Obama’s Climate Cunning

Gas, Clean Tech, and the Path Ahead

The New Year will not mark a clean slate. Congress and the president will re-convene their hostilities. And while the impasse will prevent legislative action to fix the level greenhouse gas emissions, the president is nevertheless preparing a more insidious attack on climate change.

Re-election to the White House is giving President Obama the oomph he needs to tackle the effects of global warming — a topic that has been legislatively off-limits. To achieve his objectives, Obama is remaining persistent and is pursuing a high-tech, clean-tech economy in conjunction with his administration’s recently enacted environmental regulations.

“Addressing climate change is urgent,” says Michael Shellenberger, president of the Breakthrough Institute, an environmental think tank based in Oakland, Calif. “Energy transitions take a long time and we need to get started.”

When President Obama took Washington‘s reins in January 2009, his party controlled both the House and the Senate. But he was unable to enact a cap-and-trade program to reduce the level of heat-trapping emissions.

The opposing party, which regained the U.S. House two years later, promised to block firm cuts in carbon dioxide releases. Conservative lawmakers will acknowledge that global temperatures are rising but say that such a phenomenon is a natural occurrence, not man-made. Any solution, they add, would require universal participation and that signing any protocol without such stipulations would economically disadvantage the United States.

Not to be deterred, the president then sought reforms after the U.S. Supreme Court ruled that carbon dioxide could be regulated under the Clean Air Act if the Environmental Protection Agency concluded that it was harmful to human health and the environment. Obama’s EPA made such an “endangerment finding” that has been upheld by the federal courts.

Now, no new coal plants can be constructed unless they would capture carbon dioxide releases. Meantime, the oldest coal units built in the middle 1900s are being forced to retire and they are getting replaced with combined-cycle natural gas plants that are both more efficient and cleaner.

“We should have increasingly stringent regulations on coal to help us move away from it,” says Shellenberger. “Cheap natural gas helps a lot. But we need to ramp up our investments in renewables and nuclear energy so that they can compete with coal and natural gas. If those fuels were cheaper than traditional ones, then there would be no reason to make public investments.”

Shellenberger points specifically to the shale gas sector. For decades, the naysayers downplayed the possibility of getting natural gas out of shale rocks. But through federal research and public funding, shale gas is today’s golden boy. Wind, solar and nuclear hold the same potential.

The environmental manager goes on to tell this writer that, generally, the country now invests $3 billion to $4 billion annually in “innovation.” Energy, though, is a massive segment of the U.S. economy and he maintains that such figures ought to be $30 billion a year.

While Shellenberger says that the need to address climate change is immediate and that government is a key player, others are saying that the private sector and judicial branch are just as critical. Consider the recent droughts and hurricanes that have swept the United States: Insurance carriers have calculated that weather events are a function of climate change and they are now pricing those risks into policies.

Meantime, some companies are unilaterally acting. Calvert Investments discusses Google, AT&T and Coca-Cola. Google, for instance, publicly lists its renewable energy holdings as well as its carbon footprint that it wants to reduce to zero. Meanwhile, AT&T also has a goal of increasing its green energy and decreasing its greenhouse gas emissions by 20 percent by 2020. Coca-Cola has pledged 5 percent cuts in all of its emissions by 2015.

Randy Evans, co-author of a book called “Climate Change and Insurance,” says that the global environment is not at a “tipping point.” But he told this reporter that conditions are at a “median point” whereby all political and business leaders must manage the apparent risks. To that end, he maintains that a “swarm” of shareholders, insurers and concerned enterprises are coalescing to force change.

An obvious sticking point in the scientific, political and legal worlds is whether global warming is a function of man-made emissions. But according to Evans, the standard should not be whether fossil fuels are the “main” cause but whether they bear “some” responsibility for the deviant weather patterns.

“Man-made emissions are ‘one’ cause,” says Evans, former outside counsel to Republican House Speakers Newt Gingrich and Denny Hastert. “Maybe it is a significant cause but it does not have to be ‘the’ cause. If it only has to be ‘a’ cause, there should be some accountability: Why shouldn’t those who profit the most share their profits with those who suffer the most?” The courts, he adds, will help decide these issues.

Dealing with global warming will be expensive. But the proposition posited by author Evans is that the price tag will be more affordable if it is paid up front. That sentiment is shared by the Breakthrough Institute’s Shellenberger.

Delays are unhealthy. They not only jeopardize ecological conditions but they are also blocking the emergence of better power generation. Obama has sought to break the logjam by using the regulatory process and by funding promising ideas. But the real propellants are those investors, insurers and businesses that have calculated the risks and assessed the opportunities.

Ken Silverstein is editor-in-chief for Energy Central's EnergyBiz Insider and a contributor to Forbes. Follow him @Ken_Silverstein.This article was originally published at Forbes.

Photo Credit: Flickr user Barack Obama