Archive for January, 2010|Monthly archive page
The Potential for Solar is There
Senate Environment and Public Works Committee January 28th, 2010
No one is against solar. The potential for job creation and energy production is undebatable. The only thing that needs to be figured out is the details. Furthermore, the question also remains on what to do with conventional energy sources. Sen Inhofe stated in his opening statement that to promote clean energy, it is not necessary to hammer at fossil fuels. Energy companies invest in renewables by themselves. He believes that cap and trade is not the way to go and he stated that there just aren’t enough votes. Sen. Barrasso partly reflected this view by saying that new requirements on fossil fuels would be burdensome.
ARPA-E, Jobs and Beating China
House Science and Technology Commitee Jan 27th, 2009
As the title suggests, the general topic revolved around three core issues. The Advanced Research Projects Agency – Energy (ARPA-E), creating jobs and beating China. This hearing was in essence a one year progress report of the ARPA-E whose purpose is to promote and fund research and development of advanced energy technologies. It’s modeled after the Defense Advanced Research Projects Agency (DARPA) which gave us the internet and GPS.
More from the SOTU (emphasis added):
They don’t understand why it seems like bad behavior on Wall Street is rewarded, but hard work on Main Street isn’t; or why Washington has been unable or unwilling to solve any of our problems
The Federal government did a bail out, but didn’t nationalize, or set conditions on executive pay. Today Wall Street and the banks have recovered much more then the public at large. So how else are people supposed to see things?
Obama did a good job laying out a vision for improvement moving forward, but there’s no point in soft selling the last year.
President Obama’s explanation of why we got into the budget hole:
At the beginning of the last decade, the year 2000, America had a budget surplus of over $200 billion. (Applause.) By the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade. Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program. On top of that, the effects of the recession put a $3 trillion hole in our budget.
So to review: generalized tax reductions, unfunded wars, economic recession and medicare expansion are the drivers of increased federal debt. And his spending side plan to address the debt issue is to freeze spending except for “national security, Medicare, Medicaid, and Social Security”. All the stuff that didn’t contribute to the problem needs to be cut back.
The freeze proposal contributes to the false belief that runaway government spending is primarily related to some bureaucrat in Interior, Agriculture, Energy, HHS, or HUD successfully talking Congress into spending ever greater amounts of money into their programs. That’s just not what’s happening.
We need to fit solutions to problems or else long term problems just won’t get solved.
This Morning Matthew Yglesias put forth the following scenarios to describe what happens when Obama’s proposed spending freeze gets to Congress:
Scenario one is that self-proclaimed deficit hawks like Kent Conrad turn out to like farm subsidies, decline to implement those cuts, and pass a budget that doesn’t actually freeze spending. Then Obama gets to chide them, and say it’s not his fault congress is so spendy.
Scenario two is that self-proclaimed deficit hawks turn out to like farm subsidies, and Obama launches a big political crusade on behalf of his cuts, threatening to veto anything that doesn’t come close to the spirit of what he’s proposing. That would be . . . interesting.
Scenario three, the really troubling one, is that self-proclaimed deficit hawks turn out to like farm subsidies, and Obama draws a line in the sand over the concept of a freeze, while being flexible about the details. Under that scenario, the weak claims don’t get cut and instead the politically powerless need to bear the brunt of the burden of a tactical political gambit.
Last, though probably least likely (call it Scenario Q) the administration has actually tried to draw up what it thinks is a politically realistic list of spending cuts that doesn’t touch the most famously untouchable areas of the budget. I don’t even have any idea what that would look like.
I doubt any of these scenarios exclusively sum up what the Administration is trying to do or what will actually happen. Whatever these proposed cuts are, the Administration almost certainly will include both realistic and unrealistic cuts.
As for the third scenario about politically powerless budget claims bearing the burden of political gambits, it’s already happening. Just nobody, left or right, thinks that good budgets claims match up with political power. So if you change the math regarding available funds then good programs hit.
More interesting information from Jason Chen on Cradle to Consumer products
We’ve got some interesting hearings this week on clean energy and budget issues we’ll be covering on the blog.
Andrew J. Hoffman, a Professor of Sustainable Enterprise, recently posted an article titled A New Era of Climate Change Consciousness in which he presents an interview with David Hone, Shell’s climate change advisor. There is one excerpt I would like to point out in which Hone is asked his opinion on climate change policy.
Q. Hoffman: How important is the Senate bill on climate change (sponsored by Kerry Boxer) to ongoing action on climate change? What happens if it does not pass? Do you think the U.S. Senate is critical to global action on climate change?
A. Hone: Whether it is Kerry-Boxer or Waxman-Markey or a hybrid isn’t overly important — what is important is that the Congress delivers a clear and unambiguous piece of legislation designed to drive the economy along the emissions reduction pathway that President Obama has now announced. Ideally this should be a market based cap-and-trade approach as this delivers the outcome at lowest overall cost to the economy and provides business with the clear price signal that it needs to underwrite investment. In answer to the second part, yes, the U.S. is pretty important in the grand scheme of things. Just look at the change in overall momentum on this issue under the new administration, not only inside the USA, but also outside. Without a clear direction from the USA, adding to that already provided by Europe, the world could struggle to address the issue of climate change.
Seeing how global warming mitigation is inseparable from the business sector, it is crucial to seriously consider what businesses think. I’m not trying to imply that protecting the environment is something that should be solely left to the private sector, I’m just saying that they should have a big voice at the table. Therefore, we should consider what Hone said in this interview that it does not really matter which bill gets passed so long as we pass something.
However, we also need to keep in mind that what businesses want and what environmentalist think is necessary for a successful cap and trade are two different things. Here is a chart showing just that. On one side you have the suggestions from the US Climate Action Partnership which is a group of mostly businesses (including Shell) and a few environmental organizations. On the other side you have the suggestions from the Friends Committee on National Legislation.
1. A significant portion of allowances should be initially distributed free to capped entities and economic sectors
2. Policies to mitigate cost to people and business
3. 3 billion tons of offsets
4. Regulation Local Distribution Companies
5. No mention of price floor
6. No mention of reserve pool
FNCL’s 6 Keys To Cap and Trade
1. Auction 100 percent of the pollution permits
2. Rebate the majority of revenue back to the people
3. Eliminate or strictly limit offsets.
4. Cap at the first point of sale
5. Create a price floor
6. Create a permit reserve pool
In conclusion, I think many people agree that we need to pass something, but it has to be effective. What businesses want might jeopardize the efficacy of a cap and trade system and while they should have a big voice at the table, we must keep in mind that ultimately, businesses and environmentalist have different priorities.