Comments Michael Shellenberger has made

If price is so powerful...

If price is so powerful, what explains why CO2 costs $41 a ton in Europe and there's still a coal-building boom there?

http://thebreakthrough.org/blog/2008/05/will_the_climate_ ...On How not to inform readers about cap-and-trade posted 1 year, 5 months ago 4 Responses

What Explains the Difference?

Tony,

Thanks for this post.

What explains the difference between the MIT, EPA, and EIA models?

Also, would you please link to the MIT study? I can't find it using Google.

MichaelOn Time to kick the oil habit posted 1 year, 6 months ago 1 Response

A Fairy Tale -- But Perhaps a Hopeful One

Just as the utterly disappointing Lieberman-Warner Climate Security Act (CSA) goes up for debate, Congressman Ed Markey has released his own version of climate legislation, this time with real money invested in clean energy RD&D - $25 billion a year. Sound to good to be true? It is.

Our analysis here:

http://thebreakthrough.org/blog/2008/05/a_fairytale_alter ...On Rep. Ed Markey unveils ambitious new climate legislation posted 1 year, 6 months ago 4 Responses

Way to Slime, Dave

Roberts writes:

"Not previously a global warming skeptic" sure makes it sound like he is one now, doesn't it?"

It sure does -- which is why you should have emailed Roger about the quote before attacking him.

Anyone who wants to get a sense at how the enforcers of climate orthodoxy on both left and right restrict the debate over solutions, just witness the way Roberts and Joe Romm conspired with the right-wing Washington Times' to slime Roger Pielke.

It started out innocently enough. Roger pointed out on his blog that if a recent Nature article is right that the next decade would bring global cooling, not warming, then climate models aren't very useful for making short-term predictions. Roger writes:

This means that from a practical standpoint climate models are of no practical use beyond providing some intellectual authority in the promotional battle over global climate policy. I am sure that some model somewhere has foretold how the next 20 years will evolve (and please ask me in 20 years which one!). And if none get it right, it won't mean that any were actually wrong. If there is no future over the next few decades that models rule out, then anything is possible. And of course, no one needed a model to know that.

Don't get me wrong, models are great tools for probing our understanding and exploring various assumptions about how nature works. But scientists think they know with certainty that carbon dioxide leads to bad outcomes for the planet, so future modeling will only refine that fact. I am focused on the predictive value of the models, which appears to be nil. So models have plenty of scientific value left in them, but tools to use in planning or policy? Forget about it.

Enter one Richard Rahn at the Washington Times who quotes Roger utterly out of context and implies that Roger has suddenly become a skeptic:

Roger A. Pielke, environmental studies professor at the University of Colorado, and not previously a global warming skeptic, reacted to the Nature article: "Climate models are of no practical use beyond providing some intellectual authority in the promotional battle over global-warming policy."

Roger has never been a skeptic and still isn't one. For 15 years he has called for immediate action on climate change -- both mitigation and adaptation.

Dave, the way you and Romm use personal attacks and innuendo, rather than argument, one might conclude that you are part of the The Assault on Reason we've been hearing so much about.

By way of contrast, the Times' Andy Revkin wrote a thoughtful blog post about the original Nature piece in question and asks: "Can Climate Campaigns Stand a Decade of Cooling?"

I'd say climate campaigns can withstand a decade of cooling. The question is whether enforcers of climate orthodoxy can. On RPJr. is at it again posted 1 year, 6 months ago 4 Responses

A Modest Proposal

David,

What I'm driving at is your constant disparagement of motives. If I criticize Nazi and Holocaust metaphors, it's not because I am profoundly worried about the way those statements help opponents of action on global warming. No, it's because I'm trying to appear reasonable to the establishment. If I criticize environmentalists for being overly regulation-centered, guilt-and-sacrifie oriented, and apocalyptic, it's not because I want to create a more expansive, positive, and effective politics. No, it's because I'm trying to draw attention to myself.

Your motives, by contrast, are pure as driven snow. You ruminate on global warming deniers, the Nazis, and comparisons to the Holocaust not because doing so draws attention to yourself and drives traffic to Grist. No, you're doing so for the simple fact that it's an important conversation to have.

I encourage you to find a way to disagree without disparaging the motives of your opponents. Everyone who is working on global warming is doing so because they care about a better world and future. In suggesting that's not the case you demean the conversation.

I am ready to move on and suspect you are too. I would suggest a global agreement.

1. I will never again mention in a public forum the statements made by you or Jim Hansen about Nazis and the Holocaust. And when criticizing environmentalists, I will make every effort to be as specific as possible about who I'm talking about.

2. In return, I ask that you stop attacking the motives of people who are obviously sincere in their commitment to overcoming global warming but who happen to disagree with you on how to do it.

Grist's Peacock

In defense of his call for Nazi war crime tribunals for people who deny the reality of global warming, David Roberts now claims, "I was not 'calling for war crimes tribunals for [all] global warming deniers.'"

Roberts claims I "distorted" his words. Actually, all I did was quote them. Here they are again so that readers can make their own judgment:

When we've finally gotten serious about global warming, when the impacts are really hitting us and we're in a full worldwide scramble to minimize the damage, we should have war crimes trials for these bastards -- some sort of climate Nuremberg.

It should probably go without saying that the effect of Roberts' histrionics is not to frighten guys like John Christy, William Gray and Richard Lindzen. Rather, the effect is to enforce ideological orthodoxy among environmentalists and to give global warming deniers a new way to paint environmentalists as extremists, as Sen. Inhofe did with Roberts' blog posting last year.

1.

Imagine for a moment that one of those deniers had used a Nazi or Holocaust metaphor. Roberts would have denounced them up and down to anyone who would listen. (It is an argument to which Roberts doesn't even bother responding because he knows it's true).

Now exposed, Roberts wants to change the subject.

To me, the least interesting thing about Hansen's allusion to the Holocaust is whether you, I, Revkin, Shellenberger, whoever, "approves" of it. Approval or disapproval in this case is just posturing, displaying your peacock feathers, defining your tribal affiliations. It's boring.

Ah yes, all of this is a boring matter. That's why there are 64 comments about it at Andy Revkin's blog, and 25 comments about it here at Grist (which is about 10 times as many comments on Grist's other, apparently more exciting posts).

Roberts wants to have it both ways. He wants to be able to serve up apocalyptic red meat for his followers on Grist and then claim to the New York Times that the environmental movement is beyond all that apocalypse and sacrifice stuff. Just days ago he claimed on the Times blog that, "Many people (including me) have argued that the conventional environmental narrative of fear and guilt will never build a popular base of support for the fight against climate change. My sense, though, is that this has become conventional wisdom, if not common practice."

3.

It sometimes seems that at least half of what Roberts writes -- especially when exposed on the facts -- is unadulterated psychological projection. It is Roberts, not Revkin, who enforces orthodoxy and "tribal affiliations" among Gristians.

This goes way beyond comparing deniers to Nazis. Witness his name-calling against thinkers who happen to disagree with him on questions of coal, adaptation, and the need for massive federal clean energy investment.

And unable to back up his claim that I "distorted" his words, Roberts resorts to what he does whenever he trips over his peacock feathers, he calls people names (in this case, "Rush Limbaugh").  

Roberts should seek to discipline his own language and thought before seeking to discipline others.On Is the analogy between climate change and Hitler's atrocities appropriate? posted 2 years ago 49 Responses

Time to Pay Attention to the Social Sciences

Dear Arthur,

Major public investment in clean energy is overwhelmingly popular. It is the public's preferred way to deal with high energy costs, oil dependency, and global warming. By contrast, the public is very leery of any regulation that would raise energy costs.

Much of the environmental community -- not just the big groups in Washington, but also grassroots environmentalists -- think they can persuade the public that pollution limits won't raise the cost of energy. This will work about as well as efforts by environmentalists to convince California voters last November that a tax on oil production wouldn't raise gas prices. The initiative - proposition 87 - lost. And that was five months after the supposed "tipping point of public opinion" on global warming had occurred.

At an economic and technological level, massive public investments to bring down the price of clean energy are imperative. Regulations alone will maybe get us 20 - 30 percent emissions reductions by 2050 -- in the U.S.

We make a more detailed argument in "Fast Clean Cheap," which we released along with our book in September, and is on our web site. You might consider reading it.

In the meantime, here's a summary:

Regulation creates a Gordian Knot

A regulation-centered framework creates a Gordian Knot: if government prices carbon high enough -- either through emissions limits or an outright tax --  to make currently expensive clean energy solutions like solar and carbon capture cost competitive, then energy prices will rise dramatically and will elicit a voter backlash (in addition to the inevitable industry opposition).  

But if government prices carbon too low, private sector investments will flow almost exclusively to inexpensive emissions reductions, such as efficiency, rather than to more expensive but needed technologies such as solar and carbon capture and storage.

Raising Energy Prices is Incredibly Unpopular

The political reason that the regulation-centered approach cannot result in large-scale emissions reductions is because its success depends on doing something highly unpopular with the public, industry, and elites alike: raising the price of energy. New energy regulations will increase the cost of gasoline and electricity and everything else that requires energy for its production, from food to homes to consumer products. Many industries -- from building to transportation to retail to manufacturing -- not just energy industries, may have genuine reason to fear and oppose price increases.

Developed nations will set a low price for carbon dioxide for several reasons. The first is that national governments, under pressure from domestic industries, will fear a competitive disadvantage relative to firms that operate in countries that do not restrict greenhouse gas emissions. This concern about a competitive disadvantage was in part what motivated the U.S. Senate to preemptively reject, 95-0, the Kyoto treaty on global warming in 1997.

    The second reason governments will set low prices for carbon dioxide is that voters are far more concerned about the immediate threat of higher energy prices than they are about what they perceive to be the distant threat of global warming.

Voters are today more anxious about high energy prices than have been in 30 years. When USA Today/Gallup asked how important gas prices are to someone's vote for Congress in October of 2006, 90 percent of voters said it was at least moderately important, and 34 percent of respondents called gas prices "extremely important."

Americans specifically say they do not want to pay more for electricity as well as gasoline. When asked if the federal government should increase taxes on electricity or gasoline to encourage conservation, Americans overwhelmingly reject the approach. A March 2006 ABC News/Washington Post Poll showed that 81 percent of voters oppose increasing taxes on electricity, and 68 percent oppose increasing taxes on gasoline, to encourage conservation. Those numbers actually went down, despite expensive national and local media attention about global warming (the numbers were 79 and 67 percent respectively).

Global Warming Remains a Low Priority

    Advocates of a higher price for carbon dioxide are largely making their case based on the urgency of global warming. But efforts to increase the public's concern with global warming as an issue have largely not succeeded. In 1989, Gallup asked Americans how concerned they were with global warming. Sixty-three percent said they worried "a great deal" or a "fair amount" about it -- by 2007, that number was virtually unchanged at 65 percent.

    Public awareness reached a new high in the summer of 2006 with the publicity around Al Gore's "An Inconvenient Truth." The Pew Center for People and the Press  conducted a telephone survey of 1,501 adults between June 14 and June 19, 2006, a period timed to coincide with the high point of the media's interest in Gore's movie. By far the biggest finding was that the movie had done virtually nothing to increase the saliency of global warming among voters. Pew researchers noted that "out of a list of 19 issues, Republicans rank global warming 19th and Democrats and Independents rank it 13th." By January 2007, global warming's relative importance actually declined to 21st out of 21 issues for Republicans, 17th out of 21 issues for Democrats, and 19th out of 21 issues for independents.

Congress Will Set a Low Price for Carbon

Recognizing that voters care more about the cost of energy than global warming, most policies under consideration in Congress would price carbon dioxide at around $7 - 12/ton, either directly through a safety valve or indirectly through the allocation of pollution allowances. As noted above, at that low price, private investment will flow toward the least expensive emissions reductions, as described above, and not, for the most part, toward technologies like solar energy and carbon capture and storage, which are currently more expensive but which need to receive major investment for costs to come down. It may also direct investments toward wind, though wind faces expansion obstacles from lack of transmission lines from windy rural areas (which are less subject to "not in my back yard" (NIMBY) opposition) to cities.

This is consistent with past experience in Europe. Europe's Emissions Trading System has not achieved its goal of significantly reducing the EU's emissions because European governments issued too many permits to polluters. The price of carbon dioxide peaked at €30 per ton in April 2006, but once it became evident that that countries had over-allocated permits -- and that firms did not need to reduce their emissions -- the price fell to €0.10 in September 2007. European officials are expected to give away fewer permits for the 2008 - 2010 period, but governments will remain under pressure from industry to establish a low price for carbon dioxide.

Clean Energy Investments are Hugely Popular

A March 2007 Gallup poll found that when asked a battery of questions about what the government should do to address global warming, 65 percent of Americans said the government should be "starting a major research effort costing up to $30 billion per year to develop new sources of energy," the highest scoring item in the battery.

An August 2006 Los Angeles Times/Bloomberg poll asked Americans to identify the "best way for the US to reduce reliance on foreign oil."  A majority, 52 percent, cited "having the government invest in alternative energy sources, such as wind and solar power," the top choice by a two-to-one margin.

The highest levels of support in a March 2007 Gallup poll were for spending government money on the new energy sources. Proposals for "spending more government money on developing solar and wind power" were supported by 81 percent in 2007, up from 77 percent in 2006. Gallup found that "starting a major research effort costing up to $30 billion per year to develop new sources of energy" was supported by 65 percent of respondents, the largest level of support of the items tested.

Why Does the Environmental Lobby Push Regulation But Not Investment?

Given public opinion, and the urgent need for public investment to drive down the price of clean energy, why do environmentalists and their allies in Congress continue to put regulation rather than muscular investments at the center of their agendas?

There are three reasons. The first is that bold, innovative, and aspirational proposals to dramatically transform the economic and political landscape are seen as distractions from their attempts to advance their small, incremental policies.

Proposals like the New Apollo Project, in their very conception, reject the single-issue, incremental mindset that is virtually hard-wired into the liberal special-interest group approach to politics and institution building. And while a passel of unions, environmentalists, and businesses have officially endorsed Apollo, none have championed it. A few have even worked behind the scenes to insure that it never comes up for a vote. "We've been positive publicly about Apollo," the NRDC's David Hawkins told us, "but not positive policy-wise because it doesn't have binding limits, either on CAFE or carbon."

The second reason for the dominant liberal politics of timidity and the aversion to investment is that Democrats and environmental lobbyists are scared of being called "tax and spend liberals." Our point is that this is precisely the fight we should want to have. We will be called that no matter what -- witness President Bush's press conference on Tuesday. Our response should be, "We need to invest whatever it takes to free ourselves from oil and make America the clean energy leader of the world. We can't afford not to make these investments."

    The third reason for continuing opposition to an investment-centered agenda is the dead weight of the pollution paradigm and the politics of limits. One can scarcely imagine a CEO who looks only at costs and debts and not at revenues and investments, and yet this is the mental model that several hundred members of Congress take to work every day.

Market fundamentalists say that it is not the role of government to pick winners and losers in the economy. But through everything from tax policy to social policy, the government is always picking winners and losers in the economy. Nowhere is that more true than in the energy sector, where the government has for years been subsidizing coal, oil, and gas companies and virtually ignoring clean-energy companies. The problem is not that the essential market is being distorted by old energy subsidies and improper accounting, but rather that a market created to serve the old energy economy can no longer serve our present energy and ecological needs.

While "internalizing externalities" through carbon taxes and pollution limits is a part of the solution, without major new investments, it alone amounts to tearing down the old energy economy before building the new one.

On the Sciences - All of Them

Arthur, you claim to take science seriously but then proceed to assiduously ignore all of the social science on public attitudes around climate, energy regulation, and investment.

You write:

But from my familiarity with UCS and Energize America, the only reason they haven't focused on huge bumps in "investment" of that sort is that they've not found any way to make it politically palatable. You can talk all you want about the "politics of possibility" but I'm just not seeing the big upsurge in political viability of the ideas.

You're not seeing it because you haven't looked.

Elsewhere you say:

It would be great it if were politically feasible to increase that number and move it to earlier in the program - but what are the chances of a bill like that actually getting through congress? Do you have any real reason to believe it's politically possible at the moment? I very much doubt UCS or NRDC or ED or Sierra Club have the clout to force through something right now that's even harder on the fossil-fuel industry.

As I've laid out here, investment is more popular than regulation. Regulation + investment will be more popular than regulation alone.

And how exactly is investment in clean energy politically "harder on the fossil-fuel industry"? In fact, investment in clean energy is a pathway to divide the fossil fuel industry along the lines of those companies that want to make the transition to clean energy and those that don't.

Throughout Break Through we criticize those who focus monomanically on the natural sciences and completely ignore the social sciences. Now that legislation is being debated in Washington, ignoring public attitudes around energy has become will be as dangerous as denying the seriousness of climate change.

Michael
On NYT author discusses recent story on climate 'centrism' posted 2 years ago 17 Responses

Answer the Question

Dear Dave,

I think it's incredibly exciting that Newt Gingrich is acknowledging the seriousness of global warming and calling for investments into clean energy technology.

I also think it's exciting that Lomborg is calling for carbon regulation through a tax - a position that you misrepresented in your post ("Lomborg thinks it's a mild problem that may or may not become a severe problem, one that doesn't merit constraining our fossil fuel use or making economic sacrifices.")

Rather than celebrating these developments you have largely dismissed or attacked them.

No wonder, then, that the global warming debate is moving on -- figuratively and literally, to Revkin's heavily trafficked blog.

To your question: are we centrists? I identify as a progressive. Gingrich defines himself as a conservative. I think Lomborg identifies himself as a liberal and even as an environmentalist.

Andy Revkin sees a trend in various individuals calling for a positive vision of America's future constructed around large investments in technology to bring down the price of clean energy. He thinks there's something worth paying attention to there.

You keep insisting that environmentalists are for major investment. Revkin and I keep pointing out that this is simply not the case. And, notably, you never respond with any evidence.

The national environmental lobby has never made massive public investment in clean energy a priority. When discussing global warming in Break Through, it's pretty obvious that the "environmentalists" we are talking about are the main environmental groups -- Environmental Defense, NRDC, Sierra Club, UCS, NET -- that have clout in Washington, that write environmental legislation, and that have budgets in the hundreds of millions to run ads, mobilize members, and lobby.

The environmental lobby has resisted a major push for large investments in clean energy for two reasons. First, they think that regulation plus small increases for R&D - on the order of $1 to $3 billion more a year - is all that's needed. (Hence the inadequate increases in R&D proposed by the Democratic Congress.) Our contention -- like that of Hoffert et al. and Rayner et al. (Nature October 2007), and perhaps you as well, is that investments on the order of $30 - $80 billion a year are needed.

Second, the green lobby thinks new regulations are more politically popular than major investments. And on this point they're just wrong, as every serious opinion poll shows.

Yes, various individuals have been calling for major investments for at least the last five years. Having read Hoffert et al. in 2002, I was inspired to co-found the Apollo Alliance. And yes, the expert literature, which we've summarized here, is very clear that big investments are needed.

But guess what: we're not the ones who have influence in Washington. The committee staffers look to the senior attorneys and scientists at the big environmental groups, not to Grist, Apollo Alliance, or Hoffert et al., for guidance. Sure, we all talk to Hill staffers and media. But unless you have some hidden influence on leaders of Congress that I'm unaware of, you don't drive legislative action like Carl Pope and David Hawkins do.

That's why the parts of Break Through that criticize environmentalists on climate are actually quite pointed at NRDC, Sierra Club, et al., and not at groups and individuals who have very little clout over climate policy matters in Washington.

The good news is that in the debate over Break Through, prominent environmental leaders from Carl Pope (he's quoted in the Wired magazine profile about us) and David Hawkins ( see his blog) have insisted that they support big investment.

The time has come for them to put their money where their mouths are. They need to publicly commit to making sure that Lieberman-Warner generates at least $30 billion for clean energy investments every year. A mechanism should be created to insure that the money is well-invested in R&D, demonstration, deployment, and outright procurement and not frittered away into a million little pork projects.

Will you endorse this call?

The opportunity is here to see to it that investment be taken as seriously as regulation. Lieberman-Warner, by auctioning permits, could be a vehicle to make it happen. I hope you'll join us.

Michael
On NYT's Andy Revkin pens another stinker on the so-called 'center' of the climate debate posted 2 years ago 42 Responses

Our Argument Stands

Adam,

We're glad that you're not an anti-technologist.

However, our critique of your post was that setting a price for carbon can't, alone, get us where we need to go, and that investment is more important than regulation.

You posted your reply before you had read Environmentalism's Existential Moment. I'm wondering if your opinion has changed since reading it.

Best,

MichaelOn Ted Nordhaus responds to NRDC's Dave Hawkins posted 2 years, 1 month ago 14 Responses

Challenging Orthodoxies

Dear Jon,

Thanks for your thoughtful comments.

You wrote:

And whether N&S like it or not, their position challenges, not just environmentalist orthodoxy, but more importantly, conservative economic and political orthodoxy as well.

As a matter of fact we spend much of our new book, Break Through, challenging conservative orthodoxies even while we challenge environmentalist ones.  

What's been so interesting about the reaction from David Hawkins at NRDC and many other environmentalists writing on Grist, is that they espouse market fundamentalism as much as anyone. The market fundamentalist's fallacy is that all we need to do is set a price for carbon and we will be well on our way to reducing U.S. emissions 80 percent and global emissions 50 percent by 2050.

They offer nothing in terms of an economic or political argument that considers what carbon would have to be priced at to make clean energy cost-competitive. Nor do they consider what must be done for China to reduce its emissions. Instead, they recite textbook descriptions of how behavior follows price.

So far, nobody has refuted the extended case we made in Environmentalism's Existential Moment that regulation alone can't get us from here to there for technical, political, and economic reasons.

As for the Defense Department -- I appreciate your concerns. But at the end of the day, I'd rather have our military back home in the U.S. purchasing and installing solar panels than fighting a lost war in Iraq.

We wouldn't be having this conversation through our personal computers and the Internet had the DoD not bought down the price of microchips.

That the U.S. military has done some heinous things -- why would that disqualify it from investing in the new energy sciences? The Pentagon is not a static, singular institution. It is neither all good nor all bad. Yes, it has made some bad contracting choices, like the B-2 bomber and the Osprey. But it has also made some excellent ones, like microchips and the Internet.

We should harness the military's strengths and assets to achieve positive goals, like making solar panels as cheap as coal -- or at least as cheap as natural gas.

Again, thanks for your comments.

Michael

P.S. In a bit of nice timing, the San Francisco Chronicle today ran a very good piece about how Silicon Valley -- including Intel and Google -- wouldn't exist were it not for the DoD.

The early chip industry, like the two waves of innovation before, initially depended on military expenditures, Paul Ceruzzi, a curator at the Smithsonian Institution, writes in his book "A History of Modern Computing."

Only this time, it was the Cold War that opened the government's checkbook.

The Soviet launch of Sputnik on Oct. 4, 1957, prodded the United States to modernize its missile and space program. The newfangled silicon chips were considered vital - albeit costly - components, and Ceruzzi writes that NASA and the Defense Department bought so many "that the price dropped from $1,000 a chip to between $20 and $30."

Falling chip prices fueled development of new electronics for corporate customers and eventually individual consumers. Reliance on military purchases lessened, though defense dollars remained important in spurring research. Thus, when Larry Page and Sergey Brin later dreamed up Google, a defense research grant helped support their work. And when Stanford computer scientists won a robotic car race in 2005, the prize came from the Defense Department.

By the 1970s, therefore, Silicon Valley was poised to capitalize on new civilian technologies like PCs, as exemplified by Apple Computer.

Shellenberger Responds

Dear Jesse,

Thanks for jumping in on this important topic. I hope you will continue to sink your teeth into this one -- the upcoming global warming legislation is crucial to America's future. We have to be as clear-eyed about what it will do and what it won't do as we are about the science of global warming.

First let me acknowledge points of agreement. We all agree that carbon should be priced. The question is how much can a carbon price in the U.S. do to reduce emissions?

Our analysis shows that even a relatively low carbon price will do very important work in moving from coal to natural gas, increasing efficiency, and motivating conservation -- in the United States. If executed perfectly well, it might reduce emissions 20 percent over the next couple of decades (emissions reduction calculations are very, very tricky, and I am thus happy to go over these calculations in a future post for anyone who is interested).

There are some who say the great thing about a price on carbon is that it avoids "picking winners and losers." That's a disingenuous claim. Setting a particular price on carbon very clearly does pick winners and losers. The winners are efficiency, conservation, and some kinds of sequestration (e.g., burning methane off of landfills).

All markets are constructed through regulation (the RMI quote above is a great one).

What a modest price on carbon (~$10 - 20/ton of Co2) won't do is quickly bring down the price of clean energy technologies.

Why does that matter? Because if we do not bring down the real price of clean energy technologies as quickly as possible, China and the rest of the world (us included) will bring on-line a whole new coal-based infrastructure that threatens to swamp any amount of action in the U.S.

China is not going to set a price for carbon, and thus raise its energy costs, without a good economic reason to do so. It won't blindly follow the U.S., as many environmentalists allege. And even if China establishes a modest carbon price in the future, it won't establish one nearly high enough to quickly move to solar and other clean energy technologies, including carbon capture and storage (CCS) facilities for its coal plants (few to none of which are CCS ready).

One scenario we support is simply buying down the price of solar. How could this be done? In the same way we brought down the price of microchips in the 60s. Microchips used to be expensive, now they're cheap.

The DoD could purchase 10 - 20 billion dollars worth of PV -- through a competitive, transparent bidding process -- each year for 10 - 20 years. One calculation shows that it would cost $50 - 212 billion to make solar as cheap as conventional energy sources. Again, these are tricky calculations, but solar is a great case study because its price declines ~20 percent for every doubling of capacity.

There is no silver energy bullet, and this can't happen through regulation alone. Even in California, which passed the Million Solar Home law, I was told by a solar industry executive in July that because of red tape, only 20 homes are being installed with solar systems each day, when that number needs to be 200 per day to be on track. Andy Revkin at the Times pointed out that in order for solar to constitute one-seventh of the emissions reductions we need, there will need to be a whopping 200 million solar homes. And that isn't going to happen as long as solar is 5 - 10 times more expensive than coal and natural gas.

You've suggested that we've exaggerated the difference between our investment-centered approach and the environmental lobby's regulation-centered approach. But anyone who looks at the policy agenda of the leading environmental groups who determine global warming strategy in Washington will find that there is no strategy to buy down the price of solar. Nor is there any major investment strategy whatsoever. Don't confuse green rhetoric with policy reality -- you have to look at the legislation being pushed in Congress.

That said, there is today an exciting political opening. Senator Lieberman has indicated he wants to auction permits. What will the money raised go to? It's not yet clear. We estimate that what's needed is at least $30 billion in pork-free public investment capital to buy down the price of clean energy (and invest in other areas, like new transmission lines to transport wind power from rural areas to cities).

Could the Lieberman-Warner legislation do this? Absolutely. Is the environmental lobby united behind a strategy to make it happen? Unfortunately not.

At least not yet. The good news is that there's still time. The trouble that advocates are having building support for global warming legislation in Congress might be overcome if there were a big and bold strategy for creating jobs and establishing American economic leadership in the fastest growing markets in the world. Public investment is the key to doing this.

The truth is, it's up to the (largely post-boomer) generation of environmentalists and non-environmentalists to lobby environmental leaders, lobby Congress, and blog about the necessity of a large clean energy investment.

The best part about it all is that you don't really have to care all that much about global warming to support a big investment strategy for clean energy. Maybe you just care about energy independence. Maybe you just care about economic competitiveness. The large percentages of Americans who say they support cap and trade on global warming declines dramatically when voters learn that setting a price on carbon means raising the price of coal and oil. The solution is to put investment, jobs, and economic possibility -- not pollution limits and higher energy costs -- at the center of the debate.

If global warming legislation passes that does not raise and allocate at least $30 billion/year for clean energy investment, then we'll have to find some way to get that money from somewhere else. That public investment capital to bring down the real price of clean energy is more urgent, in our view, than a price on carbon.

In any event, it's great to have the conversation, and we'll look forward to your posts on our book, Break Through.

Best regards,

Michael
On Shellenberger & Nordhaus respond to critics posted 2 years, 2 months ago 23 Responses