Updated: This post was originally published on January 1, 2012. It was updated on January 27, 2012 to reflect the announced closure of six coal-fired power plants in Ohio, Pennsylvania, and Maryland.

Two new federal air pollution regulations are expected to spur the closure of up to 69 aging, inefficient, coal-fired power plants, reducing both harmful air pollutants and emissions of the climate destabilizing greenhouse gas, carbon dioxide (CO2), according to an AP survey of US power plant operators and a preliminary Breakthrough Institute analysis of the likely impacts on CO2 emissions.

According to the AP survey, 31 coal-fired electricity generating units at power plants in a dozen states are expected to close rather than face costly upgrades to comply with a pair of new EPA regulations designed to curb emissions of smog-forming pollutants and toxic smoke stack emissions. These plants are joined by four plants in Ohio that were formerly classified by the AP survey as "at risk for closure" and two plants in Pennsylvania and Maryland that were not on AP's list. These units have a combined nameplate capacity of 15,532 megawatts.*

Up to 32 additional coal-fired units with a combined 9,714 megawatts of capacity may also decide to close, as the costs of compliance with the EPA's recently enacted Cross-State Air Pollution Rule, designed to curb air pollution in states downwind from coal-fired power stations, and the new Mercury and Air Toxics Rule announced this week both take effect.

While the purpose of these regulations is to reduce harmful pollutants and improve public health, closure of these aging plants will also lead to a 1.4 to 4.4 percent reduction in US electric power sector emissions of carbon dioxide (CO2), according to an analysis completed by the Breakthrough Institute. These air pollution regulations are thus a prime example of the ongoing success of pragmatic, "oblique" strategies to reduce greenhouse gas emissions.

If these shuttered, fossil-fueled generating units are replaced by zero-emissions renewable or nuclear power plants, total US power sector CO2 emissions would fall by up to 4.4 percent from 2010 levels (equivalent to a 1.8 percent reduction in total 2010 US CO2 emissions).

The net reduction in CO2 emissions would be reduced if closing coal-fired plants are replaced instead by generation from natural gas power plants, which are expected to significantly increase their share of US electricity generation in the coming years. Electricity generated by a natural gas combined-cycle power plant emits less than half the carbon dioxide as a typical coal-fired power plant. As such, we estimate that replacing all the retiring generation with electricity from gas-fired plants would reduce US power sector emissions between 1.4 and 2.6 percent, relative to 2010 levels, depending on the number of power plant closures. That would be the equivalent of a 0.6 to 1.0 percent reduction in total US CO2.

The new federal air pollution regulations are thus likely to indirectly result in modest but noticeable reductions in CO2 emissions, with the precise impact depending on the number of power plant closures and the replacement electricity sources.

As we argue along with our Hartwell Group colleagues in the July 2011 report, "Climate Pragmatism," these "oblique" pollution control measures can work to reduce both conventional pollutants and greenhouse gas emissions without relying on climate mitigation as the central justification.

The enforcement of this pair of new EPA air pollution rules is thus one small, successful example of the kind of "no regrets" pollution reduction policies that can achieve near-term reductions in carbon emissions.

37 coal-fired generating units are slated for closure as a result of the new EPA rules:

32 more coal-fired generating units are at risk of being shuttered due high mercury content:

*2006 emissions figures. Data: sourcewatch.org. All other data from Sierra Club Beyond Coal database.
**When AP and EIA data on capacity differed, we used EIA figures.

*Note: two additional gas-fired generating units with a total capacity of 129 MW also made the AP's list of likely closures (Fox Lake in MN and Anadarko in OK). These plants are excluded from this analysis however.

Note on methodology: these calculations are preliminary estimates based on available data for power plant CO2 emissions drawn from a variety of available sources. CO2 emissions data are available only at the power plant level. If a power plant has multiple generating units, we apportion CO2 emissions to the specific generating units expected to close based on their share of the power plant's total nameplate capacity. As different generating units operate at both different efficiencies and for differing amounts of time each year, this methodology may either somewhat under- or over-estimate the CO2 emissions associated with a given generating unit. More precise results would require obtaining data on heat-rates and capacity factors or annual generation for specific generating units at each multi-unit power plant. (Please contact alex@thebreakthrough.org if you have access to additional data that could be used to refine this analysis.)

Visit almost any city in the US or elsewhere today, and you are likely to find restaurants from all corners of the world: Indian, Thai, Italian, American, you name it. Clearly, gastronomical diversity within cities has increased hugely over the past couple of centuries. Now go to a city in another country -- and the range of cuisines on offer is likely to be nearly identical. This is a hallmark of globalization: increased diversity locally, decreased diversity globally. As Breakthrough Institute Senior Fellow Erle Ellis and colleagues show in a recent paper, the same phenomenon also applies to plants.

This long-held neglect of species deemed to be out of their place has become increasingly untenable in the last decade. In 2003, Dov Sax and Steven Gaines showed that, contrary to conventional wisdom, species richness had in fact increased in many regions -- that is, if you count the immigrants too. The reason is simple: extinctions of native species is in most cases less significant than the number of new arrivals, leading to a net increase in species richness. On many oceanic islands, for example, the number of plant species has doubled as a result of species introductions. In California, the diversity of reptiles, amphibians and freshwater fish is higher today than it was before European colonization.

Getting a good picture of global patterns of species immigrations and extinctions has, however, proved elusive. Erle Ellis thus writes on his blog that "What we don't know about the global patterns of plant biodiversity exceeds what we do know." To address this paucity of knowledge, Ellis and his colleagues constructed a ground-breaking model -- the "the first spatially explicit integrated assessment of the anthropogenic global patterns of vascular plant species richness" -- which gives us some rough indications of the global trends. The results surprised them. Writes Ellis:

The big story of plant biodiversity in the Anthropocene is not about loss at all. Our model predictions indicate that human systems have caused a net increase in plant species richness across more than two thirds of the terrestrial biosphere, mostly by facilitating exotic species invasions.

The result is 

increasingly globalized and homogenized anthropogenic plant communities characterized by reduced native richness but enriched in species at the regional landscape scale by exotics drawn globally from the relatively small pool of species that either tolerate or benefit from the novel anthropogenic habitats created by human residence and use of land.

Just as with restaurants, then, biotic globalization is a double-edged sword. But since most ecosystem processes operate on a local or regional level, the increased species richness should in principle be good news for ecosystem functioning and resilience, both of which are related to diversity (although species richness is a blunt measure of it). Empirical support for this thesis is provided in an upcoming paper by Joseph Mascaro and others, who show that in lowland Hawaiian rainforests,

aboveground biomass, productivity, nutrient turnover...and belowground carbon storage either did not differ significantly or were significantly greater in novel relative to native forests.

This leads them to conclude that

Ecosystem processes will continue even after dramatic losses of native species diversity if simple functional roles are provided by introduced species. Because large portions of the Earth's surface are undergoing similar transitions from native to novel ecosystems, our results are likely to be broadly applicable.

The implications of these new findings turn the dominant thinking about human impacts on biodiversity and ecosystems upside down, as -- according to Sax and Gaines -- the "assumption of much current research is that diversity is declining at all spatial scales."

Ellis's et al's new piece adds to the weight of reports challenging this apparent misconception. As the title of their paper indicates, in the Anthropocene, all is not loss. Perhaps it is time to follow the advice of ecologist James Brown (cited here):

It has become imperative that [as] ecologists, evolutionary biologists, and biogeographers ... we use our expertise as scientists not for the futile effort to hold back the clock and preserve some romantic idealized version of a pristine natural world, but for a rational attempt to understand the disturbed ecosystems that we have created and to manage them to support both humans and wildlife.

In his 2011 State of the Union address, President Obama tacitly acknowledged how politically toxic climate change had become by not mentioning it once. His move angered many environmentalists who insisted there could be no significant action without a full-throated defense of the climate science against skeptics.

But one year later, President Obama's shift can be understood as part of a new climate centrism, one focused less on climate science and carbon pricing and more on energy innovation and the regulation of conventional pollutants like mercury. In his 2012 address, Obama briefly mentioned the divisiveness of climate change as a segue to touting his energy policies.

Polls show that Obama's call for continued energy innovation funding was one of the most popular elements of his speech. Meanwhile, the EPA's new mercury regulations—which will result in the shuttering of some of America's dirtiest coal plants—have long been more popular with Independents and Republicans than carbon regulations.

These policies have a growing number of supporters on the right. Last week, John Tierney of the New York Times pointed to a new study in Science that touted the climate benefits of dealing with non-carbon pollutants:

After looking at hundreds of ways to control these pollutants, the researchers determined the 14 most effective measures for reducing climate change, like encouraging a switch to cleaner diesel engines and cookstoves, building more efficient kilns and coke ovens, capturing methane at landfills and oil wells, and reducing methane emissions from rice paddies by draining them more often.

]]> If these strategies became widespread, the researchers calculate, the amount of global warming in 2050 would be reduced by about one degree Fahrenheit, roughly a third of the warming projected if nothing is done.

The approach is aligned with the bipartisan policy proposal, Climate Pragmatism, co-authored by the Breakthrough Institute, which noted that Sen. Inhofe on the right and Sen. Boxer on the left could agree on the value of reducing soot from wood and dung fires in India—a major source of respiratory disease and a driver of glacial melting—even when they couldn't agree on carbon regulations.

Obama's explicit embrace of nuclear and natural gas broadens the political appeal of his energy policies. Sen. Lamar Alexander last year advocated a nuclear renewal and the electrification of America's cars and trucks. Sen. Lisa Murkowski gave a speech calling for a stronger innovation push on all of America's energy sources.

Energy innovation policies modeled after the military procurement policies that resulted in jet turbines and microchips may have more appeal than those policies modeled after agricultural price subsidies. "I'm proud to announce," said Obama, "that the Department of Defense, the world's largest consumer of energy, will make one of the largest commitments to clean energy in history—with the Navy purchasing enough capacity to power a quarter of a million homes a year."

Other conservatives are talking back to both the skepticism of the right and the apocalypse talk of the left. "A theory about the role of carbon dioxide in climate patterns has joined abortion and gay marriage as a culture war controversy," wrote former George W. Bush speech writer and Washington Post columnist, Michael Gerson, last week. "Climate scientists are attacked as greenshirts and watermelons (green on the outside, red on the inside). Skeptics are derided as flat-earthers. Reputations are assaulted and the e-mails of scientists hacked."

Gerson drew on our 2011 speech, "Why Climate Science Divides Us But Energy Technology Unites Us," to argue:

Many political liberals have seized on climate disruption as an excuse for policies they supported long before climate science became compelling—greater federal regulation and mandated lifestyle changes. Conservatives have also tended to equate climate science with liberal policies and therefore reject both.

To be sure, there will always be climate skeptics who attempt to shout down Republican leaders who acknowledge the reality of global warming, and hardcore conservatives who oppose any public investment beyond basic research -- just as there will always be greens who insist that anything other than economy-wide pollution caps will, literally, be the end of the world.

But it now appears that the influence of the extremes over their parties is giving way to a new pragmatism, one that holds the possibility of becoming a lasting consensus in favor of policies that a majority of Americans might support, even if for somewhat different reasons.

It is time to take stock of our current climate trajectory, and consider what it means for climate policy. In Part 1 of this week long series, we argued that our current climate trajectory means we must 1) redouble efforts to reduce CO₂ emissions as quickly as possible, and 2) we must proactively build resilience to the uncertain impacts of a changing climate. Part 2 examined why voluntary economic contraction is a not a viable strategy for reducing emissions “as quickly as possible.” Part 3 explained why implementing a robust clean energy innovation strategy is the key way to making clean energy cheaper than fossil fuels, thus enabling the rapid adoption of low-carbon energy sources and drastically reducing CO₂ as quickly as possible. Part 4 discussed why adaptation through innovation is central to preparing for the impacts of a warmer world. Finally, Part 5 discusses how reducing a set of non-CO₂ pollutants and greenhouse gases can make a significant, near-term dent in warming and buy time to decarbonize the energy system.

As we have argued previously in this series, averting as much dangerous climate change impacts as possible hinges on our efforts to drive innovation and make clean energy cost competitive with fossil fuels. The cost of decarbonization is the key moderating force affecting the pace of carbon dioxide (CO₂) reductions, and innovation is the key to lowering these costs and accelerating climate progress. However, CO₂ isn’t the only powerful contributor to global warming, and scientists have identified opportunities to make a significant, near-term dent in warming by tackling other greenhouse gases and pollutants.

While we cannot effectively manage human impact on the climate over the long-run without decarbonizing the global energy system — a task that hinges on the energy innovation efforts described in Part 3 of this series — in the short term, we would do well to seize opportunities to reduce non-CO₂ emissions, particularly those with immediate co-benefits (e.g. profitable byproducts, improved public health, or better agricultural yields) that align incentives for rapid action.

This month, an international team of two dozen climate scientists published their latest findings, indicating that aggressively tackling soot and methane emissions, the #2 and #3 most potent contributors to climate change (after CO₂), could reduce the amount of global warming in 2050 by 0.5°C. Methane emissions derive mostly from landfills, agriculture (particularly rice farming), livestock, and natural gas and coal extraction, while soot, otherwise called “black carbon”, results from the incomplete combustion of fossil fuels and derives primarily from primitive cook stoves used throughout much of the developing world, as well as diesel engines and coal-burning power plants.

Reducing global warming by 0.5°C may not sound like much, but when it comes to climate change, every tenth of a degree matters, and slowing near-term warming is particularly important to avoid triggering feedback loops that could accelerate further warming. Tackling methane and soot could reduce the scientists’ projections of average warming in 2050 by 40 percent, which could mean the difference between triggering serious feedbacks in the global climate systems or not.

And the best news about methane and soot is that there are numerous ways to effectively control these two climate destabilizers, often at minimal initial costs and with large near-term benefits.

Image: U.S. Navy project in Hawaii to capture methane at a wastewater treatment plant to use as an alternative fuel source.

All 14 of the best methods to reduce methane and soot identified by the team of scientists — including capturing methane at landfills and coal mines, cleaning up cook stoves and diesel engines, and changing agriculture techniques for rice paddies and manure collection — are already being used efficiently in many places, but are not universally adopted, the study's lead author, Drew Shindell of NASA, told the Associated Press. That means, just as our colleagues argued in Climate Pragmatism, that there are numerous opportunities to cost-effectively tackle these “no regrets” pollutants “through traditional air pollution regulations, the spread of best practices, and multilateral cooperation.”

Better yet, reducing methane and soot emissions would have significant, near-term benefits in addition to helping mitigate climate change. Cleaning up soot pollution could prevent between 700,000 and 4.7 million premature deaths each year, according to the international team of researchers, while capturing methane from coal mines, landfills, and agricultural waste can yield natural gas, a less carbon intensive and increasingly valuable fuel. The scientists also estimate that aggressively cutting methane and soot could boost agriculture yields worldwide by almost 150 million tons and yield overall net benefits 10 times greater than the initial costs of tackling the pollutants.

Yet for those most concerned about climate change, there’s an added imperative to tackling these non-CO₂ climate forces: cutting emissions of soot and methane could be the fastest ways to reduce near-term warming and thus buy critical time to decarbonize the global energy supply system.

It all comes down to basic chemistry: CO₂ accumulates in the atmosphere and persists there for a hundred years or more before being sequestered by natural forces or breaking down chemically. The longevity and sheer quantity of CO₂ means that over the long term, the cumulative amount of CO₂ emissions is the biggest and most important driver of long-term warming. However, the corollary of this fact is that driving CO₂ emissions downwards now does little to reduce warming in the near-term. All that CO₂ already in the atmosphere persists, and it continues to lock us into warming that is taking us closer to climate tipping points.

Not so with methane or soot. Cutting emissions of these two agents will yield almost immediate reductions in total global warming. Methane resides in the atmosphere for only 9-15 years, while black carbon precipitates out of the atmosphere after a matter of weeks.

That means that once we cut back on new emissions, the warming effect of soot and methane begins to abate almost immediately. That’s why climate scientist’s estimate over a 20 year time frame, black carbon has an impact many thousand times greater than CO₂ on a ton-for-ton basis, while methane has a more than 70-times greater warming effect than an equivalent amount of CO₂.

If our current climate trajectory has us hurtling towards a world of substantial warming, aggressive reductions of soot, methane, and other non-CO₂ climate “forcings” (i.e. nitrogen oxides and fluorinated gases) should be a central component of any climate policy strategy. These are the “fast acting” efforts that can yield critical near-term reductions in warming while delivering substantial co-benefits that justify the relatively modest costs of mitigation. There’s no reason not to act on this front, and fast.

The full series

• Part 1: Taking Stock of our Climate Outlook
  
• Part 2: Is Economic Contraction a Climate Solution?
  
• Part 3: Clean Energy Innovation Imperative
  
• Part 4: Building Resilience Through Climate Adaptation
  
• Part 5: Slowing Warming by Cutting Methane and Pollutants

Think about the America within our reach...an America that attracts a new generation of high-tech manufacturing and high-paying jobs...we have a huge opportunity, at this moment, to bring manufacturing back.

Last weekend, the New York Times ran a long and important piece on why one particular high-tech product, Apple's iPhone, is manufactured in Asia and not the United States. The article is part of a renewed debate about how the United States can reinvigorate its manufacturing sector, or whether it even should.

A key part of the article is that there is a dearth of middle-income jobs in U.S. manufacturing. A combination of labor-saving technological improvements and the off shoring of more labor-intensive manufacturing has led to a sharp reduction in factory jobs that were once a pathway to the middle class for many Americans. Manufacturing employment on the factory floor may simply never reach levels of previous decades.

Nevertheless, as we have written previously, advanced manufacturing remains critical to U.S. prosperity in the 21st century for three key reasons:

• Advanced manufacturing drives productivity and innovation. Two-thirds of R&D investment occurs in industry and manufacturing is a core component of the nation's innovation ecosystem that is key to creating new technological industries.
• Advanced manufacturing generates output and employment throughout the economy. It has the largest economic multipliers of any industry and large manufacturing facilities sustain entire communities. Even if manufacturing never supports as many direct jobs on the factory floor as it has in the past, restoring advanced manufacturing is thus essential to America's long-term employment challenges.
• Manufacturing is critical to improve the nation's trade balance and tackling our $500 billion cumulative trade deficit. Manufactured goods still comprise 57% of U.S. exports and closing the trade deficit will be difficult, if not impossible, without manufacturing playing a key role.

The fact is that global manufacturing has fundamentally and irreversibly changed in recent decades in ways that has altered the structure of national economies. In essence, the production system has become globally fragmented. In a new paper on this subject, economist Richard Baldwin calls this globalization's "second unbundling."

The "first unbundling" occurred with the introduction of steam power, which led to a sharp reduction in shipping costs. Production was no longer tethered to local consumption; factories could produce for internal markets that could now be reached by rail or foreign markets by steamships. Yet production was still local. It tended to cluster within factories and in industrial districts, both to increase the scale of production and to coordinate closely with other actors within a particular industry.

The "second unbundling" occurred with the rapid advance and diffusion of information and communications technologies, beginning in the mid 1980's and accelerating in the late 90's, which led to an unprecedented reduction in coordination costs both within and across national economies. For the first time, it became economical not just to geographically separate consumption from production but separate different stages of the production process. Today, coordination is still necessary for production, but that coordination has become increasingly internationalized into global supply chains with key components being produced in regional networks.

Apple's production process epitomizes this transformation. As the New York Times story notes, the iPhone is designed in the United States, but includes semiconductors manufactured in Germany and Japan, memory from Korea and Japan, display panels and circuitry from Korea and Taiwan, chips from Europe, and rare metals from Africa and Asia. The final device is assembled in China. All told, just 10 percent of iPhone components are manufactured in the United States.

It's important to note that it's not simply lower labor costs that are behind the iPhone story:

It isn't just that workers are cheaper abroad. Rather, Apple's executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that "Made in the U.S.A." is no longer a viable option for most Apple products.

Just as important is that China, Japan, Korea and Taiwan are part of a competitive regional electronics supply chain cluster that is self-reinforcing. As Ryan Avent writes, "After some level of Asian development and integration, it became more attractive for manufacturers to locate there as more manufacturers located there." Manufacturing firms are sustained by operating within a cluster of related firms and suppliers and drawing on pools of specialized labor and other resources. This phenomenon is known as "economies of agglomeration," and it is an increasingly important feature of the 21st century global economy.

Despite the era of globalization, geography still matters - just in new ways. Even as supply chains have globalized, proximity has retained an importance in manufacturing. This is particularly true for just-in-time manufacturing, where businesses seek to reduce inventory and waste and improve productivity by closely balancing the supply chain with product demand. If changes are made to the product design, proximity is important to reduce time lags in production. The rise of just-in-time production therefore means that the time it takes to ship supplies and components to assembly can be a much more important factor than the dollar costs of shipment itself.

This means that it would likely be difficult to bring manufacturing of key iPhone components back to the to the United States. Many of the key components of the supply chain - memory, consumer electronics batteries, flat screens, even semiconductors - have been progressively or completely off shored, and economies of agglomeration have taken over. So "bringing these jobs back," as President Obama says, would take more than simply closing the labor cost gap through either lower wages or higher productivity in U.S. manufacturing. It would also require a long effort to build our own regional manufacturing agglomerations around key components here in the United States, and that could prove costly.

Instead, a better strategy is to indentify the industries where we still have supply chain component ecosystems, particularly those at the higher end of the value chain, where policy and targeted investments can help retain and expand our competitive edge. We should also indentify emerging technology industries that have the potential to be a source of high growth, and ask what we can do to build new industry agglomerations and foster the commercialization and competitive production of those technologies in the United States.

We don't need to look far for recent examples of this strategy in action. The bailout of America's auto companies has been maligned as overreaching "industrial policy," but the logic of the move was clear. If GM and Chrysler had gone bankrupt, the entire industrial ecosystem and supply chain that supported the automakers in the United States would have collapsed, creating not just massive unemployment but also undermining America's future auto production capacity. Once lost, the network of parts suppliers could have been gone for good. From this perspective, the auto bailout efforts worked. As the President noted in his State of the Union, GM is again the world's top automaker, Chrysler is rebounding fast, and the auto industry added 160,000 jobs since the end of 2009.

The Obama Administration's investments in advanced battery technology for vehicles are an example of forward-looking policy to build an ecosystem in an industry that is in its early stages. It took $2.4 billion in stimulus grants to 48 different companies, but the Administration's efforts have helped to build a critical mass of advanced battery manufacturers, many of them clustered across Michigan and the American rust belt. Here, they may become a critical contributor to a globally competitive advanced vehicle production cluster, including the factories of the retooled "Big Three" automakers.

In this effort to identify key manufacturing opportunities, we also need to determine which industries are particularly important to sustaining a broader high-tech innovation ecosystem. Harvard Business School professors Willy Shih and Carl Pisano have made a persuasive case that a hollowing out of some high-tech supply chains in the Unites States have harmed the nation's ability to innovate and produce next-generation technologies. The consequences of losing these supply chains thus means more than losing the jobs of today; it could mean losing entire industries of tomorrow.

The new reality of global supply chains requires a new debate about manufacturing in the United States, one that recognizes that manufacturing has irreversibly changed, yet has become even more essential to sustaining American prosperity in the 21st century. The President is right to stake much of his vision for America's economic future on renewed American leadership in advanced manufacturing. But realizing that vision will require new strategies and new thinking.

For more reading, see "Manufacturing Growth: Advanced Manufacturing and the Future of American Prosperity," by Breakthrough Institute and Third Way

It was good to hear strong shout-outs for clean and renewable energy sourcing as part of the balanced energy stance promoted in President Obama's State of the Union speech this week.

We've long agreed that the "all of the above" energy approach Obama championed last night could be desirable so long as it is just that--oriented to the balanced development of all sources including American renewable and clean energy as well as fossil fuel resources.

In that nexus lies a politically defensible sweet-spot notwithstanding the tough politics of the energy debate.

And yet, the President left out a crucial link in his renewed commitments to both clean energy and increased conventional energy: He missed the opportunity to tie the revenues from fossil fuel drilling permits and licenses to investment in energy innovation.

And as it happens, such a linkage once had (and may again garner!) bipartisan support. After all, not so long ago Rep. John Boehner (R-OH), now speaker, introduced the House Republicans' American Energy Act of 2009 and in it proposed a bargain that would have paired expanded oil and gas drilling with new investments in renewable and alternative energy. The bill proposed putting hundreds of billions of anticipated new oil and gas revenues (and that even before the shale gas boom) into a trust fund to accelerate clean energy innovation. The upshot: For a few fleeting months that broad outline pointed to an intriguing way forward.

Now, maybe that grand trade beckons again. Yet to make it a truly productive agreement the Obama team needs to remember that "all of the above" should entail a true trade. Here is hoping that the forthcoming elaboration of the new stance backs up the president's stated commitments with a commonsense proposal for linking stepped-up fossil fuel extraction to revenue-raising for investments in new and cleaner energy technologies.

It is time to take stock of our current climate trajectory, and consider what it means for climate policy. In Part 1 of this week long series, we argued that our current climate trajectory means we must 1) redouble efforts to reduce CO₂ emissions as quickly as possible, and 2) we must proactively build resilience to the uncertain impacts of a changing climate. Part 2 examined why voluntary economic contraction is a not a viable strategy for reducing emissions “as quickly as possible.” Part 3 explained why implementing a robust clean energy innovation strategy is the key way to making clean energy cheaper than fossil fuels, thus enabling the rapid adoption of low-carbon energy sources and drastically reducing CO₂ as quickly as possible. Part 4 discusses why adaptation through innovation is central to preparing for the impacts of a warmer world and buying us time to drastically cut emissions.

The door is closed to mitigating away all of the potentially dangerous impacts of climate change.  We’ve simply waited too long to take sweeping action and provide a cheap and viable clean energy substitute to fossil fuels.  In Part 1 of this series, we discussed that even so, the key objective of climate mitigation efforts is still the same – we must drastically cut emissions as quickly as possible (and Part 2 and Part 3 discussed how). 

Yet the warmer world we have locked ourselves into does inform other policy choices. In particular, building our resilience to extreme weather and increasing our adaptive capacity is now equally as important as mitigation and should be treated as such. Advocating for adaptation and mitigation is nothing new – in fact it’s common place. The argument here is that adaptation must now be a cornerstone of all climate policy choices – domestic or otherwise.

When it comes to climate adaptation policymaking, a lot of work needs to be done, as it’s still a topic that has been largely ignored by U.S. decision makers. In fact, the most immediate hurdle is for decision makers to stop paying lip-service to the need for an adaptation policy and begin aggressively implementing real resilience efforts.

Yet climate adaptation is scarcely heard within the halls of Congress or among most domestic policy advocates. This must change and it should be a top priority for all climate advocates. Adaptation must be vigorously discussed alongside climate mitigation efforts, instead of as an afterthought, or as a Plan B, to be initiated sometime in the future. Building climate resilience must begin now, and in earnest.

But for any vigorous policy discussion to have an impact, we need to throw away some old mischaracterizations. Namely, we should stop narrowly defining adaptation policy as only addressing anthropogenic (aka man made) climate change impacts and instead define it as addressing resilience to extreme climate and weather, regardless of the cause. This may sound odd, but it’s a key nuance. As last year’s Hartwell Group report, Climate Pragmatism (which ITIF and BTI are signatories), points out:

“[N]ations must shift their focus away from adaptation to anthropogenic climate change and towards resilience to extreme weather events of all types, without regard to cause. After all, it is immaterial if a hurricane is marginally more intense due to climate change than it would otherwise have been; the route to resilience is the same regardless. Societies remain vulnerable to many types of hazards, and resilient societies are those best prepared to respond effectively to a diversity of threats.”

The idea here is that we shouldn’t be spending time trying to discern between human-caused weather extremes and natural-caused weather extremes, at least from an adaptive capacity point-of-view. Doing so adds yet another layer of policy tension and debate as policymakers try to figure out what constitutes human-made climate change impacts from “normal” impacts. In reality, with or without the threat of climate change, it’s important for communities to build resilience to extreme weather and climate impacts. Instead of creating a new subset of needs for communities, we should be vigorously stepping up our existing development, infrastructure, agricultural productivity, and economic resilience efforts. Climate change adds a greater sense of urgency and aggressiveness, not the need for new and artificially segregated efforts.

Furthermore, policymakers must recognize the role that innovation plays in building climate resilience. We need new technical, organizational, and societal solutions to better manage risk and expand options for boosting resilience, both in developing and developed communities.

These innovations will arise in all facets of science and engineering. Medical innovations in prevention, drugs, and drug delivery are needed to stop the spread of infectious diseases as regions become warmer and disease vectors (mosquitoes, etc.) spread across wider regions. Agricultural innovations, particularly around genetically engineered crops, are needed to continue to increase crop productivity to avoid falling yields, even in high temperature environments and instances of flooding. Breakthroughs in water recycling and purification are necessary to ensure communities in drought-prone regions and those impacted by rising sea-level or disappearing mountain glaciers have access to drinking water, while new engineering innovations are needed to safeguard those communities, buildings, and crops against rising water and other extreme weather.

Innovations in information and communication technologies are also vitally needed. New remote sensing instruments are needed to provide better data for weather forecasters and numerical models. High-speed supercomputing could allow for better risk management and scenario analysis to better prepare local and regional disaster management decisions. New software that gathers, manages, and analyzes key data to quickly provide disaster managers with real-time updates are vitally important. Information technology systems to enable better flood warning are needed. And ensuring new and functional weather and climate satellites provides key datasets for policymakers.

Therefore, everything from R&D policy and farm bills to infrastructure funding and space policy is key to an aggressive adaptation strategy. In other words, adaptation policy is cross-cutting and deeply infused with innovation policy questions. And just like policies aimed at limiting potentially dangerous climate change, adaptation policies will be implemented in the face of uncertainty, both in climate impacts and variance in extreme weather.

Even under uncertainty, one thing can be certain – in a warmer world, there is no such thing as “normal” climate or weather anymore. In the face of uncertainty, resilience is key. Given our new harsh climate realities, aggressive mitigation and climate resilience is an imperative. U.S. climate policy discussions that don’t include building resilience to extreme weather are set for failure.

The full series

• Part 1: Taking Stock of our Climate Outlook
  
• Part 2: Is Economic Contraction a Climate Solution?
  
• Part 3: Clean Energy Innovation Imperative
  
• Part 4: Building Resilience Through Climate Adaptation
  
• Part 5: Slowing Warming by Cutting Methane and Pollutants

It is time to take stock of our current climate trajectory, and consider what it means for climate policy. In Part 1 of this week long series, we argued that our current climate trajectory means we must 1) redouble efforts to reduce CO₂ emissions as quickly as possible, and 2) we must proactively build resilience to the uncertain impacts of a changing climate. Part 2 examined why voluntary economic contraction is a not a viable strategy for reducing emissions “as quickly as possible.” Part 3 explains why implementing a robust clean energy innovation strategy is the key way to making clean energy cheaper than fossil fuels, thus enable rapid adoption of low-carbon energy sources and drastically reducing CO₂ as quickly as possible.

As we wrote in Part 1 and Part 2 of this series, our current climate trajectory and global political economy dictates that the only way we can limit potentially dangerous climate change impacts, above the dangerous impacts we’re already locked into, is to redouble efforts to reduce global CO2 emissions as quickly as possible. To rapidly decarbonize the economy requires greatly accelerating the replacement of fossil fuels with low or zero-carbon clean energy substitutes. Implementing the right strategies to do so raises numerous stark policy choices and issues.

The most fundamental issue is that energy is largely a fungible commodity – the electricity coming out of your wall socket doesn’t have any immediately tangible differences whether it comes from a coal plant or a wind farm. The only immediate difference is cost. This key reality means that the rate of adoption for new clean energy technologies is largely moderated by two principal levers:

(1) The level of public tolerance for paying for the cost of cleaner energy in the form of higher energy costs, subsidies, or reduced economic welfare; and

(2) The cost competitiveness of clean energy compared to fossil fuels.

As it stands today, clean energy is, by and large, more expensive than fossil fuels. (EIA analysis here, DOE QTR overview pg. 107-108, and EPRI technology assessment table 1-2 for starters). On their own, energy consumers and utilities will predominately choose lower cost fossil fuel technologies over more expensive clean energy substitutes. So accelerating the deployment of today’s clean energy technologies is moderated by the public’s tolerance for higher energy costs.

Determining how much publics are willing to pay for cleaner energy is a difficult social science question. But a survey of the literature by Evan Johnson and Gregory Nemet of the University of Wisconsin-Madison published last year found that households are willing to pay between $22 and $3,624 a year in response to climate policy. A wide range, to be sure. However, after eliminating the outliers, the majority of studies found that publics are willing to pay somewhere in the range of $100 to $300 per year extra for cleaner energy. This suggests that the public has a pretty low tolerance – on the order of a few extra dollars a month – for higher costs related to climate policies. While public tolerance for higher energy prices may vary in different political economies, it is always fairly limited.

We can see this basic dynamic play out all across the world. We are probably all familiar with a pretty recent example: the proposed national cap-and-trade legislation defeated in the Senate in the summer of 2010, which, according to its advocates, would have increased consumers’ energy costs by about the cost of one postage stamp per day. Yet the legislation ultimately met with defeat, despite this very limited projected impact on energy prices. In a more positive example, Australia recently enacted a national carbon tax. But the increase in energy costs amounts to about six cents per gallon of gasoline, once again illustrating the constraints political economies place on efforts to substantially raise energy costs to pay for or incentivize clean energy alternatives.

We can also see this limited tolerance in action through the numerous mandates requiring utilities to adopt renewable energy alternatives. For instance, many renewable portfolio standards (RPS policies) includes one or more “cost containment” provisions limiting the ultimate cost of compliance to ensure they do not expend the limited public tolerance for higher energy prices. In Oregon and Washington, for example, state RPS policies limit the cost of compliance to a 4 percent increase over an alternative, fossil fueled energy mix. The federal RPS included in the American Clean Energy Leadership Act, an energy bill considered in the Senate in 2009, would have implemented a similar 4 percent cap on total retail rate impacts. It also offered an alternative compliance payment of 2.1 cents per kilowatt-hour, which utilities could pay in lieu of purchasing or generating renewable electricity, effectively limiting the incremental cost of renewables above fossil fuels to less than 2.1 cents per kWh.

To make matters worse, we can expect this public tolerance to be even lower in emerging economies, where the vast majority of energy demand and emissions growth will occur in the coming decades. The millions simply struggling to gain access to energy will surely go for the least cost option as their ability to take on additional costs will be small to non-existent. Along the same lines, the governments of emerging economies won’t also be able to sustain high public subsidies for clean technologies, as some Western European nations have.

In response to this reality, an intense and robust climate communications effort may indeed help by incrementally increasing the public’s tolerance for higher energy prices in the name of climate mitigation. But should we expect these PR efforts to double or triple Americans’ apparently low tolerance? How about in developing nations that have trouble affording not only cheaper fossil energy, but medicine and food?

We should clearly pursue efforts to increase the public’s willingness to accept the costs associated with today’s investments in clean energy alternatives wherever and whenever such strategies prove effective. But we cannot expect public willingness to pay for climate mitigation or cleaner energy to ever be infinite, and we must plan for success within the constraints this entails.

With that in mind, we now turn to the second lever at our disposal: making clean energy cost competitive with fossil fuels.

In the near-term, we can make clean energy cost competitive simply through subsidies, which artificially lower the cost of cleaner energy. For instance, New Jersey’s Renewable Energy Credits for solar have been on the order of $300 to $700 per MWh (or an order of magnitude above retail rates). But this causes an immediate issue, as subsidies are a public cost to consumers (albeit a less transparent cost than higher utility bills). If subsidy efforts succeed in driving wide-spread adoption, the cost of subsidies will concurrently increase unless the real costs of clean energy fall and subsidies fall along with it. For example, if the federal wind PTC stays constant at 2.2 cents/kWh in 2011 dollars and wind installations grow to provide 20 percent of U.S. electricity in 2030 (the stated goal of the wind industry), the public cost of the PTC would total more than $20 billion annually (assuming EIA estimates for 2030 electricity demand). That would make wind subsidies one of the largest single incentives across all government.

In short, as subsidized clean energy deployment mounts, public cost will rise, eventually to unsustainable levels – unless the unsubsidized costs of clean energy steadily fall alongside deployment.

That means we have to invest every public dollar wisely and use our limited public tolerance for subsidy or higher energy prices to maximum effect. The best way to do that is to invest in ways that drive down the real, unsubsidized cost of clean energy as rapidly as possible. In other words, we need to leverage each public dollar we spend to make clean energy cheap.

This brings up a key point because in many cases, we simply don’t have all the cheap, clean technologies we need. In fact, we need much better technologies than what we have now, especially if we expect to deploy them worldwide. Fortunately history shows us how to do this: through a more diverse and targeted set of policy tools aimed at supporting a robust and aggressive energy innovation system.

In fact, it easy to see how a well functioning innovation system can yield far more progress towards rapid clean energy deployment than communications efforts, as important as the latter is.  Take a look at utility-scale solar PV. According to the World Resources Institute (WRI), solar PV has dropped in cost by 90 percent in the last 30 years. If we had tried to accelerate decarbonization by deploying 1980s solar technology, it would have cost a staggering $53.5 trillion to scale up solar to provide just 11 percent of total global electricity supply, according to WRI’s numbers. Yet at dramatically reduced 2008 solar costs, that figure drops to by more than a factor of six, to $8.46 trillion. The power of innovation doesn’t stop there. According to WRI, if further innovation achieves the cost targets set by the US Department of Energy’s SunShot initiative, the cost of solar scale-up would be fall again by more than a factor of five.

Click to enlarge. Source: World Resources Institute

It should be clear that innovation is essential to dramatically reduce the public costs required to drive the rapid adoption of clean energy. At the same time, it is difficult to imagine even the most effective climate communications efforts boosting public tolerance for higher energy costs by a factor of five or ten. While climate communication efforts are important, they cannot supplant a robust innovation effort as the central lever to accelerate clean energy adoption.

Unfortunately, efforts to build consensus around an innovation-centered approach to climate mitigation have been marred by at least two major mischaracterizations that have muddled the debate.

First, counter to what many folks believe innovation does not mean deployment with a little bit of R&D sprinkled in. A “deploy, deploy, deploy, R&D, deploy, deploy, deploy” approach either ignores the need to drive cost reductions in clean energy alternatives or assumes that the lion’s share of clean energy cost reductions will come via scale-up (while ignoring the public’s low tolerance for subsidies). This is fundamentally inaccurate. The large and growing literature on what is really behind “learning curves” – the complex processes of research, learning, new technology adoption, and supply chain improvements that typical lead to falling costs alongside expanding technology adoption – puts to lie the idea that deployment alone is all we need to drive down costs. What lies behind significant declines in the price of solar PV over the last thirty years, for example? Equal parts ongoing R&D and economies of scale, according to research from Univ. of Wisconsin-Madison’s Dr. Gregory Nemet. In other words, you need both robust R&D system and aligned incentives for market adoption that reward innovators who adopt cutting edge methods and continue to cut costs.

Second, innovation does not mean R&D alone. While public investments in R&D are an absolutely necessary part of a clean energy innovation approach, it is but one piece of the puzzle, something innovation experts have always been quite clear about.

The bulwark of an effective energy innovation system is the aggressive pursuit of new products, new services, performance improvements and cost declines across each stage of innovation and technology maturation. It includes major support for R&D for both radical new clean technologies like vehicle batteries that travel 500 miles or more on a single charge as well as includes steady incremental improvements in existing designs like on-shore wind turbines. The ecosystem supports the accelerated commercialization and demonstration of new clean technologies so potential breakthrough ideas don’t collect dust on a laboratory’s shelf. And the ecosystem includes deployment policies that should be explicitly designed to ensure that every dollar invested provides the best incentives for further innovation and cost declines. Deployment policies must play a key role in creating markets for clean energy, but we must ensure that those markets have the right structure and offer the right incentives to demand and reward continual improvements in the price and performance of clean technologies.

The ultimate goal of this system is to use limited public investments to support a variety of clean energy technologies on a path to subsidy independence and true cost competitiveness with fossil fuels, as quickly as possible. It ensures we not only smartly deploy clean technologies today, but make these technologies affordable enough for the rapid, widespread, global adoption needed to drastically cut emissions.

As it stands, America’s clean energy innovation ecosystem has significant weaknesses and is not running at top gear. The goal of climate advocates should be to strengthen the innovation ecosystem so it can develop cheaper options in a small fraction of the time it took solar PV to decrease in cost. If we take our climate outlook seriously, we have to focus just as seriously on efforts to strengthen and support the energy innovation ecosystem to make clean energy cheap. It’s our only realistic way to limit any further potentially dangerous climate change than what we are already locked ourselves into.

The full series

• Part 1: Taking Stock of our Climate Outlook
  
• Part 2: Is Economic Contraction a Climate Solution?
  
• Part 3: Clean Energy Innovation Imperative
  
• Part 4: Building Resilience Through Climate Adaptation
  
• Part 5: Slowing Warming by Cutting Methane and Pollutants

In a recent edition of their political fact-checking series, CNN makes glaring historical omissions in their claim that the private sector, not the government, was the leading developer of the technologies that led to the modern shale gas boom.

In a reaction to President Obama's statement in this week's State of the Union address that "it was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural gas out of shale rock," CNN reporter Matt Smith claims that the President's analysis was "true, but incomplete." In reality, CNN's fact-check is light on the facts and could use a check of its own.

CNN claims that hydraulic fracturing has been around since initial private application in the 1940s, and therefore government investment was inconsequential to the modern gas boom. This is like saying government investment in jet engines was inconsequential because the Wright Brothers pioneered air travel. CNN gets its facts and its history wrong. Here's what really happened:

• All the component technologies and techniques that made the shale revolution possible - massive hydraulic fracturing (MHF), microseismic imaging, and directional drilling among others - are direct products of federal R&D and demonstration.


• At the request of the gas industry, a diverse set of federal labs and agencies spearheaded R&D and demonstration of early shale extraction technologies, including the Morgantown Energy Research Center, the Energy Research and Development Administration, the Bureau of Mines, the Department of Energy, and the national laboratories.


• The Department of Energy first demonstrated MHF in 1977. Slickwater fracturing, Mitchell Energy's technique for Barnett drilling in the late 1990s, was an incremental improvement on this foundational innovation in hydraulic fracturing.


• In a joint DOE-industry venture, the first successful multi-fracture horizontal well was drilled in 1986. The Gas Research Institute (GRI), which was funded partially by a government-imposed surcharge on retail gas bills, subsidized Mitchell's first horizontal well in 1991.


• Sandia National Labs developed microseismic imaging technology and mapping for use in coalbed methane recovery. Data and techniques developed by Sandia were cited as critical contributions to Mitchell Energy's R&D in the 1990s.


• The federal Section 29 tax credit for unconventional gas resources benefitted the gas industry from 1980-2002.


• Using an innovative technique called slickwater fracturing and capitalizing on federal contributions like MHF, directional drilling, and microseismic imaging, Mitchell Energy engineers drilled the first economical well in the Barnett Shale in 1998. This was the first profitable commercial shale drill in history.

CNN dates the modern gas boom all the way back to 1947, when they claim (accurately) that hydraulic fracturing was first applied in limestone gas deposits in Kansas. The CNN fact-checkers proceed to draw a direct line between 1947 and today's gas boom, claiming that "while private industry pioneered the practice, far cheaper sources of oil and gas were readily available at the time." In reality, there is a vast discrepency between fracking limestone and penetrating shale deposits, an elemental obstacle to shale gas development that CNN ignores.

CNN also ignores the pertinent dynamics in the gas industry during the 1970s. Amidst years of falling domestic gas production, leaders in the industry issued direct pleas to the federal government for R&D support for shale gas drilling. At the time, the impermeability of shale made economical extraction of natural gas impossible. Indeed, this would remain the case until 1998, when Texas-based Mitchell Energy completed the first successful drill in the Barnett Shale. But where did Mitchell get its tech and its knowhow?

The answer is federal investment in R&D and demonstration of new technologies and drilling techniques. To be sure, the team at Mitchell demonstrated extremely impressive engineering and persistence, and performed significant in-house R&D. But all the component technologies that make shale gas extraction possible - massive hydraulic fracturing (MHF), microseismic imaging, and directional drilling among them - trace their lineage directly to R&D and pilot demonstration performed by federal labs and agencies during the 1970s and 1980s.

Starting with the Eastern Gas Shales Project in 1976, federal agencies like the Morgantown Energy Research Center (MERC) and the Energy Research and Development Agency (ERDA) spearheaded efforts to design and demonstrate technologies that could effectively and efficiently drill and extract gas from shale deposits. In the late 1970s, the brand new Department of Energy (DOE) was the first to demonstrate MHF at scale, and partnered with the American Public Gas Association to form the Commercialization Plan for Recovery of Natural Gas from Unconventional Sources.

If that partnership doesn't tip off CNN's fact-checkers, nothing will. Industry and government at the time were in full agreement: shale gas was not a commercially viable option for large-scale mining and extraction. During the 1980s, the DOE partnered further with industry to achieve the first multi-fracture air-drilled horizontal well in Wayne County, WV, a critical step on the road to full development of economical shale extraction. Not to mention, from 1980-2002, companies working on shale gas deposits benefitted from the Section 29 tax credit for unconventional gas.

It's clear from the history (and accounts from gas industry executives and historians) that the shale gas boom would not have been possible without early and sustained government investment, and that Mitchell Energy would not have had the requisite technologies to successfully tap the Barnett Shale. But was it simply a case of Mitchell taking government technology and running with it? No, actually, it was more than that. In 1991, the Gas Research Institute (GRI), which was funded via a surcharge on retail gas bills levied by the Federal Energy Regulatory Commission, subsidized Mitchell Energy's first horizontal drill. GRI continued to fund Mitchell Energy throughout the 1990s.

Even with the foundational R&D and technology demonstration completed by the federal government over the 1970s and 1980s, Mitchell Energy needed to spend the majority of the 1990s doing their own in-house R&D to finally achieve an economical horizontal well fracture in the Barnett Shale. The decades of investment by federal agencies and the commitment to its purpose applied at Mitchell Energy are revealing - the modern gas boom is not simply a latent application of a 1940s technology. Instead, it is the result of private sector entrepreneurs and engineers capitalizing on substantial federal government R&D and tech demonstration to achieve a novel and profitable drilling technique.

As former Mitchell Energy Vice President Dan Steward said in an interview with the Breakthrough Institute, "Government has to be looking down the road. We really cannot wait to develop those other energies. Industry doesn't look as far down the road as the government should."

CNN's claims otherwise - that hydraulic fracturing has been around for decades and that any government investment was both marginal and wasteful - are an insult to Mitchell Energy engineers and a poor misreading of the history of innovation. As with microchips, nuclear power, and the Internet, it was initial government investment that gave birth to the shale gas industry. Strategic and sustained government investment has been applied over the centuries in the United States, at every phase of technological innovation from basic and applied research to demonstration to procurement to full commercial deployment. As President Obama reiterated in his speech this week, public investment in technology is a fundamental quality of American ambition and achievement.

"It was public research dollars, over the course of thirty years," said the president, "that helped develop the technologies to extract all this natural gas out of shale rock -- reminding us that Government support is critical in helping businesses get new energy ideas off the ground."

Obama is referring directly to a Breakthrough Institute investigation, which found that all the major technologies -- massive hydraulic fracking, horizontal drilling, 3-D mapping -- came from federal funding. Breakthrough's research was published in the Washington Post, with a longer history of shale gas and key interviews published at the Breakthrough.

"Our experience with shale gas shows us that the payoffs on these public investments don't always come right away," said Obama. "Some technologies don't pan out; some companies fail. But I will not walk away from the promise of clean energy."

Obama's statement mirrors something one of Mitchell Energy's top geologists at the time, Dan Steward, who described himself as "conservative as hell," told Breakthrough.

"I don't bad mouth government involvement in solar and wind because we have to be experimenting with that," Steward said. "We're not far enough along for solar and wind to provide much energy. But government has to be looking down the road. Industry doesn't look as far down the road as the government should."

Last year, Obama noted that because "it's not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need."

Obama went on to refer to the role of the federal government in creating microchips, satellites, and the Internet -- the core technologies of the information technology revolution -- which had been highlighted in Breakthrough Institute's 2010 report, "Where Good Technologies Come From."