the economic case for energy efficiency upgrades, they simultaneously raise the specter of significantly greater rebound in energy demand than if the improvement in energy productivity were considered alone (as is common in the inquiries discussed in prior sections). If the economic impact of labor productivity improvements from efficient buildings is several orders of magnitude greater than the simultaneous savings in energy consumption, for example, then the rebound due to economic growth/output effects alone should also be several orders of magnitude greater than would be predicted if the energy savings were considered alone.
A: Most certainly not! Truly cost-effective energy efficiency improvements make great economic sense and improved energy efficiency may be a key determinant of future economic welfare. In this sense, it may also contribute indirectly to climate mitigation and decarbonization objectives (see "Discussion and Implications" section of our report).
As Skip Laitner of the American Council for an Energy Efficiency Economy writes, "our lagging efforts on efficiency may actually constrain our larger economic productivity."
As we note in our report, this is often the case, particularly in the developing world. Pursuing cost effective energy efficiency opportunities makes great sense then from an economic development and human welfare perspective. At the same time, however, this is precisely why energy efficiency can trigger significant rebound effects that reduce the ability of efficiency to drive down total greenhouse gas emissions, even as efficiency contributes significantly to greater economic growth.
In short, unlocking the full potential of efficiency may mean the difference between a richer, more efficient world, and a poorer, less efficient world. The former is clearly the desirable case, and the one we should all strive for! But in either case, the world will use more or less the same amount of energy. In some parts of the economy, efficiency may reduce overall energy use, while in others it may increase it. The net effect, after accounting for efficiency's role in unlocking economic growth (among other rebound effects) is far from a linear and direct reduction in energy use.
We therefore argue that we should continue to pursue any cost-effective efficiency opportunities on economic grounds, even as we reconsider the degree to which these measures will contribute to climate mitigation efforts.
"In any case, truly cost-effective energy efficiency measures should be vigorously pursued, as they will lead to an improvement in general welfare (at least narrowly construed in economic terms). However, from a climate mitigation perspective, we must be keenly aware of the precise, macroeconomic impacts of energy efficiency improvements, since only a reduction in total aggregate energy consumption will directly contribute to emissions reduction objectives. This in turn requires an understanding and analysis of the non-linear combination of impacts on economic activity, demand for energy as a factor of production, and other macroeconomic factors that are together summed up in the term 'rebound effect.'"
A: Rebound effects are part of the reason that energy use is still growing, even as the economy gets more and more efficient. True, economic growth drives up energy use, even as we get more efficient. But those two terms - economic growth, and energy efficiency - are not unrelated, and rebound effects describe the relationship between the two.
Part of the reason the economy continues to grow is because below-cost energy efficiency improvements grow the supply of energy services and increase the productivity of the economy - we get more economic activity and income and welfare out of the same amount of energy - and productivity improvements are a key driver of economic growth.
Some economists argue that the supply of energy services is a key enabling force in economic growth: think about the impact of electric motors, industrial lasers, computing, automation, and all of the other ways in which we use energy - often quite efficiently - to greatly improve the productivity of our economy. Think about how important energy services - lighting, efficient cooking stoves, electricity - are to development outcomes in the emerging economies of the world. Efficiently expanding the supply of energy services may thus be one of the principal factors determining the rate of economic growth in rich and poor nations alike (see the previous question for more).
That said, there are definitely other factors driving economic growth, including improvements in the productivity of other inputs to the economy, such as labor, capital, and other materials. Rebound effects and energy productivity improvements aren't the only driver of economy growth by any means.
A: Overall, the global economy has been growing at the rate of roughly 3% per year. Historically, we've only seen a roughly 1-1.5% improvement in energy use per unit of economic output (energy intensity or productivity) each year.
For energy efficiency gains to outstrip the increase in energy demand driven by the growing economy, the economy must improve energy intensity/productivity by at least 3% per year, roughly double or triple the historic rate of improvement.
So economic growth continues to out-pace energy efficiency improvements, and energy use continues to grow overall.
Efficiency advocates argue that if we work harder at capturing energy efficiency opportunities, we can more than double or triple this rate of efficiency improvement and bend global energy use downwards.
That's a big task already, but at least two factors make this challenge even harder:
First, a large portion of changes in energy intensity over time can be attributed to structural changes in the economy (Baksi and Green 2007), as economies shift from agricultural to industrial to services-oriented over time. These aren't the technical improvements in transportation, lighting, buildings, or industrial efficiency that energy efficiency policies are concerned with, and these trends are hard to accelerate or effect through policy. They may not continue indefinitely either, so there are limits to gains here.
If, for example, one-half or two-thirds of the historic rate in energy intensity improvements are due to sectoral transitions and structural changes in the economy, then efforts to increase the rate of technical efficiency improvement must work two or three times harder to succeed. Instead of a more than doubling or tripling of our efforts, we must achieve a more than four to nine-fold increase in technical efficiency improvements.
Second, that estimate does not account for rebound effects. Rebound makes the goal even more challenging, as it means efficiency feeds back into energy consumption and economic growth increasing both and making the horizon we're reaching towards recede even further. For every two steps forward we take with below-cost energy efficiency, rebound effects take us roughly one (or more) steps backwards.
For these reasons, we think it is prudent to revisit the ability of below-cost energy efficiency to decouple the economy from growing energy use and drive lasting reductions in climate-destabilizing greenhouse gases. While we should continue to pursue cost-effective energy efficiency measures improvements wherever they may be found, as we write in the report (p. 52):
"Efforts to reliably reduce greenhouse gas emissions or dependence on depleting fossil fuels would be prudent to avoid the risk of overreliance on energy efficiency measures. Such efforts should therefore focus primarily on shifting the means of energy production (rather than end use), relying on zero-carbon and renewable energy sources to diversify and decarbonize the global energy supply system."
A: While the term 'rebound effect' is generally used by energy economists to talk about rebounds after energy efficiency, the basic economic mechanisms - elasticity of demand and substitution, re-spending effects, and the contribution of productivity to economic growth - are well-understood economic phenomena relevant to improvements in the price or productivity of any factor of production, be it capital, materials, or labor.
Let's consider labor, for example. Economists would never assume that a 20% improvement in labor productivity - aka a "labor efficiency" improvement - would reduce overall demand for labor in the economy by 20%.
Everyone knows that improving labor productivity drives economic growth, creates new profitable ways to utilize labor, and overall generally increases employment at the macroeconomic scope, not decreases it.
Even at the scope of the individual factory or assembly line, improving labor productivity may mean the plant can get by with fewer laborers on the shop floor, but even there, the net effects on demand for labor are far from linear and direct. Higher labor productivity lowers product costs and increase demand for those products and opens up new markets that weren't profitable before. It frees up money to re-invest in other areas of production, and it creates new jobs in other areas of business. Even at the firm level, a 20% improvement in labor productivity won't mean 20% of the company's staff is laid off.
Yet this is precisely the simplified, linear assumption that is routinely made in energy and climate forecasting and scenario planning. A 20% improvement in energy efficiency = a direct, 20% net reduction in energy demand, relative to business as usual.
"Rebound effects" are what energy economists call the same, common sense story we just went over for labor, when we're talking about energy productivity or efficiency rather than labor productivity.
The reality is that energy isn't different from labor, or materials, or capital, and a whole field of academic work has gone on - largely out of notice of mainstream energy analysis and policy making - to explore and illustrate how energy efficiency leads to a series of complex, non-linear response throughout the economy that drive a rebound in demand for energy services and thus a rebound in consumption of energy itself. Our "Energy Emergence" report surveys this evidence and presents key implications for climate mitigation efforts.
A: More or less, yes. This basic but somewhat paradoxical dynamic - that energy efficiency lowers the price of energy services, leading to a rebound in consumption of those services - was first thoroughly discussed by British Economist William Stanley Jevons in an 1865 book, The Coal Question. He famously wrote, "It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth."
Some people define this so-called "Jevons Paradox" more strictly, saying that the Paradox refers only to cases when the rebound effects triggered by efficiency measures drives more demand for energy than was originally saved by the efficiency improvements. That's a scenario known in the rebound literature as "backfire," a special kind of severe rebound effect that is greater than 100% of the initially expected energy savings. Backfire means improving energy efficiency actually increases energy demand overall, relative to what it would have been if the efficiency measures hadn't been pursued at all. This is precisely what Jevons observed when he noted that the much more efficient steam engine developed by James Watt led to a huge increase in coal consumption during the 19th century, rather than the conservation of Britain's dwindling coal resources.
However, the generalized dynamic Jevons observed: that efficiency lowers the cost of energy services, driving a rebound in demand for those services, not a direct linear reduction in demand or conservation of fuels, is equivalent to what energy economists now call "rebound effects."
A: No, not all energy efficiency measures trigger rebound effects. Rebound effects are concerned with the response to below-cost efficiency improvements. That's the "low-hanging fruit" we always hear about, the efficiency measures that pay back more in avoided energy use than they cost to install. These are also the ones "below zero" on the often-cited McKinsey and Co. greenhouse gas abatement cost curve seen below. Below-cost efficiency measures always reduce the implicit price of energy services - the useful work provided by energy consumption, be it heating a home, transporting people or goods some distance, powering a production facility, or lighting a work space - and thus always trigger a rebound in demand for those services (see the first question in this series above). It's not a question of whether efficiency measures that truly "pay for themselves" will trigger rebound - they will - the question is how large that rebound will be?
Not all energy efficiency measures are below cost though (the graphic above has arrows pointing to a couple of 'above-cost' efficiency measures, according to McKinsey: plug-in hybrid electric cars, and efficient building design for new buildings). While they incur an economic cost, these efficiency measures should not trigger rebound effects and may still prove effective at reducing energy demand. As we wrote in the report (p. 52):
There is no shortage of opportunities to improve energy efficiency that are not cost-neutral or below-cost. While these measures come with a price tag, in many cases the costs are reasonable and such efforts may be well justified given the long-term threat, economic and otherwise, that global climate change represents.
A: Technically, yes. Price-induced efficiency improvements, whether in response to exogenous energy price increases (changes not caused by policy that is) or successful policy efforts to price carbon emissions or impose energy taxes, should not be expected to result in significant rebound. However, as we write in the report (p. 53), "to fully avoid rebound effects, energy price increases must be sufficient to keep the final price of energy services constant despite improvements in energy efficiency, eliminating any net productivity gains from the efficiency measures." That is, in rough terms, if energy efficiency drives down the price of energy services by 30% or 50%, then energy prices would have to increase through carbon taxes or fees by an equivalent 30% or 50%.
Achievement of deep reductions in energy demand and associated carbon emissions through price induced efficiency will therefore require substantial and rising energy prices over time and sustained over the multi-decadal periods relevant to climate policy, such that rising energy prices keep pace with the improvements in energy productivity.
Furthermore, if revenues collected through carbon pricing, energy taxes, or other efforts to raise energy prices are reinvested into economically productive ends, macroeconomic rebound effects may result, so the precise use of revenues will determine the efficacy of these policies in curbing rebound.
As we conclude in the report:
"Thus, carbon pricing policies (e.g., carbon taxes or cap and trade systems) and energy taxes offer potential tools to mitigate some or all of the energy demand rebound resulting from efficiency improvement - although implementing such policies faces practical challenges and will invariably encounter the political difficulties inherent to policy efforts that seek to impose energy price increases that will result in loss of economic welfare (ignoring potential benefits of avoided economic externalities).
A: Dr. Koomey has done no such thing, as he clarifies in a post at his own blog here. Koomey writes, "It will take time to review the technical questions in the detail this issue deserves, so I'll hold off on stating any conclusions until that work is done."
Joseph Romm of Climate Progress has misrepresented Koomey's work, claiming that "Some of the nation's top energy experts have debunked" our report, linking to a memo from Koomey as his sole evidence. There has been no "debunking" of the the Breakthrough Institute report surveying that literature nor even a serious attempt to debunk it.
A more up to date and unedited compilation of the key emails in that dialog can be read here, if the reader cares to delve deeply into this discussion and see for themselves. Note that the discussion is ongoing.
No. Far from blaming below-cost efficiency for "evils" we praise it as good for economic growth and welfare. However, we do point out that it can increase energy consumption, and that efforts to reduce greenhouse gas emissions cannot rely, as many leading analysts to, on simplistic claims that energy efficiency results in direct energy consumption declines.
Steven Sorrell of the University of Sussex in England headed up a similarly comprehensive review of the evidence for rebound effects published by the UK Energy Research Center in 2007 and originally commissioned by the UK government. In reply to NRDC's David Goldstein and Ralph Cavanagh, he wrote:
"[T]he claim that the Breakthrough Institute "fails to back up its accusations with facts" is plain wrong. Their report is based upon a large volume of empirical evidence in the academic literature. I reviewed this a few years ago - [link] - and the Breakthrough report brings this up to date."
As Mr. Sorrell cautious, "[T]his topic [rebound effects] needs intelligent and careful research to help us understand it better, to improve the quantitative estimates, to reduce the uncertainties and to figure out what we can do in response. Simply dismissing it out of hand," as Goldstein and Cavanagh have tried to do, "will get us nowhere."
Do you have your own questions that aren't answered here? Please leave your question in the comments and we'll do our best to answer.
Last week, a group of Senate Democrat leaders unveiled their plan to build off of the innovation-centered budget proposal released by the President two weeks ago, including several important investments in energy innovation, advanced manufacturing, and infrastructure.
Senate Majority Leader Harry Reid introduced the proposal as an effort to simultaneously "create jobs, promote growth and help America win the future by making smart investments in education, innovation and infrastructure while cutting spending to live within our means."
The Senate Democrats' plan to judiciously invest in innovation and infrastructure while cutting wasteful spending elsewhere in the budget stands in sharp contrast to the Continuing Resolution bill passed by the House this weekend. The House bill budget would cut more than $60 billion from the federal budget to fund the government through FY2011, slashing several important energy innovation initiatives.
The House Republican's Continuing Resolution proposal to fund the government through the rest of Fiscal Year 2011 (FY11, ending Sept. 30) would slash energy innovation investments across federal agencies. The bill, H.R. 1, was introduced last Friday as the GOP's attempt to reduce the deficit and restore "fiscal responsibility," yet would nevertheless strip highly leveraged dollars from important federal programs, while representing merely a drop in the bucket of the $1.3 trillion federal deficit.
The Continuing Resolution as it stands would slice over two billion dollars from the DOE's budget alone and would have detrimental impacts on the state of American energy innovation. The budget cuts would force the layoffs of scientists and engineers, shrink the capabilities of laboratories and universities to perform the most critical cutting-edge energy research projects, and, by cutting funds for highly-leveraged loan guarantee programs, steer private sector funds away from American entrepreneurs and small businesses looking to demonstrate and deploy their innovative energy technologies on American soil.
The Continuing Resolution proposes cuts of at least 17% as compared to FY10 levels in each of the most innovation-oriented offices in the Department of Energy:
The agency which would be hardest hit would be the Advanced Research Projects Agency-Energy (ARPA-E), which funds both the riskiest and most transformative, early-stage energy innovation projects, and would lose a staggering 75% of its budget under H.R. 1.
The Office of Energy Efficiency and Renewable Energy (EERE), which was responsible for roughly 34% of the DOE's energy innovation investments in 2010, would lose 35% of its FY10 budget.
The Office of Science, which funds critical early-stage energy innovation research, would see a 20% decline in its budget. Office of Science devoted 20% of its 2010 budget to energy innovation funding, while supporting additional fundamental physical science research.
The Office of Nuclear Energy, which devoted 41% of its funds to energy innovation projects in 2010, would lose 23% of its budget.
Meanwhile, the Office of Fossil Energy would see an 11% reduction in its budget. 43% of the office's 2010 budget was devoted to energy innovation efforts.
"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.
President Obama released his fiscal year 2012 budget proposal this morning, a solid endorsement of the necessity to increase public investment in energy innovation amidst proposals to indiscriminately cut discretionary spending across all federal programs. The President's budget proposal builds off of the innovation-centered economic growth strategy presented in the State of the Union Address last month and the White House Innovation Report released two weeks ago.
On the energy investment front, the budget proposal aims to increase the DOE's budget by 11.8 percent over FY2010's current appropriation levels, or $3.1 billion dollars, a comparatively small increase in an overall budget proposal of $3.7 trillion that proposes reducing the projected deficit by roughly $110 billion per year for the next ten years.
This budget increase is a vital step towards meeting the scale of the energy innovation challenge long-underlined by the Breakthrough Institute and by a general consensus of leading energy innovation experts, think tanks, and policymakers.
However, not all of these increases lie with funding for energy innovation. Using the Energy Innovation Tracker, a tool that compiles federal energy-innovation funding across nine federal agencies for the years 2009-2011, inclusive of ARRA, we've broken out investments in energy innovation (defined in the tracker as Basic Science, RD&D, and Education investments) from general energy investments in measures such as deployment, facility construction, and program management.
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.
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.
Update 1/31/11: If you missed Michael Shellenberger, Ted Nordhaus, and Steve Hayward at Duke last week, check out the video of their full lecture, "Hitting the Reset Button on Energy Policy," below:
Next week Breakthrough's Michael Shellenberger and Ted Nordhaus begin a university speaking tour focused on taking a look at energy policy beyond the climate wars. The duo will discuss "Post Partisan Power," an October 2010 report co-authored by think tanks on the left, right, and center, which calls for $25 billion in federal funding to accelerate energy innovation.
The first leg of the tour will take them to Duke and NYU, along with Steve Hayward of the American Enterprise Institute, a co-author of the "Post-Partisan Power" report. Later in February, Ted and Michael will extend their tour with an event at the University of Wisconsin-Madison.
On January 26, the two stop at Yale for a special retrospective on "The Long Death of Environmentalism." Michael and Ted last visited Yale in 2005 to defend their thesis that the modern environmental movement was incapable of effectively addressing the planet's most serious ecological challenge, global warming, and will return to discuss the evolution of the environmental movement and where we stand today.
As Ryan Avent writes: "economics is clearly moving beyond the carbon-tax-alone position on climate change, which is a good thing. If the world is to reduce emissions, it needs technologies that are both green and cheap enough to be attractive to economically-stressed countries and people. And a carbon tax alone may not generate the necessary innovation."
Over at the Economist, Ryan Avent notes that economists are beginning to move beyond a simple reliance on carbon pricing as the sine qua non of climate policy:
The typical baseline economist response to the problem of global warming is a very simple and straightforward one. Climate change is a negative externality, and the carbon emissions that generate it are easily targetable. The clear thing to do, then, is to place a tax on carbon emissions which will lead economic actors to internalise the cost of the warming they create with their decisions. This will discourage carbon-intensive activities and contribute to the development of clean alternative, reducing emissions and climate change.
Easy enough. Unfortunately, this strategy quickly runs into difficulty. One big problem is political. It's very difficult to convince people to accept higher energy costs, and it's very difficult to coordinate policy across countries, which is necessary to ensure that the policy works correctly. But there are also economic challenges. ... Economies are good at finding substitutes for key technologies, but it does take some time. And so because the world has waited so long to act, it now seems that the disaster-avoiding carbon tax path may itself be too economically damaging. So what's an economist to advocate?
Here's an intriguing story to kick off the new year with a little retrospection...
Flash back to 2008, and nearly all of the top GOP contenders for a 2012 presidential run were taking global warming pretty seriously and offering real, if measured, endorsements of Congressional or state action to curb pollution and GHGs.
On the campaign stump, in books, speeches and nationally-televised commercials, aspiring GOP White House candidates such as Tim Pawlenty, Mike Huckabee and Mitt Romney have warned in recent years about the threats from climate change and pledged to limit greenhouse gases. Some have even committed the ultimate sin, endorsing the controversial cap-and-trade concept that was eventually branded "cap and tax."
Back in 2008, Newt Gingrich took to a couch next to the Right's current-day arch-nemesis, Nancy Pelosi, to endorse Congressional climate action in an ad sponsored by Al Gore's Alliance for Climate Protection.
And as Politico notes, even Sarah Palin has flip flopped on the issue:
Just days after McCain picked her as his running mate, Palin told ABC News she believes human activities "certainly can be contributing to the issue of global warming, climate change" and that "we've got to do something about it, and we have to make sure that we're doing all we can to cut down on pollution."
Politico's Darren Samuelsohn calls it the McCain effect, with John McCain's prominent endorsement of cap and trade legislation making it safe for GOPers to talk about climate.
"I think McCain is moving in a responsible direction," then-House Minority Leader John Boehner (R-Ohio) told E&E News in May 2008. "Clearly the issue of climate change is on the minds of a lot of people. Humans clearly contribute to this. It just really depends on what kind of a cap-and-trade system, what kind of safety valves are in there."
Flash forward just a few years and each of these prominent GOPers are likely running for an excuse, a mea culpa, or another way to distance themselves from green records that are now liabilities with a Republican base strongly influenced by the Tea Party movement.
So what happened? Was it simply the polarizing direction of the cap and trade debate? The shift in the economic winds? The rise of the Tea Party? The inherent politics of a proposal centered on making our current base of energy sources more expensive, rather than making the cleaner alternatives cheaper?
Whatever the constellation of causes, the change is quite stark. Looking ahead to 2011 and beyond, can we build a new and enduring consensus around an innovation-centered approach to energy reform, building a clean economy, and responsibly reducing pollution? And can we make it sustained enough to avoid the factors that turned the endorsements of prominent GOP leaders into liabilities just a few years later?
Nobel Laureate physicist Dr. Burton Richter discusses the three dimensions of the global energy challenge - economy, security, and environment - in his keynote at the "Energy Innovation 2010" conference in December.
"Energy Innovation 2010" keynote presentation delivered by Nobel laureate physicist Dr. Burton Richter on December 15, 2010.
(Richter's Keynote begins at 5:56 in the video below)
I have been asked by the organizers to be provocative at this discussion of energy innovation - the more provocative the better, I was told. So far, the talks have focused on the need for innovation to get the technologies of the future developed and deployed so that the issue of climate change can be effectively addressed. We all know that the country is not getting the action on the Federal front that the issue warrants, and thinking about how we might do better leads me to three questions.
1. Have we focused so exclusively on climate change as a justification for action on energy that we have excluded potential allies?
2. Have we emphasized ultra-green technologies that are not yet ready for the big time, and so had our desire for the perfect drive out the available good?
3. Have we pushed policies that are so narrowly targeted as to prevent much larger and less costly emissions reductions to be made in the nearer term than have been made with the renewables?
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.
Earlier this month, China surpassed Japan as the world's second largest economy and since, has snared a flurry of clean tech headlines that collectively tell a very clear story: China is rapidly and effectively securing its position as a global clean technology leader as the U.S. watches in stagnated wonder.
Below we've aggregated some of the most important updates coming out of China over recent weeks as it surges to the front of the global clean technology sector:
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.
_____________
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.
By Rob Atkinson, Ted Nordhaus, and Michael Shellenberger
For forty years, presidents and policymakers have promised and planned for a new energy future just over the horizon. While the rationales have varied - reducing dependence on imported oil, stopping global warming, reducing air pollution, creating clean energy jobs - the song has largely remained the same: America has most, if not all, of the technologies needed today to make a quick and relatively painless transition away from fossil fuels.
Yet America is more dependent upon fossil fuels than ever before. U.S. oil consumption rose from 15 to 20 million barrels a day between 1970 and today, while coal still provides about 50 percent of our electricity. U.S. carbon emissions continue to rise unabated, as efforts to cap them have repeatedly foundered in the face of daunting political, economic, and technological obstacles. And renewable technologies like wind and solar only meet a tiny fraction of America's energy needs despite several decades of efforts to subsidize their deployment.
When experts convene in Washington next week to discuss energy policy at the Energy Innovation 2010 conference, they will do so in the wake of yet another failed federal effort to pass legislation to support a transition away from fossil fuel-based energy.
Breakthrough Institute and other leading think tanks sponsor day-long conference rethinking energy innovation in the United States: getting to scale, making clean energy cheap, securing American leadership.
After
two years of often-tumultuous debate in Congress, the national debate
over energy and climate change policy has now been altered: cap and
trade policy efforts have run aground in Congress, perhaps fatally, and
Republicans are ascendant, reshaping the national political landscape.
Meanwhile, with economic recovery the top priority for the public and
policymakers alike, America's clean tech competitors are surging ahead,
raising the stakes for energy policy.
Against this backdrop,
support is growing on both right and left for new national investments
in energy innovation that can help address some of the most urgent
imperatives of our time - renewing the economy, improving energy
security and public health, and overcoming key environmental challenges.
A growing chorus of voices thus counsels a renewed national commitment to develop breakthrough energy technologies - and to the reform of America's energy innovation system itself.
In
recent months, energy experts have advised policymakers to: take a page
from the nation's long history of successful military research and
procurement; build on the success of agricultural research stations and
the National Institutes of Health by establishing new innovation
institutes and clusters nationwide; promote the right mix of both
competition and collaboration to spur innovation and productive
knowledge spillover; reform energy subsidies to reward innovation; and
restructure business taxes to promote investment in the building blocks
of an innovation economy.
On December 15th, a group of America's leading policy think tanks will host a day-long conference in Washington D.C. to rethink energy innovation.
Energy Innovation 2010,
held at the National Press Club, will bring together leading experts
from government, think tanks, academia, and business to ask hard
questions about how energy innovation efforts can be brought to scale,
how the innovation system must be restructured and reformed, and how to
renew the kind of active partnerships between the public and private
sectors that were responsible for so much of America's prior
technological innovation and economic strength.
Breakthrough Institute is proud to organize and sponsor this free, day-long conference, along with the Information Technology and Innovation Foundation and with sponsoring partners the American Enterprise Institute, Third Way, Clean Air Task
Force, Consortium for Science, Policy and Outcomes, Securing
America's Future Energy, and the Brookings Institution. We are pleased to
welcome TheEnergyCollective.com and Yale Environment 360 as media sponsors for the event.
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.
Forcing countries to agree to emissions caps will never work, argue Ted Nordhaus and Michael Shellenberger. The duo argues in a special Wall Street Journal column that the global community should think past U.N. climate talks in Cancun and focus instead on energy innovation, adaptation, and no regrets policies that do not require agreement about global warming.
The failure of the U.N. climate process is proof that shared economic sacrifice cannot be the basis of global action. Nations will not scale up clean energy as long as it remains so much more expensive than fossil fuels. Thinking past talks in Cancun, nations should focus instead on energy innovation, adaptation, and no regrets policies that do not require agreement about global warming. The first step is recognizing that the global market for clean energy exists only thanks to government subsidies and mandates. Instead of imposing emissions controls and subsidizing existing technologies, nations should use competitive deployment to purchase advanced energy technologies, benchmark the winners, and allow intellectual property to spill-over between firms and nations.
This is the framework we propose for pragmatic global climate action in the cover story for a special energy section in today's Wall Street Journal, pegged to the start of U.N. climate talks in Cancun, Mexico. Today also marks the launch of a new web site, Breakthrough Europe, and its kick-off post, "Cancun Can't: The Twilight of European Climate Leadership," which documents the failure of Europe's cap and trade system to reduce emissions.
Our Wall St. Journal essay, "How to Change the Global Energy Conversation," builds on Breakthrough Institute's thinking about the failure of the UN process ("Scrap Kyoto," Democracy Journal), the clean tech intellectual property illusion ("The Revolution Will Not Be Patented," Slate), the green Keynesianism and neoliberalism behind Obama's green jobs fiasco ("Green Jobs for Janitors," The New Republic), and our proposal to make clean energy cheap through technology innovation ("Fast, Clean & Cheap," Harvard Law and Policy Review, Feb 2008).
Gains from a stronger proposed EU emissions target will be swamped by two weeks of emissions growth in China, according to the International Energy Agency.
Were the European Union to call for a deeper cut in carbon dioxide emissions, it would do little to stem the unrelenting increase in global emissions and is unlikely to have any effect on the international climate negotiations, according to the International Energy Agency.
While Europe's negotiating position in international climate talks remains a target of 20 percent emissions reductions below 1990 levels by 2020, some have pushed it to target an additional ten percent reduction. The EU has long maintained that it would boost its target to 30 percent if other industrialized countries followed suit.
"We estimate extending Europe's plan to cut emissions from 20 to 30 percent would roughly equal China's two-week gas output."
Could the 10 percent EU additional emissions cut really equal only two weeks of emissions in China? We checked the numbers on that (h/t Roger Pielke, Jr.), and Mr. Birol is indeed correct.
Research and innovation on energy storage and transmission technology must proceed in parallel as the nation ramps up use of renewable energy, according to a new report from the American Physical Society.
New innovations in energy storage, transmission, and the integration of variable electricity sources are necessary to enable renewable energy sources to contribute significantly to the U.S. energy supply, according to a new report from the American Physical Society.
Establishing national policies to spur the deployment and adoption of renewable electricity sources, such as wind and solar power, are important, but the scientists warn that research and innovation must also proceed in parallel on better energy storage technologies, new strategies for integrating the varying and intermittent output of these energy sources, and improved technologies for the long-distance transmission of renewable electricity.
A new report by Third Way and an op-ed by three U.S. Senators add to the gathering consensus for a technology and innovation-led strategy for clean energy progress and economic renewal.
America can recapture the lead in the global clean energy race if it commits itself to a major public-private effort to spur clean energy innovation.
That's the message of a new report released today by Democratic think tank Third Way. The report, "Creating a Clean Energy Century," is the first in a series of reports from Third Way's new project on energy innovation, co-chaired by U.S. Senators Mark Udall (D-CO), Kay Hagan (D-N.C.), and Debbie Stabenow (D-MI).
The report begins with clear-cut premises. Clean energy is still too expensive and unreliable relative to fossil fuels. Other countries are moving toward clean energy more quickly than the United States. Countries that are able to make clean energy cheaper than fossil fuels will gain the greatest economic benefits, by capturing more of the rapidly growing domestic and global markets for clean energy.
There will be no cap-and-trade climate bill considered in the next Congress, Majority Leader Harry Reid (D-Nev.) promised a colleague today.
Newly sworn-in Sen. Joe Manchin (D-W.Va.) said today that Reid made a "total commitment" to him that there would be no cap and trade next session.
Reid's office confirmed the promise. "Given the election results, there is no chance we can deal with cap and trade," Reid spokesman Jim Manley told E&ENews PM.
New ideas will clearly be needed to make clean energy progress in the next Congress and beyond.
For more on that, see the "Climate Next" series now underway at the Atlantic, Slate, Mother Jones and the other participating partners in the Climate Desk project. Breakthrough's Michael Shellenberger and Ted Nordhaus kick off the series with their essay, "Innovate First, Regulate Later."
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.
Neal Lane, of Rice University former science advisor to President Bill Clinton, showed the slide above in a recent talk at the University of Colorado (which he provided to me today, Thanks Neal!). It shows a number of technologies somehow connected to federal innovation investments and their relationship to the iPod, discussed in an earlier post today.
Apple has long boasted of its culture of innovation, and how this led to such products as the original Mac and the iPod. However, it turns out that, at least in the case of the iPod, Apple had a hidden ally: the US government. During a speech at Tuskegee University, President (and iPod user) George W. Bush told his audience, "the government funded research in microdrive storage, electrochemistry and signal compression. They did so for one reason: It turned out that those were the key ingredients for the development of the iPod." While we have to gratefully acknowledge the efforts of government agencies such as DARPA in some of the fields mentioned by the President, we also feel obligated to point out the accomplishments of private companies in the US and abroad, including IBM, Hitachi and Toshiba -- not to mention the Fraunhofer Institute, which developed the original MP3 codec, and codeveloped (with Sony, AT&T and others) the AAC format used by Apple in the iPod.
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:
The United States and Australia have inked a new partnership to pursue joint solar energy research designed to make solar energy cheap enough to compete with fossil fuels.
Prime Minister Julia Gillard and US Secretary of State Hillary Clinton made the announcement in Melbourne on Sunday, with the Australian government set to commit up to $50 million towards the program.
Ms Gillard said the aim was to make solar power as cheap as conventional energy sources.
"One of the greatest barriers to a broader commercial take up of solar power is its cost and that is specifically what this joint research initiative will address," Ms Gillard told reporters.
"The joint project with the United States is part of an aggressive effort to bring the sales price of solar technology down by two to four times."
Ms Clinton said the program aimed to make solar power competitive with conventional energy sources by 2015.
The price had dropped by 50 per cent in the past three years but there was more work to be done, she said.
"Under this initiative our two governments will share both the costs and the benefits of research and development which will speed up innovation," she said.
Secretary Clinton also pledged a $500,000 grant from the U.S. State Department to support a global survey to identify opportunities to reuse carbon dioxide emitted by power plant and industrial processes, headed up by the Global Carbon Capture and Storage Institute, a recently established research center co-funded by the Australian government.
Solar Powerhouse? Solar irradiation in Australia is among the highest in the world, as this color-coded map from NASA illustrates (darker red areas have the most incoming solar energy). Source: The Age/Reuters
Australia, with perhaps the greatest solar energy potential in the world, has an obvious interest in pursuing affordable, scalable solar power solutions, and has also maintained several long-standing solar research efforts. Can the two new partners accelerate efforts to make solar energy cheap?
European Union member states may oppose new rules on how far their factories and power plants can offset their carbon emissions, to be proposed by the European Commission, environment ministries told Reuters.
The EU executive is expected to propose in the next two weeks curbs or an outright ban from 2013 on the most common types of offsets.
Europe's emissions trading scheme caps planet-warming gases emitted by industry, but allows companies to offset emissions by paying for carbon cuts in developing countries, as a cheaper alternative to cutting their own.
Shutting the main supply of offsets could push up carbon prices, if agreed by a majority of member states at a meeting of Commission officials and environment ministers later this month.
Any such ban would represent a step towards a more transparent form of carbon pricing, along the lines of a straight up tax. Offsets are of course one reason why there is no such thing as a "cap" in cap and trade.
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. ...
Support for a technology-first approach to America's energy and climate needs is rapidly growing in the wake of the October 14 release of the "Post-Partisan Power" proposal by scholars at the Brookings Institution, AEI and Breakthrough Institute. Here is a sampling of the many reactions and widespread discussion generated by the report...
Joshua Green, Atlantic Monthly & Boston Globe: "Unlike most of what gets introduced just before an election, this was not a soon-to-be-forgotten political ploy, but a long-term project to accomplish what Congress and the president could not: put the country on the path to a clean energy future."
David Leonhardt, New York Times: [T]he death of cap and trade doesn't have to mean the death of climate policy. The alternative revolves around much more, and much better organized, financing for clean energy research. It's an idea with a growing list of supporters, a list that even includes conservatives -- most of whom opposed cap and trade."
Tim Mak, Frum Forum (a site started by former Bush speechwriter David Frum): "If Americans want to fight the challenges of climate change and reduce their dependence on foreign oil, this piece sets a good baseline for discussion."
Ezra Klein, Washington Post: "It's not that PPP is a sure thing, nor that it will pass Congress anytime soon. The Tea Party Republicans will need to sow their wild and crazy oats for awhile before they feel any need to tack to the center. But when they do, they aren't going to embrace cap and trade. They might, on the other hand, embrace a limited and direct approach to energy innovation."
Michael Levi, Council on Foreign Relations: [T]his idea may well make a lot of sense... most of the paper is actually a smart and thoughtful discussion of how to do energy innovation policy right".
Kirsten Powers, New York Post: " If America wants to remain the leader of the world economy, Washington has to attack this issue."
Bryan Walsh, TIME Magazine: "A truly bipartisan approach on energy and climate won't be easy--sometimes, especially right before an election, it seems completely impossible--but it's the only approach we can hope for, if we still hope."
Nature: "[G]iven the lack of consensus in other areas, long-term R&D intended to bring the cost of clean energy down might well be one area where lawmakers will be able to agree."
Case Western professor Jonathan Adler writes: "While not without flaws, the proposal represents a serious alternative to politically-moribund cap-and-trade proposals and the regulate-everything mindset that produced the Waxman-Markey bill."
Newsweek: "Cap-and-trade is on life support, but its weakness is giving other ideas room to breathe. Emerging proposals focus on investment in clean energy, pitched to the public with a narrative that omits a doomsday point of view about global warming and instead focuses on more practical considerations like job creation or the need to stop certain types of pollution."
All that convergence around a politically centrist, technology-first approach alarmed some climate warriors on left and right.
Climate skeptic Steven Milloy of Green Hell blog (and Junkscience.com) wrote: "The left isn't oscillating at all. They are focused on establishing a one-world socialist paradise. Whatever path gets the comrades there, they'll follow. Global warming has just been there most successful gambit to date."
Said Grist.org's David Roberts: "The Republican Party don't want to spend government money on clean energy, Hayward notwithstanding."
Joe Romm, ClimateProgress.org: [It] should also be obvious we're not going to get a massive federal clean energy program either."
Not all long-time climate warriors were sour on the proposal.
While EDF chief economist Nathaniel Keohane reiterates that "we need both cap and trade and sustained investment in clean energy R&D," he went on to tell the New York Times' David Leonhardt, "if it turns out that we can't get cap and trade in the near term, we need R&D investment all the more."
Harvard's Robert Stavins still insists "there is no other feasible approach that can provide meaningful emissions reductions" beyond cap and trade, but he acknowledges: "New path-breaking technologies will be needed to address climate change, and public support for private-sector or public-sector R&D will be crucial to meet this need."
MIT's Michael Greenstone, a long-time cap and trade supporter, isn't so sure about the real-world viability of the policy he once advocated. "The first best hope was getting a world price for carbon, and that now looks remote in the coming years," he told Leonhardt. "But there are ways in which the other options may be preferable to a price only in the U.S." Greenstone endorses the need for $25 billion in clean energy R&D investments and rightly explains, "All the action is really going to be occurring in developing countries" who will need clean and affordable energy to power their economic growth.
In a second post, Washington Post's Ezra Klein looks the realpolitik in the face as well and concludes: "The best of all worlds would've been a price on carbon married to a big investment in clean-energy research. But this is not the best of all worlds. This is our world. And this [technology-first proposal] ... might be our last, best chance to protect it."
Update The Washington Post editorial page endorses Post-Partisan Power's call for a bipartisan energy innovation strategy, noting: "Even if cap-and-trade had passed, the logic goes, the government would still have had to invest in scientific research to make green energy affordable; might as well make those investments, anyway ... incremental action is better than none."
David Ropeik brings to light a pragmatic point about the psychological challenges to new nuclear power deployment caused by fear of nuclear power:
But, as is often the case with risk perception, emotional filters, more than the facts, determine how afraid we are, or aren't.
Whether this is rational or irrational, right or wrong, is irrelevant. It is, inescapably, how it is. But we must recognize that our response to risk can pose a danger all by itself. Our fear of nuclear power has led to energy economics that favor coal and oil for electricity, at great cost to human and environmental health. Particulate pollution from fossil fuels kills tens of thousands of Europeans every year, and CO2 emissions fuel a potentially calamitous shift in global climate.
No amount of education or good communication can get around this. Subjective risk perception is hard-wired into our architecture and chemistry. What governments can do is to learn what psychological research has established: our perceptions, as real as they are and as much as they must be respected in a democracy, can create their own perils.
With that understanding, government risk assessment can account not only for the facts, but also for how we feel about them and how we behave. That way, we can reduce conflict over nuclear power and other risk issues, and foster wiser and more productive policies for public and environmental health.
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."
When policies on emissions reductions collide with policies focused on economic growth, economic growth will win out every time. Climate policies should flow with the current of public opinion rather than against it, and efforts to sell the public on policies that will create short-term economic discomfort cannot succeed if that discomfort is perceived to be too great. Calls for asceticism and sacrifice are a nonstarter.
The "iron law" thus presents a boundary condition on policy design that is every bit as limiting as is the second law of thermodynamics, and it holds everywhere around the world, in rich and poor countries alike. It says that even if people are willing to bear some costs to reduce emissions (and experience shows that they are), they are willing to go only so far...
To succeed, any policies focused on decarbonizing economies will necessarily have to offer short-term benefits that are in some manner proportional to the short-term costs. In practice, this means that efforts to make dirty energy appreciably more expensive will face limited success.
...
The unavoidable reality is that policy makers and those they represent are committed to sustaining economic growth, bringing populations out of poverty, and expanding access to energy. Emissions reduction goals will not be achieved by policies that seek to stimulate innovation by constricting, much less by reducing, economic activity.
Yesterday, scholars from the American Enterprise Institute, the Brookings Institution, and the Breakthrough Institute released a joint report proposing a post-partisan way forward on climate and energy policy that moves beyond the framework of cap and trade. The report, "Post-Partisan Power," ignited a firestorm of discussion.
To answer some of major questions about the report, E&E News OnPoint TV host Monica Trauzzi invited Breakthrough Institute Director of Climate and Energy Policy Jesse Jenkins and Brookings' Senior Fellow and Director of Policy for the Metropolitan Policy Program to join her show.
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."
The new report calls for increasing federal innovation investment from roughly $4 today to $25 billion annually, and using military procurement, new, disciplined deployment incentives, and public-private hubs to achieve both incremental improvements and breakthroughs in clean energy technologies. The authors point to America's long-history of bi-partisan support for innovation.
Writes David Leonhardt in today's New York Times, "the death of cap and trade doesn't have to mean the death of climate policy. The alternative revolves around much more, and much better organized, financing for clean energy research. It's an idea with a growing list of supporters, a list that even includes conservatives -- most of whom opposed cap and trade."
Mark Muro of Brookings tells Politico the proposal's four parts "are broadly popular, provide a very broad and appealing American vision of economic transformation and are certainly far more doable than a global pricing system at this point." Added Steve Hayward of American Enterprise Institute, "The entire climate and energy agenda that we've been talking about for several years now has hit a dead end, so it's time to hit the reset button."
The new report calls for increasing federal innovation investment from roughly $4 today to $25 billion annually, and using military procurement, new, disciplined deployment incentives, and public-private hubs to achieve both incremental improvements and breakthroughs in clean energy technologies. The authors point to America's long-history of bi-partisan support for innovation.
Writes David Leonhardt in today's New York Times, "the death of cap and trade doesn't have to mean the death of climate policy. The alternative revolves around much more, and much better organized, financing for clean energy research. It's an idea with a growing list of supporters, a list that even includes conservatives -- most of whom opposed cap and trade."
Mark Muro of Brookings tells Politico the proposal's four parts "are broadly popular, provide a very broad and appealing American vision of economic transformation and are certainly far more doable than a global pricing system at this point." Added Steve Hayward of American Enterprise Institute, "The entire climate and energy agenda that we've been talking about for several years now has hit a dead end, so it's time to hit the reset button."
As the Times's Leonhardt explains the new post-partisan proposal, and the growing energy innovation consensus surrounding it, "reflect[s] the political reality that raising the cost of dirty energy is unpopular, especially when the economy is so weak. Finding the money to make clean energy cheaper, even when government budgets are tight, will probably be an easier sell."
While cap and trade legislation became embattled by partisan wars over climate science and compromised to the point of inefficacy, Leonhardt reminds readers that there is a successor strategy waiting, if one only turns to the long, bipartisan history of American technological leadership.
"[H]istory shows that government-directed research can work," Leohardt writes.
"The Defense Department created the Internet, as part of a project to build a communications system safe from nuclear attack. The military helped make possible radar, microchips and modern aviation, too. The National Institutes of Health spawned the biotechnology industry. All those investments have turned into engines of job creation, even without any new tax on the technologies they replaced.
"We didn't tax typewriters to get the computer. We didn't tax telegraphs to get telephones," Breakthrough Institute's Michael Shellenberger told the Times. "When you look at the history of technological innovation, you find that state investment is everywhere."
And in that history, lies a new path forward to deliver clean cheap energy, economic productivity, and national prosperity.
By Steven F. Hayward, American Enterprise Institute; Mark Muro, Brookings Institution; Ted Nordhaus and Michael Shellenberger, Breakthrough Institute
If ever there were a time to hit the reset button on energy policy, it is today. Congress is set to adjourn without taking substantive, long-term action on either climate or energy. While conservatives may be celebrating the death of cap and trade, the truth is that the right's longstanding hopes for the expansion of nuclear power and oil production have also run aground, foundering on the high cost of constructing new nuclear plants and the impacts of the devastating oil spill in the Gulf of Mexico. As a result, energy policy is at a standstill, despite overwhelming public support for accelerating the move to clean, affordable energy sources and tapping fast-growing clean energy industries to create jobs and wealth in the United States.
[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.
Turns out that decades of energy efficient lightbulbs and Energy Star appliances haven't led to reductions in energy consumption in the average household, but they have given the average American relatively more disposable income to devote to new (energy-guzzling) gadgetry.
As David Fahrenthold reports in the Washington Post:
The amount of energy that the average American requires at home has changed little since the early 1970s -- despite advances in technology that have made many home appliances far more energy efficient...
But on a per-capita basis, Americans still require about 70 million British thermal units a year to heat, cool and power their homes, just as they did in 1971...
A key reason, experts say, is that American homes are getting bigger, which means more space to heat and cool. And consumers are buying more and more power-sucking gadgets -- meaning that kilowatts saved by dishwashers and refrigerators are often used up by flat-screen televisions, computers and digital video recorders.
These trends "have balanced each other out. It's been a wash, basically," said Lowell Ungar of the nonprofit Alliance to Save Energy.
Breaking against conventional wisdom, SolveClimate's Elizabeth McGowan takes a fresh look at what a GOP win in November could mean for clean energy progress, noting that new political dynamics in a Washington under divided rule could actually improve chances for bipartisan energy legislation.
According to most electoral prognosticators, Republicans are poised to win major victories in the upcoming November midterm elections, with control of both the House and Senate within their reach. That should spell the end for climate and clean energy legislation, according to many observers, at least for the next Congressional cycle.
But what if it doesn't? Over at SolveClimate, Elizabeth McGowan takes a fresh look at what a GOP win in November could mean for clean energy progress, noting that split control in Washington could actually improve chances for bipartisan energy legislation.
The German government is proposing to extend the life of its nuclear power plants and use the resulting windfall to invest in alternatives to fossil fuels. The WSJ reports:
Germany's proposal to keep its nuclear reactors running on average 12 years longer than planned will bring in €30 billion ($38.69 billion) in taxes and levies from utility companies, Economics Minister Rainer Brüderle said Monday.
"It's about €30 billion overall. These are large sums that will be directed to the government, toward renewable energy," Mr. Brüderle said in an interview with radio broadcaster Deutschlandfunk. He added that the revenue includes the contributions utilities will be obliged to make toward renewable-energy research and development, and a tax on nuclear fuel rods. The fuel-rod levy, which utilities fought vigorously to avoid, will generate an estimated €2.3 billion annually but will be limited to six years, Mr. Brüderle said.
Instead of raising the price of fossil fuels, Gates argues that the time has come to shift our attention to raising the revenues necessary to fuel innovation and make clean energy cheap.
In a new interview with Technology Review, Bill Gates nails the global energy and climate challenge and discusses the need for dramatic increases in energy innovation funding to make clean energy cheap.
In a climate discourse dominated by emissions targets and carbon caps, Gates has provided a refreshing and clear-eyed look at the first-order importance of direct public investment to develop clean, affordable technologies to replace fossil fuels on a global scale.
In this new interview, Gates discusses why dismissing the difficulty of the challenge is counter-productive, and argues that carbon pricing can never drive the dramatic innovation required to transform the global energy system. Instead of raising the price of fossil fuels, Gates argues that the time has come to shift our attention to raising the revenues necessary to fuel innovation and make clean energy cheap.
Below the fold, you can find excerpts from Gates' interview, which can be read in full here.
For more, the NYTimesAndy Revkin and TIME magazine's Bryan Walsh each spotlight the interview here and here, respectively.
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.
New legislation introduced by Republican Representative Devin Nunes (CA) and backed by several GOP House members would invest billions into renewable energy deployment, signaling an opportunity for bipartisan support for clean energy technology policies.
Over at CNBC, reporter Trevor Curwin has been one of the first to note the significance of the Republican bill, which Nunes' says could "potentially provide hundreds of billions in financing" for renewable energy over the next several decades.
There's been some change over at WhiteHouse.gov's energy and environment page, but probably not the kind we had in mind when we heard President Obama's oft-repeated campaign slogan, "Change You Can Believe In."
A number of (as yet unfulfilled) energy and environmental policy pledges have been removed from the WhiteHouse.gov page in recent weeks.
Chief among them: President Obama's pledge to "invest $150 billion over ten years in energy research and development to transition to a clean energy economy," once a central plank in Obama's energy and environment platform, and a feature of his first national budget proposal (in FY2009).
With support from short-term federal stimulus funds, state and local governments aren't waiting for the academic and political debate over whether the U.S. should pursue an industrial policy to spur a clean energy economy. Instead, they are implementing targeted investments, tax breaks, and loans to help expand home grown clean tech companies and entice foreign firms to expand U.S. operations.
A vigorous debate about whether the U.S. government should invest in and help manage clean energy industries to spur economic growth is unfolding among academics, policy makers and business leaders. Curiously, a handful of federal, state, and local government officials are forging ahead in spite of the national discussion and formulating targeted industrial policies to create vibrant clean energy innovation ecosystems that include manufacturing, material suppliers, customers, and R&D. Cases like Rioglass Solar, a Spanish glass manufacturer expanding operations in Arizona, as well as the considerable growth of the wind industry across the US show how the public and private sector can collaborate and, more importantly, how effective industrial policy can create well-paying, long-term jobs.
This past week Rioglass Solar, which provides curved glass sheets used in solar panels, decided to build a $50 million headquarters and a 130,000 square foot manufacturing plant in Surprise, Arizona. The project will create 100 new jobs at the headquarters alone and many more in the manufacturing plant - a welcome economic boost for the town.
The chief incentive for the American operations expansion? Local, state, and federal officials provided almost $12 million in tax credits and fee reductions to (successfully) lure Rioglass to the area.
"What determines success in industrial policy is not the ability to pick winners but the capacity to let the losers go." - Dani Rodrik, as quoted in a Businessweek article evaluating the future of industrial policy and clean energy...
"What determines success in industrial policy is not the ability to pick winners but the capacity to let the losers go."
- Dani Rodrik, as quoted in a Businessweek article evaluating the future of industrial policy and clean energy technology in the United States. Really, a useful lesson to keep in mind when it comes to policy design.
Perhaps there are some signs that a technology-centered approach to decarbonization is gaining momentum. First, from the international negotiations:
U.S. companies are lobbying at UN climate talks in Bonn for incentives to spur technologies that could slow the pace of carbon emissions, abandoning a push to encourage a cap on gas emissions, a business lobby group said.
The U.S. Council for International Business, whose members include General Electric Co. and Coca-Cola Co., said rules to cap CO2 emissions are unlikely soon, Norine Kennedy, vice president of energy and environmental affairs, said in an interview today. Instead, they want incentives encouraging technologies they're promoting.
"The center of the action is technology," she said at the United Nations climate talks. "There's broad agreement that we won't get to the mitigation targets without technology."
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.
India recently released the first guidelines for the rapidly-developing nation's ambitious National Solar Mission that outline how the program plans to successfully deploy 20,000 MW of grid-tied solar power within the next 12 years. That goal, which would see the equivalent of 13% of the India's entire current electricity generation come from solar panels by 2022, presents a formidable challenge, one that India seeks to address with proactive public policy.
"The objective of the Jawaharlal Nehru National Solar Mission (JNNSM) under the brand 'Solar India' is to establish India as a global leader in solar energy, by creating the policy conditions for its diffusion across the country as quickly as possible. The Mission has set a target of 20,000MW and stipulates implementation and achievement of the target in 3 phases (first phase upto 2012-13, second phase from 2013 to 2017 and the third phase from 2017 to 2022) for various components, including grid connected solar power.
The successful implementation of the JNNSM requires the identification of resources to overcome the financial, investment, technology, institutional and other related barriers which confront solar power development in India. The penetration of solar power, therefore, requires substantial support. The policy framework of the Mission will facilitate the process of achieving grid parity by 2022.
In order to facilitate grid connected solar power generation in the first phase, a mechanism of "bundling" relatively expensive solar power with power from the unallocated quota of the Government of India (Ministry of Power) generated at NTPC coal based stations, which is relatively cheaper, has been proposed by the Mission. This "bundled power" would be sold to the Distribution Utilities at the Central Electricity Regulatory Commission (CERC) determined prices."
Julia Gillard's announcement last Friday marked a new low point for Australian climate change policy. If reelected, a Labor government will fill the void created by its decision to defer the Carbon Pollution Reduction Scheme (CPRS) a collection of low-impact policy measures: miniscule investments in renewable energy; an ill-conceived "cash for clunkers" program; and the much criticised plan for a "citizens' assembly" to establish "community consensus" on climate change. Such measures do not reflect the urgency and scale of the climate change challenge.
In the wake of Gillard's announcement, several climateadvocates made the case that community consensus on climate change already exists. Be that as it may, community consensus doesn't tell us whether climate change is a priority issue for Australians. Polling released last week revealed a disturbing truth for Australia's climate change advocates. Contrary to the rhetoric of many, addressing climate change ranks well down the list of the most important issues for voters in the 2010 federal election.
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.
The latest death of cap and trade demands a fundamentally new clean energy strategy designed to overcome political obstacles to carbon pricing and simultaneously achieve the primary objective upon which our climate future hinges: making clean energy cheap.
Reports put the time of death at 1 P.M. EST, July 22nd, 2010. That is when Senate Majority Leader Harry Reid emerged from a meeting of the Democratic Caucus without enough support for even a severely weakened and scaled-back emissions cap on the utility sector.
With that, recognition has finallyset ineverywhere: the United States Senate is not going to enact any form of cap and trade. Not this year. And probably not any time in the foreseeable future.
Worse yet, clean energy progress this year has gone down with the long-sinking cap and trade ship.
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.
The ascension of Julia Gillard provides an opportunity for Labor to reorient its climate change policy agenda.
Contrary to what its proponents have argued for years, emissions trading has not been as politically feasible as initially thought. Labor's inability to pass a market-based mechanism in its first term not only brings into question the political palatability of neoliberal-inspired policy, but also draws attention to the need for alternative approaches.
With the national climate change debate focused solely on capping and trading carbon, policymakers have forgotten that there are many paths to reduce Australia's emissions and transition to a clean energy economy.
The launch of Beyond Zero Emissions'Zero Carbon Australia Stationary Energy report is an attempt to push back against narrow-minded policymaking. It details a path for Australia to meet 100 per cent of its energy needs with renewable energy by the end of the decade. Making the plan a reality will require a radical shift in climate policy.
Breakthrough's Jesse Jenkins offers his recommendations for clean energy policy and strategy in a panel format at online environmental magazine, Grist.org.
Over at online environmental magazine Grist.org, I've been featured among a panel of "seven of Grist's favorite journos and wonks" each offering their two cents on what (if any) changes to climate and clean energy strategy should be made now that cap and trade is on the ropes.
Part 1 focuses on what to do with the remainder if this quickly-waning Congressional year, while Part 2 focuses on longer-term strategy. Here's my response to each question:
Update (Jul 16, 2010): Expanding on a Washington Post op-ed, Vinod Khosla delineates his argument "about the deficiencies of an isolated cap-and-trade or carbon-pricing bill," and joins the climate technology consensus. Khosla writes, "If we want to make a significant difference, we need to get on the path to reducing carbon worldwide by 80 percent now by focusing on what I call "carbon reduction capacity building" -- in other words, we need to develop radical carbon-reduction technologies. A utility cap (or a carbon price) won't build capacity -- it will just increase our utility costs and decrease our manufacturing competitiveness without any increase in our technological competitiveness. On the other hand, although a policy that promotes capacity building will increase research investments in the short term, it will likely decrease overall electricity costs in the medium to long run (through the magic of competition, technology and regulatory certainty), while simultaneously reducing carbon. Disruptive technologies require investment; they don't come from the status quo."
Update (Jul 14, 2010): Other observers have reached similar conclusions about the faltering pollution paradigm. Walter Russell Mead and Clive Crook weigh in on "The Big Green Lie" but can't agree on what it is. Mead argues that it is "that the green movement is a source of coherent or responsible counsel about what to do" while Crook argues that "it's the diminished credibility of the claim that we have a problem in the first place." But both agree that cap and trade and the effort to establish a global carbon pollution regime are dead. Meanwhile, Newsweek's Stefan Theil observes that "the whole concept of radical, top-down global targets is coming under scrutiny" and suggests that the "new climate realism" will "look at other options beyond the current set of targets" and "include a broader mix of policies" including "a shift of subsidies into research and development" and "greater efforts to adapt society to a warmer climate."
Update (Jul 10, 2010): See Andrew Pendleton and Matthew Lockwood of the UK-based IPPR think tank response to Alex Evans' contention that real action on climate will only occur after a major global warming disaster. "There is simply no reason to believe that a climate shock big enough to bring about major changes in thinking will come along before we reach a tipping point (how would we know?)" they write. "Climate change is by its nature long-term and insidious, more like a frog in a warming pot than a sudden Anschluss."
The twenty-year effort to create a single global pollution framework to reduce carbon emissions is in a state of collapse. Meanwhile, a new climate policy consensus is emerging, one which prioritizes direct investment in technology innovation to make clean energy cheap. The new framework begins from the understanding that the root cause of the failure of the pollution paradigm was the technology and price gap between fossil fuels and their alternatives. But hard and important questions are being asked of the new investment-and-innovation paradigm. How is it different from just increasing subsidies for clean energy? How can we be sure it will reduce emissions? What role should carbon pricing play? Here Breakthrough Institute answers frequently asked questions of the climate technology paradigm and responds to challenges raised by Alex Evans on the left and Robert Michaels on the right, among others, who have taken aim at Breakthrough's and Bill Gates' proposals, respectively.
By Ted Nordhaus and Michael Shellenberger
The twenty-year effort to create a single global pollution framework to reduce carbon emissions is in a state of collapse. Europe's Emissions Trading Scheme (ETS) has not reduced emissions and is quickly fading as the central effort to decarbonize European economies. The UN process is becoming a forum for nations to compare and coordinate national policies and measures, not create or enforce a binding global treaty. And it is now clear that, if energy legislation passes the U.S. Senate, it will not create an economy-wide cap-and-trade system, nor will it increase the deployment of clean energy.
Meanwhile, a new climate policy consensus is emerging, one which prioritizes direct investment in technology innovation. This consensus begins with the recognition that the root cause of the failure of the pollution paradigm was the technology and price gap between fossil fuels and their alternatives. No nation -- not even the wealthiest in Europe -- is willing to price carbon enough to cover the difference. Until the technology gap is closed, little will be done to accelerate the transition to a low-carbon economy.
The truth is that we've never been debating a real, binding "cap" on greenhouse gas emissions, just an emissions target and a (pretty modest) carbon price signal. With that as the bar set by "cap" and trade legislation, it is certainly possible to get even better outcomes -- faster transformation of the U.S. energy sector, faster clean energy innovation, and even faster emissions cuts -- with a new clean energy strategy.
Unfortunately, Doniger, NRDC (and EDF) wind up clinging onto a "cap" on carbon they have already given away while at the same time standing opposed to a new clean energy strategy that could still salvage a substantive win despite what little time remains on the Congressional clock.
In a new IEA report intended to inform and guide climate and energy policy decision makers, the Energy Technology Perspective 2010 (Exec. Summary; full report purchase required) demonstrates that the clean technology revolution will require an additional $46 trillion investment (beyond energy infrastructure investment expected in BAU scenarios) if we intend to halve carbon emissions by 2050 (from 2005 levels). And, the IEA adds, a carbon price alone will not be sufficient to drive that level of investment.
With the final seconds ticking down on the Congressional clock, President Obama and Senate Democrats face a choice: waste what time remains convincing supporters they haven't abandoned cap and trade, or call a new play and build upon substantive Republican proposals to score a real clean energy win this year.
With the final seconds ticking down on the Congressional clock, President Obama and Senate Democrats emerged from a White House summit with Republican moderates Tuesday still lacking any plan to score a last minute win for clean energy.
Wasted opportunity
Establishing a price (any price) on carbon pollution through a(n increasingly weak) cap and trade system continues to be the the preferred climate and energy approach of environmental advocacy groups and Democratic leadership. This preference holds despite the fact that for at least three years, that plan has consistently failed to uncover any route to securing the sixty votes necessary for passage in the Senate (a similar bill narrowly passed the House last June).
Heading into the Tuesday morning White House summit, Republicans eyed as key swing votes for any clean energy or climate bill telegraphed clear intentions: cap and trade would be a practical non-starter, but they were ready to act with the President on measures to promote zero-carbon electricity, electric and plug-in hybrid vehicles, and greater energy technology innovation, clean up dirty coal plants, and improve energy efficiency.
The summit offered President Obama a prime opportunity to reset the Senate energy debate by calling a new play: take up the energy provisions Republicans have offered, counter with a more aggressive proposal on similar fronts, and begin earnest negotiations with GOP swing votes to ensure passage of a final bill that could move America towards a clean energy economy before the Congressional clock expires.
Unfortunately, President Obama let this chance to break from the failed and increasingly desperate cap and trade agenda slip by, using the meeting, instead, to reiterate to the assembled Senators - and greens watching from the sidelines - that "he still believes the best way for us to transition to a clean energy economy is ... by putting a price on [carbon] pollution."
In the face of numerous energy dilemmas there is a growing consensus that energy innovation offers a pathway to the most important solutions of our time. As the White House and Congress seem flummoxed by what steps to take next, it may be time to look to history for some guidance.
Just ten years into the second millennium, the U.S. finds itself in a situation complicated by a catastrophic oil spill dumping hundreds of thousands of barrels of oil into the Gulf, a badly wounded, if recovering, economy whose historic dominance is being ably challenged, and a growing demand for energy that must be produced without hastening the impacts of climate change. There is a growing consensus that energy innovation offers a pathway to the solutions for all of these challenges, but the White House and Congress seem flummoxed by what steps to take next. As TIME magazine's Bryan Walsh suggests in his latest cover story (subs. req'd) profiling the influence of Thomas Edison's innovative genius on the energy industry in the 20th century, it may be time to look to history for some guidance.
As Walsh explains, Edison "spent his career "inventing the century" - the 20th century." But he did not devise the inventions that gave birth to the electrical power industry (not to mention the recorded music and motion picture industries) in a vacuum. Instead, Edison's innovative potential was nurtured from a young age and as an adult, he continued to encourage his creativity by surrounding himself with others whose knowledge base could help him realize his ideas.
The White House has postponed a scheduled meeting with a group of bi-partisan Senators to discuss plans for comprehensive energy legislation, and while Republicans have made it clear they plan to unanimously block cap and trade, that may prove to be a good starting place for a non-controversial route forward centered on vehicle electrification, nuclear power and energy technology innovation.
Republicans also would press Obama to reach consensus on less aggressive energy options, including incentives for electrification of cars and trucks, more nuclear power and offshore oil and gas production, and research and development for low-carbon energy technologies.
The GOP has several "clean energy proposals which we are for and he's for too," [Sen. Lamar] Alexander said.
Although cap and trade efforts have consumed most of the legislative clock this year and there's dwindling time for any big plays, if Republicans are really willing to support a big technology push Democrats could have the bargaining chip they need to make some real progress, perhaps even mounting a more aggressive push into key technology areas - research and innovation, vehicle electrification, and accelerated deployment of clean electricity sources. This type of bipartisan effort would not be the "comprehensive" solution to our nation's multifold energy and climate challenges, but it would prime the Congressional pump for a greater bipartisan collaboration in 2011...or so one could hope.
Last week, IEEE USA and GridWise Alliance wrote a joint open letter urging U.S. Senator Alexander (R-TN) to support RE-ENERGYSE, a Department of Energy and National Science Foundation strategic partnership that would establish the nation's first comprehensive federal program for clean energy science and engineering education. Senator Alexander is a member of the Senate Appropriations Subcommittee on Energy & Water Development, which will decide if RE-ENERGYSE gets appropriated or not.
Now that Obama has officially opened the door to alternatives to the conventional cap and trade framework, Congressional Democrats are finally willing to admit the policy is dead and focus on finding an economically and politically viable Plan B. According...
Now that Obama has officially opened the door to alternatives to the conventional cap and trade framework, Congressional Democrats are finally willing to admit the policy is dead and focus on finding an economically and politically viable Plan B.
According to E&E (subs. req'd), efforts to formulate that Plan B have just begun and are as yet indecisive. One thing, however, is now clear:
Senate Democrats may have emerged from their much-hyped caucus meeting without a clear plan for this summer's energy bill, but they appeared to agree on one point: Cap and trade doesn't have the votes...
It is unclear whether Obama and Senate Democratic leadership intend to push aggressively for cap and trade or any mechanism to price carbon this year. Obama failed to call for it directly in his Oval Office address this week and Senate Majority Leader Harry Reid (D-Nev.) yesterday declined to promise to include a price on carbon in an energy package slated for floor debate next month.
Reid said yesterday that his goals for energy legislation are dealing with the crisis in the Gulf of Mexico, creating jobs and cutting pollution. "There are many strong passions and arguments about the best way to achieve these goals," Reid said yesterday after the Democratic caucus met to discuss an energy bill. "And I'm always focused on what is possible."
...
Democrats hope that another caucus meeting slated for next week will help push them closer to a consensus about how to proceed...
"Sooner or later, hopefully sooner, people will come together and come up with a comprehensive plan," said Sen. Carl Levin (D-Mich.). "There's a lot of hurdles to be jumped."
With time now short in the Congressional calendar this year, it is unlikely that Congress will implement a comprehensive response to our nation's multifold energy and climate challenges. But as the failed cap and trade framework falls away, space is now opening for new and productive ways forward.
It comes as no surprise that a broad-based coalition of activists are calling the bluff of 19 companies earning carbon offset credits through the Carbon Development Mechanism created by the Kyoto Protocol. The activists accuse the companies, based largely in China and India, of creating greenhouse gas emissions for the sole purpose of earning credits from destroying them.
According to a review by E&E News (subs. Req'd):
"Sometimes they produce gas just to burn it and get some CDM money, and it's not at all an honest way of behaving," said Chaim Nissim, an engineer with Noe21, a Geneva-based climate change advocacy organization that has researched carbon offsetting projects at industrial gas companies.
"It's fake," Nissim said.
CDM officials say they are investigating the allegations...
With countries still unable to negotiate a second commitment period to the Kyoto Protocol, the future of the entire CDM is in limbo. No one could say what it meant for the carbon market as a whole if it is indeed determined that one third of the whole volume of CERs don't represent any actually abated or avoided greenhouse gas emissions.
At Dot Earth, Andrew Revkin discusses why we should stop waiting for the "fog of misinformation and disinformation on climate" to dissipate from the public mindset and instead focus on the developing "energy consensus" that we need clean, cheap energy to meet the expanding energy needs of quickly growing global population.
Reflecting on lawmakers' struggles over climate bills through most of the last decade, it seems clear that insistence on comprehensive one-step legislation including firm, declining caps on emissions from the get-go -- before building confidence and momentum around the new direction -- is a path to nowhere...
Given the stasis in the Senate, even with the "external" costs of fossil fuels on glaring display in the Gulf of Mexico, it may be time to start listening more to those proposing this more stepwise route forward. Such an approach would better reflect an unbending reality: A quest for new energy choices that advance human lives while limiting conflict and climate risks will require sustained work by a generation or more -- not just one Congress or president.
Christiana Figueres startled delegates when she addressed the United Nations climate conference in Bonn last week: "I do not believe we will ever have a final agreement on climate change, certainly not in my lifetime," the Costa Rican diplomat told them.
"If we ever have a final, conclusive, all-answering agreement, then we will have solved this problem. I don't think that's on the cards." Addressing the issue successfully would "require the sustained effort of those who will be here for the next 20, 30, 40 years".
Her words count, and not only because of her 15-year involvement in tackling global warming. Next month, Ms Figueres takes over from the Netherlands' Yvo de Boer as executive secretary of the UN's climate change secretariat, based in the former west German capital.
As Bonn's low, heavy skies pelted delegates with rain, much of the rest of the talk during the long sessions was of technical matters such as the measurement of greenhouse gases. But in quiet conversations in the corridors, in cafes over hurried coffees or while scurrying between thunderstorms, the deeper question some officials were asking was whether there was indeed any point in continuing with this type of negotiation, which had failed for 20 years. Could the UN climate talks be reformed - or were they just too broken to fix?
Eight universities and think tanks have all converged on four policy principles to enhance technology innovation in the effort to mitigate climate change, says a new report released earlier this week by the Clean Air Task Force and the Consortium for Science, Policy, and Outcomes (CSPO) at Arizona State University.
The report, "Four Policy Principles for Energy Innovation & Climate Change: A Synthesis" (PDF) combined the recommendations made in eight studies conducted by universities like Harvard and MIT as well as think tanks like the Brookings Institution and the National Commission on Energy Policy to create the following four policy principles:
1. Recognize that innovation policy is more than R&D policy
2. Pursue multiple innovation pathways
3. Recognize CO2 reduction as a public good, and pursue energy innovation through a public works model.
4. Encourage collaboration on energy innovation with rapidly industrializing countries.
Despite the independence of the teams, we found remarkable convergence on some very basic principles that should guide the design of workable, comprehensive clean energy innovation policies. Key among them is that we are going to have to deploy lots of real stuff at a large scale in the field - and not just in the lab - to innovate our way toward a solution. That's not going to be cheap, but it is going to be worth it. We need to start yesterday.
The report is one of four reports released this month calling for a strengthened, robust commitment to U.S. clean tech innovation policy. The Breakthrough Institute co-released two of those reports -- one arguing that Congress must support legislation to improve U.S. clean tech competitiveness and the other demonstrating that the Kerry-Lieberman American Power Act would increase energy R&D funding by as little as $2.2 billion per year. The third, a report released by the new American Energy Innovation Council, called for a tripling of public investment in clean energy R&D.
The majority of Americans do believe that Earth's climate is warming and they want the government to take action, according to Stanford Professor Jon Krosnick and his Political Psychology Research Group, but they still don't want to pay higher taxes. These findings echo Breakthrough's own social values research demonstrating strong public support for large-scale federal investment in clean energy R&D and greater support for carbon limits when they are coupled with policies, like public investment, that make clean energy cheaper.
Fully 86 percent of our respondents said they wanted the federal government to limit the amount of air pollution that businesses emit, and 76 percent favored government limiting business's emissions of greenhouse gases in particular. Not a majority of 55 or 60 percent -- but 76 percent.
Large majorities opposed taxes on electricity (78 percent) and gasoline (72 percent) to reduce consumption. But 84 percent favored the federal government offering tax breaks to encourage utilities to make more electricity from water, wind and solar power.
And huge majorities favored government requiring, or offering tax breaks to encourage, each of the following: manufacturing cars that use less gasoline (81 percent); manufacturing appliances that use less electricity (80 percent); and building homes and office buildings that require less energy to heat and cool (80 percent).
Thus, there is plenty of agreement about what people do and do not want government to do.
A new policy brief by the Breakthrough Institute and Americans for Energy Leadership, "The Power to Compete?", provides the first independent analysis of how the Kerry-Lieberman American Power Act would impact U.S. competitiveness in the global clean energy industry.
A new policy brief released today by the Breakthrough Institute and Americans for Energy Leadership provides the first independent analysis of how the Kerry-Lieberman American Power Act would impact U.S. competitiveness in the global clean energy industry, benchmarking its provisions against key policy components for technological innovation and industrial development in the low-carbon power and transportation sectors.
Federal energy policy has become a primary U.S. national priority in the wake of the Deepwater Horizon oil spill and amidst the ongoing Senate debate over comprehensive climate and energy reform. The May 2010 release of the Kerry-Lieberman American Power Act (APA) currently represents the flagship proposal for comprehensive reform in the Senate, and its future within the context of broader energy legislation will be determined in the weeks ahead.
The renewed urgency for energy reform arrives among growing national concern that the United States is falling behind its competitors in the growing clean energy industry. Thus, in addition to reducing emissions of greenhouse gases, one of the core objectives of the Kerry-Lieberman proposal is to enhance U.S. competitiveness in clean energy technology markets. As Senator Kerry declared in the opening of the APA release press conference, "The bill that we are introducing today and revealing today, the American Power Act, will restore America's economy and reassert our position as a global leader in clean energy technology."
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.
Despite the Deepwater Horizon calamity, if the Kerry-Lieberman climate bill gets passed then concessions on offshore drilling are likely to be part of the deal. But Brookings' Mark Muro points out that this outcome could provide a "teachable moment and tie further fossil fuel use once and for all to energy system transformation," citing a post by Breakthrough's Jesse Jenkins and I, in which we argued that a 2009 GOP plan to dedicate the new oil and gas royalties to a clean energy fund would be an appropriate compromise if drilling is inevitable.
Before a Senate Finance Subcommittee, ITIF President and "Rising Tigers, Sleeping Giant" co-author Rob Atkinson testified in support of incentives for US clean energy manufacturing as part of a comprehensive strategy for clean energy competitiveness.
Testifying before the Senate Finance Subcommittee on Energy, Natural Resources and Infrastructure, ITIF President and "Rising Tigers, Sleeping Giant" co-author Rob Atkinson spoke in support of incentives for US clean energy manufacturing as part of a comprehensive strategy for clean energy competitiveness. Building on Breakthrough's work with him on "Rising Tigers," Atkinson warned that a carbon price, and other demand side policies, are not enough to spur the kind of innovation necessary to ensure clean energy competitiveness.
Below are some highlights from his testimony. You can read the full testimony here.
Culturally, the nation-building model provides Australians with a way of understanding the technological challenge at the heart of climate change. It also draws attention to the scale of engineering and can-do spirit required to transform the nation from a fossil-fueled economy to a renewable one.
It's no understatement that last week's Federal budget was bad for climate change. The Rudd Government, fresh from its emissions trading backdown, once again failed to live up to its rhetoric. It failed to act on "the greatest scientific, moral and economic challenge of our time". And it failed to deliver the scale of investment needed to drive our transition to a clean energy economy.
There was a belief that the 2010 budget would include some big investments to combat the climate crisis. Rudd's decision to delay the Carbon Pollution Reduction Scheme (CPRS) to 2013 coincided with a sharp decline in public support for the government. The Prime Minister's own approval rating has collapsed in recent weeks, falling 14 points to 45 per cent - the lowest level since taking office in 2007. The budget was regarded as a way for Rudd to regain his edge on climate policy. He would have the opportunity to restore the confidence of voters suspicious of his government's commitment to climate change.
As we now know, the government's investment in renewable energy was markedly less than the year earlier. But should this come as a surprise? No. It shouldn't.
Global climate policy should be radically overhauled in the wake of the failure of the United Nations process, an international group of 14 climate policy experts and scientists argue in the "Hartwell Paper." Instead of the failed Kyoto-Copenhagen focus on national emissions targets and timetables, what's needed is a focus on expanding access to energy for the poor, quickly reducing non-CO2 climate forcings, and adaptation to changing climate.
Global climate policy should be radically overhauled in the wake of the failure of the United Nations process, an international group of 14 climate policy experts and scientists argue in a new paper. The Kyoto-Copenhagen focus on national emissions targets and timetables was bound to fail because it proposed a single over-arching framework to deal with a "wickedly' complex problem. Instead what's needed is a focus on expanding access to energy for the poor, quickly reducing non-CO2 climate forcings, and adaptation to changing climate.
The paper brings together a set of ideas that have been developing over the last decade. The meeting was convened by Gwyn Prins of London School of Ecomomics and Steve Rayner of Oxford University, who wrote "The Wrong Trousers," a 2007 critique of Kyoto. The group included, among others, East Anglia University climate scientist Mike Hulme, author of "Why We Disagree About Climate Change," Ted Nordhaus and Michael Shellenberger of the Breakthrough Institute, the economist Chris Green, co-author of a 2002 Science article calling for advanced energy research to stabilize climate emissions, and University of Colorado's Roger Pielke and Arizona State's Dan Sarewitz, authors of a 2000 Atlantic magazine story arguing climate policy to shift focus to technology innovation and adaptation. Green, Pielke, and Sarewitz are all Breakthrough Senior Fellows.
The bottom line: putting a price on carbon or regulating emissions is not sufficient to address the nation's climate problem or seize the economic opportunities in the fast-growing clean energy sector. Any Senate climate bill worth it's salt must clear the critical clean energy innovation threshold: $15-25 billion a year invested in clean energy technology innovation.
What is clear, though, is this: To get to a good bill senators need to deal properly with the revenue--whether from offshore oil drilling or pollution allowance auctions or whatever else is in the bill. And to do that they need to make sure a huge chunk of it gets applied to clean-energy research and development. Get that right and much else needn't be perfect. Blow that, and the bill is likely not worth it.
... The bottom line is this: Putting a price on carbon, or regulating emissions, ... while absolutely necessary, will not be sufficient to address the nation's climate problem and will, importantly, not put the U.S. in the position to seize the extraordinary opportunities that will come with rebuilding to global energy economy. Also necessary, as we keep saying, will be a major drive to promote large-scale technology breakthroughs. No matter how you measure it, U.S. government investment in clean energy R&D remains grossly inadequate. Right now clean energy R&D accounts for only around $3 billion a year. But if we're going to see real progress in de-carbonizing the present economy and creating the next one this number should be closer to $15 billion and probably as much as $25 billion per year.
So that's the target: $15 to $25 billion a year is "the number"--the critical investment threshold for federal clean energy investment that must become a core benchmark for evaluating any and all federal climate, energy, or indeed appropriations deal making.
Mark notes the rumors and reports of the still-not-yet-public drafts of the K-G-L bill do not bode well for the bill's ability to clear this critical clean energy innovation threshold...
Breakthrough's Jesse Jenkins joined Senator Lamar Alexander (R-TN) and moderator Marc Gunther of Fortune Magazine and Greenbiz.com to discuss the fate of climate and energy legislation in the U.S. Senate in a webinar, hosted by theEnergyCollective.com.
Jenkins and Alexander discussed the embattled Kerry-(Graham?)-Lieberman climate bill and potential alternatives to modernize our energy system, secure dependence from oil, and reduce U.S. emissions. Listen to the archived webinar here.
Yesterday's column in the NYT by Thomas Friedman illustrates why efforts to put a price on carbon are not going to do much at all to stimulate energy technology innovation. Friedman writes:
After months of heroic negotiations, Senators John Kerry, Lindsey Graham and Joseph Lieberman had forged a bipartisan climate/energy/jobs bill that, while far from perfect, would have, for the first time, put a long-term fixed price on carbon -- precisely the kind of price signal U.S. industry and consumers need to start really shifting the economy to clean-power innovations. . .
Without that price signal, you will never get sustained consumer demand for, or sustained private investment in, clean-power technologies. All you will get are hobbies. . .
I'd love to see the president come out, guns blazing with this message: "Yes, if we pass this energy legislation, a small price on carbon will likely show up on your gasoline or electricity bill. I'm not going to lie. But it is an investment that will pay off in so many ways. It will spur innovation in energy efficiency that will actually lower the total amount you pay for driving, heating or cooling. It will reduce carbon pollution in the air we breathe and make us healthier as a country. It will reduce the money we are sending to nations that crush democracy and promote intolerance. It will strengthen the dollar. It will make us more energy secure, environmentally secure and strategically secure. . . "
It is not clear what that "price on carbon" is in the legislation or how widely it would be applied, but for the purposes of discussion, let's just say that it starts at $15 per metric ton of carbon dioxide and is applied economy-wide.
The U.S. Senate isn't alone in putting the breaks on cap and trade legislation plans. Australia's Prime Minister, Kevin Rudd has also "put its carbon emissions trading plan on hold," until the end of 2012 according to the New York Times.
Some analysts believe the government's decision was a tactical one. Though Mr. Rudd's approval ratings remain strong, recent polls have suggested that climate change is becoming less important to an electorate that has shifted its focus to education and health care reform, skyrocketing housing costs and immigration. National elections are due this year.
Out of the scramble over the thrice-delayed Kerry/Graham/Lieberman climate bill, various policy alternatives have emerged. Grassroots greens are arguing for cap and dividend but high tech leaders including Bill Gates are calling for an explicit energy technology innovation agenda that - if backed by a direct, large-scale plan for investment - could leave carbon pricing alternatives by the wayside.
Out of the scramble over the thrice-delayed Kerry/Graham/Lieberman (KGL or "keggles") climate bill have emerged various alternatives, with grassroots greens arguing for cap and dividend and high tech leaders including Bill Gates calling for an explicit technology innovation agenda.
Earlier this month, Bill McKibben advocated in The New Republic for the Cantwell-Collins CLEAR Act, claiming it would solve the political problem of raising energy costs because it would rebate some of the pollution allowances to consumers -- "three-quarters will come out ahead," McKibben claims, "with only real energy hogs hurting .
It is simply not true that the government should not or cannot pick technological winners and losers. That was ITIF President Rob Atkinson's message in a piece today at Huffington Post. Indeed, as Atkinson writes, the government has always picked winners and in the process, has developed entire new industries, like IT, that have formed the foundation of economic prosperity and the basis of our modern way of life. What would our lives be like if we had left everything to the "free market"?
From Huffington Post:
"But the free market opponents will say how can Washington outsmart the market? Is this the same market that through its infinite wisdom invested hundreds of billions of subprime mortgages? In fact, the government has a pretty good track record of picking winners. Just look at the technologies that the government had a key role in developing: the Internet, the web browser, the search engine, computer graphics, semiconductors, and a host of others. There are many other examples of success stories made possible not because government anointed a particular young entrepreneur but because the government made a conscious choice to open new pathways into which young innovators could embark."
A few weeks ago, at an event on the same subject, Atkinson and former-Reaganite Clyde Prestowitz took the neoliberal free market ideologues including former Clintonite, Robert Lawrence (ironic?) to task for their ahistorical views. Amidst all the anti-government fervor lies the true but unconventional wisdom: the government can and should pick technological winners. Our economic prosperity depends on it.
Looks like climate legislation is getting bumped...again. This time around it's taking a back seat to immigration reform (not to mention an imminent Supreme Court Justice nomination), raising some eyebrows about whether or not we'll see a climate bill this year.
In a leadership meeting late Tuesday, Senate Majority Leader Harry Reid said he would bring immigration legislation to the floor this year, and House Speaker Nancy Pelosi of California said she would try to move the bill if it passed the Senate first, according to three Democratic officials. With limited time available for action this year, both leaders said they would put immigration ahead of energy on their priority list, the officials said.
Previously, leaders were noncommittal on when they would bring the bill up...
News that congressional leaders plan to move immigration higher on their agenda underscores the uncertain prospects for the energy legislation.
The transportation sector is responsible for roughly one-third of all U.S. greenhouse gas emissions. Yet as we await the release of the Kerry-Graham-Lieberman senate climate bill next Monday, there's little clarity about how, if at all, transportation sector emissions will fall under the bill's carbon regulations.
According to severalreports, the trio of senators leading the effort to craft a climate and energy bill for release next Monday are back-peddling from earlier plans to implement a new fee on petroleum-based fuels such as gasoline amidst concerns that any new "gas tax" would trigger voter backlash.
Earlier reports of ongoing, private negotiations on a Senate climate and energy bill led by Senators John Kerry (D-MA), Lindsey Graham (R-SC), and Joseph Lieberman (I-CT) indicated that the trio were planning to drop the 'economy-wide' cap and trade plan included in the House-passed Waxman-Markey bill in favor of a 'three sector' approach to regulating emissions from power plants, industry, and petroleum-based fuels.
A cap would be implemented on the power sector to begin with, with industry phased in at a later date, while the oil sector would be exempted from the plan. Instead, petroleum-based fuels, including gasoline and diesel fuel, would be subject to a "linked fee" that would be tied somehow to the price of carbon pollution credits under the power sector cap and trade program -- in effect, a variable tax on gasoline and other petroleum products.
Now however, the Wall Street Journal reports that Sen. Kerry vehemently declares, "There is no gas tax, there was no gas tax and there will never be a gas tax."
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...
During a panel hosted by Waxman-Markey proponent, Center for American Progress, ITIF president Rob Atkinson argued that cap and trade was not sufficient to catalyze a clean energy future, proposing instead, policy focused on public investment in innovation to make clean energy cheap and abundant.
Speaking at a panel on building a clean energy economy, ITIF President and "Rising Tigers, Sleeping Giant" co-author Rob Atkinson declared that current technologies are not enough to create a competitive domestic clean energy industry and that major investments in energy innovation are necessary to make clean energy cheap and abundant.
Last summer I noted that the Obama Administration gave the go-ahead for the building of a new pipeline to bring petroleum from Canadian oil sands to the United States. I am sure that I wasn't alone in wondering why they would do this at the same time that they were pushing to create a cap-and-trade program to put a price on carbon. I got the answer in today's FT in an article on investors who are seeking to increase disclosure from BP on tar sand development.
The Breakthrough Institute team works to publish quantitative analysis of Congressional climate and clean energy legislation, often working to publish a series of analyses "in real time" as the Congressional debate unfolds. Here is our collection of analysis of climate bills in the current Congress:
Last week, Michael and Ted wrote an essay for Yale E360 arguing that the primary basis for decarbonization does not need to rest on the certainty of climate science since there are so many other reasons to craft transformative energy policy.
The horrific West Virginia mine explosion that killed at least 25 miners, is a tragic but clear example of a non-climate reason to decarbonize. Dirty, destructive, dangerous, deadly - there are plenty of reasons to transition away from fossil fuels.
The reputation of a Kyoto Protocol carbon finance scheme was dealt another blow after a UN climate panel late on Friday suspended the third emissions cut verifier in 15 months, and partially suspended a fourth.
The scheme's executive board suspended emissions auditors TUEV SUED and partially suspended Korea Energy Management Corporation (KEMCO) after spot checks at the companies' offices revealed procedural breaches.
After President Obama's announcement in support of expanded offshore drilling on Wednesday, another GOP energy plan may offer a silver lining that could work to truly strengthen American energy security and make clean energy cheap.
Update: Michael Lynch, an energy consultant and MIT faculty, writes as an op-ed contributor to the New York Times that total oil and gas tax revenues from new offshore production could reach at least $10 billion per year and likely no more than $25 billion. His estimates are quite a bit higher than ours because he counts both royalty payments and other taxes paid by oil and gas exploration and production companies. Lynch also notes that there would be about $20 billion a year in additional taxes if we open up California and other Pacific coastal areas, which he advocates.
Jesse Jenkins and Yael Borofsky
With President Obama's announcement Wednesday that the Administration would support expanded offshore oil and gas extraction, it's now apparent that price pressures on oil make politicalpressures on politicians impossible to ignore and that some expansion of offshore drilling is inevitable.
But despite Green backlash against the Obama administration's apparent embrace of "drill, baby, drill," it's actually another Republican energy plan Obama should turn to if he wants to make a real dent in America's dependence on oil. Embracing a GOP plan to put the hundreds of billions in potential federal revenues from new oil and gas royalties into a fund to accelerate clean technology innovation could offer Obama a bona fide opportunity to "reach across the aisle," strengthen America's energy security, and help make clean energy cheap.
Who killed cap and trade? Harvard economist Robert Stavins and the New York Times' John Broder blame a conservative political environment. Breakthrough Senior Fellow Roger Pielke's not having it:
"[Stavins'] argument is wrong in at least two dimensions. First, since the 2008 elections the US has large Democratic majorities in both the House and Senate (including a Senate "supermajority" for much of 2009) and a Democratic President. This fact alone renders Stavins argument flawed. The problem was not a lack of political support, but failed policy design despite the strong political support."
Update: Michael and Ted are not the only ones who have argued that there are many reasons to catalyze an energy transformation regardless of the certainty of climate science. In 2002, Oxford Professor Steve Rayner made a similar point in the Guardian that " further research is not a prerequisite for sound policy action."
Michael Shellenberger and Ted Nordhaus have an essay up at Yale e360 arguing that in the wake of Climategate, energy policy should be made independent of climate science. The piece is already beginning to set the climate blogosphere aflutter, with coverage from the National Journal, E&E News (subs. req'd), The Hill, and the North County Times.
While Michael and Ted's argument has particular resonance in the wake of Climategate, in truth, they have been making this argument for a long time.
After his governing conservative party took a pounding in regional polls on Sunday, French President Nicolas Sarkozy has dropped a key environmental goal: setting up a carbon tax to limit the growth of carbon emissions and spur the development of renewable fuels.
"We want decisions that are taken in common with other European countries, or else we will see our competition gap widen," said François Fillon, the French Prime Minister, according to The Financial Times.
The idea of a carbon tax had been widely opposed by France's business lobby, which argued that it would increase costs, as well as by members of the governing party which opposed the idea of a new tax. A law was initially voted by parliament last year but was censured by France's top court, the Constitutional Council because it was too weak on polluting industries.
Breakthrough Senior Fellow Roger Pielke Jr. reviews four books on climate change for Nature and concludes that asserting the scientific high ground and demanding action on that premise won't make better climate policy--"admitting the limitations of science in compelling political agreements," he says, is the critical step towards that end.
"If science leads inexorably to particular political outcomes, then it would seem to favour autocratic forms of governance. The middle man -- the general public -- is easily ignored if heads of state need only hear the expert voice of science. Schneider worries that democracy finds it hard to deal with complex issues: if only the public understood the real risks, he explains, they would be "much more likely to send strong signals to their representatives". He bemoans a public debate that includes the participation of "special interests" and that is filtered through an inept media, a perspective echoed by Hansen."
In the face of energy and financial companies pushing for offsets in Senate climate legislation, Public Citizen forces Senators Kerry, Graham, and Lieberman to wrestle with a tough question: Will they allow carbon offsets to gut the Senate bill, the way it did under ACES?
Polluting energy companies and giant financial firms are once again allying to advance international offsets that have the potential to render a carbon cap entirely non-binding. The Coalition for Emissions Reductions Projects (CERP), wrote to Senator Maria Cantwell earlier this month criticizing the CLEAR Act she co-sponsored with Senator Susan Collins for not including an offsets program.
Membership of the CERP coalition includes: Alpha Natural Resources, American Electric Power, BlueSource, Global, C-Quest Capital, C-Trade Comercializadora de Carbono, Deutsche Bank, Dominion, DTE Energy, Duke Energy, EcoSecurities, Element Markets, El Paso Corporation, Environmental Credit Corp, Equator, John Deere, Leaf Clean Energy Company, Macquarie Bank, Natsource, Noble Carbon Credits, PG&E Corporation and Verdeo Group.
Over at Grist, Gar Lipow explained, last week, why a carbon price is far from the answer to all our climate and energy prayers and why even Adam Smith "would have laughed at the idea of capitalism without a strong state," despite what modern day libertarians would have you believe.
"Any society that needs infrastructure more complicated than that built by hunter-gatherers will need public involvement, whatever "public" means in that particular society... The best we can do is explicitly choose what we want regulation and public investment to accomplish, and focus our rules and our public investments on those goals. The minimal state is not an option and never has been."
This week, U.S. clean tech news is almost as dramatic as the buzz surrounding the 2010 Academy Awards. And while the outcome of intensifying competition has more serious implications in the clean tech sector, like any motion picture worthy of a nomination, there's a very distinct underlying theme to the clean tech drama unfolding: the U.S. needs a national strategy for clean tech competitiveness.
As Joan Fitzgerald suggested in a lengthy American Prospect piece in December, "America's failure to have a coherent, national industrial policy," has dire consequences for long-term economic competitiveness.
That's part of the reason the Department of Energy (DOE) held its inaugural ARPA-E Innovation Summit in Washington D.C. earlier this week, which amassed about 1,700 scientists, engineers, policymakers, investors, and entrepreneurs to discuss the details of a national competitiveness strategy.
The CLEAR Act targets a 20% reduction in U.S. greenhouse gas emissions by 2020, relative to a 2005 benchmark, but the bill's emissions cap on fossil fuel emissions would require cuts just 5 percent below 2012 levels, making that target aspirational. If the most recent EIA projections of depressed emissions levels due to the economic recession prove accurate, those cuts could be in the range of 9% below the 2005 benchmark by 2020. The cap would apply only to CO2 emissions, and does not cover the non-CO2 greenhouse gases responsible for roughly 15 percent of U.S. emissions, when weighted by their impact on global warming. To achieve additional reductions necessary to hit the bill's 20% by 2020 target, the legislation directs the President to achieve additional emissions reductions in non-capped sectors of the U.S. economy by directly funding programs to encourage land-use changes that sequester carbon in forestry and agriculture or reduce emissions of non-CO2 greenhouse gases such as methane. The bill sets aside a portion of the cap and auction revenues in a trust fund that prioritizes spending on these additional reductions, but precise uses of that fund is subject to Congressional appropriations, and the 20% by 2020 target should be considered aspirational. See more here.
The CLEAR Act's clean technology investments fall far short of expert recommendations, amount needed to ensure emissions goals are achieved. Ensuring emissions reduction goals can be achieved at affordable and politically sustainable costs, without triggering the bill's cost cap (see below), will require proactive and aggressive investments in clean technology innovation and deployment to ensure a steady supply of affordable emissions reduction technologies. The CLEAR Act will raise an estimated $42-126 billion annually by auctioning 100 percent of the emissions permits created under the bill's upstream carbon cap, leaving sufficient funding for necessary clean technology investments. However, the legislation devotes three-quarters of the carbon auction revenue to sending monthly rebate checks to households on an equal, per-capita basis. That leaves just one quarter of the bill's revenue that is set aside in a "Clean Energy Reinvestment Trust Fund," for an estimated $10-32 billion annually at the outset of the cap and auction program, increasing over time as carbon prices rise to roughly $16-46 billion by 2020. CERT funds would be prioritized to meet additional emissions reductions of non-CO2 greenhouse gases to meet the bill's 20% by 2020 aspirational target, and the bill names a number of other competing potential uses for the fund. Breakthrough Institute estimates that the CLEAR Act could easily devote as little as $2.5-8 billion annually at the range of initial carbon prices to catalyze clean technology innovation, directly support clean energy manufacturing capabilities and domestic market growth, and spur the construction of critical enabling infrastructure, such as long-distance transmissions lines, smart grid technologies and electric vehicle charging stations. That level of investment in clean technology could grow to $4-11.5 billion by 2020 but falls far short of expert recommendations, which call for targeted investments to remove key barriers to widespread clean energy adoption totaling on the scale of $30-80 billion annually. See more here.
The CLEAR Act does not allow carbon offsets and is transparent about the emissions reductions the bill's carbon cap will drive. Fossil fuel importers and producers regulated under CLEAR are not permitted to use emissions offsets to prove compliance with the bill's emissions cap. Unlike otherclimate bills, CLEAR keeps emissions reductions in non-capped sectors strictly separate from efforts to transform the U.S. energy system through the bill's carbon cap. This enables a transparent debate over how quickly the U.S. energy sector can (or must) transition away from fossil fuels towards cleaner alternatives while ensuring that emissions reduction efforts in other sectors, including agriculture and forestry, are pursued in conjunction with, rather than instead of, the critical transformation of the energy system. Instead of relying on offsets to achieve reductions outside the cap at the expense of reductions under the cap, CLEAR pursues additional emissions reductions outside the energy-sector cap by using a portion of the bill's cap and auction revenues to directly provide incentives for land-use changes that sequester carbon in forestry and agriculture and fund programs to reduce non-CO2 gases such as methane. Competing climate bills, including the House-passed Waxman-Markey bill and the Senate Kerry-Boxer bill, allow regulated entities to rely heavily on emissions offsets for compliance with their emissions caps, despite widely documented difficulties (even outright fraud) in verifying the actual emissions impacts of many offset projects. Both of these competing bills permit regulated polluters to offset up to two billion tons of their emissions annually. That's a huge amount -- roughly one third of all U.S. energy-related emissions -- and is enough to completely negate any pressure on the energy sector to transition towards cleaner energy technologies for much if not all of the next two decades, rendering their emissions "caps" effectively non-binding for the foreseeable future.See more here and here
The CLEAR Act features transparent, predictable cost-containment. Public (and policymaker) tolerance for increased energy prices is a key constraint on politically viable carbon pricing policies. Mechanisms to constrain the cost of carbon are thus an inevitable component of any politically successful cap and trade policy. Securing passage of any carbon pricing proposal will require a clear and transparent debate over the costs (and benefits) of such a policy and political consensus that such costs are worth it. To date, the most prevalent cost containment mechanisms have been complex and opaque, including the massive reliance on offsets. Eschewing the traditional reliance on offsets, CLEAR offers a simple and transparent approach to cost containment that can help end these debates: the bill provides assurance that carbon prices will not rise (or fall) outside of a prescribed and predictable range of prices. This approach, sometimes dubbed a "cost collar," guarantees that auction prices for carbon emissions permits will fall between both a floor and a ceiling, initially set at $7 and $21 respectively in CLEAR, with each value rising steadily each year. If the ceiling is reached, additional permits will be auctioned at that price, increasing the supply of permits to contain prices, and raising additional revenues. Unlike complicated and unpredictiable cost containment measures in other bills which subject climate policy to an endless war of competing economic models, CLEAR's transparent approach to cost containment offers a predictable mechanism that enables a transparent debate about how high the body politic is willing to allow carbon prices to rise, or where we want to limit the economic damage in any worst-case scenario. See more here.
The CLEAR Act's transparent emissions cap calls the question on offsets. Until just recently, carbon offsets appealed to environmentalists, polluting firms, farmers, timber interests, and development agencies alike because they promised to hold down the cost of reducing greenhouse gas emissions while promoting sustainable development. But things that seem too good to be true usually are, and the awareness that offsets all-too-often do not represent real emissions reductions is growing. Rather than resolving the political and economic tradeoffs inherent in reducing emissions, offsets obscured them. Such was the case with Waxman-Markey cap and trade legislation, which passed the House last year. The bill's heavy reliance upon offsets obfuscated the fact that Waxman-Markey would not require emissions reductions by regulated firms for the first decade or two of the program. Thus, the bill would not result in the radical technological transformation required to make clean energy cheap and reduce emissions globally. By eschewing offsets entirely and featuring both a transparent emissions cap, the CLEAR Act would actually mandate greater emissions reductions in capped sectors of the U.S. economy than Waxman-Markey, and thus reveals the way offsets can undermine both the clean energy transformation and environmental objectives. The question now is whether policymakers, green groups and reporters will be able to continue representing offsets as real emissions reductions, and whether they will in the future continue to use them to mask two of the most unpopular elements of emissions trading legislation: higher energy costs and wealth transfers from consumers in developed nations to businesses in developing ones. See more here and here.
The CLEAR Act features a number of other streamlined features, each of which offers advantages. The CLEAR Act would establish a simplified "upstream" cap on the few thousand fossil fuel importers and producers that first bring carbon-laden fuels into the U.S. economy. Unlike competing climate bills, 100% of the emissions permits would be auctioned at a regular (monthly) basis, and only the fuel producers/importers regulated under the emissions cap would be able to purchase permits. Wall Street derivatives marketers, speculators and other interests can't buy or sell emissions permits or create and trade in carbon derivatives or other secondary products under CLEAR. See more here
Until just recently, carbon offsets appealed to environmentalists, polluting firms, farmers, timber interests, and development agencies alike because they promised to hold down the cost of reducing greenhouse gas emissions while promoting sustainable development. But things that seem too good to be true usually are, and the awareness that offsets all-too-often do not represent real emissions reductions has now been recognized by both a new alternative cap and trade proposal (Cantwell-Collins) in the Senate and by the World Resources Institute.
Rather than resolving the political and economic tradeoffs inherent in reducing emissions, offsets obscured them. Such was the case with Waxman-Markey cap and trade legislation, which passed the House last year. The bill's heavy reliance upon offsets obfuscated the fact that Waxman-Markey would not require emissions reductions by regulated firms for the first decade or two of the program. Thus, the bill would not result in the radical technological transformation required to make clean energy cheap and reduce emissions globally.
Green groups like World Resources Institute (WRI) were complicit in the obfuscation, and major media outlets including The New York Times followed their lead, duly reprinting WRI's graph showing that the legislation would reduce emissions reductions 17 percent by 2020, even though all of those reductions could be purchased as offsets.
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.
Funding for more research on renewable energy is the most popular policy response to climate change across all respondents, netting 85% support, according to a Yale poll.
Yale just released the latest iteration of their "Climate Change and the American Mind" tracking polls. Once again (this has been a consistent finding), the poll shows funding for more research on renewable energy is the most popular policy response to climate change across all respondents, netting 85% support.
In a letter to President Obama, clean tech entrepreneurs, investors, and stakeholders joined Sen. Jeff Bingaman in calling for the creation of a Clean Energy Deployment Administration (CEDA) to support deployment, create clean energy jobs, and boost long-term U.S. economic competitiveness
A new Clean Energy Deployment Administration (CEDA) is critical to "position the U.S. as the global leader in the development and deployment of clean energy technologies for years to come," according to a letter written by the country's leading clean tech entrepreneurs, investors, and stakeholders.
Thirteen leading clean tech companies, including Google, GE, and Kleiner Perkins, wrote to President Obama last week urging him to expedite the creation of a Clean Energy Deployment Administration along the parameters outlined by the Senate's American Clean Energy Leadership Act of 2009 (ACELA).
Simplicity and transparency are the strengths of the new CLEAR Act, a climate bill recently introduced by Senators Maria Cantwell (D-WA) and Susan Collins (R-ME).
In Part 1 of our analysis of the new Cantwell-Collins CLEAR Act, we demonstrated how the bill fails to make the investments needed to jumpstart a competitive American clean energy economy and fund the technology innovation and deployment needed to affordably secure deep cuts in U.S. carbon emissions. In Part 2, we focus on several important structural advantages of CLEAR that open the door to a more transparent debate about the costs and benefits of climate action in Congress.
Simplicity and transparency are the strengths of the CLEAR Act, a climate bill recently introduced by Senators Maria Cantwell (D-WA) and Susan Collins (R-ME).
In contrast to competing climate proposals, which weigh in at several hundred pages in length, CLEAR contains just under 40 pages of text. Some of this brevity is achieved by punting on the development of a clean technology investment and competitiveness strategy (see more in Part 3, forthcoming), but much of the bill's simplicity comes from avoiding many of the complex and opaque measures in competing bills, creating new opportunities for transparent and open debate of climate action that may prove critical to securing real political consensus.
CLEAR does not allow offsets, is transparent about emissions reductions carbon cap will drive
Fossil fuel importers and producers regulated under CLEAR are not permitted to use emissions offsets to prove compliance with the bill's emissions cap. Unlike otherclimate bills, CLEAR keeps emissions reductions in non-capped sectors strictly separate from efforts to transform the U.S. energy system through the bill's carbon cap.
This enables a transparent debate over how quickly the U.S. energy sector can (or must) transition away from fossil fuels towards cleaner alternatives (and there will surely be much debate on that subject). Avoiding offsets also ensures that emissions reduction efforts in other sectors, including agriculture and forestry, are pursued in conjunction with, rather than instead of, the critical transformation of the energy system.
CLEAR's transparent cap on energy-related CO2 emissions is thus much better than competing climate bills at providing the kind of certainty that energy sector players need to plan investments in technology and infrastructure.
A new climate bill, introduced Friday by Senators Maria Cantwell (D-WA) and Susan Collins (R-ME), would invest only a tiny fraction of the bill's revenues to catalyze clean energy technology innovation while implementing an emissions cap that requires CO2 emissions to fall roughly 5% below 2012 levels.
A new climate bill, introduced Friday by Senators Maria Cantwell (D-WA) and Susan Collins (R-ME), would invest only a tiny fraction of the bill's revenues to catalyze clean energy technology innovation while implementing an emissions cap that requires CO2 emissions to fall roughly 5% below 2012 levels.
[Note: post updated 12/17/09 with a correction and additional information]
At least $15 billion must be invested annually to boost federal R&D budgets and jumpstart clean energy innovation to improve the price and performance of clean technologies, according to a wide consensus of energy experts, along with additional investments in clean energy demonstration, deployment, manufacturing and infrastructure.
In contrast, the Cantwell-Collins bill would initially direct just $2.5-8 billion annually to support U.S. clean energy technologies and industries, the Breakthrough Institute estimates based on the bill's supporting documents.
The Carbon Limits and Energy for America's Renewal, or CLEAR Act proposes to limit U.S. emissions of greenhouse gases through a simplified cap and trade system that auctions permits to polluters and rebates the majority of revenues directly to households through monthly, per capita dividend checks.
The legislation targets a 20 percent, economy-wide cut in U.S. greenhouse gas emissions by 2020, relative to a 2005 benchmark.
To achieve this target, the bill sets an upstream cap on importers and producers of fossil fuels that would require CO2 emissions to fall just over 5 percent relative to 2012 levels. If the most recent EIA projections of depressed emissions levels due to the economic recession prove accurate, those cuts could be in the range of 9% below the 2005 benchmark. [Note: post updated with correction on 12/17/09; rate at which emissions cap declines was misreported in prior version.]
That falls short of the bill's 20% by 2020 target and the CLEAR Act's emissions cap covers CO2 only, which is responsible for roughly 85 percent of U.S. greenhouse gases when each gas is weighted by their impact on global warming.
To fill this gap, the legislation directs the President to achieve additional emissions reductions in non-capped sectors of the U.S. economy by directly funding programs to encourage land-use changes that sequester carbon in forestry and agriculture or reduce emissions of non-CO2 greenhouse gases such as methane. The bill sets aside a portion of the cap and auction revenues in a trust fund that prioritizes spending on these additional reductions, but precise uses of that fund is subject to Congressional appropriations.
While it offers several structural advantages over competingcap and trade proposals (discussed in Part 2, forthcoming), CLEAR is principally focused on pollution reduction and does not implement a clean economy strategy sufficient to keep the U.S. competitive in the global clean energy race (see forthcoming Part 3).
Climate change e-mail scandal underscores myth of pure science. Breakthrough Senior Fellow Dan Sarewitz and co-author Samuel Thernstrom in an LA Times op-ed.
The necessary boundary between climate science and politics has become indiscernible as politicians on both sides of the political spectrum invoke "pure" science as the justification for climate policy, said Breakthrough Senior Fellow Dan Sarewitz and co-author Samuel Thernstrom in an Los Angeles Times commentary on the lesson learned from ClimateGate.
"As two scholars with different political orientations but common concerns, we have each worked to challenge conventional wisdom that has undermined public understanding of the climate change problem. Many Republicans have been too reluctant to acknowledge strong evidence of human-caused warming and the need for prudent policies that could reduce its harmful effects. Democrats have let their own political judgments and values infect climate science and its interpretation, often understating the uncertainties about the timing and scale of future risks, and the tremendous costs and difficulties of effective action.
Yet both parties have agreed, although tacitly, on one thing: Science is the appropriate arbiter of the political debate, and policy decisions should be determined by objective scientific assessments of future risks. This seductive idea gives politicians something to hide behind when faced with divisive decisions. If "pure" science dictates our actions, then there is no need to acknowledge the role that political interests and social values play in deciding how society should address climate change."
Sarewitz and Thernstrom go on to explain that even though the East Anglia e-mails do not discredit the significant body of evidence pointing to anthropogenic global warming, scientists who claim they are "unsullied providers of truth in an otherwise corrupt and indecipherable world," are misrepresenting the nature of the scientific inquiry and perpetrating a "myth of pure, disinterested science."
Promising "we can and will pass climate change and energy independence legislation this Congress," Senators John Kerry (D-MA), Lindsey Graham (R-SC) and Joseph Lieberman (I-CT) unveiled a new framework intended to form the core of a "compromise" climate and energy bill capable of clearing the 60-vote hurdle needed to secure passage. Details are still vague, but here's a run-down of where that framework is headed...
Promising "we can and will pass climate change and energy independence legislation this Congress," Senators John Kerry (D-MA), Lindsey Graham (R-SC) and Joseph Lieberman (I-CT) unveiled a new framework intended to form the core of a "compromise" climate and energy bill capable of clearing the 60-vote hurdle needed to secure passage.
The framework aims to cut U.S. emissions of greenhouse gases by 17% below 2005 levels in the "near-term," by which the senators apparently mean the year 2020. The three senators brand such a target "achievable and reasonable" and also declare their support for "a long term target of approximately 80 percent below 2005 levels," presumably by 2050.
Details of the new proposal are still scant, in an apparent nod to several Senate committee chairs -- and the numerous swing votes -- who will no doubt shape the final legislation.
Sen. Liberman told reporters today "there are well over 60 votes in play in the Senate, not that we have 60 votes yet." He'll have a steep hill to climb by all accounts.
Will details still vague, we can only get a sense of where the new Kerry-Graham-Lieberman framework is headed, but here's a run-down of notable passages...
Forget 80% by 2050 and 450ppm. Stop fixating on emissions reduction targets and timetables. As UN climate negotiations begin today in Copenhagen, there is only one number that deserves the world's attention: $10.5 trillion. That is the scale of shared investment that the International Energy Agency says is necessary over the next two decades to bring about a clean energy revolution and enable the global community to meet its climate goals. For years, climate activists and government leaders have continued to obsess about emissions reduction targets, while paying short shrift to the critical clean technology investments that we will need to get us there. If Copenhagen doesn't get us closer to closing the massive clean technology investment gap, it will have failed the global community.
Forget 80% by 2050 and 450ppm. Stop fixating on emissions reduction targets and timetables. As UN climate talks kick off in Copenhagen, Denmark, if you want a number to focus the world's attention on, try this one: $10.5 trillion.
That's the scale of additional investment required between now and 2030 to put the world's energy system on a lower-carbon path, according to the world energy watchdog, the International Energy Agency.
Without measurable progress that dramatically increases global investments in clean energy, we can forget stabilizing global temperatures or atmospheric carbon dioxide at any level. And as the IEA makes clear, the world's governments must lead the way in making massive public investments to rapidly develop and deploy an array of clean energy technologies capable of sustainably and affordably powering the planet.
So for those following the progress in Copenhagen, keep that sense of scale -- $10.5 trillion -- and just one phrase on your mind: Show me the money!
Enough With the Targets and Timetables
In the days leading up to the UN climate summit beginning today in Copenhagen, the focus has been on pronouncements from world leaders establishing various national targets to reduce or curb the growth of the carbon dioxide emissions principally driving global warming.
In July of this year, the world's 17 largest economies declared support for "an aspirational global goal" to reduce emissions by 50% by 2050. Then, the world watched in recent weeks as first the United States, then China and most recently Brazil and India put their emissions pledges on the table. Each would cut their emissions some amount by some date, with the developed countries outlining targets for absolute cuts to CO2 emissions and most developing countries, including China and India, announcing reductions in the carbon intensity of their economies (aka CO2 per GDP).
As the Times info-graphic clearly illustrates, the "Lessons from Kyoto" are clear: economic trajectories, and little else, determined emissions outcomes under the targets and timetables focused Kyoto Protocol. Without a proactive and massive shared global effort to sever economic growth from emissions by accelerating clean technology innovation and deployment, the Copenhagen summit now underway shouldn't be expected to produce a dramatically different outcome than it's Kyoto predecessor, despite likely "participation" from the U.S. and big developing nations like China this time around.
A new info-graphic from the New York Times, released today as UN climate talks begin in Copenhagen, looks at the "Lessons from Kyoto," the global treaty that's ongoing fate will be the focus of UN climate negotiations beginning today in Copenhagen, Denmark.
The graphic gets the lessons pretty much dead-on, including how little actual progress any nations have made towards meeting their Kyoto "obligations." As the Times notes, "The legacy of the Kyoto Protocol is mixed." Of the 36 wealthy nations who agreed under the 1997 treaty to cut their emissions by an average of 5% below historic 1990 levels, just 18 are on track to meet their targets, almost all of them in Europe.
As the graphic illustrates, the bulk of these "successful" nations are former members of the Soviet bloc, and almost all saw deep economic declines after the fall of the Soviet Union, which conveniently occurred after the 1990 emissions baseline year used in the Kyoto treaty. Deindustrializing Eastern bloc nations, including East Germany, saw big cuts in their emissions and made compliance with the Kyoto protocol easy. Better yet, for these nations, exceeding their Kyoto "obligations" left them with excess credits under the treaty framework that they could sell to other nations struggling to cut their own emissions.
A recent Nature article by Breakthrough Senior Fellow Christopher Green and co-author Isabel Galiana explains why a technology-led policy is the best way to achieve climate stabilization and transition to a future fueled by clean energy technology.
"The fixation on near-term targets for reducing greenhouse-gas emissions at the climate meeting in Copenhagen has resulted in insufficient attention towards the technological means of achieving them."
So begins "Let the Global Technology Race Begin," an article in Nature by Breakthrough Senior Fellow Christopher Green and co-author Isabel Galiana explaining the need for a technology-led approach to mitigating climate change instead of the emissions reductions target approach that is the hallmark of conventional climate policy.
The authors' focus on a technology builds on the findings of a 2008 Nature article entitled, "Dangerous Assumptions," co-authored by Green, Breakthrough Senior Fellow Roger Pielke, Jr., and Tom Wigley. They found that the IPCC had significantly underestimated the emissions reductions necessary to achieve climate stabilization and thus, had seriously underestimated the scale of the technology challenge, concluding:
"enormous advances in energy technology will be needed to stabilize atmospheric concentrations of carbon dioxide at levels that are currently considered acceptable... In the end, there is no question whether technological innovation is necessary -- it is. The question is, to what degree should policy focus explicitly on motivating such innovation?"
Here, Green and Galiana answer this question. Their analysis shows:
"cumulative emissions consistent with minimizing the rise in global temperature (climate stabilization) can be achieved by investing US$100 billion a year for the rest of the century in global energy R&D, testing, demonstration, and infrastructure."
The two experts offer three suggestions for how a technology-led approach to policy would work to catalyze the research, development, and deployment of a steady stream of clean energy technologies:
1) Instead of emissions targets, governments would agree to "credible long-term global commitments to invest in energy R&D," technology and infrastructure financed by "a low carbon price of $5 per tonne of emitted carbon dioxide, which would raise almost $150 billion per year globally and $30 billion in the United States alone."
2) The carbon price would "send a forward pricing signal to deploy new or improved low-carbon technologies" by rising gradually over time "doubling, say, every 10 years."
"These would span the technology spectrum: basic R&D in breakthrough technologies, 'enabling' R&D that allows scale-up of existing technologies (such as utility-scale storage for intermittent solar and wind energy); testing and demonstration projects; end energy-related infrastructure, such as 'smart grid' that help to manage intermittent energy sources."
3) Dedicated trust funds should be created to isolate R&D monies from "political interference." These funds would be overseen "by independent committees drawn from the public and private sectors." Countries that do not engage in R&D could use their portion of the funds "to purchase successfully developed technologies from those that do participate [in R&D]."
Galiana and Green explain how a technology-led policy "inverts the usual relationship between carbon pricing and technology, whereby carbon pricing is naively expected to induce fundamental technological innovation."
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:
"Attaining the 2 degree goal in the United States with existing technology will likely be very expensive. Doing so in the developing world with existing expensive technology is likely to be impossible. ...
While an emissions price is an absolute requirement for an efficient regulatory framework, it is likely not the sole requirement. Due to some imperfections in any market economy, price signals may be dampened or be short circuited. This is particularly true in the market for research and development, where it is well known that firms have incentives to under-invest in research and development (R&D) due to the fact they cannot capture all the returns to R&D--some of those returns spill over to others in the market that did not invest as much. In this case, the emissions price cannot fully motivate the R&D market and therefore a well-designed regulatory program will contain a role for government funding of R&D. ...
In addition to the economic rational for government support of R&D, there is a political case to be made. Spurring R&D and demonstration and deployment of financially risky technology investments may require an emissions price that is not politically viable (that is, it is too high to be politically acceptable). In this case, absent the market imperfections above, the price is simply too low to generate the needed investments and government must step in to support the required levels of from R&D and demonstration and deployment."
-Ray Kopp, Senior Fellow at Resources for the Future, in testimony before the Senate Energy and Natural Resources Committee, Dec. 2, 2009.
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.
Senator Schumer and others are demanding a ban on federal stimulus funding to import Chinese wind turbines for planned Texas wind farm, but attempting to cut off foreign imports addresses the symptoms not the problem, which is a lack of long-term, consistent investment in domestic clean energy manufacturing, deployment, and R&D
Outcry over a planned Texas wind farm, which will be the first project to import wind turbines from a Chinese manufacturer, has resulted in calls to prevent government stimulus money from funding the project. As Bloomberg reported, in a letter to U.S. Energy Secretary Steven Chu, Senator Charles Schumer insisted that funding only be granted to U.S. manufactured turbines.
"I urge you to reject any request for stimulus money unless the high-value components, including the wind turbines, are manufactured in the United States...China is fast emerging as one of our main rivals in the race to build the technology that can help us achieve energy independence. We should not be giving China a head start in this race at our own country's expense."
But those expressing alarm that money from the stimulus package will accrue to China are forgetting that importing wind turbine components is actually nothing new in the United States. In fact, this story broke at almost that same time that a new investigative report by the American University School of Communication revealed that 84% of the U.S. stimulus money for renewable projects has been given to overseas companies.
Republicans on the EPW committee are reverting to schoolyard tactics to stall markups of pending climate and energy legislation and in the process, are belittling the functionality of the American democracy
"Their behavior challenges everything that we're about here. If you don't like it, turn your back and walk out. It's almost like school children over there."
Those were the remarks of Sen. Frank Lautenberg (D-N.J.), chastising the Republican members of the Senate Environment and Public Works Committee (EPW) who have spent the past two days showboating for the press while boycotting the committee's markup of pending climate and energy legislation.
Sending just one Republican member to monitor the stalled hearings each day, the Republicans are using procedural tricks (rules require at least two members of the minority party present to consider amendments to pending legislation) to block any debate on the Kerry-Boxer climate bill.
The excuse for these schoolyard tactics? Republicans complain that the U.S. EPA has not fully analyzed the Kerry-Boxer climate bill, despite the fact that Agency analysts spent weeks looking at impacts of key differences between the House and Senate climate bills, which are nearly identical in most major components.
I've also included the boost in FY2009 Department of Energy (DOE) R&D budgets provided by the economic stimulus bill, the American Recovery and Reinvestment Act. As Google's Dan Reicher warned the Senate on Wednesday: when these temporary stimulus funds dry up, the U.S. could fall of a "funding cliff" unless significantly larger allocations are made for clean energy R&D in Congressional legislation.
Senator Warner, a rare Republican champion of climate action, found common ground with Breakthrough's Jesse Jenkins on the need for much greater investment in clean energy technology in final Congressional climate legislation. Is this the sign of a possible bipartisan consensus on clean energy R&D funding?
Breakthrough's Jesse Jenkins joined former Senator John Warner of Virginia on the KPFA Morning Show today to discuss Senate climate and energy legislation, the focus of hearings this week in the the Environment and Public Works Committee. (listen to the full interview below)
Senator Warner, a rare Republican champion of climate action, was the co-sponsor of the 2007 Lieberman-Warner "Climate Security Act." He retired in 2008 after thirty years in the Senate but remains an active advocate of Congressional climate legislation, and is working to convince his reluctant Republican former colleagues to embrace the climate and energy legislation authored by Senators John Kerry (D-MA) and Barbara Boxer (D-CA).
Jenkins was honored to join the discussion with Senator Warner (who's spent more time in the Senate than Jenkins has on this warming planet). He was also pleased to find consensus with the veteran Republican on the need for final Senate climate legislation to include much greater investments to ensure U.S. innovators, entrepreneurs and businesses invent and commercialize clean energy technologies here in America.
Agreeing with the strong consensus of energy innovation experts, the former Senator said that the current Kerry-Boxer bill invested too little in clean energy R&D and did not provide enough proactive support for American firms commercializing, manufacturing and installing clean energy technologies, but he noted that final legislation is still taking shape. Hopefully his common-sense attitude on clean energy innovation and technology investment will prevail on Senate Republicans, who so far have resorted to threatening to boycott hearings on the Kerry-Boxer bill, rather than work constructively to ensure the bill includes more funding for American innovators and clean energy firms.
Senator Warner, the long-time Chairman or Ranking Member of the Senate Armed Services Committee and a former Secretary of the Navy, also highlighted the need to avert climate change in order to mitigate future conflicts and humanitarian crises that would sap the resources of the U.S. military. For more on the Senator's views on climate legislation, you can read his testimony before the Environment and Public Works Committee on earlier this week here.
Listen to the full interview here or using the player below. The segment starts at 1:08:00 into the Morning Show.
$15 billion. That is the figure at the heart of a growing consensus of energy innovation experts, all calling for dramatically larger U.S. investment in clean energy research and development. Writing at theEnergyCollective.com, Breakthrough's Jesse Jenkins highlights mounting calls to address what Google Director of Climate Change and Energy Dan Reicher called "a serious energy R&D short-fall" in the current House and Senate climate bills. As Congress debates energy and climate change legislation, a chorus of voices including policy think tanks such as the Brookings Institution, Third Way and the Breakthrough Institute, as well as a collection of both the nation's top research universities and dozens of Nobel-prize winning scientists have joined leading businesses like Google to converge on a $15 billion increase in annual U.S. energy R&D budgets as a critical component of any final legislation.
In testimony before the Senate EPW committee, Google's Dan Reicher adds to the growing consensus that final climate legislation must invest $15 billion/year in clean energy R&D in order to mitigate climate change and transition to a clean energy economy
Lending his voice to a growing consensus that congressional climate policy must make dramatically larger investments in energy R&D in order to accomplish its stated objectives, Google Director of Climate Change and Energy Initiatives, Dan Reicher, delivered the following message in testimony before the Senate Committee on Environment and Public Works (emphasis in original):
"Chairman Boxer, it is essential that Congress address this serious energy R&D short-fall by incorporating President Obama's goal of $15 billion per year in federal energy R&D spending in final climate legislation."
Reicher also highlighted the fact that a price on carbon will not be sufficient to position the U.S. competitively as a world leader in clean energy innovation.
"But let me emphasize that putting a price on carbon, while absolutely necessary, is not sufficient to address the climate problem and, importantly, will not put the US in the position to seize the extraordinary opportunities that will come with rebuilding the global energy economy."
Overall Reicher's commentary drew pointed attention to the need for direct public investment - on the order of $15 billion annually - in clean energy R&D to make up for a funding drop off in the sector over the last few decades, as well as to "nurture" basic R&D, a high risk step in the innovation process that is traditionally unattractive to private interests.
Like its House sibling, the Senate's Kerry-Boxer climate bill allocates the vast majority (64%) of the tens of billions annually in emissions allowances created by the bill's cap and trade program to shield energy consumers and industry from the impacts of carbon prices. Just 13% of the value of allowances in the "Clean Energy Jobs and American Power Act" are invested in clean energy technologies.
Late Friday night, Senator Barbara Boxer's Environment and Public Works Committee released a new draft of the Kerry-Boxer "Clean Energy Jobs and American Power Act" (S.1733), the first version of the legislation to detail how emissions allowances created by the bill will be divvied up. These allowances, which give polluters the right to emit greenhouse gases under the bill's cap and trade program, will be worth nearly a trillion dollars over the first ten years of the program alone.
Breakthrough Institute staff worked over the weekend to dig through the new legislation and get an accurate picture of the allowance allocation pie [see summary tables and graphics below and click here to download a comprehensive spreadsheet(*also in xls format) of allowance allocations in both Kerry-Boxer and the House Waxman-Markey/ACES bill. Note: updated after initial posting to convert EPA forecasts to 2009 constant dollars. Hat tip to Jason at 1Sky for catch].
Depending on the value of emissions allowances under the cap and trade program, an average of roughly $70 billion to $126 billion in emissions allowances will be created and distributed on each year under the first ten years of the bill's cap and trade program, 2012-2021.
Of that value, by far the largest share, roughly 64% of the total allowances, will be distributed for free to shield energy consumers and industry from the higher energy prices driven by the establishment of a price on carbon dioxide and other greenhouse gases under a cap and trade system. This includes both direct rebates to end consumers and low-income energy assistance, as well as free allocations to electric and natural gas utilities (aka "distribution companies"), which they are directed to use "on behalf of" their customers. It also includes direct transfers of billions of dollars in free allowances to various industries, ranging from the relatively defensible (11.3% of allowances to heavy industries vulnerable to international competition), to the pretty indefensible, (e.g. a windfall-profit generating allocation of over 3% of the allowances -- worth at least $2 billion annually -- to the "merchant" operators of conventional coal plants).
By contrast, only about 13% of the value of allowances will be invested in various clean energy technologies, including incentives for the deployment of carbon capture and storage technology (aka CCS, given 2.2% of permits on average each year), federal, state and local government funds to incentivize renewable energy and energy efficiency (6.4%), and investments in advanced clean vehicle technologies (1.7%).
Just 1.9% of the allowances are dedicated to critical clean energy research and development (R&D) efforts, which amounts to an investment of just about $1.4 billion annually under EPA-projected allowance prices (in 2009 constant dollars).
Overall, the "Clean Energy Jobs and American Power Act's" investments in clean energy technologies will total under $9.5 billion per year under allowance prices projected by the EPA.
In summary: CO2 price from cap and trade = effective clean energy subsidy of $8-15/MWh. Current PTC is worth $20/MWh. Solar incentives typically top $400-500/MWh. Stimulus bill driving big investments with cash grant worth 30% of clean energy project costs. How again is the House-passed cap and trade program going to spur a clean energy revolution?
As President Obama challenges the U.S. to lead in the global clean energy race today, here's a quick comparison of methods that can drive clean energy deployment. Which do you think will be more effective...
Average CO2 prices under the cap and trade system that would be implemented by the House-passed Waxman-Markey bill are expected to be roughly $15 per ton average through 2020.
Ignoring for a moment free allocations that could undermine these permits, that will raise the price of coal-fired power plants and natural gas fired power plants against which clean energy must compete by roughly $15 per MWh and $8 per MWh respectively. A typical coal plant emits roughly 1 ton CO2 per MWh and a natural gas plant emits about 40% less.
The production tax credit that has driven the rapid expansion of the wind industry (when it isn't expiring every other year...) drives down the cost of wind power by roughly $20 per MWh.
Feed-in tariffs responsible for rapid growth of the solar industry in Germany lower the net cost of solar power by over 50 cents per kilowatt-hour,or $500 per MWh. In the U.S., an investment tax credit nocks off a full 30% of the cost of solar projects and state-level incentives offer even greater support in big solar states like California, Pennsylvania and New Jersey. The value of solar renewable energy credits (SRECs) supplied to solar energy generators in New Jersey has averaged well above $400 per MWh over the last few years.
This year and next, new wind, solar and other renewable energy projects can enjoy a cash grant in lieu of these tax credits worth 30% of the total cost of the projects, funded through the stimulus bill. That incentive is expected to drive up to $10 billion in grants supporting over $33 billion in clean energy projects.
In summary: CO2 price from cap and trade = effective clean energy subsidy of $8-15/MWh. Current PTC is worth $20/MWh. Solar incentives typically top $400-500/MWh. Stimulus bill driving big investments with cash grant worth 30% of clean energy project costs. How again is the House-passed cap and trade program going to spur a clean energy revolution?
Click to enlarge
*All figures in this post are approximate and meant for comparison purposes only.
Pulling no punches, Greenpeace writes: "There is all manner of spinning--well-intentioned, disingenuous, self-serving--among supporters of climate action, and it has become almost impossible to separate political calculus from scientific necessity. ... Many supporters of climate action find themselves forced to grasp a flimsy hope--that we just need to get something started--anything--and strengthen it later. And so we witness the cheerleading to which we cannot lend our voice. ... Politics as usual will only produce its corollary, business as usual."
Titled "Business as Usual," the report was prepared on behalf of Greenpeace by David Sassoon, who publishes the climate news site, SolveClimate. It is written as a "plain-spoken" analysis meant to be "a call to action to the President of the United States," according to the document.
"In order for federal climate legislation worthy of this nation to pass Congress, we see no alternative to active and principled engagement from the Oval Office," Greenpeace writes.
The report levels five key criticisms of current Congressional legislation, calling attention to what Greenpeace describes as "five points of maximum danger" that the environmental group argues must be addressed to ensure climate legislation is capable of spurring "a swift transition to a clean energy future."
While we certainly don't share Greenpeace's position on all (most) climate matters, this new report levels a pointed and impassioned critique of current Congressional climate action well grounded in the details of the pending legislation. Here's a 'Cliffs notes' version of the full report below the fold...
Environment Committee Chairwoman Barbara Boxer says the Senate climate policy debate is on by month's end. Meanwhile, Republican Lindsey Graham, the new hope for a bipartisan bill in the Senate, tells us he's trying make sure the House's Waxman-Markey bill is dead.
Senator Barbara Boxer (D-CA), chair of the Environment and Public Works Committee, said she's ready to green light debate by month's end on the Senate climate bill she has co-authored with Senate Foreign Relations Committee Chair John Kerry (D-MA). According to Politico:
A major Senate climate change bill is written and ready to be debated before the Environment and Public Works committee, the chairwoman of the panel said Tuesday.
Sen. Barbara Boxer's legislation would distribution of tens of billions of dollars of pollution allowances to power plants, manufacturing, and other industries. It will mirror cap and trade legislation passed by the House in late June with, she noted, "a few tweaks."
For a summary of those "tweaks" - at least as of the discussion draft version circulated by Kerry and Boxer two weeks ago, see my post "Anatomy of a Bill: Key Features of Kerry-Boxer Senate Climate Bill" over at theEnergyCollective.com.
While biomedical research receives nearly $60 billion in private investment and $30 billion in public investment through the National Institutes of Health, investment in energy R&D leaves a huge innovation gap. Private sector spending is less than $3 billion annually with the government contributing just $5 billion per year more. A National Institutes of Energy and massive increase in federal clean energy spending is needed to fill the energy innovation gap and jumpstart a clean energy revolution.
Friday factoids time: The U.S. biomedical and pharmaceutical industry invests between 10-20 percent of revenues in R&D and new product development, spending $58.8b on R&D in 2007. The U.S. government adds an additional $30 billion per year investment in biomedical R&D through the National Institutes of Health.
In contrast, the U.S. energy sector invests well below $3 billion annually in R&D in an industry with well over a trillion dollars in annual revenue. The energy sector's R&D spending as a percent of revenues - call that figure the industry's innovation intensity - is just 0.23%. That compares to a national average innovation intensity across all industries of 2.6%, or ten-times greater than the energy-sector's innovation intensity. And it pale sin comparison with the innovation intensity of leading technology and innovation-intensive sectors including biomedical technology (10-20%), information technology (10-15%), and semiconductors (16%).
This downright paltry private-sector energy innovation spending leaves a massive energy innovation gap that the U.S. government barely begins to fill, investing only about $5 billion annually in energy R&D. That's barely more than half the levels spent on public research to pursue clean and affordable energy alternatives during the late 1970s and early 1980s. The scale and urgency of our national energy challenges have clearly grown since then, yet the national commitment to energy innovation has moved in the wrong direction. Public R&D spending on health care ($30b) and defense ($80b) signal the scale of true national innovation priorities and begs the question: when will the U.S. get serious about investments in clean energy innovation? When we do, a new National Institutes of Energy and a major increase in federal energy R&D investments are needed to fill the energy innovation gap and spur a clean energy revolution.
With just two months left until much-anticipated negotiations in Copenhagen, it will be "extraordinarily difficult" for the U.S. to agree to specific emissions reduction targets in an international climate treaty, warns the United States' deputy climate envoy Jonathan Pershing.
A week of preliminary UN climate talks in Bangkok come to a close today with little concrete progress to show for it. With just two months left until much-anticipated negotiations in Copenhagen, it will be "extraordinarily difficult" for the U.S. to agree to specific emissions reduction targets in an international climate treaty, warns the United States' deputy climate envoy Jonathan Pershing.
[T]he chief U.S. negotiator acknowledged that the United States may not agree to cut greenhouse gas emissions in a treaty this year until Congress passes its climate legislation.
"It will be extraordinarily difficult for the U.S. to commit to a specific number in the absence of action from Congress," State Department deputy climate envoy Jonathan Pershing said. "The question is open as to how much we can do. It's not really possible to answer."
Some progress was made in Bangkok, said Kim Carstensen, leader of the global climate initiative at WWF. But "on issues that require political breakthroughs, they've not made any real progress," she said. "That means targets, finance, institutions and the legal form of the outcome in Copenhagen."
While efforts to drive towards global agreement on binding emissions targets stall and both the United States and key developing nations, including China and India, balk at such proposals, a series of recent recommendations are establishing a growing consensus for an alternative to the targets and timetables approach that has repeatedly failed to make either political or substantive progress.
Alongside real commitments from the world's rich nations to help provide financial and technical support to speed the diffusion of clean technologies to the world's poorer nations, this more direct framework can build off of policies already underway in key nations, including the U.S., China and India, and result in far more concrete climate action than the empty commitments to symbolic emissions targets.
As the Senate's climate and energy bill takes shape, it looks broadly similar to the House-passed Waxman-Markey American Clean Energy and Security Act, with a couple exceptions.
As the Senate's climate and energy bill takes shape, it looks broadly similar to the House-passed Waxman-Markey American Clean Energy and Security Act, with a couple key exceptions, according to E&E News' ClimateWire service.
ClimateWire has obtained an early version of the bill (pdf) being written by Senators Barbara Boxer (D-CA) and John Kerry (D-MA). Key sections are still under development as Senate staffers put the finishing touches on the discussion draft version of the bill scheduled for public release tomorrow, but the early draft appears to mirror closely the structure and content of its House sibling.
Emissions targets in 2020 are stronger than the House-passed version (20% below 2005 levels instead of 17%) and the EPA's authority to separately regulate greenhouse gas emissions from major sources is reportedly preserved. A modest new nuclear title has been added as well. Other major provisions, including the extensive permitted use off offsets and a strategic reserve pool to control allowance prices, appear consistent with the House climate bill.
[Update, 9/29/09, 5:33 PST: additional details are emerging as successive drafts of the legislation are leaked to reporters and bloggers. An 801-page draft bill was leaked this afternoon, which is reportedly more current than the 684-page draft reported by ClimateWire earlier today. This version is still not the final, which we'll have to wait until tomorrow for.
The current draft apparently contains a cost collar on emissions allowance prices backed up by the same kind of strategic allowance reserve in the House bill. The floor price begins at $11 per ton in 2012 and the ceiling at $28 per ton, both rising steadily each year. The House version had a $10 floor price in 2012 and a ceiling that floated at 60% above a rolling average of market prices for allowances, providing little certainty of an upper price on carbon under the bill. E&E News also reports that the new bill contains greater support for research and commercialization of advanced biofuels and greater incentives to replace coal-fired power plants with new natural gas plants.]
Key sections on how the climate bill will divvy up hundreds of billions of dollars in allowance allocation revenue will remain blank, to be filled in later when Senator Boxer releases a "chairmans mark" before formal markup of the bill in the Environment and Public Works Committer, likely sometime in October. However, if theHill.com's observations are accurate, as in the House bill, these billions in new revenue will likely be considered "chits to use to negotiate support for their bill as they attempt to form a winning coalition," rather than a funding source for critical, proactive investments to spur clean energy technologies, industries and jobs.
Joseph Romm warns on ClimateProgress.org that the House's Waxman-Markey climate bill is poised to over-allocate emissions permits, collapsing the carbon price and undermining emissions caps.
For readers of Climate Progress looking for some help sorting through Joe Romm's latest vituperation, here's a cliff-notes version: he agrees with our conclusions showing that climate legislation passed by the House in June would over-allocate emissions permits in the early years of the program, resulting in a collapse of carbon prices to the bill's $10 floor and the banking of excess permits that will undermine the stringency of the emissions cap in future years. He warns readers about precisely the same likely outcomes here.
Breakthrough conducted analysis of the implications of the economic recession and lower-than-expected emissions levels, concluding that the House climate bill would not require regulated firms to reduce emissions at all, either through offsets or actual reductions in their own emissions, until as late as 2018 under likely economic recovery scenarios. With offsets utilized at just 6 to 25 percent of the maximum levels permitted, the bill's cap and trade program would not require any actual reductions in emissions from regulated firms until 2020 or later.
Romm doesn't like these conclusions because it challenges his contention that Waxman-Markey is a strong bill. So, unable to actually challenge our analysis, Romm calls our analysis "crap" -- and then says we "glommed" it from him. He then quotes at length from an egregiously unbalanced E&E article about our analysis.
A Japanese think tank recently released a paper commenting on the recently-elected DPJ's adoption of aggressive emissions reduction targets and discusses the international implications of such bold climate policy
Akihiro Sawa of the 21st Century Public Policy Institute, a think tank in Japan, has written an interesting paper on the new Japanese government's (the DPJ) proposed climate policies. The paper also has some interesting views on how the United States is viewed in Japan. The paper has just been translated into English as is available here in PDF.
Here is what Prof. Sawa says about Japan's policy, (note that "clear water" refers to Japan's Mamizu climate policy that I discuss in this paper in PDF):
The DPJ has forgotten (or perhaps, are not aware?) that many major developing countries appreciated Prime Minister Taro Aso‟s genuine "clear water" target of reducing 15% compared with 2005 levels (which would be achieved solely by domestic efforts, not employing overseas credits, or offsets), and that these countries have also criticized the EU for including offsets and other developed countries such as Australia for "cheating." Councilor Fukushima mentioned the possibility that "the 25% target may not be a "clear water" target." If this is true, Japan may have disappointed South Africa and Bangladesh, which were supportive of Japan‟s "clear water target" as a criterion proving the sincerity of its reduction efforts, and government authorities of China and India, which have been critical of the excessive use of offsets by developed economies. We would hope that a leader of government charged with severe international negotiations would be more prudent of what he says, as any statement he makes, even domestically, is bound to eventually reach all governments via their embassies.
Perhaps the DPJ's intention was to impress developing countries by setting out the 25% reduction initiative as a sign of Japan‟s enthusiasm towards large reductions. However, at the current global negotiation table, developing countries led by China and India are not ready to give up their demands for reductions in developed economies by 40-80％ - far beyond 25%. Although Councilor Fukuyama mentioned that reduction efforts are meaningless without the participation of China and India, saying that the government would "strongly urge" their involvement, it is hard to conceive that two countries which have maintained a hard-line stance so far in global negotiations, which are not always based on good intentions, would be so easily "urged" to assume a reduction target.
They are, however, very likely to escalate their demands, applauding Japan's competence - its unprecedented declaration of a high reduction target exceeding the capacity of all other countries and its positive outlook that the more stringent the target is, the more innovation is promoted, and hence a stronger economy. They would suggest that in order to accelerate economic recovery, Japan might seek an even higher target which would fulfill their demands of reductions by 40% or more. Would the DPJ be ready to accommodate such demands? Or, would they respond that 40% would be impossible even in their best efforts? If so, what makes 25% a viable figure, and 40%, not? If in turn, China and India should insist on a 40% reduction target as a nonnegotiable condition for their involvement, would the DPJ assent to the 40% reduction target alone, regardless of US and EU resistance? If not, the DPJ would leave developing countries in great despair.
The major problem with the 25% reduction initiative is that it was announced without any diplomatic strategies to convince developing countries to abandon their severe demands and has unnecessarily raised their expectations.
Japan's new government has set forth a strong goal for emissions reductions by 2020, but admits that it really doesn't know how it is going to meet that goal:
Environment Minister Sakihito Ozawa said Sunday that Japan's new goal for cutting greenhouse gas emissions will put the country in a strong position at international negotiations on climate change. But details of how the government will achieve the ambitious goal of reducing emissions by 25 percent from 1990 levels by 2020 has yet to be crafted within the new government, Ozawa admitted.
Meantime, my paper evaluating Japan's Mamizu climate policy has been provisionally accepted for publication. I'll post up the final pre-publication version by tomorrow once I finalize and submit. Meantime, here is how I conclude the paper:
If climate policy is to be about more than symbolic exhortation, then it will necessary for goals to be more than aspirational. Japan's Mamizu climate policy targets for 2020 and 2050 announced in mid-2009 were exceedingly ambitious, and if they are to be criticized, it should be for being too aggressive, not too weak. Should Japan actually succeed with respect to its short-term target then it will have achieved a carbon intensity of its economy lower than that of France in 2006 by the end of the decade, representing a decrease in emissions per unit of GDP of about 33%. If the world economy were to be as carbon efficient as implied by Japan's 2020 target, then global carbon dioxide emissions in 2006 would have been only 40% of their actual value.
Regardless of the nature of changes to the composition of the Japanese government in coming months and years, there is considerable merit in encouraging Japan to actively seek to achieve its Mamizu climate policy because its successes and shortfalls will provide a valuable body of experience to other countries seeking to achieve similar goals. Should Japan choose to depart from its proposed Mamizu climate policy to one based on (even more) impossible targets and timetables than they may find themselves the subject of international applause rather than condemnation. At the same time such a shift would signify a desire to meet the symbolic needs of international climate politics while sacrificing the practical challenge of decarbonization policy. Conventional approaches to climate policy have thus far borne little fruit, but that is a topic that goes well beyond this brief analysis. Diversity in climate policy should be encouraged.
Pielke, Jr., R.A., 2009 (provisionally accepted). Mamizu Climate Policy: An Evaluation of Japanese Carbon Emissions Reduction Targets, Environmental Research Letters.
The global recession is likely to drive an oversupply of emissions permits in the early years of the House cap and trade program, collapsing carbon prices and allowing regulated firms to continue business as usual without cutting their own emissions or purchasing any offsets through as late as 2018. With only a fraction of the offset utilization permitted by the bill, U.S. emissions in capped sectors could rise for much--if not all--of the next two decades.
By Jesse Jenkins, Ted Nordhaus and Michael Shellenberger
The large decline in U.S. emissions in 2008 and 2009 due to the economic recession ensures that if the House-passed Waxman-Markey climate legislation becomes law, the bill's emissions reduction cap will require no reduction of carbon emissions over the first two to five years of the program. The resulting oversupply of emissions permits will allow regulated firms to continue business as usual emissions through as late as 2018, according to a new analysis by Breakthrough Institute based on new Energy Information Administration emissions projections that take into account the impacts of the global recession.
The analysis further establishes that very modest utilization of the offset provisions of the Waxman-Markey bill, as little as one-tenth to one-quarter of the levels of offset utilization projected by the Congressional Budget Office and the Environmental Protection Agency respectively, will allow emissions in regulated sectors of the U.S. economy to proceed at business as usual levels through 2020 or beyond. Depending upon how quickly U.S. emissions recover over the next decade, firms would need to purchase on average as few as 124 million tons of offsets annually in order to comply with the emissions reduction caps through 2020, substantially less than the 526 million and 1,223 million tons of average annual offset utilization between 2012 and 2020 projected this summer by CBO and EPA respectively.
In conjunction with the free allocation of a high percentage of emissions allowances under Waxman-Markey, and lower global demand for offsets from recession-hit EU and U.S. firms, substantial over-allocation of emission allowances in the early years of the program will likely lead to a cap and trade program awash in both cheap emissions allowances and offsets during at least the first decade of implementation. Under such conditions, the functional carbon prices for the first decade or more under Waxman-Markey are likely to hover at or even below the $10 per ton floor on allowance auction prices (rising slowly each year) established by the bill.
"Jumpstarting a Clean Energy Revolution with a National Institutes of Energy," a policy memo co-authored by the Breakthrough Institute's Director of Climate and Energy Policy, Jesse Jenkins, and Third Way's Joshua Freed and Avi Zevin, is a joint effort by both think tanks to jumpstart American energy research and development.
In September 2009, Senator Sherrod Brown (D-OH) and Congressman Rush Holt (D-NJ) joined the Breakthrough Institute and Third Way to release the report and issue a call for significantly increased public investment to catalyze clean energy innovation.
You can watch the video of the release event below or click here.
The memo calls for a national commitment to energy innovation that includes direct support for the research and development of new and existing clean technologies and creates a structure for energy research, modeled on the National Institutes of Health, capable of coordinating large scale R&D efforts.
The memo acknowledges that the U.S. faces a "defining challenge" in its effort to transition to clean energy. Based on historical evidence of national commitments made to confront significant challenges, the authors suggest two key components of a national effort to address the clean energy challenge in the United States.
1) Increase federal investment in energy R&D by $15 billion per year: In line with President Obama's 2009 budget request, the scale of investment for comparable national priorities, and the recommendations of innovation experts, the authors propose a sustained $15 billion per year increase in federal clean energy R&D to approximately $20 billion per year. This level of funding is necessary to both create new breakthrough technologies and drive improvements to existing technology, enabling the production of clean energy at significantly higher efficiencies and lower costs.
2) Create a National Institutes of Energy: Modeled on the National Institutes of Health, a new National Institutes of Energy (NIE) would effectively apply R&D funding to the development of new, low-cost commercial clean energy technologies. The NIE would function as a nationwide network of regionally based, commercially focused, and coordinated innovation institutes. Alongside other effective federal energy R&D agencies, an NIE would critically strengthen the U.S. clean energy innovation system.
Realizing the economic benefits of a thriving clean technology sector, the new Japanese government seems likely to make its clean energy investment proposals the centerpiece of its energy policy - a potential boost to the nation's competitiveness in the clean energy race
Elected less than a week ago, the Democratic Party of Japan (DPJ) may be new to power but according to a recent Bloomberg piece, it has already acknowledged the urgency of the clean energy race. Centered on an aggressive target to reduce carbon emissions 25% by 2020 from 1990 levels and increasing the share of renewables to 10% of its energy mix by 2020, the DPJ has set forth a proposal to achieve those cuts that is on course to outdo its predecessor, the Liberal Democratic Party (LDP), in both promise and execution.
While many nations' emissions targets end up as nothing more than empty promises, the DPJ's proposal outlines plans that include direct investment in clean energy technology that could have a variety of positive impacts on Japan's clean energy sector and ultimately improve its ability to compete in the clean energy race.
With the intent to expand and improve upon the LDP's clean energy deployment initiatives and grow the share of renewables in its energy mix, the DPJ is offering increased subsidies for solar photovoltaics as well as planning to extend Japan's soon-to-be feed-in tariff system, to include all renewables, instead of just solar.
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.
India's progress on building a domestic clean energy economy through investment represents a strategy that could also serve as a new approach to international climate policy. Unfortunately, Western nations that stall climate negotiations with their insistence on setting carbon caps continue to miss the world's best chance at forging a global agreement.
In New Delhi today, Indian Prime Minister Manmohan Singh said that India must invest in both new and existing clean energy technologies in order to develop sustainably over the coming decades. This comes as the latest indication of India's progress on building a domestic clean energy economy through investment--a strategy that could also serve as a new approach to international climate policy. Unfortunately, Western nations that stall climate negotiations with their insistence on setting carbon caps continue to miss the world's best chance at forging a global agreement.
US and EU climate negotiators keep pushing for an international treaty based on hard emissions caps, yet developing nations like China and India keep refusing to adopt them. A report by the Center for Clean Air Policy says it's time for a new framework: achieving direct decarbonization by setting targets for the deployment of clean energy technologies.
Here's the current climate stalemate: While US and EU negotiators keep pushing for an international treaty based on cutting emissions, developing nations like China and India keep refusing to adopt hard emissions caps. But according to a new report by the Center for Clean Air Policy, those emission caps are too hard to measure and monitor in developing nations, anyway. Instead, the report concludes, developing countries should adopt a new approach to increase efficiency in their most energy-intensive industries by setting measurable clean energy technology targets.
Dan Klein of CCAP, a co-author of the report, explained:
"To be able to say we're going to improve our emissions intensity by 5 percent, that's a nice concept. But to be able to actually do that means ... you have the ability to measure industrywide what you're doing now and what you're doing after."
On the other hand, "It's not such a difficult thing to count the number of plants that have a certain technology," Klein said.
A fair share of the global climate investments called for the UNFCC Secretariat would imply a commitment of $75-99 billion annually from the United States. The Waxman-Markey climate bill leaves us far short of that mark. Will that picture change before the Copenhagen climate negotiations this December?
The global community should be investing $300 billion annually to combat global warming, according to UN climate chief Yvo de Boer (pictured). De Boer, the Executive Secretary of the UN Framework Convention of Climate Change, says the world needs to be spending $100 billion annually to help vulnerable communities adapt to the impacts of climate change, and another $200 billion each year to shift the global energy mix away from fossil fuels.
"The world will need a phenomenal amount of money to change its energy supply from fossil fuels to cleaner sources and to adapt to climate change," de Boer said Friday.
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.
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.
Policymakers should employ a portfolio of policies that "supports a broad range of initiatives from basic research through demonstration" of clean energy technologies, the National Academies' Committee on America's Energy Future recommends.
The United States needs a new "sustained national commitment" to improving energy efficiency and accelerating both the development and deployment of clean energy technologies, according to a major new report from the National Academies Press (NAP).
Authored by the National Academies' Committee on America's Energy Future, the recently released paper is the first part in a longer report, titled America's Energy Future: Technology and Transformation. The result of a major study initiated in 2007, the report is designed to inform policymakers about the state of development, costs, implementation barriers, and impacts of current energy technology and potential options for the future and presents eight key findings (summarized below).
Policymakers should employ a portfolio of policies that "supports a broad range of initiatives from basic research through demonstration," the Committee recommends, adding the typical cautionary note, that policymakers should strive to avoid "select[ing] technology winners and losers,"
America's Energy Future explains that the scope and scale of the U.S. energy challenge requires that the U.S. take advantage of available energy efficiency improvements, deploy emerging clean energy technologies, and fund long-term investments in research and development of new technologies. No single component of that strategy is sufficient. According to the report:
"'Business as usual' approaches for obtaining and using energy will be inadequate for achieving the needed transformation. The efforts required will involve not only substantial new investments by the public and private sector in research, development, demonstration, and deployment--in virtually all aspects of the energy infrastructure--but also new public policies and regulations on energy production, distribution, and use."
The authors also acknowledge that the "the U.S. energy system has developed in response to an array of uncoordinated market forces and shifting public policies," the result of the fact that the United States has never before advanced a comprehensive set of national energy policies. The report calls for a concerted, coordinated and sustained suite of federal policies and investments to advance clean energy technologies and transform the U.S. energy sector, such as the Breakthrough Institute's proposal to make clean energy cheap and abundant.
President Obama has repeatedly promised America $150 billion in clean energy spending over ten years--but, if and when that money materializes, what precisely has it been promised for?
In a post
today on DotEarth, Andy Revkin raises an excellent question: President Obama
has repeatedly promised America $150 billion in clean energy spending over ten
years--but, if and when that money materializes, what precisely has it been
promised for?
As Breakthrough has observed,
the language of Obama's promise has varied over time. During the campaign,
he pledged $150 billion to help "build a clean energy future." At that point,
Obama suggested the money would go toward a variety of green improvements
ranging from development and deployment to new grid and infrastructure.
But as Revkin notes, the White House web site
now states more narrowly that the Obama administration will: "Invest $150 billion over 10 years in energy research
and development to transition to a clean
energy economy."
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...
RE-ENERGYSE, a program aimed at 'REgaining our ENERGY Science and Engineering Edge', was given $7 million by the House appropriations bill and $0 by the Senate Appropriations Committee, embarrassingly shy of $115 million requested in the President's FY2010 budget. The proposal was sent back to the DOE with a request to distinguish between current and potential future programmatic efforts (according to ScienceInsider). In other words, it was rejected.
Revkin asked the White House about the funding cut and Kenneth Baer at the Office of Management and Budget sent him this reply:
"The appropriations process is ongoing, and we look forward to working with Congress to make sure there is the needed funding to prepare our students for the jobs of the growing clean energy sector."
The sign-on letter will hopefully boost the Administration's efforts, as it summarizes the clear need for new energy education funding and demonstrates a broad constituency in supportive of such a program.
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.
President Obama has repeatedly pledged $150 billion to clean energy research and development, but with just $1 billion per year in R&D funding, the Waxman-Markey bill falls far short. Will Obama listen to 34 Nobel laureates urging him to keep his promise?
With this week's letter urging Obama to ensure "stable support" for a Clean Energy Technology Fund in the climate bill currently before the Senate, America's top scientists and energy experts signaled that the scientific community will hold Obama to his promise of investing $150 billion in clean energy research and development.
The names on the letter represent a virtual who's who of the upper echelons of the American scientific community, led by former Federation of American Scientists Board Chairman Burton Richter. Its supporters include Dan Reicher, director of climate change and energy initiatives at Google, former special assistant to the Energy Secretary during the Clinton administration, and a former candidate for Energy Secretary under Obama.
These science and energy experts are insisting that the American Clean Energy and Security Act (ACES) be strengthened from its current form, which would invest just one-fifteenth of the $15 billion per year Obama pledges for clean energy R&D in his current policy plans. "This is a serious deficiency," the letter warns.
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.
I was interviewed on a radio show this morning about our new climate "super lobby" analysis with Burt Cohen, former State Senator from New Hampshire and host of the radio show Port Side:
On the road to Copenhagen, international climate negotiations remain plagued by the same (intractable?) challenges they have faced for decades. Will negotiators and nations find a new framework that can break old impasses and pave the way for global cooperation before it's too late?
By Johanna Peace, Devon Swezey, and Leigh Ewbank, Breakthrough Fellows
It's official: India won't accept binding caps on its emissions of greenhouse gases. Indian Environment Minister Jairam Ramesh made the case clear last Thursday:
"India will not accept any emission-reduction target--period," Ramesh said. "This is a non-negotiable stand."
India's announcement is the latest frustrating news for those following the efforts of climate negotiators as they struggle to eke out an international agreement by this December's UN summit in Copenhagen. It's frustrating because the fundamental dissonance between what developed countries demand and what developing countries are willing to give appears to be the single most intractable roadblock standing in the way of a successful treaty. In fact, this very problem has impeded progress on international climate negotiations for decades.
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.
The U.S. EPA projects renewable energy sources like wind, solar and biomass will generate just 9% of U.S. electricity by 2020 under the Waxman-Markey renewable electricity standard.
The U.S. Environmental Protection Agency projects renewable energy sources like wind, solar and biomass will generate just 9% of U.S. electricity by 2020 under the Waxman-Markey renewable electricity standard (RES). This contrasts with the bill's nominal 20% combined efficiency and renewable electricity standard due to numerous exemptions in the standard. Total renewable electricity generation under EPA's modeling of Waxman-Markey with the renewable electricity standard is just 41 terawatt-hours (or 7%) higher than the Agency's business as usual projections.
As we reported, EPA concludes that the expansion of new wind farms, solar arrays and other renewable energy power plants will actually be somewhat slower under their core scenario for Waxman-Markey than under their BAU projections [p. 27]. Total renewable electricity generation under their core scenario is somewhat higher (3%) in 2025 under Waxman-Markey than in their BAU scenario, but this extra generation comes in the form of biomass co-firing at existing coal-fired power plants, EPA predicts [p. 26].
However, EPA's core scenario does not attempt to model the impacts of the Waxman-Markey bill's RES. EPA apparently decided they were not confident enough in their results to include the effects of the RES in their core scenario and chose to model it instead as a "sensitivity analysis" for the power sector only. Here we look at their projections for the impacts of the bill's RES.
Waxman-Markey would reduce the amount of renewable energy deployed in the United States relative to business-as-usual, increase the amount of coal-fired electricity generation relative to 2005 levels, and provide no incentive for a move to cleaner cars, according to a new analysis by the U.S. EPA
The Waxman-Markey climate bill (AKA the American Clean Energy and Security Act) would reduce the amount of renewable energy deployed in the United States relative to business-as-usual, increase the amount of coal-fired electricity generation relative to 2005 levels, and provide no incentive for a move to cleaner cars, according to a new analysis by the U.S. Environmental Protection Agency (EPA).
We certainly can't vouch for EPA's methodology or assumptions. However, with EPA's conclusions about the likely cost of the Waxman-Markey bill on U.S. Households and the broader economy being widely cited, the surprising and even counter-intuitive projections that underlie EPA's cost estimates are worth a close look. In this post we dig passed the EPA's executive summary to take a closer look at their modeling and projections.
The climate bill is now poised for a vote on the floor of the U.S. House of Representatives as soon as Friday, following a deal struck late yesterday between the bill's champion and Energy Committee Chairman Henry Waxman (D-CA) and Agriculture Committee Chairman Collin Peterson (D-MN). Waxman agreed to further concessions to secure the support of agricultural interests and their Congressional champions, including agreeing to strip EPA of primary oversight over the domestic carbon offsets market, giving the US Department of Agriculture jurisdiction over these programs instead, provide additional free allowances for rural electric co-operatives, and place a moratorium on new EPA rules to strengthen the environmental integrity of biofuels like corn ethanol.
The segment with Morning Show host Amy Allison begins at 1:10:00 into the show which you can listen to below or click here to download an mp3 of the segment and listen on your computer:
The Los Angeles Timesreports that the Environmental Protection Agency projects coal plant electricity generation would grow through 2020 if Waxman-Markey climate legislation becomes law.
Electricity generation from coal will grow if Waxman-Markey climate legislation becomes law, according to a Los Angeles Times investigation. The Times notes that "coal-fired power plants are the largest source of heat-trapping gases that cause global warming," and yet the EPA projects [pdf] (p. 23) that conventional (not CCS) coal power generation will increase from 2013 TWh in the year 2005 to 2030 TWh in 2020.
According to a new analysis by Public Citizen, Waxman-Markey (W-M) climate legislation would inadequately protect American consumers from electricity price increases, despite claims by the bill's authors that the value of the free pollution allowances allocated to utilities would be returned to consumers.
According to a new analysis [pdf] by Public Citizen, the Waxman-Markey (W-M) climate legislation would inadequately protect American consumers from electricity price increases, despite claims by the bill's authors that the value of the free pollution allowances allocated to utilities would be returned to consumers. W-M grants 30 percent of all of the emission allowances to local distribution companies (LDCs) -- otherwise known as regulated utilities. The bill's authors suggest that 50 different state utility regulators will ensure that the benefits will be passed onto consumers.
EPA analysis of the American Clean Energy and Security Act projects that firms regulated under the bill's cap and trade program will opt to purchase over one billion tons of offsets each year from 2012-2020 rather than reduce their own emissions.
[Updated 6/18/09 with graphics that more clearly reflect banking of offsets under EPA's projected offsets scenario.]
The Waxman-Markey climate bill (HR 2454) will not require emissions reductions below projected business as usual (BAU) growth in emissions for at least a decade ahead, according to an EPA analysis [pdf]. EPA projects that firms covered under the bill's cap and trade program will opt to purchase over one billion tons of offsets each year from 2012-2020 rather than reduce their own emissions.
EPA predicts that firms would use 110 - 120 million metric tons (mmt) of available domestic offsets each year between 2012 and 2020 [see graphic, p. 6] and the full 1 billion mmt of international offsets permitted under the cap and trade program [p. 5].
If offsets are utilized at the levels projected by EPA, cumulative emissions in the sectors of the U.S. economy covered by the Waxman-Markey cap and trade program will be legally permitted to exceed EPA's business as usual emissions rates from 2012-2020 by nearly five billion mmt. If emissions in covered sectors were actually required to fall to the 17% below 2005 levels by 2020 targeted by the legislation, cumulative emissions would be just 49.5 billion mmt, 10.1 billion mmt lower than the levels legally permitted under EPA's projections for offsets utilization.
In the first projections from a government agency of the likely impacts of the American Clean Energy and Security Act, the Congressional Budget Office projects that the legislation will cut cumulative emissions in supposedly capped sectors of the economy by just 2% through 2020. Economy-wide emissions would fall just 5%, CBO projects.
[Updated with correction, 6/18/09: Thanks to John Larson at WRI for alerting us to an error in our data. Our data is now corrected and impacted figures and conclusions have been bolded in the text below so readers can see what has changed. An updated spreadsheet has been uploaded.
In summary: a smaller portion of economy-wide emissions were included in the emissions profile for sectors that fall under the cap starting in 2012 and a larger portion was included in the sectors that are phased into the cap starting in 2014. The result is slightly lower emissions under the ACES target scenario and CBO projected offsets scenario for the years 2012 and 2013 and slightly lower cumulative emissions between 2012-2020.
This effects the post's key result: assuming offsets are utilized at CBO's projected levels, cumulative emissions from 2012-2020 are 2.0% below BAU levels , not 0.5% as originally posted. This change has no effect on other years, on the difference between emissions at the CBO projected offsets scenario and emissions at the ACES target scenario, or on the BAU scenario. As always, we will continue to publish all of our assumptions and calculations and invite readers to look at the data and our analysis themselves. - Jesse Jenkins, Director of Energy and Climate Policy]
The Waxman-Markey climate bill (HR 2454 or the American Clean Energy and Security Act) would reduce cumulative emissions by just 2% between 2012 and 2020 in the sectors of the U.S. economy regulated under the bill's cap and trade program, according to the Congressional Budget Office's analysis of the legislation.
The CBO analysis is significant in that it is the first published predictions from a government agency about the likely actual impact on U.S. emissions resulting from the version of Waxman-Markey legislation passed by the Energy and Commerce Committee and now heading towards debate on the House floor.
According to a new, as-yet-unpublished analysis from the Union of Concerned Scientists (UCS), the combined efficiency and renewable electricity standard (CERES -- formerly RES) in the Waxman-Markey climate legislation will not increase renewable electricity generation and might actually reduce it.
UCS concludes:
"Bottom line: The Waxman-Markey RES does not ensure that any new renewable electricity will be developed beyond the renewables that are already projected to occur under the business as usual forecast by the U.S. Energy Information Administration (EIA)."
UCS created a high-deployment and a low-deployment scenario to predict the impact of the CERES provision in Waxman-Markey, as compared to the EIA's business-as-usual (BAU) baseline projections of renewable electricity generation. Under the high-deployment scenario, the Waxman-Markey CERES provision "would lead to slightly more renewable energy to be developed than business as usual" -- but only starting in 2020.
"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?"
Effective climate policy must include a proactive strategy to spur clean energy technology development and deployment. The Waxman-Markey climate bill contains several smart provisions that could be key components of an effective clean technology strategy -- but only if they are adequately funded.
Several of the bill's provisions aim to do that, but we conclude that most are currently either completely unfunded or critically underfunded. Here we take a look at three smart provisions in the ACES bill that could be key components of a proactive clean energy technology strategy -- but only if they are adequately funded.
Clean Energy Deployment Administration: this provision would establish a sort of public clean energy bank charged with creating an attractive investment environment for the widespread deployment of a suite of advanced clean energy technologies. Notable for being a deployment policy explicitly dedicated to advancing technology development goals, this provision also enjoys strong bipartisan support on both the House and Senate. However, ACES provides zero funding for this critical component of a proactive clean energy technology strategy. At least $16 billion in initial seed funding should be provided for CEDA, consistent with the Senate version of this provision.
Energy Innovation Institutes: largely consistent with the recommendations of the Brookings Institution, Breakthrough Institute, Third Way and others, ACES establishes new "Clean Energy Innovation Centers" at research universities, national labs and private research facilities, creating new cross-sector and multi-disciplinary hubs for applied research and development on clean energy technologies. However, these energy innovation institutes are critically underfunded, receiving less than $1 billion/year in funding from the bill's cap and trade allowance value. To bring federal energy R&D programs to a scale sufficient to address the urgent energy innovation imperative and address the needs of a $1.5 trillion annual industry, at least $15 billion in new annual funding should be dedicated to energy R&D, with a significant portion of this new funding dedicated to establishing a robust nationwide network of energy innovation institutes.
Carbon Capture and Sequestration Demonstration and Early Deployment Program: financed by a micro-carbon fee on all electricity sold in the United States, this program would dedicate $10 billion over the next ten years to promote the commercialization and large-scale demonstration of carbon capture and sequestration technologies for coal plants and other major point-source emitters of CO2. This program is a good example of the kind of direct public investment necessary to bring down capital and technology risk barriers and accelerate clean technology commercialization. But a much better-funded and technology neutral program that would provide competitively awarded funding for the demonstration of a whole suite of first-of-their-kind clean energy technologies is needed, and would be vastly superior to this technology-specific, industry-managed program.
We delve into each of these programs in more detail after the break...
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:
As debate moves on around the Waxman-Markey climate bill, there seems to be no one contesting the conclusion that the legislation notably does not establish a binding cap on U.S. emissions.
But whether or not you believe the legislation would result in lower emissions, there appears to be universal acknowledgment that various provisions in Waxman-Markey -- including but not limited to the extensive number of offsets permitted and the strategic reserve pool -- prevent the "cap" from being binding. Given this, Waxman-Markey cannot be accurately referred to as establishing a "cap" on U.S. emissions, much less a "binding cap." Probably the most accurate term is "non-binding cap."
VoteSolar is "skeptical that current versions of either the RES or a carbon cap and trade policy will lead to significant solar deployment" and thinks it will fail to make solar energy cheap and abundant.
The solar energy advocacy organization VoteSolar issued a pretty clear verdict on whether or not the Waxman-Markey American Clean Energy and Security Act will effectively make solar energy cheap and abundant: "The accurate answer is nuanced, but the short answer is no."
New Breakthrough analysis concludes that the national renewable electricity standard (RES) established by the American Clean Energy and Security Act has been severely weakened since initially proposed; as it now stands, the RES may barely increase U.S. renewable electricity generation compared to business as usual projections.
Advocates of the Waxman-Markey American Clean Energy and Security Act (H.R. 2454, or "ACES" for short) argue that the bill is far more than just a climate bill. It's a comprehensive piece of clean energy, efficiency and climate legislation, and taken as a whole, they argue, it should be considered transformational -- even if the cap and trade portion of the bill may have been significantly weakened (see Breakthrough's detailed analysis of the ACES cap and trade program here).
The ACES bill does indeed include many provisions to set a new course for our nation's energy policy, including efficiency standards and regulations, authorization for new programs aimed at modernizing the nation's electricity infrastructure and paving the way for plug-in hybrid and electric vehicles, and a national renewable electricity standard. Many of these will move America in the right direction.
But the question remains: will ACES really be transformational? And will it propel American quickly away from business as usual and towards the prosperous clean energy economy and dramatic emissions reductions we need?
Here we examine one of the other major provisions of the ACES bill, the national renewable electricity standard (RES) established by Title I of the bill. Unfortunately, our analysis concludes that the RES has been severely weakened since initially proposed in the discussion draft version of the ACES bill; as it now stands, the RES may barely increase U.S. renewable electricity generation compared to business as usual projections.
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.
Momentum is now behind a serious effort to address climate change, and that itself is cause for celebration. However, knowing how much is at stake, we must also take a close look at whether or not the bill lives up to its promises. Unfortunately, after spending all last week digging through the 1,000 page ACES bill, I'm left worried, very worried. Find out why...
Late last Thursday night, the House Energy and Commerce Committee voted 33-25 to pass landmark legislation that promises to address our nation's urgent energy challenges and help avert potentially catastrophic climate change. The legislation, known as the American Clean Energy and Security Act (or ACES), also presents an unprecedented opportunity to renew our economy and position the United States at the forefront of a burgeoning global market for clean and affordable energy technology.
Momentum is now behind a serious effort to address climate change, and that itself is cause for celebration. The bill's champion's - notably Henry Waxman, Ed Markey and Jay Inslee and their dogged staff - deserve praise for bringing the bill through some pretty hostile territory in the Energy and Commerce Committee, and for their tireless efforts during the marathon sessions of the past week.
However, knowing how much is at stake, we must also take a close look at whether or not the bill lives up to its promises.
Speaking in London, U.S. Energy Secretary Steven Chu said Tuesday that climate policy debates may be "over-obsessed" with emissions reduction targets and timetables, echoing a long-standing Breakthrough Institute argument that we must focus more on effective mechanisms to drive technology transformation, energy modernization and emissions reductions, not haggle over long-term targets.
U.S. Energy Secretary Steven Chu said Tuesday that the long-standing focus of climate policy on setting precise emissions reductions targets and timetables has led to an "over-obsession" with numbers, according to Reuters.
Reuters reports:
The comment came less than a week after a congressional panel
approved President Barack Obama's landmark draft bill on climate
change [see Breakthrough's analysis of the bill here], bringing it closer to debate in Congress.
"There was a great deal of discussion on the Kyoto targets, and I'm
not really sure which fraction of the countries that took part in that
actually met their targets," Chu, a Nobel laureate for physics, said at
a conference in London. "In terms of the targets, whether it's 17
percent or 20 or 25 percent, I think there's perhaps ... an
over-obsession on these percentages."
If fully utilized, the emissions "offset" provisions in the American Clean Energy and Security Act would allow continued business as usual growth in U.S. greenhouse gas emissions until 2030, leading one to wonder: where's the cap in the "cap" and trade?
[Updated 6/18/09 to more clearly explain and depict the potential banking of offsets.]
At the heart of the nearly thousand page long climate change and clean energy bill being debated in the U.S. House of Representatives this week is a "cap and trade" mechanism aimed at limiting greenhouse gas emissions that contribute to global warming.
However, a provision in the bill, known as the American Clean Energy and Security Act (H.R. 2454 or "ACES"), allows polluting firms in the U.S. to finance emissions reductions overseas in lieu of reducing their own global warming pollution and may allow American emissions to continue to rise for up to twenty years, according to new analysis from the Breakthrough Institute.
The provision allows power plants, oil refiners, and other polluters regulated under the bill's cap and trade program to use up to one billion tons of international emissions reductions, or "offsets," to be used instead of reducing their own emissions each year. The bill also allows up to one billion tons of additional offsets each year, sourced from sectors of the U.S. economy that do not fall under the pollution cap, such as forestry and agriculture. If a suitable supply of domestic emissions offsets are unavailable, the limit on the use of international offsets may be raised to 1.5 billion tons annually at the discretion of the Administrator of the U.S. Environmental Protection Agency (EPA).
The extensive use of these international and domestic offsets would effectively allow U.S. firms in capped sectors to continue emitting global warming pollution at levels well above the reductions supposedly driven by the emissions cap. New analysis from the Breakthrough Institute reveals that if fully utilized, the offset provisions in the ACES bill would allow continued business as usual growth in U.S. greenhouse gas emissions until 2030. Emissions in supposedly sectors of the economy supposedly "capped" by ACES could continue to grow at BAU rates until as late as 2037.
Compared to President Obama's promises and the recommendations of a variety of energy experts alike, the ACES climate and clean energy bill's investments in clean energy are an order of magnitude too small.
[Updated 5/22/09: the ACES bill now includes a $10/ton price floor for auctioned pollution permits. The analysis below has been updated to reflect that change in the legislation]
Today, the House Energy and Commerce Committee began markup of the American Clean Energy and Security Act of 2009 (ACES). The bill promises to cap and reduce carbon pollution, create clean energy jobs, and spur technology innovation. Unfortunately, as our analysis of the use of carbon pollution allowances in the ACES bill revealed, the bill is on course to invest very little of the hundreds of billions of dollars in value created by the bill's cap-and-trade program over the coming years towards those objectives.
Most of the allowance value (74 percent) created by the ACES cap and trade program is dedicated to blunting the impact of the carbon price established by the program on industries and consumers (and securing the critical swing votes on the committee representing these entrenched energy and industry interests). In contrast, just 12 percent of the allowance value is dedicated to clean energy investments, broadly defined.
At an average allowance price of $10 to $20 dollars per ton of CO2 between 2012-2025, that would amount to clean energy investments of just $6-12 billion per year, and just $490-980 million for clean energy R&D (see our full analysis of the allowance allocations in ACES for more).
President Obama has repeatedly promised to, "Invest $150 billion over ten years in energy research and development to transition to a clean energy economy" (from WhiteHouse.gov). The President's 2010 Budget Outline specifically dedicated $15 billion per year in new revenue generated by a cap and trade program to this purpose. Yet the bill before us, depending on the allowance value it establishes, would invest just one-fifteenth to one-thirtieth of the $15 billion President Obama has pledged -- and specifically requested from Congress. Furthermore, this new energy R&D spending may amount to just a ten percent increase in current federal energy R&D budgets.
Likewise, the total investments in a new clean energy economy, more broadly defined, are an order of magnitude smaller than proposals advanced by the Breakthrough Institute, Apollo Alliance and others have deemed necessary to drive clean energy innovation, create millions of new energy jobs, and jump-start a prosperous, clean energy economy.
Below the fold, you can see how the clean energy investments made by the ACES bill compare with what a range of proposals and current R&D funding levels...
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.
Two graphics illustrate why pollution regulation like the cap and trade program that reduced acid rain-forming SO2 emissions at coal plants is not a real parallel for the global climate challenge.
One of the most often-repeated assumptions in the climate policy debate is that cap and trade, the preferred mechanism for reducing greenhouse gas emissions, worked for SO2 and acid rain, so it will work for GHGs. Sounds good. Until you take a second to think about the comparison.
Dealing with GHGs is a challenge of an order of magnitude greater scale and complexity. To see why, see the two graphics below:
First, here's a graphical representation of the Acid Rain cap and trade challenge:
Below the fold, you'll see a graphic representation of the global flow of greenhouse gas emissions, the challenge we have to deal with to avert potentially catastrophic climate change...
Australia shelves Cap and Trade until 2011. ABC's Peter Mares asks David Spratt of Climate Code Red and Ted Nordhaus of the Breakthrough Institute for their take on the need for a government supported clean energy push.
Stream it directly from the ABC News Australia site, or download the mp3 here(particularly if you're a Mac/Linux user).
From Peter Mares at ABC Australia National Radio:
"This week, Prime Minister Kevin Rudd announced changes to the Australian federal government's planned emissions trading scheme, postponing the start date, increasing the compensation for big polluters and promising deeper cuts to Australia's greenhouse gases (with the proviso that the rest of the world does the right thing). The result is a scheme that's both greener and browner - if such a thing were possible. But as we examine the pros and the cons of the decision, some argue it's all pointless anyway. Climate change sceptics dispute the need for any reductions at all; then there's the critique from sections of the environmental movement that an emissions trading scheme is like rearranging deckchairs on the Titantic: far too little, far too late. On the program today, we're going to hear the case for state intervention - the idea of a Marshall Plan for alternative energy in which public money is used to solve the global warming problem."
New details on President Obama's RE-ENERGYSE energy education initiative, which mirrors closely Breakthrough's National Energy Education Act proposal. Is the new program large enough to truly prepare a new generation to tackle the greatest innovation challenge this nation has ever faced?
President Obama and the Department of Energy are launching a new energy education initiative, very similar to the National Energy Education Act recommendations advanced by the Breakthrough Institute beginning in June 2008 (see recent post here). Today, the Department of Energy released official FY 2010 budget documents that start to flesh out what this new program will look like. It appears the program will receive $115 million in funding, if the President's budget request is implemented.
Here's the description of the program from the new 'Budget Highlights' document available here (pdf):
RE-ENERGYSE (REgaining our ENERGY Science and Engineering Edge)
The Department will launch a comprehensive K-20+ science and engineering initiative, funded at $115 million in FY 2010, to educate thousands of students at all levels in the fields contributing to the fundamental understanding of energy science and engineering systems. This initiative, which complements the Department's other education efforts, will provide graduate research fellowships in scientific and technical fields that advance the Department's energy mission; provide training grants to universities that establish multidisciplinary research and education programs related to clean energy; support universities that dramatically expand energy-related research opportunities for undergraduates; build partnerships between community colleges and different segments of the clean tech industry to develop customized curriculum for "green collar" jobs; and increase public awareness, particularly among young people, about the role that science and technology can play in responsible environmental stewardship.
Bjorn Lomborg wants to make clean energy cheap. Unfortunately, he doesn't seem to understand that making clean energy cheap is about far more than R&D.
Bjorn Lomborg wants to make clean energy cheap. Unfortunately, the author of The Skeptical Environmentalist and Cool It doesn't seem to understand that making clean energy cheap is about much more than R&D.
"I love this thought--it comes from the Breakthrough Institute. Basically, the idea is that everyone seems to be trying to make fossil fuels so expensive that we won't use them. But that's never going to happen. So why don't we try to make green energy so cheap that everyone will want to use it?"
He then argues, "We should spend vastly more on research and development."
Lomborg get's that part right. As we've long argued, today's paltry investments in clean energy R&D -- from both public and private sectors alike -- is woefully inadequate to the energy innovation imperative we face today. With a broad expert consensus making the case and politicians from President Obama to Republican Senator Lisa Murkowski (R-AK) calling for more public investment in clean energy R&D, we seem to be approaching the political 'critical mass' necessary for real change on that front.
But for Lomborg, clean energy R&D is something you do instead of deploying clean energy technology available today, and that's where we part ways with "the Skeptical Environmentalist."
What Lomborg apparently doesn't understand is that efforts to truly "make green energy so cheap that everyone will want to use it" will necessarily involve major direct public investments to spur the rapid deployment of emerging clean energy technologies. Far from something that just occurs in the lab, the innovation process extends well beyond R&D.
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).
New social values research offers insights into the challenges facing carbon taxes, cap and trade, congestion pricing and other "environmental pricing reform" proposals.
American climate policy advocates should watch our neighbor to the north closely. With social and political values not too distant from our own and an economic makeup broadly similar, Canada's experiments with climate policy - particularly carbon pricing schemes - offer a real-world laboratory we would be wise not to ignore. While Canadians are broadly supportive of actions to address climate change, proposals at both the federal and provincial levels to establish a price on global warming pollution have met with difficulty. We covered the failure of the national Liberal Party's "Green Shift" carbon tax proposal in the October 2008 elections here, and have watched closely as British Columbia battles over their controversial, first-in-North American carbon tax system. Now, social values research firm Environics (the sister firm to our colleagues at American Environics) has new research findings that shed light on the difficulties facing 'environmental pricing reform' proposals like carbon taxes, cap and trade, and congestion pricing. Environics' Keith Neuman presents their findings in this piece, originally posted at Green Business...
By Keith Neuman, Ph.D.
Environmental pricing reform (or EPR) is the term now used to describe the various types of market mechanisms (e.g. carbon pricing, cap and trade, congestion fees) which are now being given serious attention as the most promising strategy for addressing climate change and other pressing environmental challenges such as water scarcity and traffic congestion. This concept has been around for some time, and is now finally receiving serious attention on the North American policy agenda. Economists have long been making a persuasive case for harnessing market forces to achieve environmental objectives, but only recently has this cause been adopted by major players, such as the Canadian Council of Chief Executives and the National Roundtable on the Environment and Economy. The idea that society puts a monetary price on environmental "goods" and "bads", and then letting market forces do their work (as they do with most other forms of business and consumer behavior) is compelling.
Governments and industry now seem ready to move forward with environmental pricing strategies, but is the Canadian public ready to buy in? The limited experience to date is hardly promising. Over the past year, the B.C. provincial carbon tax has been implemented but remains highly controversial (it has become a major issue in the current provincial election), and the Federal Liberal Party's touted "Green Shift" election platform failed spectacularly with the electorate. These early examples suggest there is sufficient citizen resistance to make EPR a difficult political sell. Why should this be the case, given the clear evidence that EPR can be an effective environmental policy? There are three central reasons.
First, is it axiomatic that consumers prefer not to pay more for goods and services, and will resist at varying levels when asked to do so. This is the most commonly understood basis for resistance to EPR, and many policy makers mistakenly believe it is the overriding obstacle. But in fact this dilemma is by no means limited to environmental policy, and has not prevented other successful economic policy measures that shifted costs to consumption, such as the GST and the Ontario Health Premiums. Such measures do not succeed because they are popular, but when they are deemed acceptable given their purpose by a sufficiently critical mass of relevant constituents.
Second, the public is skeptical about the effectiveness of EPR, in terms of how paying more for gasoline, water or consumer goods will actually benefit the environment. Research has shown that public resistance to B.C.'s carbon tax has as much to do with doubts about its effectiveness in reducing the province's greenhouse gas emissions as it does with paying a few more cents per litre at the pump. Consumers can readily understand how stiffer regulations or new technologies can make a difference in cleaning up pollution, but it requires a greater act of faith to believe that higher prices or trading systems will accomplish the same goals. Such faith requires confidence in both the intentions and efficacy of governments and industry, and neither has been seen to have done much to justify this level of confidence. Moreover, there continues to be a widely-held public sentiment that market-based environmental policies, such as cap and trade systems, favour industry by giving it a "license to pollute."
Third, at a deeper level environmental pricing reform is not currently well-positioned in terms of how it fits within Canadians' social values and broad world views. This conclusion comes from a research study Environics recently completed for Sustainable Prosperity, a multi-stakeholder non-profit initiative dedicated to promoting EPR policy in Canada (www.sustainableprosperity.ca). This research revealed that Canadians generally view environmental pricing mechanisms in narrow economic terms (akin to other conventional financial levers), without much appreciation of the broader principles of "polluter pays" and the positive force of the market to achieve important social goals.
The research identified distinct segments or groups of the Canadian population, based on their orientation to EPR and their broader social values. It found that among supporters of EPR, there is only a very small group (4%) who understand and support EPR in the same way as the economists and policy-makers who promote it. Most of the Canadians who express support for EPR (13% of the population) do so for very different reasons - they put much less priority on environmental solutions but rather are pro-market enthusiasts who accept the inevitability of market forces whatever their effect (e.g. they are very strong on a social value Environics defines as "social darwinism", and weak on one called "primacy of environmental protection"). While this latter group is on-side with environmental pricing, they are hardly the kind of supporters sought by EPR advocates.
On the opposite side of the issue, the strongest opponents of EPR are those Canadians who make up the most vulnerable parts of society, including women, older Canadians, and those with the lowest levels of education. This group (21% of the population) sees EPR more as a threat than as a solution to anything. They may care about the environment, but tend to be more focused on day-to-day concerns. There is little potential for building support for environmental pricing initiatives within this group, but it is hardly one that can be ignored if EPR policy is to succeed in Canada.
In the middle is a sizeable group (33%) which is on the fence about EPR. This group (we call them "responsible citizens") has a high degree of social responsibility and concern about the environment. These Canadians are open to the potential of market mechanisms to offer solutions to issues like climate change because they are truly worried about these issues and feel strongly that progress is essential. But they are also concerned about how EPR might affect those more vulnerable than themselves; they are unlikely to support pricing policies that do not treat everyone fairly and make provisions for those who are disadvantaged. The size and composition of this group makes it a critical constituency for building public support for broad-based environmental pricing initiatives, and attracting its support will require demonstrating how such initiatives address social and economic equity issues.
What does this research tell us about what it will take to build the necessary public support in Canada to move forward with environmental pricing reform? EPR will continue to be a tough sell to consumers until such market mechanisms are framed in ways that are more in tune with Canadians' social values, and in particular address the discomfort many citizens have with using market forces to address environmental objectives. This cannot be accomplished through facts and arguments alone (which rarely sway established public attitudes), but through developing a new narrative that more effectively defines EPR in what it will accomplish, in meeting broadly held environmental, economic and social aspirations.
Keith Neuman (keith.neuman@environics.ca) is Group Vice-President, Public Affairs, for Environics Research Group Ltd.
The more things change, the more things stay the same: Senator Arlen Specter announced today he would be switching party allegiance and running for re-election as a Democrat in 2010. Unfortunately, the new "D" next to his name is unlikely to change the policy positions of this free-thinking Senator from Pennsylvania - especially when it comes to climate legislation.
The 'interwebs' are abuzz today with the surprise announcement that moderate Republican Senator Arlen Specter of Pennsylvania is switching parties and plans to run as a Democrat when he makes his 2010 re-election bid.
The move is clearly a powerful symbol of how far to the right the Republican Party has moved in recent years. What it means for policy is less clear.
Senator Specter's membership in the Democrat ranks would nominally give the party the sixty votes necessary to overcome the near-constant threat of Republican filibuster in the Senate (assuming Democrat Al Franken wins the contested court battle that will decide Minnesota's senate seat). That has prompted a sudden burst of optimism about the prospects of contentious Democratic policy priorities, including health care reform and climate change legislation.
ClimateProgress's Joe Romm blithely asserts, for example, that Senator Specter's new party allegiance will mean he'll change his stance on climate legislation. "One assumes that if he is going to seriously run as a Democrat, he'll support an energy and climate bill," Romm wrote today.
More astuteobservers, however, quickly recognize that Senator Specter's move changes little in the landscape of climate politics. For serious advocates of urgently needed and effective climate legislation, it's not hard to see why. We simply have to ask ourselves: does the "D" next to this free-thinking Senator's name suddenly change his vote on climate legislation? Of course not.
The carbon offset provisions in the House Energy and Climate Bill could sap half a trillion dollars out of the U.S. economy between 2012 and 2030 and over $2 trillion between now and 2050, according to Breakthrough Senior Fellow David Douglas.
In my role of Chief Sustainability Officer at Sun, I take part in an annual discussion of whether the company should purchase carbon offsets as part of our GHG reduction plan. Since we can buy carbon offsets at a price which is lower than what it costs us to reduce our GHG directly, we have four different approaches available to us:
use offsets to report a greater emissions reduction at the same price as if we only did internal projects
use offsets to report the same emissions as internal projects, but at a lower price
ignore offsets and just do internal projects
some mix of offsets and internal projects
So far, each year we have elected to only invest in internal projects. Our rationale is that we can help the company and the environment with that choice -- the company gets more efficient and the we lower our direct GHG emissions. Furthermore we find that this rationale is applicable to each marginal dollar of investment, so that we end up only investing in internal projects as opposed to a mix. This means that the emissions reductions that we report aren't as low as they theoretically could be, but that's a tradeoff that we think makes sense for us, since we keep reducing our own emissions instead of paying others to reduce theirs.
As it thinks about creating a cap and trade system, the US Government faces the same decision: do we allow international offsets in order to keep costs down and/or make the results look better, or do we stick to investing within the country?
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."
We have a post up at Salon today that criticizes cap and trade legislation in the House (Waxman-Markey). We argue that it cannot achieve the clean energy revolution we need. Compromises will no doubt be necessary to pass climate legislation in Congress, but as currently drafted, Waxman-Markey looks like it will make all the wrong compromises, allowing firms to buy dubious and sometimes phony carbon offsets rather than invest in clean energy, giving away billions of pollution allocations to incumbent energy interests for free, and committing a fraction of the funds needed for direct public investments in clean energy research, development, and deployment.
We propose an alternative cap and trade, which would explicitly cap the price of carbon dioxide pollution at roughly $10 per ton, rising over time, would auction all pollution allowances with no free giveaways and no offsetting, and would use the vast majority of the revenues, about $60 billion a year, to fund the accelerated development and deployment of clean energy technologies. We believe that such a solution would more rapidly achieve the technological innovations we need at a lower cost. It is also great politics, given strong public support for government investment in clean energy technology. This is the same position we have held since 2007, when we laid out this basic approach in Break Through and other writings.
Jesse, what exactly is investing public money in deployment of wind farms and PV arrays supposed to accomplish if you do it [along] with a carbon cap/trade? Its one thing to address market failures like a lack of research and transmission, but deploying extra carbon-reduction measures in sectors covered by the cap will not compel emissions reductions beyond what the cap mandates. What am I missing?
Below the fold, you'll find my reply, which articulates three reasons why clean energy investments are critical to climate objectives. We'll leave the part about how investing in a clean and prosperous energy economy is also a politically powerful proposition that strengthens the political appeal of climate policy for another day (check here if you're interested (pdf)).
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."
Cries of alarm from the environmental left warn that offset provisions in cap-and-trade legislation "blow to pieces" the supposedly hard caps on global warming pollution at the heart of the proposal.
Is the cap and trade system at the core of the draft Waxman-Markey climate and clean energy bill full of hot air? That's what a new report from two environmental organizations warns.
Rainforest Action Network and International Rivers released an initial analysis (pdf) of the Waxman-Markey climate and energy discussion draft yesterday. The two environmental groups conclude that the cap and trade regulations established by the bill would be "blown to pieces" by the up to two billion metric tons of carbon offsets the bill allows polluters to use in lieu of pollution permits.
Despite all of the talk of establishing hard caps on global warming pollution, the use of so many offsets would stuff the cap full of hot air, making it not much of a cap at all. The report concludes:
Unfortunately the "firm" caps exist only on paper. In reality, the caps will be blown to pieces by allowing polluters to meet their emission reduction responsibilities through buying offset credits rather than reducing their emissions.
If the full amount of offsets allowed by the Waxman-Markey draft legislation were utilized by polluters, the report concludes that any actual emissions reductions in capped sectors of the U.S. economy would be delayed until 2026, allowing a full seventeen years of continued business as usual. (See figure below...)
A new study concludes that California's energy efficient economy offers less of a model for the nation than many advocates assert. What's driving the Golden State's efficient electricity use and what does it say about our efforts to build a sustainable and prosperous 21st century energy economy?
Kate Galbraith at the NYTimes' Green Inc. blog dives into that question in a recent post, "Deciphering California's Energy Efficiency Success." Galbraith looks at a new study critical of the attempts frequently made by climate and energy efficiency advocates to hold up California's low per-capita electricity use as proof that cutting carbon emissions won't be all that hard.
Talk to any California utility or environmental advocate, and at some point they are bound to cite - with pride - the flattening out of the state's per-capita electricity use.
Since 1975, the amount of electricity per person has grown by almost 50 percent in the rest of the country, but California's numbers have stayed nearly level.
Advocates often credit energy-efficiency measures taken by utilities, at the behest of the state.
Unfortunately, matters aren't that simple it seems, according to a new study from Cynthia Mitchel and two colleagues at Energy Economics, which suggests that many of the drivers behind California's low per-capita electricity consumption have nothing to do with the state's battery of policies encouraging energy efficiency.
New York Times columnist Tom Friedman criticizes cap and trade as politically unworkable and suggests that greens shouldn't be the spokespersons for the climate agenda.
In his column today, New York Times columnist Tom Friedman criticized cap and trade as politically unworkable and suggested that greens shouldn't be the spokespersons for the climate agenda. This comes on the heels of an interview with Newsweek's Sharon Begley where he attributes the increase in Americans who say news of global warming is being exaggerated to Al Gore.
The mood must be transatlantic, as British environmentalist Stephan Hale has also published an op-ed piece in the Guardian titled "Climate change is too big a problem to be left to the environmentalists," which makes many similar points.
In the Newsweek interview, Friedman claims that polling by the Times shows that while voters oppose taxes, they support them if you target the money for action on global warming and energy independence. But Friedman has mis-remembered the Times poll in ways that support his policy agenda of a high carbon tax. The difference has significant policy implications
I went back and read the 2007 Times/CBS poll Friedman is referring to. Voters told pollsters they would pay more in taxes or for electricity from solar and wind and would pay more for gasoline to reduce oil dependency. But they said they would NOT want to pay higher taxes if it 'combats climate change' or 'relieves us from living under the thumb of petro-dictators,' as Friedman claimed to Begley. The difference is critical.
Here are the questions that Friedman is mis-remembering. Voters told the pollsters that they:
* Would be willing to pay more in taxes on gasoline and other fuels if money went to research for renewables like solar and wind (64-33)
* Would pay more for electricity if it came from solar or wind (75-20)
* Oppose raising gasoline taxes to deal with global warming (58Â38)
* Support a gasoline tax to reduce dependence on foreign oil (64-30)
* Oppose a gasoline tax to pay for war on terrorism (49-44)
* Oppose a gasoline tax if it was $2/gallon, or $1/gallon (76-20, 70-27)
Contrary to Friedman's claim, voters in the Times/CBS survey support paying more in taxes or for electricity for solar and wind for reasons that are independent of their concern over global warming. Indeed, what this survey found is that voters oppose paying more in gasoline taxes to deal with global warming or the war on terror.
This is consistent with other polls, and is the reason that we have long encouraged a policy agenda focused on increasing investment in clean energy for economic and energy independence reasons, rather than increasing the price of fossil fuels for global warming reasons. If the money for investment comes from a modest carbon tax, all the better. But the public has clearly and repeatedly stated it would only support a tax or higher fossil fuel prices if it used for clean energy investments.
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.
"Technology policy lies at the core of the climate change challenge. Even with a cutback in wasteful energy spending, our current technologies cannot support both a decline in carbon dioxide emissions and an expanding global economy. If we try to restrain emissions without a fundamentally new set of technologies, we will end up stifling economic growth, including the development prospects for billions of people.
Economists often talk as though putting a price on carbon emissions--through tradable permits or a carbon tax--will be enough to deliver the needed reductions in those emissions. This is not true. Europe's carbon-trading system has not shown much capacity to generate large-scale research nor to develop, demonstrate and deploy breakthrough technologies. A trading system might marginally influence the choices between coal and gas plants or provoke a bit more adoption of solar and wind power, but it will not lead to the necessary fundamental overhaul of energy systems.
For that, we will need much more than a price on carbon. ...
Economists like to set corrective prices and then be done with it, leaving the rest of household and business decisions to the magic of the market. This hands-off approach will not work in the case of a major overhaul of energy technology. We will need large-scale public funding of research, development and demonstration projects; intellectual property policies to promote rapid dissemination to poor countries; and the promotion of public debate and acceptance of new options. We will need to back winners, at least provisionally, to get new systems moving. "
An oldie but a goody from well-known economist and direct of the Earth Institute at Columbia University, Jeffrey Sachs, April 2008 in Scientific American, "Keys to Climate Protection."
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.
A major new climate bill hit the House of Representatives this week and was met with deft political maneuverings from Senate Republicans that could render cap and trade dead on arrival. The Breakthrough Institute team has the angles covered:
Jesse Jenkins says this new climate bill is proof of misplaced priorities as the leading green groups setting the climate agenda walk away from billions of dollars in critical clean energy investments in favor of regulations, standards and carbon pricing. See also "Climate Bill is All About the Coal Hard Cash" at Huffington Post and listen to Jenkins talk about the Markey-Waxmen bill on KPFA radio.
Meanwhile in the Senate, two Republican amendments may leave cap and trade with no where to go. In reaction to the House climate bill, the Senate this week voted 89-8 to preemptively reject any cap and trade bill that increases consumer energy prices and voted 98-0 to ensure that any climate bill protects middle-income taxpayers from any tax increases.
Michael Shellenberger sees these votes as the clearest rejection yet of the pollution pricing paradigm and examines the artful political maneuverings at play.
Ted Nordhaus is left worrying that the climate bill is on a crash course for compromise that will leave us stuck with the worst of both worlds: a climate policy lacking both a price signal sufficient to drive private investment anywhere near the scale we need and NO money for public investments in an RD&D strategy sufficient to make clean energy cheap.
Teryn Norris and Jesse Jenkins outline what Democrats can do to regain the political high ground and win the climate debate in this op ed, featured at Huffington Post. If Democrats want to win, they 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.
While Congressional Democrats and leading green groups insist that what the public wants is cap and trade to deal with climate change, yet another poll was released today showing voters want investments in clean energy, not new taxes or regulations.
If I were a Republican, I'd be relieved to have climate legislation to attack right about now...
We are nowwitnessing the inevitable entailment of putting pollution caps and climate at the center of the political proposition.
Everyone is all for capping carbon until it comes time to pay for it. Then it is a consumption tax and few politicians and voters are prepared to support it. It inevitably leads to a debate centered on the costs and regulations, not the social benefits of the policy.
The Apollo approach, which puts the immediate social and economic benefits - a clean energy economy, energy independence, new industries that can create good jobs - at the center of the debate and uses modest carbon price revenues to pay for it has always been vastly more robust to the kinds of political attacks that we are seeing this week. The debate becomes about whether or not we are going to make these investments in America's future - not whether or not we are willing to take our medicine in order to avoid the end of the world. But making this move requires more than simply swapping out the picture of the polar bear on the front page of your newsletter for a picture of a construction worker. It requires taking the investment agenda seriously and making it the central objective of policy.
The choice that greens and sympathetic policy makers will have in the coming months will be whether to move to this kind of plan B or accept a cap and trade bill that is likely to provide neither a very significant price signal nor any serious money for RD&D.
As I mentioned yesterday, some stark political lines are being drawn in the Senate on cap and trade legislation. The Thune Amendment had 89 members of the Senate going on record opposing any increases to electricity or gasoline prices as a result of cap and trade legislation. In the Senate yesterday another important amendment to the Budget Resolution was approved unanimously, 98-0, sponsored by Senator Ensign (R-NV), chair of the Republican Policy Committee. Here is its text:
To protect middle-income taxpayers from tax increases by providing a point of order against legislation that increase taxes on them, including taxes that arise, directly or indirectly, from Federal revenues derived from climate change or similar legislation.
What does this amendment mean?
It means that money raised from cap and trade (or even a carbon tax) cannot lead to a net increase in the overall tax burden on the "middle class." What is "middle class"? According to Senator Ensign in a press release trumpeting the amendment, it includes those households earning less than $250,000 per year. Senator Ensign cites the President on this point, referring back to his campaign promises not to raise taxes on this group.
Politically and practically, this amendment could then mean that proponents of cap and trade will need to pursue an explicit "cap and dividend" approach with any such policy being tax neutral for those earning less than $250,000 per year. In other words, the costs of cap and trade will have to be fully borne by those earning above $250,000 per year. Some of the challenges of the distributional effects of cap and trade are discussed in recent CBO testimony (PDF). Whether or not legislation can be written that allows supporters to claim to have met the spirit of the Ensign Amendment, it is clear that the Amendment makes the political challenge that much more difficult.
The ability of Congressional legislation on cap and trade to result in actual emissions reductions was dealt a serious blow yesterday. An Amendment was introduced by Senator John Thune (R-SD) on the Budget Resolution and its text is as follows:
To amend the deficit-neutral reserve fund for climate change legislation to require that such legislation does not increase electricity or gasoline prices.
What is this? Climate change legislation cannot increase electricity or gasoline prices? The entire purpose of cap and trade is in fact to increase the costs of carbon-emitting sources of energy, which dominate US energy consumption. The Thune Amendment thus undercuts the entire purpose of cap and trade.
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...
A high hurdle: of the 37 Senators identified as swing votes, all but seven must be convinced to vote "Yes" in order to secure passage of any climate policy in the U.S. Senate.
There's been a spate of recentpublicannouncements from moderate Democrats and Republicans alike, voicing caution about a proposed cap and trade program to place a price on carbon dioxide and cut global warming pollution. More than one third of the U.S. Senate now joins the fifteen moderate Democratic Senators we've dubbed the "Technology Fifteen" as vocal swing votes in the upcoming debate on climate policy.
Below the fold is an updated tally of where the Senate stands on climate policy by my assessment, based on recent public announcements and past voting histories. With using budget reconciliation to bypass the 60-vote filibuster hurdle off the table, to secure passage of any climate policy in the U.S. Senate, all but seven of the 37 Senators I identify as swing votes must be convinced to support the proposal (joining the 30 Senators I classify as "Assumed Yes" votes).
I provide the vote count below without further comment, and will delve into the implications of this tally in further detail in an upcoming post...
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.
"Political will and a price on CO2 won't be enough to bring about low-carbon energy sources" needed to overcome the global energy and climate challenge, concludes Sharon Begley in an upcoming piece in Newsweek. Major investments to accelerate energy innovation are much needed, and "the clock is ticking" she writes.
"Political will and a price on CO2 won't be enough to bring about low-carbon energy sources" needed to overcome the global energy and climate challenge, concludes Sharon Begley in an excellent piece, "We Can't Get There from Here," due out in the upcoming issue of Newsweek (and online now here).
Begley puts the spotlight on Nate Lewis of CalTech and Mark Muro of the Brookings Institution who succinctly explain the massive scale of the challenge and why we currently lack the full portfolio of energy technologies necessary to overcome it. "The clock is ticking," Begley concludes, and investments to accelerate energy innovation are much needed.
UN Climate Czar Yvo de Boer joins IPCC Chairman Rajendra Pachauri and Obama Climate Envoy Todd Stern to offer a "reality check" before upcoming international climate negotiations.
It appears that there is an effort underway (whether coordinated or just coincident) from the Obama Administration, Intergovernmental Panel on Climate Change (IPCC) and United Nations to place a reality check on expectations for United States climate policy progress in advance of the international climate negotiations in Copenhagen this December.
Yesterday, IPCC chairman Rajendra Pachauri told UK newspapers that Barack Obama would have a "revolution on his hands" if he tried to implement binding cuts in emissions on the scale that the IPCC's scientific consensus recommends.
"He [Obama] is not going to say by 2020 I'm going to reduce emissions by 30 per cent," Pachauri said. "He'll have a revolution on his hands. He has to do it step by step."
Pachauri's word's echo those of U.S. special climate envoy, Todd Stern, who recently stated that the 25-40% emissions cuts called for by the IPCC are "beyond the realm of the feasible" in the U.S. Congress. Stern called for a focus on "the art of the possible," saying "we need to be guided both by science and by common sense."
Just like the "Sputnik" generation committed itself to the Cold War and led the information technology revolution, today's generation must commit itself to the Terawatt Challenge and lead the global energy revolution.
The opportunity to advance transformative, progressive change has never been greater. Now, in the wake of the 2008 election and the historic Power Shift summit, young progressives have a unique opportunity to take a step back and look at the big picture: How can the we continue advancing bold solutions on energy and climate? What can young people do beyond energy and climate? And if national climate legislation succeeds, what's the next "Big Idea" for the progressive youth movement?
These are just some of the ideas we're exploring in a Special Breakthrough Issue - "After Power Shift: What's Next?" - to examine the next steps for the progressive youth movement. The issue will include contributions from some of the country's top young leaders throughout the week, and we hope you'll join the discussion. Here's our first piece to kick it off.
Over 12,000 young adults attended the recent Power Shift 2009 summit in Washington, DC. Their goal? Building the largest youth movement in decades to save the world from global warming.
Largely missing from Power Shift, however, was a critical group: young scientists, engineers, and entrepreneurs. Maybe it was mid-terms. Perhaps the event seemed too political. Or maybe the summit recruited too many traditionally-defined "activists."
Whatever the cause, we have very little chance of overcoming climate change without enlisting young innovators at a drastically greater scale. Simply put, they represent one of the most important catalysts for creating a clean energy economy and achieving long-term prosperity.
The reason is this: at its core, climate change is a challenge of technology innovation. Over the next four decades, global energy demand will approximately double. Most of this growth will happen in developing nations as they continue lifting their citizens out of poverty and building modern societies. But over the same period, global greenhouse gas emissions must fall dramatically to avert the worst consequences of climate change.
Last Thursday, Secretary of Energy Steven Chu delivered groundbreaking Congressional testimony (testimony PDF) to the Senate Energy & Natural Resources Committee about Obama's energy plan and what's necessary to create a clean energy economy:
"Our previous investments in science led to the birth of the semiconductor, computer, and bio-technology industries that have added greatly to our economic prosperity. Now, we need similar breakthroughs on energy. We're already taking steps in the right direction, but we need to do more...
Developing Science and Engineering Talent: Several years ago, I had the honor and privilege of working on the "Rising Above the Gathering Storm" report commissioned by Chairman Bingaman and Senator Alexander. One of the key recommendations was to step up efforts to educate the next generation of scientists and engineers. The FY 2010 budget supports graduate fellowship programs that will train students in energy-related fields. I will also seek to build on DOE's existing research strengths by attracting and retaining the most talented scientists.
Focusing on Transformational Research. The second area that I want to discuss is the need to support transformational technology research. What do I mean by transformational technology? I mean technology that is game-changing, as opposed to merely incremental...
Speeding Demonstration and Deployment: While we work on transformational technologies, DOE must also improve its efforts to demonstrate next-generation technologies and to help deploy demonstrated clean energy technologies at scale...
We will move forward on all of these fronts and more, as we invest in the transformational research to achieve breakthroughs that could revolutionize our Nation's energy future."
Breakthrough Senior Fellow Marty Hoffert joins panel of experts calling for major, direct government investments and targeted public policies designed to spur high-risk, high-reward energy innovation.
Breakthrough Institute Senior Fellow Marty Hoffert joined a panel of energy experts from both industry and academia at an American Association for the Advancement of Science panel on energy innovation held in Washington D.C. this week. The panel of experts called for major, direct government investments and targeted public policies designed to spur high-risk, high-reward energy innovation.
Businesses and the private sector are ill-suited to perform the kind of critical, long-term energy research needed to solve national energy challenges, panelists said, calling for targeted public policies and investments designed to drive improvements and lower costs of clean energy technologies.
They also encouraged federal energy R&D initiatives to not overlook some of the more outlandish proposals for new energy and climate technologies, including space-based solar power and geoengineering techniques. With early-stage R&D a low-cost investment, putting money behind these potentially high-payoff technologies has no downside, they say.
Read on for excerpts from Energy and Environment Daily's coverage of the AAAS panel...
Todd Stern, chief US climate negotiator in the State Department, gave a speech two days ago in which he laid out some of the principles that will guide the Obama Administration's approach to climate policy. In it he recognizes that what is politically possible will be the most important factor guiding the pace of policy implementation. He says the following:
. . . at the same time we are being guided by the science and doing the math, we cannot forget that we are engaged in a political process and that politics, in the classic formulation, is the art of the possible. Of course we cannot afford to be passive in our understanding of that principle - we need always to push the envelope of what is possible. But we ignore the principle at our peril.
Let me apply this principle in a couple of ways. Some assert that the United States can only meet its responsibility if it agrees to reduce emissions 25-40% below 1990 levels by 2020, equivalent to at least a 40% reduction below where we are right now (a much deeper cut than the EU would have to make compared to where they are now). But, first, as a matter of substance, this is not necessary. What counts is getting on a viable path between now and 2050. Reducing 25-40% below 1990 levels would be a good idea if it were doable, since it would allow a less steep reduction path in the 2020-2050 time period. But it is not independently necessary; a somewhat steeper path in the latter period could make up for the slightly slower start.
In addition, a 25-40% requirement for the United States would garner very little support here, because it would appear both unnecessary, for the reasons I just noted, and beyond the realm of the feasible. The most ambitious proposals that have been seriously considered here, both those introduced in Congress last year and the objective that President Obama has endorsed, call for reductions equivalent to 1990 levels by 2020 and 80% below 1990 levels by 2050. These would equate to around 15% below 2005 levels by 2020, and over 80% below those levels by 2050. So insisting on a 25-40% cut below 1990 for the United States is a prescription not for progress but for stalemate. Again, we need to be guided both by science and by common sense.
There are two important points to make about this passage.
First, in rejecting a 25-40% emissions reduction by 2020 target as unnecessary and unachievable Stern is openly departing from the both the conclusions and implications that many have taken from the 2007 IPCC report, including its head, Rajendra Pachauri:
We [in the IPCC] have estimated that to stabilize global temperature increases at just 2° to 2.4° Celsius, we have only about seven years to turn around global emissions of greenhouse gases like carbon dioxide. By 2015 they'll have to peak. By 2020, we'll need to put in place a 25 to 40 percent reduction in greenhouse gas emissions.
While many people have pointed to the fact that the science of climate change has advanced since the 2007 IPCC report, far more importantly, the ongoing discussion of policy options has rendered the IPCC obsolete. Pachauri has criticized the Obama Administration for its climate policies, so it will be interesting to see how the broader IPCC community reacts to the scaling back of expectations being set forth. This will be especially interesting as many IPCC scientists gather in Copenhagen later this month to "influence policy." Will the Obama Administration be criticized by the scientists?
The second important point to take from this passage is a realization that climate policy must be governed by common sense and what is politically "possible" and "feasible." This realpolitik approach is a healthy one for climate policy as it moves debate beyond aspirations and exhortations to what can actually be accomplished. However, at the same time it is also a slippery slope, as what is politically possible at present is, to be honest, not much. What will the Obama Administration do if it learns that a 15% reduction by 2020 is not possible or feasible?
If you're looking closely at the public investments Obama plans to pair with his carbon pricing proposals, you've got to start worrying: if Obama remains committed to spending just $15 billion per year to spur a new energy economy, America will fail in that endeavor.
The public is overwhelmingly behind President Obama right now, and if he was elected with a mandate to do anything beyond stem the economic crisis, it was a mandate to build a new, clean energy economy that finally secures America's energy independence and averts potentially catastrophic climate change.
Yet once you start looking at the critical areas for public investment - research, development and demonstration, or RD&D; critical infrastructure, like a modernized electrical grid; deployment incentives to spur emerging technologies; and efficiency incentives, financing and other investments to retrofit American homes, businesses and factories - it's not hard to see why $15 billion per year is simply not up to the task.
"If the U.S. is to invent its way out of climate change, which some suggest is our only hope, it will need to spend [a] lot more and a lot more wisely on basic energy research."
In his latest piece, Time magazine's energy and climate writer Bryan Walsh takes readers beyond carbon pricing, to look at the more active government engagement in energy innovation necessary in the race against climate change.
"[A] growing chorus of experts is beginning to doubt whether cap-and-trade alone will reduce CO2 enough to curb runaway climate change," Walsh writes, before turning to the need for new energy innovation on an unprecedented scale. As Walsh writes, "If the U.S. is to invent its way out of climate change, which some suggest is our only hope, it will need to spend [a] lot more and a lot more wisely on basic energy research."
At a public event at an efficient co-generation power plant in China, Secretary of State Hillary Clinton and Obama Climate Envoy Todd Stern both discuss the importance of partnership and collaboration to develop and deploy clean, cheap energy technologies to power sustainable development in China.
Are these the first signs of a new Obama Administration strategy for U.S.-China engagement on climate change? Are Clinton and Stern preparing to embark on a strategy focused explicitly on harnessing the best and brightest researchers, entrepreneurs and businesses and leveraging major investments on both sides of the Pacific to develop and deploy clean, cheap and scalable energy sources?
I'll be writing more about this tomorrow, but for now, the full transcript of their remarks are below. I'm interested in your reaction to these remarks and your thoughts on how the United States and the Obama Administration should engage China to ensure a climate stability and to help drive sustainable development in China?
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.
James Hansen of NASA has written an op-ed for the Guardian that, more than any other piece of his that I've seen, expresses his political philosophy. In a phrase, that philosophy can be characterized as "scientific authoritarianism." Scientific authoritarianism, as I am using it here, holds that political decisions should be compelled by the political preferences of scientists. It is a very strong form of the "linear model" of science and decision making that I discuss in The Honest Broker.
Hansen believes that the advice of experts, and specifically his advice alone, should compel certain political outcomes. He opens his op-ed in the Guardian with this statement:
A year ago, I wrote to Gordon Brown asking him to place a moratorium on new coal-fired power plants in Britain. I have asked the same of Angela Merkel, Barack Obama, Kevin Rudd and other leaders.
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.
Chu says "second industrial revolution" needed in energy technology. Calls for Nobel-level "breakthroughs" in biomass, batteries and solar power to offer "better choices" in fight to overcome energy and climate challenges.
In a candid conversation with reporters yesterday, newly-confirmed Energy Secretary Dr. Stephen Chu called for "a second industrial revolution" in energy technology to overcome the world's energy and climate challenges.
Sounding like an honorary Breakthrough Institute Senior Fellow, Dr. Chu said solving these pressing challenges would require Nobel-level "breakthroughs" in at least three core energy technologies: advanced batteries for vehicles, new crops for biomass energy, and solar panels cheap enough to deploy without subsidy.
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?
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.
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."
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."
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."
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."
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.
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 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."
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."
A cautionary note about losing sight of climate objectives amidst all the fervor about green jobs and green stimulus. ... Jesse Jenkins and Teryn Norris in the Huffington Post.
The Huffington Post has featured an op-ed by me and Jesse Jenkins, "The Danger of Green Stimulus," which issues a cautionary note about losing sight of climate objectives amidst all the fervor about green jobs and green stimulus:
Barack Obama's final appointments in December indicate a strong commitment to action on climate change. Steven Chu as Energy Secretary, Carol Browner as Energy & Climate Czar, John Holdren as Assistant for Science and Technology -- just to name a few recent selections -- are all proponents of vigorous action to cut U.S. global warming pollution and take leadership on a new international climate treaty. And Hilda Solis, Obama's new Labor Secretary, is a champion of "green jobs."
All is well on the climate front, it seems. Except that it's not.
Carbon cap and trade regulation remains the top federal policy priority for the majority of environmental groups. But in June, cap and trade legislation failed in the Senate, and sixteen Democratic Senators from coal and manufacturing-heavy states voiced their opposition to high carbon pricing. The policy faces even greater obstacles in today's economic climate, since it would increase the energy bills of the American public.
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.
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.
"Energy efficiency cannot be seen as Job 1 and the other stuff Job 2. You've got to do them all as Job 1 because they all have to work."
-Dr. Nathan Lewis, California Institute of Technology, in today's New York Times piece, "Hard Task for New Team on Energy and Climate. Dr. Lewis explains why any program on climate-friendly energy must move forward on three prongs simultaneously: increasing efficiency, moving existing nonpolluting energy technologies more rapidly into the market, and advancing on the frontiers of energy science in search of radical breakthroughs.
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 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.
The UK auctioned the first four million allowances to emit greenhouse gases under the EU's Emissions Trading System, but will not earmark auction revenues for investment in clean energy.
The UK Government auctioned the first four million allowances to emit greenhouse gases under their portion of the European Union's Emissions Trading System this week, raising 54m British pounds ($80.9m). However, the government is drawing fire for failing to earmark the auction revenues to investments in clean energy and energy efficiency that could further cut emissions and help reduce the costs of compliance with the cap and trade program. Instead of reinvesting the revenues in clean energy ventures, the government is reportedly planning to add revenues to the general budget.
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.
The Environmental Protection Agency 
The following was originally submitted to the National Journal discussion "
