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Why We Need Uncle Sam

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New York -- Perhaps it's not surprising that the audience of investors at this year's CERES Climate Risk Summit would give the day's only standing ovation when AFL-CIO President Richard Trumka pledged organized labor "to work together with others to shape a process for how we are going to address climate risk by putting America back to work, how we are going to build a smart grid and retool our vehicle fleet, catch up with our foreign competitors on high speed rail and wind and solar, retrofit coal plants and commercial buildings and modernize industry...."

But Trumka, while stepping up the climate plate, also made it clear that achieving his goal required that investors and society-at-large to step up to the inclusiveness plate. "The truth is that in many places -- and not just places where coal is mined -- there is fear that the "green economy" will turn into another version of the radical inequality that now haunts our society -- another economy that works for the 1% and not for the 99%."

Trumka's speech was remarkably direct, raw and honest. I asked one conservative climate advocate at the Summit his reaction. He commented that he was going to try to use it with his community, by saying, "If the President of the AFL-CIO can tell the truth even if it is painful for some of his community, why can't we?"

Trumka's speech was not the only good news. Investors, who for a long time were convinced that without a price on carbon they couldn't shift their investment and go short on carbon, are changing their minds. Kevin Parker, head of Deutsche Asset Management, told the audience that a price on climate-warming carbon emissions would be "nice to have" but not essential.

A major theme for many of the speakers was that the private sector both could and must move without waiting for government leadership. But at the same time, a presentation from Bloomberg New Energy's Ethan Zindler showed that 2011 had been the year when investment in clean energy began to recover from the Great Recession -- but only because of the flourish with which the Obama administration's green-technology stimulus ended.

And it's clear that the fossil fuel industry sees government leadership as its biggest threat. Even as the UN Deputy Secretary General was warning investors against "putting all our eggs in the government basket" because "The carbon-burning economy is tomorrow's Rust Belt," Koch Industries was gearing up a major ad campaign against federal government encouragement for clean energy, booking $5 million dollars worth of TV ads designed to further inflate the ginned-up conservative outrage over the bankruptcy of Solyndra. Needless to say Koch won't run a similar series decrying the waste of four times as much money on the brand new Great Lakes Spiritwood coal-fired power plant, also built with public funds -- and shuttered the day it opened because coal is no longer competitive as a way of generating electrons. The opposite problem dogged Solyndra, which simply lost its cost edge as the price of solar panels kept racing down. No, government funding for fossil fuel projects that don't pan out is investing in American greatness -- and helping innovation out is a scandal!

Trumka made it clear that he knows that government leadership has to be part of the solution -- and that the fact that Congress is currently completely controlled by Big Carbon and factions indifferent to mass unemployment is a major problem. So while private sector leadership is both inspirational and essential, it's not enough. "Companies," as Dow's Andrew Liveris warned last spring, "can't compete with countries." The U.S. government will need to step up to the plate if we are going to have the kind of rapid, inclusive, low-carbon prosperity that the Investor Summit gathered to celebrate.

 

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