The End of Magical Climate Thinking

One year ago, America's president said he was going to start a green-energy revolution. Here's why the Obama administration failed -- and what needs to come next.

BY TED NORDHAUS, MICHAEL SHELLENBERGER | JANUARY 13, 2010

There was good reason to be hopeful in January 2009 that the election of Barack Obama would bring about America's long-awaited clean energy revolution. As president-elect, Obama had started to talk about energy policy in a way that no leader of either U.S. party had before. Promising to save the country from both severe recession and industrial decline, Obama described the transformation of the United States' energy economy as a defining challenge of his presidency -- an economic and national security imperative that Congress would fail to address at the country's peril.

But the reality fell far short of expectations. The Obama administration succumbed, like many others, to a sort of magical climate thinking that promised a painless and even prosperous transition to a low-carbon future with the tools already at hand. The only official within his administration to accurately grasp the technology challenges faced, Energy Secretary Steven Chu, was sidelined at crucial moments.

Here is the back story of how the Obama administration dramatically raised and then dashed America's -- and the world's -- hopes that 2009 would be a pivotal year for remaking our collective energy future.

One year ago, in his first State of the Union address, Obama proposed a previously unprecedented $15 billion annual investment in clean energy research and development. Further, he appointed a technologist, the Nobel Prize-winning physicist Chu, as energy secretary to oversee that investment. The $800 billion stimulus, passed shortly thereafter, gave further credence to the notion that after 30 years of false starts, overblown rhetoric, and outright neglect, Congress and the president might finally get serious about remaking the United States' energy economy.

The stimulus included billions for energy R&D, infrastructure, and efficiency, and overturned the conventional wisdom that the United States would never again make big federal investments in technology as it had during the Cold War. But no sooner had the president's stimulus program demonstrated that a new way forward on climate change and energy might be possible, then the new administration relinquished its climate change and energy policy to the partisans of the past.

A new administration is always an inchoate thing, a reflection of the divergent and conflicting interests that make broad and successful electoral coalitions possible. The Obama administration was no different, and when it came to energy and climate change, a tangled text of sub rosa commitments -- to various carbon emissions targets and timetables, to making clean energy "the profitable kind of energy," to investing in clean coal, nuclear power, and solar tax credits -- lay beneath the banner headlines about clean energy investments and green jobs.

As the new administration took shape, the question of how those various commitments would be reconciled was largely unresolved. But the senior team that Obama assembled to lead the administration's climate change and energy efforts held some clues. Chu, as it turned out, was the only prominent energy technology advocate given a senior role in the administration. Virtually every other key policy role was filled by environmental regulators -- former Environmental Protection Agency (EPA) head Carol Browner as climate czar, former Browner aide Lisa Jackson as EPA administrator, and Nancy Sutley as chair of the White House Council on Environmental Quality.

Putting Browner, a former Al Gore aide, in charge of climate-change policy was payback to environmental groups and the green donors who had supported Obama's campaign. But it also signaled that, inside the White House, the clean energy investment message that the president had used to such great effect in winning battleground states like Ohio and Colorado was seen as just that: a powerful message to use in the campaign, not a policy priority.

In this, Obama was following two decades of magical thinking among both greens and liberal Democrats about energy technology. In this view, energy efficiency pays for itself, solar and wind power are already nearly cost competitive with fossil fuels, and both can quickly and cheaply reduce emissions. This Pollyanna view of fossil fuel alternatives and efficiency, which makes going green seem cheap and easy -- little more than the cost of "a postage stamp a day" -- has provided the justification for green-policy advocacy that has overwhelmingly focused on pollution regulations and carbon pricing while ignoring serious investment in energy research and development.

The price of Obama's failure to break with green climate orthodoxy is only now becoming apparent. The collapse of international climate negotiations in Copenhagen last month was just the latest evidence that efforts to regulate global pollution output cannot succeed. The Kyoto framework, which imagined that carbon pollution limits could be the primary driver of the complete transformation of the global energy economy, has irretrievably failed.

The real technological obstacles to decarbonizing the global economy today represent an insurmountable obstacle to political efforts to limit carbon emissions. Until policymakers get serious about addressing the central technological challenge, all efforts to control carbon emissions are doomed.

RAVEENDRAN/AFP/Getty Images

 SUBJECTS:
 

Ted Nordhaus and Michael Shellenberger are authors of Break Through: From the Death of Environmentalism to the Politics of Possibility and founders of the Breakthrough Institute.

F1FAN

11:03 AM ET

January 14, 2010

Or Maybe

Carbon dioxide emissions have nothing to do with climate change.

 

BLUE13326

1:44 PM ET

January 14, 2010

The only way forward is to

The only way forward is to combine energy exploration of fossil fuels with clean energy technological development, and present it as a national security issue. The notion that we should be the only advanced industrial economy that doesn't engage in significant energy exploration, and doesn't consider nuclear power is absurd; only a leftist academic could see such a scheme as reasonable.

This is one of the areas where McCain was much better than Obama.

 

ALEX 77

3:44 PM ET

January 14, 2010

More of the same from S & N...

Schellenberger and Nordhaus' entire raison d'être is to advance the proposition that renewable energy technologies are currently too expensive to meaningfully displace high carbon energy sources. They do not make this claim in good faith, and they are not motivated by mitigating climate change or commercializing renewable energy technologies.

The mission of this argument is to indefinitely delay deployment of existing technologies at scale. Its broad acceptance is critically important to financial beneficiaries of the current high carbon energy paradigm, and they will continue to fund S & N indefinitely in this mission.

The cost of renewable energy will never be low enough, and the cost of fossil fuels will never rise high enough, for them to cease advancing this specious claim. "More research and development!" is a hue and cry that keeps on giving, because it sounds as though it is serious in addressing the energy / climate crises, whereas it is in actuality only an indefinite delaying tactic.

The low costs achieved by fossil energy are due to the massive subsidies these industries receive from taxpayers, as well as their ability to externalize their environmental costs. To make a true cost comparison between various energy types, these factors must be considered, which S & N have and will never do.

It would completely undercut the core of their argument, and give the lie to their conclusions and motivations.

Foreign Policy does its readership a disservice by publishing this piece by Schellenberger and Nordhaus.

 

FREETRADER

9:34 PM ET

January 14, 2010

Nonsense

I don't particularly have a dog in this hunt, but if there is anyone showing bad faith here, it seems to be you. The authors write a fairly straightfoward narrative that makes it obvious that it is the political process that is to blame here, and they - rightly - note that despite all the nice talk, no country, including the US, is willing to pay the price to make renewabe fuels price competitive -- today. I suppose if you think that Stephen Chu is a shill for the coal lobby your view might have some credence, but he was the guy who said $70/ton was the right price, not the $15/ton agreed to by the administration. By what mechanism do you propose to displace coal and oil in the marketplace? Or is your 'good faith' enough to make it happen?

 

MELHARTE

3:11 PM ET

January 16, 2010

Adaptation to Climate Change Impossible, Market Manipulation Key

Freetrader may not have a dog in this, but he also has no sense of history, which shows time and again how civilizations DO NOT adapt to environmental changes -- Easter Island, the Mayan civilization are just microcosms of the catastrophes in store for humanity if we labor under the illusion that we can adapt to far greater environmental perturbations underway than those failed civilizations ever experienced, and yet failed to adapt.

S&N may be accurate in their political analysis but as Alex77 points out, grossly inaccurate in their portrayal of technological hurdles and the expense of clean renewable energy, and hence, the expense of transitioning to clean energy economies globally, whatever their motivations.

So far the legislative process has shown that Cap n Trade, & carbon tax plans can be deformed to suit short-sighted greed of the fossil fuelers. Let's make clean energy cheaper instead, since both Congress and the public prefer carrots to sticks. Simply shift fossil fuel subsidies away from fossil fuel industries (and tax breaks for the rich) and use it to subsidize windfall profit tax breaks on the sale of energy efficient and conservation products, and clean renewable energy and attendant products. Let the market pick the winners, and we all win.

We write about this in our book at www.CoolTheEarth.US

 

MELHARTE

7:17 PM ET

January 16, 2010

addenda to Market Manipulation Key

Clarification: nix the word "windfall". The idea is to redirect fossil fuel subsidies towards subsidizing a program that gives tax breaks on the profits of those successful marketers of products that promote energy efficiency, conservation and the use of clean renewable energy.

 

M WILK

9:18 AM ET

January 15, 2010

Odd that Europeans Use about 1/2 Energy We Do per Capita

While I am all for continuing long term research into new energy, I don't understand the claim that currently available technolgy for reducing energy usage is uneconomic. Why then can Europe and Japan have advanced, prosperous democratic societies and use about 1/2 the energy per person that we do? We continue to waste incredible amounts of energy because we use energy like we are about to discover a new Saudi Arabia within our borders.

 

HSCHMIDT

3:40 PM ET

January 15, 2010

Look at the cost

If you had to pay 8$ for on gallon of gasoline (it is regular price in most EU countries), you would save energy, too. Similar goes for electricity.

But saving ourselves to death has never been any solution. I believe that the mankind is intelligent enough to adapt to the new kind of world climate, whatever it might be a 100 years from now. We have survived all natural catastrophes of which some where far worse than the supposed global warming. I suspect that most 'alarmists' simply underestimate the rest of the humanity. We will find a solution, and it will be totally different from anything that seems logical today. Look at how different the world is compared to what we had just 100 years ago. It is an insult of human intellect to extrapolate our today's views and assume that our great-grandchildren will be only as primitive as we are.

So, global warming or not, it is not worth it to turn our world into one giant gitmo in which our every single step is limited by a backward-oriented energy policy. Why not look forward? This attitude has worked well for millenniums, and I do not see the reason why it should fail us now.

 

CARROL

8:46 PM ET

January 15, 2010

I think that we need clean

I think that we need clean energy revolution. It is one of the most important issues of nowadays. Paper Writers wrote a lot of articles concerning this field. But the problem still exists.

 

OBIE

3:26 PM ET

January 16, 2010

Why Either/Or?

This article is dead-on in some aspects, but the authors are engaging in rather silly either/or posturing. Yes, we certainly need more R&D, but we do also need to send a price signal to more efficiently allocate that R&D. If the goal is to make clean energy economically competitive with fossil fuels, we have two options: we can invest to make clean energy cheaper, and/or we can interfere in the market to promote clean energy at the expense of fossil fuels. We should certainly do the former. As to why we should do the latter, we can point to climate change, or we can also point to the artificial subsidies given to fossil fuels (i.e., much of our military budget), or to the implications of energy dependence. So we should be lowering the price of clean energy through investment, while also raising its price through some market interference.

Now, what sort of market interference? I agree that the cap-and-trade bill is a waste and shouldn't be passed (and whereas I think the healthcare bill is a least-worst-option situation, Nordhaus and Shellenberger make a decent argument that this is a worse-than-the-status-quo bill). But should the crappiness of this one bill doom any attempt to establish a carbon market? I don't think so. I happen to think that the carbon tax is less politically unviable than it's assumed to be, and that we should give it a shot. It would have to be essentially revenue neutral (although some money would need to be plowed back into R&D) so you'd put money back in the payroll tax. The upside of this, politically, is that if a future administration tried to lower the carbon tax they'd have to raise payroll taxes (tough) or increase the deficit (also tough). Legions of economists have demonstrated that the carbon tax is a much more efficient policy than cap-and-trade (Greg Mankiw is the cheerleader of this squad, the Pigou Club).

The final point is that R&D is harder than just pushing a button and making research happen. I haven't read the Chu piece, but when it comes to clean energy, we have so many options, and so many areas that need improvement, that I can't imagine the government is the best provider of funding. Maybe for solving specific problems, but for finding cheap solutions and cost-cutting mechanisms--you want the government to do that? See this Megan McArdle post for why we can't just talk idly about a green Manhattan Project:http://meganmcardle.theatlantic.com/archives/2008/11/manhattan_no_more.php

 

OBIE

5:20 PM ET

January 16, 2010

edit: oops

This sentence should have read: So we should be lowering the price of clean energy through investment, while also raising its competitors' prices through some market interference.

 

RCTHWEATT

1:05 PM ET

January 17, 2010

Like Obie, I'm a fan of a

Like Obie, I'm a fan of a carbon tax rebated in payroll tax reductions- shown on the pay slips-versus cap and trade. Most Americans realize the long term trend in fuel prices is up, anyway. However, the clear losers-rural states, exurban real estate, long haul trucking, the oil and coal companies-currently probably have the muscle to stop it.
The crucial thing now, therefore, is to enable the scaling of green power generation; once this has happened, green power will be itself a lobby, able to compete for legislators with the oil and coal lobbies; the more so if, like weapons programs, it is spread over as many constituencies as possible.
The way to accomplish this is to guarantee a market for the power- capital will not be a problem; with ordinary due diligence- good management and engineering- investors will make money. We might see a bubble, in fact.
So- do we need years of basic research first? Not if the thermal solar guys are right-''give us the area of New Hampshire in the Southwest and we'll power the country'(if memory serves)-what's at issue are the practical engineering problems which only get solved in scaling, which private companies probably are best equipped to handle.
The R&D needed is in the batteries, to enable this power to displace fossil fuels in transportation as much as possible. Electric delivery trucks were common in the 1920s; why wouldn't updated versions be practical?

 

SHANSON

11:26 AM ET

January 19, 2010

WRI response

The World Resources Institute has responded to this piece: http://www.wri.org/stories/2010/01/response-end-magical-thinking

 

DAVID44

2:42 AM ET

January 20, 2010

The Technology Exists

"We simply do not have low-carbon technologies today that can at large scale replace fossil fuels at a cost that any political economy in the world is willing to impose upon itself." Wrong.

Ironically, the technology to address our energy dilemma has existed since the 1960s. The Molten-Salt Reactor Program at Oak Ridge National Laboratory proved the feasibility of the liquid fluoride thorium reactor (LFTR). First proposed by R.C. Briant of Oak Ridge in 1951, the liquid fluoride reactor was radically different from other reactors that relied on solid fuel and has tremendous safety and performance advantages over solid-fueled reactors, as well as a remarkable versatility in potential fuels. A proof-of-concept fluoride reactor was built and operated in 1954 at Oak Ridge. Dr. Alvin Weinberg, the director of ORNL and the inventor of the solid-fueled light water reactor (LWR), recognized the remarkable potential of the fluoride reactor and was particularly impressed with the ability of the fluoride reactor to safely and efficiently use thorium which unlike uranium, isn't useful in making weapons.

Weinberg was able to win funding for a second fluoride reactor of much-improved design capable of stable, self-controlling operation without control rods, and with strong passive safety features.: the Molten-Salt Reactor Experiment (MSRE), which was built and operated by ORNL from 1965 to 1969. However, the thorium MSRE and fluoride reactors in general could not fulfill the most important mission of the Atomic Energy Commission in those days: the production of weapons-grade plutonium. The MRSE was abandoned and because of his concerns about the safety of solid fuel reactors which were the politically favored technology, Weinberg, one of the greatest minds in nuclear physics and reactor design, was fired.

Thorium is poised for a renaissance and, in addition to its tremendous potential in LFTRs, it can be used in existing solid fuel reactors without significant modification. Read more here:
http://pubs.acs.org/cen/email/html/8746sci2.html
http://blogs.howstuffworks.com/2009/12/01/how-a-liquid-fluoride-thorium-reactor-lftr-works/
http://www.energyfromthorium.com/forum/index.php