Global Warming? That’s the Least of It

With the fight about the reality of global warming settled for all but a few diehards, a fight among the winners — scientists, environmentalists and policy experts — has broken out. But, it’s all good for the renewable energy industries.

The instigators in this “fight” are two young environmental iconoclasts named Michael Shellenberger and Ted Nordhaus. They challenged the establishment enviros with an essay called “The Death of Environmentalism” in 2004.

Now they have developed the ideas in a new book, “Break Through:From the Death of Environmentalism to the Politics of the Possible,” which subordinates regulation and carbon-trading to massive government investment on a scale of Apollo, the Manhattan Project, not to mention Iraq.

S&N, as they have become known to those they torture, think the price of carbon can never be high enough to make the non-carbon alternatives competitive with cheap oil and coal. Why? Prices on the order of $400 to $700 a ton, which they say are needed, would do real damage to the economy and cause a populist rebellion against high energy prices.

Current carbon price proposals in Congress are in the range of $35 a ton. Europe’s experience with carbon trading yielded roughly the same price and no carbon reduction. They look at carbon taxes in much the same way.

What so upset leaders of the clean energy movement, such as David Hawkins of the National Resources Defense Council, and Joseph Romm, who ran the Clinton Administration’s renewable energy program, is this:

S&N, as they see it, are siding with President Bush, Exxon, novelist Richard Crichton, Danish contrarian Bjorn Lomborg and the other “delayers and deniers.” We don’t need a massive research and development program, the critics say, we have the technology now. We don’t need technological breakthroughs. What we need is a market for the technology we have.

Many readers of REA would probably agree. As Adam Browning of Vote Solar Initiative put it: “Once California stepped up with a $3.3 billion, 10-year program of declining incentives and addressed the market barriers (interconnection, net metering, and rate design), they established market certainty—and investments in the solar industry have gone through the freakin’ roof.

I just got back from Solar Power 2007. Five years ago, the conference drew 200 be-sandaled people to a dingy ballroom in Reno. This year, they had to cut off registration at 12,500, and conference sessions were a sea of blue suits.”

Yet, it is clear that Nordhaus and Shellenberger are neither delayers nor deniers. Their alarm about global warming is as urgent as that of Al Gore. Where they differ is that they think Americans won’t respond to a message of doom and gloom. Much of this is coming from the authors’ background as political pollsters. They say polling and social science research show that apocalyptic warnings “tend to provoke fatalism, conservatism, and survivalism among voters – not the rational embrace of environmental policies. … research correlates fear, rising insecurity, and pessimism about the future with resistance to change.”

And change is needed on a vast scale. Say S&N: “U.S. dropped its already modest $8 billion (government investment in renewables) in 1980 to $3 billion in 2005. Given this, it’s understandable that energy is the least innovative sector of the economy.” They estimate the annual investment should be $15 to $30 billion, broadly defined to include R&D, deployment, procurement, education and infrastructure.

Where would the money come from? Here’s the role for regulation and carbon trading. Auctioning emission permits to polluting firms could generate $15 billion or more per year. A tax on carbon could generate a similar amount. A $300 billion investment over ten years would, according to one study, generate an additional $200 billion in private capital.

However, the UK firm New Energy Finance estimates that this figure would be reached by 2013 if the present rate of 17% annual growth of VC and other equity investment continues.

If the enviros have miscast S&N and delayers and deniers, so have the authors misread the environmental movement as preachers of material sacrifice and austerity. This chestnut has been a standby of the status quo fossil fuel industries for decades (Remember the 70s bumper sticker? “Let them freeze in the dark”) All this while environmentalists led the charge for a new energy era from the beginning and continued through the wilderness of the cheap energy 80s.

Despite this, environmentalists, for all their successes, are seen by much of the public as more protective of trees and creatures than people-elitists who’ve got theirs and now want to sit back and enjoy the scenery.

The answer, according to S&N, is technological and market breakthroughs that will make clean energy as cheap as dirty energy. Even if economies were to become more efficient, to bring all of mankind out of poverty, they figure, we would still need to roughly double energy consumption by 2050 and triple by century’s end. This while simultaneously cutting global greenhouse gas emission in half (and about 80 per cent in the US) so that we can avoid the worst consequences of climate change.

Regulation alone, say Shellenberger and Nordhaus, won’t do it. “We did not invent the Internet by taxing telegraphs or the personal computer by limiting typewriters. Nor did the transition to the petroleum economy occur because we taxed, regulated, or ran out of whale oil. Those revolutions happened because we invented alternatives that were vastly superior to what they replaced and, in remarkably short order, became a good deal cheaper.”

As I read these bad boys, they don’t dismiss existing technology. As in the 70s, renewables are booming because of high oil prices. But anyone who has priced a rooftop array of solar panels lately knows: this won’t be a mass consumer item until prices, even net of rebates and tax breaks, come down.

What I found especially valuable in “Break Through” was the debunking of the myth that all worthwhile change in the economy happens in the market place. And the government must not pick winners and losers. S&N cite the government-created computer and Internet industries which dominate, in one way or another, modern economies:

“In the roughly five years that the federal government guaranteed the market for microchips in the 1960s, the price of a microchip came down from $1,000 to $20. A similar federal effort in the 1980s saw similar improvements in price and performance.” Denmark, they add, did this for wind energy in the 1980s and 90s.

Because so much American innovation came from strategic military investment in technological innovation, it’s appropriate that Shellenberger and Nordhaus are calling for a new vision of “American Power.” They turn the Al Gore and the environmental movement argument on its head: we remain the world super power by leading the way to a new non-carbon energy economy.

That is the way to the military security and economic revitalization we are looking for. And, by the way, we save ourselves from global warming.

Mark Braly was energy advisor to the mayor of Los Angeles during the 70s energy shock, author of the city’s prize-winning energy plan, and president of a State of California non-profit corporation which made loans to renewable energy businesses. Now retired, he is a City of Davis, California, planning commissioner working on the city’s zero-carbon program.

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