The Technology Imperative for Energy and Climate

 

If you care about fostering prosperity in poor places while limiting the buildup of greenhouse gases in the globe’s shared atmosphere, it’s time to recognize the technology imperative that lies behind the world’s entwined climate and energy challenges. Without greatly intensified work to advance and disseminate energy choices that don’t come with heat-trapping emissions, there’s no smooth path as human populations and appetites crest in the next two generations.

The fundamental debate among the camps pressing for action on climate — even as the world expands its energy menu — is over how to facilitate the spread of non-polluting energy choices. Option one, of course, is cutting energy waste. But that is only the first baby step given the need for far more energy to supply human needs, even with spreading efficiency (recall that 2 billion people are cooking on firewood or dried dung at the moment).

An important source of insights in coming weeks will be a new series in The Times, “Beyond Fossil Fuels,” that kicked off today with a look at Portugal’s push on wind power and electric vehicles.

The real disagreement is over the best way to cut the cost differential between dirty energy sources, like coal combustion, and those that provide power without pollution. David Roberts at Grist today posted on the need to move this sweeping global challenge out of the traditional niche of environmentalism. He described how many climate campaigners are trying to shift to building a “climate movement.”

But he still tends to compartmentalize the climate challenge, saying the issue “needs to take its place alongside the economy and national security as a priority concern of American elites across ideological and organizational lines.” A different approach, to my mind, is to make smart climate and energy actions a natural, rational component of decision making in all arenas instead of keeping them in a box.

A shift toward this approach appears to be occurring at both the national and international levels. As The Times reported today, after a fruitless year championing a comprehensive new climate pact, Ban Ki-moon, the United Nations secretary general, on Monday proposed a shift to making progress on small steps in separate fields in climate negotiations. More on that approach can be found in “After Copenhagen,” a new Council on Foreign Relations paper. (I’ve sent some questions I have about that analysis to the author, Joshua Busby of the University of Texas, Austin).

There is a useful roundup of opinions by the National Journal on the role of the United States in driving energy advances.

Two of those who weighed in were Teryn Norris and Daniel Goldfarb of the nonprofit group Americans for Energy Leadership. Here’s how they began their pitch for an innovation push:

U.S. economic leadership is at a crossroads. Recent outlooks suggest we may experience long-term stagnation and unemployment comparable to Japan’s lost decade. Yet while we have suffered an economic crisis produced by our own financial sector – losing millions of jobs, trillions in economic output, and further damaging our industrial base – China has largely shrugged off the global recession with high levels of growth and self-financed stimulus, all while purchasing billions of Treasury bills to finance our own deficit.

Meanwhile, as Breakthrough Institute and ITIF documented in “Rising Tigers, Sleeping Giant,” China and other nations are establishing dominance in one of the largest growth industries of the century. According to the World Economic Forum, the global clean energy market will reach $450 billion annually by 2012 and $600 billion by 2020. Full market potential for clean energy products is much larger, with one analysis estimating Chinese market potential alone at $500 billion to $1 trillion. No wonder President Obama declared in the State of the Union, “The nation that leads the clean-energy economy will be the nation that leads the global economy.”

The United States must quickly pursue a new growth agenda, and clean energy technology offers one of our greatest opportunities. For over a decade, the primary goal of U.S. climate and clean energy advocates has been to establish a strong carbon pollution cap. This agenda is dead for the foreseeable future, and precious time has been wasted. The United States must quickly pivot from pollution regulation to an aggressive clean energy  competitiveness and innovation agenda, and we can begin with new leadership in the next Congress.

Securing our competitiveness in this sector requires a comprehensive industrial development strategy (see our report, “The Power to Compete“), including robust and targeted federal support for clean energy research and innovation, manufacturing, and domestic market demand, as well as infrastructure, education, and industry cluster formation. This is necessary for a range of technologies, including but not limited to onshore and offshore wind, solar PV and thermal, advanced geothermal, hybrid and electric vehicles and batteries, carbon capture and storage, nuclear, smart-grid, and high-speed rail.

Fortunately, this approach includes several incremental, actionable components that can garner greater support than comprehensive and controversial cap and trade. The first is research, development, and demonstration (RD&D), which is necessary to invent new clean energy technologies, components, and manufacturing processes; improve the cost and performance of existing technologies and processes; and demonstrate proof of concept for advanced and higher-risk systems. The next Congress can start by increasing federal clean energy RD&D to at least $15-20 billion per year and making the R&D tax credit permanent. This target represents a growing bipartisan consensus and contrasts with the $30 billion federal budget for health research and $80 billion for military R&D, and only $3-5 billion for energy R&D today.

These strategic federal investments, and those identified below, can be financed through a variety of modest revenue streams, such as offshore drilling royalties, an oil import fee, reduced fossil fuel subsidies, or a small fee on fossil fuel electricity. For example, an “energy security fee” of $3.50 per barrel of imported oil would raise approximately $15 billion annually; reduced fossil fuel subsidies as proposed by the administration could generate upwards of $35 billion over ten years; a utilities electricity fee could raise at least $2 billion annually, as included in the Kerry-Lieberman American Power Act; and royalties on new offshore continental shelf drilling could raise more than $100 billion over twenty years.

The Technology Imperative for Energy and Climate

1:39 p.m. | Updated
If you care about fostering prosperity in poor places while limiting the buildup of greenhouse gases in the globe’s shared atmosphere, it’s time to recognize the technology imperative that lies behind the world’s entwined climate and energy challenges. Without greatly intensified work to advance and disseminate energy choices that don’t come with heat-trapping emissions, there’s no smooth path as human populations and appetites crest in the next two generations.

The fundamental debate among the camps pressing for action on climate — even as the world expands its energy menu — is over how to facilitate the spread of non-polluting energy choices. Option one, of course, is cutting energy waste. But that is only the first baby step given the need for far more energy to supply human needs, even with spreading efficiency (recall that 2 billion people are cooking on firewood or dried dung at the moment).

An important source of insights in coming weeks will be a new series in The Times, “Beyond Fossil Fuels,” that kicked off today with a look at Portugal’s push on wind power and electric vehicles.

The real disagreement is over the best way to cut the cost differential between dirty energy sources, like coal combustion, and those that provide power without pollution. David Roberts at Grist today posted on the need to move this sweeping global challenge out of the traditional niche of environmentalism. He described how many climate campaigners are trying to shift to building a “climate movement.”

But he still tends to compartmentalize the climate challenge, saying the issue “needs to take its place alongside the economy and national security as a priority concern of American elites across ideological and organizational lines.” A different approach, to my mind, is to make smart climate and energy actions a natural, rational component of decision making in all arenas instead of keeping them in a box.

A shift toward this approach appears to be occurring at both the national and international levels. As The Times reported today, after a fruitless year championing a comprehensive new climate pact, Ban Ki-moon, the United Nations secretary general, on Monday proposed a shift to making progress on small steps in separate fields in climate negotiations. More on that approach can be found in “After Copenhagen,” a new Council on Foreign Relations paper. (I’ve sent some questions I have about that analysis to the author, Joshua Busby of the University of Texas, Austin).

There is a useful roundup of opinions by the National Journal on the role of the United States in driving energy advances.

Two of those who weighed in were Teryn Norris and Daniel Goldfarb of the nonprofit group Americans for Energy Leadership. Here’s how they began their pitch for an innovation push:

U.S. economic leadership is at a crossroads. Recent outlooks suggest we may experience long-term stagnation and unemployment comparable to Japan’s lost decade. Yet while we have suffered an economic crisis produced by our own financial sector – losing millions of jobs, trillions in economic output, and further damaging our industrial base – China has largely shrugged off the global recession with high levels of growth and self-financed stimulus, all while purchasing billions of Treasury bills to finance our own deficit.

Meanwhile, as Breakthrough Institute and ITIF documented in “Rising Tigers, Sleeping Giant,” China and other nations are establishing dominance in one of the largest growth industries of the century. According to the World Economic Forum, the global clean energy market will reach $450 billion annually by 2012 and $600 billion by 2020. Full market potential for clean energy products is much larger, with one analysis estimating Chinese market potential alone at $500 billion to $1 trillion. No wonder President Obama declared in the State of the Union, “The nation that leads the clean-energy economy will be the nation that leads the global economy.”

The United States must quickly pursue a new growth agenda, and clean energy technology offers one of our greatest opportunities. For over a decade, the primary goal of U.S. climate and clean energy advocates has been to establish a strong carbon pollution cap. This agenda is dead for the foreseeable future, and precious time has been wasted. The United States must quickly pivot from pollution regulation to an aggressive clean energy  competitiveness and innovation agenda, and we can begin with new leadership in the next Congress.

Securing our competitiveness in this sector requires a comprehensive industrial development strategy (see our report, “The Power to Compete“), including robust and targeted federal support for clean energy research and innovation, manufacturing, and domestic market demand, as well as infrastructure, education, and industry cluster formation. This is necessary for a range of technologies, including but not limited to onshore and offshore wind, solar PV and thermal, advanced geothermal, hybrid and electric vehicles and batteries, carbon capture and storage, nuclear, smart-grid, and high-speed rail.

Fortunately, this approach includes several incremental, actionable components that can garner greater support than comprehensive and controversial cap and trade. The first is research, development, and demonstration (RD&D), which is necessary to invent new clean energy technologies, components, and manufacturing processes; improve the cost and performance of existing technologies and processes; and demonstrate proof of concept for advanced and higher-risk systems. The next Congress can start by increasing federal clean energy RD&D to at least $15-20 billion per year and making the R&D tax credit permanent. This target represents a growing bipartisan consensus and contrasts with the $30 billion federal budget for health research and $80 billion for military R&D, and only $3-5 billion for energy R&D today.

These strategic federal investments, and those identified below, can be financed through a variety of modest revenue streams, such as offshore drilling royalties, an oil import fee, reduced fossil fuel subsidies, or a small fee on fossil fuel electricity. For example, an “energy security fee” of $3.50 per barrel of imported oil would raise approximately $15 billion annually; reduced fossil fuel subsidies as proposed by the administration could generate upwards of $35 billion over ten years; a utilities electricity fee could raise at least $2 billion annually, as included in the Kerry-Lieberman American Power Act; and royalties on new offshore continental shelf drilling could raise more than $100 billion over twenty years.

By ANDREW C. REVKIN/NYTimes
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