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We're Poised to Leave a Pitiful Legacy on Debt and Energy Crises

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There's an old movie comedy called Support Your Local Sheriff , with James Garner playing a gunslinger hired to clean up a Western mining town. When he's hired to replace the latest of a long line of short-lived lawmen, the mayor hands him a tin star with a big dent in it.

"Looks like this saved somebody's life," Garner muses.

"It would have," says the mayor, "if it weren't for all the other bullets flying in from every direction."

We thought of that when reading Andrew Revkin's latest Dot Earth blog post at The New York Times, an interview with Vaclav Smil, one of the world's leading experts on energy. They both argue that people who care about energy and climate better start caring about debt, because you can't have a clean energy economy if you're too broke to make the initial investment.

The debt crisis and the climate crisis do have similarities. Unfortunately, people have a troubling habit of embracing one and ignoring the other.

But let's start with a basic premise: they're both very, very real.

All of the federal government's budget agencies -- the Government Accountability Office, the Congressional Budget Office, and the Office of Management and Budget - use the same word to describe the long-term outlook for the federal budget: unsustainable. The long-term outlook for the national debt is daunting, on track to be as large as our total economy in less than a decade, and twice our total GDP by the 2030s. And that's not even considering the debt-induced hangover that's affecting Europe and the global economy.

Plus, the government's fixed costs are on track to overwhelm the rest of the budget. In less than 10 years, unless things change, the government's own financial report says that 90 cents of every tax dollar the government takes in will go to Medicare, Medicaid, Social Security and interest on the money we've already borrowed . There wouldn't be much left over for education, defense - or investment in clean energy and infrastructure.

The International Energy Agency used the exact same word last year to describe the global energy system: unsustainable. Scientists are convinced that we simply cannot continue to get 80 percent of our energy from fossil fuels without causing irreversible damage to the climate. And even if that weren't the case, the IEA and other experts say the world is going to have enormous difficulty just keeping up with energy demand. The Earth's population is growing, and people in developing countries like India and China are beginning to be prosperous enough to live like we do. That means we'll need a lot more energy of all kinds. Global energy demand is projected to rise by more than a third in just 20 years.

In both cases, the country badly needs to make some decisions to head off a debacle. The energy issue is usually discussed in terms of its environmental impact, which is all too real. But it poses worrisome economic dangers as well.

  • Not facing up to the energy situation means that Americans will be competing with people worldwide for whatever fossil fuels remain available--that's a recipe for higher prices for just about everything, but oil in particular.
  • Not facing up to the budget mess eventually means higher interest rates, and less flexibility for the government to meet challenges. In the worst scenarios, we could face the kind of credit crises that have devastated the economies of countries like Argentina, Greece, and Ireland.

So far, Washington has been no help at all on either problem. We've been completely unable to come up with a comprehensive energy policy, even though just about everyone agrees we need one. And don't get us started on the debt ceiling. The idea that at least some of our political leaders are willing to risk another 2008-style global financial crisis in order to avoid a tax increase is staggering.

The irony of course, is that both these problems can be solved in ways that work together. A number of economists argue that it's vital for the country to invest in areas that strengthen the economy--spending money on a smart grid and clean energy investment, for example, but combine it with a serious plan to cut the cost of entitlements like Medicare over time. Or, you could go with a carbon tax, raising revenue to close the fiscal gap and at the same time making renewable more competitive with fossil fuels. There are plenty of options.

The real risk is that we end up doing nothing while the politicians argue - which means both of them will eventually show up in full force. The question isn't whether we face a debt crisis or a climate crisis. It's whether we'll have a debt crisis followed by a climate crisis.

A world that's flat broke and up to its knees in melted glaciers is a pitiful legacy. Even more pitiful will be the realization that there were solutions available, but we didn't have enough sense to adopt them.