Update (8/14/10): A few additional voices in this argument. Over at his blog for the Council on Foreign Relations, Michael Levi argues that government investment in research isn’t enough on its own to bring clean energy to parity with fossil-fuel power, in part because unlike previous innovations like the Internet, clean energy doesn’t offer much to consumers:
There are big social benefits to clean energy, most prominently through reductions in both greenhouse gas and particulate emissions. But neither individuals nor companies have any significant reason to shift to clean energy, even if innovation closes the cost gap considerably. (There may be small exceptions for things like rooftop solar PV in limited areas, but these don’t upend the general point.) For the foreseeable future, government will still need to cover the remaining gap, either through subsidies for clean energy or by making dirty energy more expensive.
Roger Piekle, Jr. responds directly to Levi’s arguments over at his blog, making the case that the innovation policy is less about trying to directly reduce carbon emissions then in attempting to get more inexpensive energy over the long run—which will especially benefit the 1.5 billion people who lack access to power of almost any sort right now:
First, the goal of making clean energy cheaper is not so much for it to displace existing fossil energy, but to become increasingly preferred as new infrastructure in the future. As Ken Caldeira and colleagues recently argued in Science, it is future infrastructure that matters most.
Second, while it is true that you don’t much care about clean energy, there are 1.5 billion people who lack access to electricity world wide, and a big reason for that is that energy presently costs too much. These folks have a big stake in making clean energy cheaper.
Third, a related point is that by making fossil fuels more expensive you would be making energy access to those 1.5 billion more distant. There is an iron law of climate policy that says that while people will accept some price for environmental objectives, that willingness only goes so far. The key to putting a price on carbon is through the availability of cheaper clean alternatives.
Finally, there is evidence that several countries are already investing in clean energy based on pricing fossil fuels, most notably India. They are doing this not out of environmental concerns but to secure more energy at a low cost for the future. Energy demand is going to increase dramatically in coming decades, and someone is going to provide the technology and infrastructure. The US can be part of that economy or not, and investments in clean energy are a good way to make that more likely.
Oh, and because Nordhaus and Shellenberger appear to like nothing more than making mainstream greens really, really mad, they have a piece in the New Republic today on why Obama’s green jobs plan failed.
Original post: Carbon cap-and-trade is dead. You can read Ryan Lizza’s magisterial piece in the New Yorker to find out just what happened behind the scenes as the policy drowned in the Senate this spring, but the reality is that 2010 was the best chance for cap-and-trade happening, and the midterm elections will almost certainly return a Congress far more hostile to climate policy. If greens—and really anyone who cares about energy and the future of the planet, which should be most of us—want to get climate policy moving again, they’re going to need new approaches that can attract votes across the aisle. And unless Joe Romm can copy himself into every standing senator Agent Smith-style, a carbon cap, or any policy that involves increasing the price of fossil-fuel energy isn’t likely to fly. Those are the rules of the game.
So why not try an end around? That’s what three think tanks—the Democratic-leaning Brookings Institution, the conservative American Enterprise Institute and the unclassifiable Californians at the Breakthrough Institute—have tried with a new report out today called Post-Partisan Power (PDF). The policy paper calls for focusing on greatly increasing direct government investment in energy research and development—spending about $25 billion per year, up from a few billion annually now—and paying for that research by reforming current energy subsidies and potentially adding a small direct price on carbon. As the authors write in an introduction to the paper, this kind of limited but direct approach to energy should appeal to liberals and conservatives alike:
Today, few issues in American political life are as polarized as energy policy, with both left and right entrenched in old worldviews that no longer make sense. For the better part of two decades, much of the right has speculated darkly about global warming as a United Nations-inspired conspiracy to destroy American sovereignty, all while passing off chants of “drill, baby, drill” as real energy policy. During the same period much of the left has oscillated incoherently between exhortations that avoiding the end of the world demands shared sacrifice, and contradictory assertions that today’s renewable energy and efficiency technologies can eliminate fossil fuels at no significant cost. All the while, America’s dependence on fossil fuels continues unabated and political gridlock deepens, preventing real progress towards a safer, cleaner, more secure energy system.
The extremes have so dominated mainstream thinking on energy that it is easy to forget how much reasonable liberals and conservatives can actually agree on. Fossil fuels have undeniably been critical to American prosperity and development, but we can gradually move toward cleaner, healthier, and safer energy sources. Indeed, throughout history, as we have become a more prosperous nation, we have steadily moved to cleaner energy sources, from wood and dung to coal to oil to natural gas, hydropower, and nuclear energy. Our goal today should be to make new clean energy sources much cheaper so they can steadily displace fossil fuels, continuing this ongoing process. If we structure this transition correctly, new energy industries could be an important driver of long-term economic growth.
The post-partisan plan begins by boosting funding for basic energy science education—making us all more energy literate—with $500 million annually to support K-12 curriculum and teacher training, along with scholarships, research grants and fellowships. (The idea here—repeated frequently—is to do for energy research what Sputnik and the Cold War did for engineering and space science.) Then there would be $5 billion annually to establish a national network of regional energy innovation institutes, with the private sector, universities and the government working together. The Advanced Research Projects Agency for Energy (APRA-E)—an infant program modeled after the very successful Defense Department research agency, which helped come up with stuff like the Internet—would become a real boy with $1.5 billion a year, and the armed forces would play a key role in development and implementing clean energy, with billions more to appropriate. (Something they’re already doing.) Nuclear power would play a much larger role in the energy mix—the authors are particularly keen on small-scale, modular nukes, which could be more manageable to build. This would all be paid for through deficit-neutral means, either through a small carbon tax—designed not to change behavior, but just to raise money—or other electricity surcharges, much as the gas tax is used for highway construction and maintenance.
This isn’t a new argument—I wrote about America’s energy innovation crisis earlier this summer for TIME—but it is one that is getting a more respectful hearing, in light of the failure of cap-and-trade. David Leonhardt of the New York Times wrote a piece today about similar research-focused climate policies:
To put it another way, 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…
These proposals reflect 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.
But not all greens are so easily convinced. At Grist, David Roberts praised increased research funding as an important part of what should be a multi-pronged approach to climate change, but said it wasn’t nearly enough on its own:
Climate policy is not a zero-sum game. These policies work in concert. The carbon price raises the unit cost of dirty energy while efficiency and public investment drive it down. Charging polluters for their climate pollution (and removing existing subsidies to dirty energy) can help raise the money to spend on investment. Regulation can create tangible short-term benefits for the public and help drive industry to the table to negotiate legislation. All the pieces work together and there’s no reason they can’t all be pushed simultaneously at every level of government.
And at Climate Progress, Joe Romm wrote a scathing critique of the plan, mocking the idea that conservatives would be any more likely to support billions for energy research than they would to support cap-and-trade:
Now it is quite obvious to any political observer, including myself, we’re not going to get a cap-and-trade bill anytime soon — see “What are the prospects for comprehensive climate and clean energy legislation in the coming years ….” But it should also be obvious we’re not going to get a massive federal clean energy program either. In fact, conservative politicians have opposed that idea for longer than they have opposed cap-and-trade. It’s beyond disingenuous to suggest otherwise.
Is Romm right? It’s hardly “beyond disingenuous” to suggest that a more straightforward, government-focused plan to spend on energy research might have better luck with conservatives than a very complex cap-and-trade scheme. Government research programs, as the authors of the report point out, have enjoyed bipartisan support in the past. We spend over $30 billion a year on the National Institutes of Health—more than the report is suggesting we spend for energy research—and that’s not considered a waste of money. This seems like a tailored example of what David Brooks recently called the “limited-but-energetic” role for government that once had support on both sides of the political aisle.
Does that mean that the Republican Party today will support this kind of spending on energy research? That’s far from guaranteed, thanks to the corrosive growth of the rabidly anti-government Tea Party and the spread of climate denialism among Republican candidates. It’s entirely possible that a Republican landslide could lead to total inaction, a no-compromises, no-surrender ensures that nothing happens at the federal government. But this compromise plan seems to me have a much better shot with the right than one focused on carbon pricing.
So here’s the more important question: is it enough? Would the recommendations in this report lead to the kind of carbon reductions needed to avert dangerous climate change? That’s far less certain. In truth, this report isn’t about reducing carbon emissions—at least, that’s not the only aim. It’s about changing the way we produce energy and expanding access to it, but there’s no guarantee that it will lead to a certain emissions level by 2020 or 2050. And the trump card for cap-and-trade has always been that it will guarantee those carbon reductions, setting the U.S. economy on a smooth transition to lower emissions—with the market doing the work for us. An innovation-focused policy can’t do that—especially if it doesn’t include anything on energy efficiency standards or renewable energy portfolios, as Romm points out.
But if you believe what Roger Pielke Jr. calls in his new book The Climate Fix the “iron law of climate policy“—that societies won’t accept policies that raise the cost of energy, no matter how dire climate change appears—then you have to accept that carbon caps can’t guarantee those reductions either. If a carbon cap became uncomfortable, or raised the cost of energy too much, governments would likely cheat with offsets—or just ignore the cap altogether, as Canada has done with its blown targets under the Kyoto Protocol. (So much for a binding cap.) I don’t know if greatly expanded energy innovation is enough to avert disaster—that might depend on your definition of disaster. But everything that I’ve seen over the past two years on climate and energy policy makes me think that Post-Partisan Power is a pretty good place to start. And if even these fairly low-key ideas can’t break through a partisan logjam then, as Ezra Klein points out, “we’re cooked.”