The Stimulus Package Must Include a Commitment to Green Energy
When Barack Obama takes the oath of office next Tuesday, he will have a huge pile of problems on his Oval Office desk awaiting his attention. (Thanks George W.!) You have to think, though, that the number one issue facing him will be pushing through a stimulus plan to help the economy out of the current morass. Economists from both sides of the aisle seem to agree that some kind of stimulus is necessary. While I fear partisan bickering will delay or water down the final package to the point that it doesn't address the dire problems in the economy, I am even more concerned that in the battle, an important (maybe the most important) component will be lost.
Whereas a plan like the $700 billion financial bailout worked on one level (keep the financial system from collapsing), the stimulus package should, if it's done right, work on two equal tracks: In addition to the obvious -- boosting the economy by increasing consumption via government-funded projects -- the nearly unprecedented government investment in the economy also provides a unique opportunity to reposition the country for success going forward regarding our energy policy. What concerns me is that even if not a single dollar of stimulus money goes to pork, and every penny goes to projects that will actually contribute to our society (like building highways and schools), we still could miss out on a golden opportunity, one that may not happen again for quite some time.
As a nation, we can no longer avoid the fact that from an economic, environmental and foreign policy perspective, the energy policy (or lack thereof) that has reigned for the last 60 or so years cannot be sustained. No matter how you spin the energy situation, the U.S. is a follower, not a leader. We use far more oil than we produce. We do not build vehicles that our citizens want to buy. And we don't have any national plan or commitment to address our dependence on foreign oil. It seems to me that this massive government stimulus initiative, if combined with government action and, more importantly, a commitment by Americans, can launch the United States into the forefront of world leadership on energy. But if we don't act, we will just fall behind again.
Consider these two news stories that quietly broke in the last week. Toyota announced that it is speeding up its production of green vehicles, and that it will introduce an all-electric car for sale in the United States in 2012. The car will release only 99 grams of carbon dioxide per kilometer. Even more troubling was the news that Abu Dhabi plans to spend $15 billion dollars -- to start -- to develop green energies. Realizing that oil is a finite resource, the Abu Dhabi crown prince wants to make sure his government will continue to prosper in the future energy market. The plan includes building a "zero-carbon" and "zero waste" city of 15,000 people in the next few months.
So while the Democrats in Congress complain that too much of the stimulus package is dedicated to tax cuts, and while the Republicans try and slow the stimulus train down as best as they can (especially direct aid to the states), the Japanese are jumping ahead of us in the future generation of car production, and Abu Dhabi is beating us to the punch with green energy.
Do we really want to lag behind again?
Barack Obama has said often, "This is our moment." I know I'm moving his words to a new context, but this is our moment to assert control of the next generation of energy production and use. It's time for a confluence of government and industry, rules and innovation, investment and sacrifice. It's time for the government to set standards for vehicle efficiency that revolutionize how we look at car travel in this country. It's time for the government to create an atmosphere in which American automakers (assuming there still are any in the near future) know what they have to do to take the lead in the next generation of green vehicles. And it's up to the American people to agree to the changes in habits that will allow all of these initiatives to flourish.
And none of it can happen if the stimulus package doesn't sufficiently address these issues, providing the money and direction to ensure that the United States can take the lead in green energy production and smart energy usage policies.
Luckily, it seems like Barack Obama is on board with this approach to the stimulus package and our future. On Meet the Press on Sunday, former Congressman David Bonior (of Michigan, not incidentally), an Obama economic advisor, said this:
"But I would say that if we run this--we run the program that President Obama has suggested on the spending side through a prism of a green new energy economy, there ought not to be a worker in this country, a building trades person that's on the bench. They out to be out rebuilding our schools, our highways, our bridges, our buildings, our office buildings, our autos and our trucks. All of that needs to go through a prism of a green new energy economy, because I think that's the new economy that he is striving for, the president and the Congress, and that's the one that's going to really bring us out of this."
My hope is that when the Democrats and Republicans in Congress are finished with their political turf battles, the notion expressed by Bonior survives.
As a country, we are tired of playing second fiddle to the Japanese in the car industry (with the resulting loss of jobs) and to the traditional oil-producing countries on energy. We are tired of the economic impact of our oil dependence, as well as the foreign policy decisions that result from our oil addiction. And we should all be worried about global warming and other environmental perils that have resulted from our lack of an energy policy. The stimulus package needs to do more than just jump-start the economy; it needs to make sure that as the 21st century energy world order takes shape, this time, the United States is at the forefront.
The Japanese and Abu Dhabi aren't waiting to make their initial moves. We shouldn't be, either.
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But it isn't fair!
All the republicans are trying to do is give other countries a chance to be superpowers, since we have done it for a century. We shouldn't knock them for trying to turn the US into an economic backwater, they are just being fair.
/end snark
The biggest problem is finding a KISS (keep it simple) solution. I think the folks talking solar panels have a good point, what would it cost to put one solar panel on every house and apartment in the US, and reduce power bills? This would save every American on power, reduce greenhouse gasses and dependance on foreign oil, and would be relativly fair. Currently solar systems seem to run about $10,000, if you are putting a system on every roof in a community, it will cut costs. But even if you cut it a lot, say to $5,000. $5,000 per household is 5000X100,000,000 or 500,000,000,000. Five Hundred Billion dollars, there is the whole purchase side of the stimulus right there, which is a problem.
It would cost a lot less to send an energy advisor, followed by vouchers, to every home. If you gave every American a $1000 voucher to purchase insulation services, new energy efficient appliances, or replacement windows and doors, it would quickly pump a Hundred Billion into the economy while making sure the entire stimulus was spent, and reducing energy bills.
Redesign exercise machines so they produce electricity when in use.
Every fitness center becomes a mini power plant.
Every home could be reducing its electric bill.
Zero pollution.
The solution to most of the world's problems is Human-powered Electricity.
"Redesign exercise machines so they produce electricity when in use."
Amusing. This has been thought of before. In Charles Dicken's day, this was known as the Treadmill.
It amazes me that a country that has done nothing right for 8 years. Now wants to do many things all at once. Without getting out of the mess more carefully than we go into it.
If we go GREEN and produce the exact wealth structure we will have done nothing. REIT's take corporate assets like FORESTS, then clear cut them giving Stock Owners 90% and we have no way to replant the forrest. THE EARTH DIES!
"keep the financial system from collapsing" just like saying since 911 we have stopped terrorist attacks. That is like me saying since I have not had no accident since I bought Insurance. Insurance stops accidents
"boosting the economy by increasing consumption via government-funded projects -- the nearly unprecedented government investment in the economy " YES, Since Reagan we have used only Monetary Policy and no Keyesian Economcs. Monetary Policy expands and contracts the money supply. But it has been used to transer wealth from the worker to the RICH in the last 15 years with republican policy. Keynesian Economic drove government policy up to the 80's to stimulate the economy. Unfortunately the over did it and created runaway inflation. It brought the economy back after the crash in 1929 and republicans transferrig wealth to the rich. Keynsian government spending on Butter and not Gun work during an economic down turn only!
all we need are LOANS FOR SOLAR PANELS AND A FEED IN TARIFF. why are we trying to do millions of super-complicated, environmentally harmful and economically wasteful programs (like Big Solar, Big Wind and Big Transmission) when we could green our grid and OWN THE GENERATION OURSELVES. all this talk about the "market" but WE are being excluded from the guaranteed paybacks and loans that Big Energy gets. why?
i live in CA and EVERYONE WANTS PANELS ON THEIR ROOF. all we need is the means to get them on there and to pay for them. we have legislation that allows cities/counties to LOAN us the money and use the property tax system for repayment over 20 years, so the loan stays with the property, is guaranteed to be repaid and is tax deductible. We just need the program funded and we will ALL sign up, once we get paid for clean power we produce and feed into the grid...
no dead wilderness, no eminent domain, no weird food issues, no more Big Energy Monopolists!
Yes, I'm a Californian with a residential solar photovoltaic system. My system is a bit too large. I thought that plug-in-hybrid cars would be coming along faster than they did.
Right now I'm generating $200/year in surplus electricity. All I get for it is an annual thank-you note from the power company.
I actually have room to expand my array by another 20%. I would do it, if I was getting paid for my surplus. Enact that feed-in tariff, and be sure to include existing residential solar suppliers when you do!
I must be the only one that sees these 'bailout' as code-words for pork... I assume that you can't get a hotel room in DC right now given the number of 'special interest groups' setting up shop for the big pay day. This is insane...
Gov. cannot, does not fix these sorts of issues... Obama is just another politician and while he may have 'moved' independent voters in the last election, he's not going to be able to really change the fact that when the Gov. starts writing checks (or even talks about writing checks) the crooks all run to DC.
Oil... it's cheap and efficient and we have a lot of here to be tapped... we need to drill...
Global warming... oh, you mean "Climate Change" (the name we use now given the record cold temps around the globe) can we please drop this one... really, there's no concrete evidence..
See Mitchell Bard's Profile
Wake-up, you have it backwards. There is no real evidence that there isn't climate change. Instead of just listing talking points like "there is no concrete evidence," look at the facts. Look at temperature readings in the arctic and Antarctica, ice levels, etc. Even Bush no longer denies global warming. Your "there is no concrete evidence" line is from 2002. Time to catch up.
And after the collapse of the financial markets, it's time to retire the "the market will cure all" philosophy. Yes, government should not overregulate, but it needs to regulate. It needs to prevent the kind of abuses that took place in the financial markets, and, in the case of green energy, it has the means to inject money and direction in a way that private business cannot. GM cannot make people agree to more efficient vehicles. But government can decide that the danger posed by inefficient vehicles is such taht they should not be allowed anymore.
Your position that there is plenty of oil and we should just forget about our energy problems is not only short-sighted and dangerous, but it's the exact outlook that has created the mess we are in right now.
We can't drill ourselves out of this mess. It sounds good, but there isn't enough oil there.
By the time the last global warming denier is convinced, it will be too late to fix (and the entire state of Florida will be underwater, but who cares about that except Floridians and Disney nuts?).
"needs to prevent the kind of abuses that took place in the financial markets,"
The government itself was the source of these abuses. How will the government prevent itself from repeating these offenses? Not at all, I say.
"in the case of green energy, it has the means to inject money and direction in a way that private business cannot"
Isn't this exactly how the government collapsed the mortgage market and instigated the current financial crisis? By "injecting money"?
"it's the exact outlook that has created the mess we are in right now"
Government meddling and intervention in private financial markets is indeed exactly what caused the current mess. Why then, do you propose more of this insanity?
"but there isn't enough oil there"
This lie is often repeated. If there is no oil, then there is no need for a drilling ban, is there?
Hey thanks! So you're on Bush's side on this one!!??! ha-ha... I won't tell!! That's Bush doing politics..
Point is, you line up your scientists that say we're causing the climate change and I'll line up mine that say your wrong. So without consensus (e.g., smoking cause heart disease - I'd say all agree) then why bother worrying about it? You agree that carbon is the big concern, yes? In all of recorded history 60 or so years of measuring it, humans (industry) have contributed something like (if memory serves) 4%. The ocean is the main contributor of carbon and one large volcano can do what we'd do in 10 years. Politically, without India and China on board (not likely ever) this is a total waste of time. I find it funny that since Al Gore's scare-you-movie, we've had no big hurricane issues and this year again, super cold winter where it's usually cold... which is why the left is now selling this cow as "Climate Change" and no longer "Global Warming"
Drill here & everywhere while other tech (private industry) is being refined and build a few nuke plants for cryin-out-
There is evidence, its frozen solid!
we won't have universal prosperity until we have universal, cheap, sustainable green energy....
Solar doesn't work... it requires toxic batteries and is not efficient given the need for sun... Nukes are the way to go, ask France...
Solar power works. It's working on my house right now.
And solar power does NOT require batteries. If you do choose to include batteries a part of your system, lead-acid is a fine battery chemistry for stationary objects. You don't care that the batteries are heavy if you're not towing them around on a car.
Lead-acid battery recycling is old technology and is already in wide use.
solar is the way to go....ask germany...
This stimulus package should include money dedicated to "Green Infrastructure", including solar & wind farms as well as the development of transmission lines to transfer this power to our homes and businesses. Furthermore, any new housing development or business park should require the building of a green energy power plant that will produce at least 50% of the power necessary for it's energy needs. The Stimulus package could include money for tax rebates in order to help offset the cost of these energy plants, w/ could be recouped via the energy taxes the federal government already receives or possibly an additional surcharge for the consumer.
See Mitchell Bard's Profile
All good ideas, tenzenz. To me, there has to be an overriding plan, somethign that puts programs in a position to succeed, with all the factors pulling in the same direction. Thanks for commenting.
"Toyota announced that it is speeding up its production of green vehicles, and that it will introduce an all-electric car for sale in the United States in 2012. The car will release only 99 grams of carbon dioxide per kilometer.
OK. make that two different cars. There will be an all electric vehicle for short distances and there will be a (different) gasoline car with CO2 emissions of 99g/km. Now, the last one is not much of a progress since the Prius is already spec'd at 104g/km (both numbers are green washed by the way they are being calculated, so in reality it's a lot more). It's probably just going to be a much smaller and cheaper car to cover the entry level for Toyota.
If I understand it correctly (the reports I have seen are shaky, so I have to extrapolate), Abu Dhabi plans to build a plant that strips hydrogen off the oil and takes the CO2 created in that process and pumps it back into the oil fields to enhance total yield. So the end result of that investment is MORE oil being pumped, not less. It's just that a small part of that oil is being used in an ingenious way to extract more money from it. Green that ain't.
Details matter.
We could use a couple hundred more nuke plants in the US.
actually obama campaigned on this.....c
Obama dangerous or nukes? Nukes are as safe as it gets... just ask France and others
This article is so right. Nothing can help this country more the moving off oil. But for the Abu Dhabi project i just wanna say that it is gonna fail. These dictatorships are not good at spending their money. The US has actual scientists and we need to put them to work in our system on this issue. Only we can move at the fastest of paces. With a good president that is.
With or without Govt help does anyone really think the next breakthrough in green technology is going to come from anywhere but the US? What was the last major breakthrough to come out of Europe , Asia, or the ME? The reason being is we have the most robust private system. Private companies backed my private capital competing with each other lead to all the latest innovations go back and look what Bell Labs, Xerox Parc, Ibm and silicon valley have developed. All without Govt interferen
actually, if any one country can propel the green energy movement it is china. they currently has a project to power all off grid areas online with alt energy.
europe and asia(japan) are way ahead of the usa in alt energy r and d and use.
Thats implementation, not innovation and new developmen
Bell Labs, Xerox Parc, Ibm labs etc. are mostly gone or reduced to a mere shadow of their own selves because quarter by quarter interest has taken precedent over long term planning.
Sorry, you are living in the past. And the past was that all these labs got very generous government research grants. When these grants dried up and the often less than profit oriented R&D in these places became too expensive to hide from the balance sheets, their owners cut back until there was nothing left to cut.
IBM registers more new patents per year than all of its competitors combined, but the actual point was an historic one that we have had succession of innovators that primarily if not entirely function without Gov't interference and the best shot at successful innovation in the future is in the private sector. Govt is only effective in closed market such as defense and space...
See Mitchell Bard's Profile
ccclj, nobody is talking about government taking over the innovation. Government can do two things though that the market can't. First, it can provide funds to companies that have promising products, which serves to not only boost the economy (jobs, etc.), but also serves to move along products that help society's energy needs. Second, government can come up with laws/regulations that drive demand. That is, people might not care about gas mileage on a car because at this exact moment, gas is relatively affordable. But if government legislates some kind of need for high-mileage vehicles (mileage standards, taxes on gas, etc.), it can create demand for the thing that is beneficial to society (that is, fuel-efficient vehicles).
Nobody is picking on the U.S.'s ability to innovate. But it should be a fair fight. We can't expect our guys to win when the competitors have advantages, both in money and governmental support.
You can't manufacture demand. The high tech , bio tech, pharma industries do not need Govt assistance. Venture Capitalist have plenty of money (unlike Govt) to invest in the right opportunities. They are not motivated by govt regulations or tax breaks, they are in it for one thing, profit. Govt is not efficient enough. If demand is there the private money adn innovation will pour in to solve the problem and to great extent already has. There is anenormous amount of R+D going on presently. All Govt can do is force artificial demand on what will probably be the wrong solution (like corn based Ethanol).
Everyone is so used to saying that we need better technology when green energy is mentioned, they don't stop to see how far we've come. We have all the green-energy innovation we need, to get started. What we need is a financial commitment to buy significant amounts of the green-energy technology that ALREADY exists. Economies of scale will take care of the rest.
Sorry, NOT without government help, and all of your examples support the case. Bell Labs, Xerox Parc, and IBM all grew into powerhouses on the backs of huge government research grants. Silicon Valley is the result of those projects and others, and government played a critical role in their success.
Lots of the green economy changes we need are just a matter of recognizing the need to change and putting people to work making the changes (we have the technology in place right now for building efficiencies into the power grid and the building codes, for example), but some of the technology requires a new generation of seed money to get started.
And there's no guarantee it will happen here. Right now, that seed money is getting spent elsewhere, and not here. The article is absolutely right, that has to change, or our economic goose is cooked.
Not to get all radical on you, but why not let the market decide what energy sources should be used. The last time the environuts had a lot of pull on the subject, they gave us Ethanol and world-wide food riots and starvation.
If an electrical/air powered/hydrogen whatever car is a better value than a gas powered car, people will make it for a profit because others will buy it.
p.s "And we should all be worried about global warming ...."
Ah, no we should not. Minus 22 Celcius today in Toronto and colder than that in a lot of the US and Europe. Its the sun, stupid!!!
Ethanol is an invention of big agribusiness. Please give credit where credit is due. We had enough of history rewriting during the past eight years already.
But since you have not learned the difference between weather and climate since fifth grade, I will not bother you with more facts. You might just get a headache.
See Mitchell Bard's Profile
kingcityguru, we are well beyond the market in this case. People may want not to think about the damage that oil addiction does to the economy, the environment and foreign policy, but the government has to. People haven't chosen to buy energy efficient cars, but in the same way that the government won't allow people to buy heroin, rocket launchers and anthrax, because they are dangerous to others, the same judgment is going to have to be made on vehicles that burn too much gas.
BTW, when you use the term "environuts," you lose credibility. It's no longer a discussion but a name-calling contest.
As for denying global warming, to do so, you have to go against the overwhelming tide of science, which is not an enviable argument to have to make. Global warming doesn't mean its always warm everywhere. It is about the overall temperature of the planet. Your cold day in Toronto today is not a large enough sample. It would be like arguing that Amy Winehouse is stable because she happened to get through the one gig you went to without passing out. (If that was unnecessarily mean to Ms. Winehouse, I apologize.
"...overwh
Why waste time, money and focus on this when we can control it... even if we did stop whatever your against here , China and India would be laughing all the way to the bank.
"why not let the market decide what energy sources should be used."
Sure! On one condition: every energy source must be priced according to its ACTUAL costs, including externalized ones. Collect a tax to make up the difference between the market price and the true price. Earmark the proceeds of the tax to address the externalized costs of that fuel.
Whoops! Under those rules, a gallon of gas would cost over $5.00. Don't take my word for it. That was the conclusion of the National Defense Council Foundation a right-of-center think tank, back in 2004. The price at the pump then was $1.75, about the same as now).
http://www
Their findings echo a 1990's study by the super-conservative Cato Institute, which determined that -- even before Gulf War Two started-- America's oil addiction enjoyed an annual hidden subsidy of $50 billion.
How about the true costs of coal? Uranium? Solar and wind start to look cheap.
the most effective way to create the economies of scale in the green energy movement is to make the price of petro fuels as high as possible either through taxes or a producers bourse setting prices. money talks.....
That reality should be coming along , probably by early next year. This current depression of gas prices will end up being a cruel illusion to a lot of people, who undoubtedly will rush out to get those great deals on close out suv's. What I don't understand is the failure of so much of the public and private sectors to see beyond the quarterly business cycle. Maybe everyone should be required to go back to school to learn how to think beyond immediate satisfaction.
See Mitchell Bard's Profile
Thanks for the comment, graffen48. I often lament how the world has lost sight of thinking beyond the current business quarter. It affects so many facets of life, from important things like energy policy to the destruction of the TV and music businesses. I think you are correct.
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