By Jesse Jenkins and Sara Mansur

Kevin Drum's recent post on the low price elasticity of demand for oil has reignited an old debate over gas taxes and energy innovation.

Drum draws our attention to some "eye popping" figures for price elasticity of demand for oil from the IMF. According to Drum, these elasticities mean that, in the short term, a 50 percent increase in price leads to a 1.2 percent decrease in consumption. In the long term, it leads to a 4.7 percent decrease.

Conservative blogger Jim Manzi rightly points out that, with elasticities as low as these, a gas tax at any politically realistic level is not going to reduce our dependence on fossil fuels.

Specifically, to the extent that we continue to progress in making non-fossil-fuels technology cheaper and more effective for an ever wider array of applications, we can accelerate the ongoing de-carbonization of our economy. The idea of economists to use artificial scarcity pricing to do this is aggressively marketed in blogs, magazines and TV shows, but is extremely unlikely to work, because the current price elasticity of oil is so low. The work of engineers and physical scientists, however, is likely to be determinative.

Continue reading "Weighing in on the Gas Tax Debate" »

Here's an interesting argument from our friends across the pond at the UK-focused Political Climate blog, making the case that despite rising deficit concerns and austerity measures in the UK and elsewhere, borrowing from the future may still actually be an appropriate way to pay for clean energy innovation today:

Against this background, it may sound mad to argue for more public borrowing in order to pay for investments in low carbon technologies and infrastructure, but that is what I am going to do in this post.

Let's start with the rationale. ... The starting point is that in advanced economies successive generations tend to get better off over time. For example, at the depths of the 1930s depression Keynes observed that despite the general gloom, he was confident that 100 years in the future, people might be eight times better off in real terms. And indeed average GDP per capita in the UK is now already about 5 times what it was in the 1930s. By extension, we would normally expect future generations to be better off than us in GDP terms.

... [Furthermore, if] we in this generation mitigate climate change, we will allow future generations to have a higher standard of living than they would have if we did nothing. We are very slowly beginning to do this, with policies being introduced to encourage us to invest less in conventional capital (e.g. fossil fuel power stations) and more in investments that effectively maintain natural capital (like renewable energy).

At the moment we are paying for these more expensive investments through reduced consumption, in the form of higher energy bills. If instead we were to borrow a certain amount of money from future generations (who will have to repay through their taxes) and use this money to pay the extra cost of renewables, carbon capture and storage and so on, then the theory says it should be possible to make both our generation and future generations better off. ...

Continue reading "Should We Borrow from the Future to Pay for Clean Energy Innovation Today?" »

In a new interview with Technology Review, Bill Gates nails the global energy and climate challenge and discusses the need for dramatic increases in energy innovation funding to make clean energy cheap.

Bill Gates has been speaking out publicly over the last few months--first in a blog post on his website, then in a talk at the TED conference, and now as part of the American Energy Innovation Council--for radical energy innovation to drive carbon emissions to zero.

In a climate discourse dominated by emissions targets and carbon caps, Gates has provided a refreshing and clear-eyed look at the first-order importance of direct public investment to develop clean, affordable technologies to replace fossil fuels on a global scale.

In this new interview, Gates discusses why dismissing the difficulty of the challenge is counter-productive, and argues that carbon pricing can never drive the dramatic innovation required to transform the global energy system. Instead of raising the price of fossil fuels, Gates argues that the time has come to shift our attention to raising the revenues necessary to fuel innovation and make clean energy cheap.

Below the fold, you can find excerpts from Gates' interview, which can be read in full here.

For more, the NYTimes Andy Revkin and TIME magazine's Bryan Walsh each spotlight the interview here and here, respectively.

Continue reading "Gates: Invest in Innovation to Make Clean Energy Cheap" »

After the governing conservative party of French President Nicolas Sarkozy got clobbered in regional elections this week, France's proposed carbon tax is going the way of the Canadian Liberal Party's 'green shift' carbon tax proposal and Australian Prime Minister Kevin Rudd's Carbon Pollution Reduction Scheme (a cap and trade plan), according to the NYTimes' Green Inc. blog:

After his governing conservative party took a pounding in regional polls on Sunday, French President Nicolas Sarkozy has dropped a key environmental goal: setting up a carbon tax to limit the growth of carbon emissions and spur the development of renewable fuels.

"We want decisions that are taken in common with other European countries, or else we will see our competition gap widen," said François Fillon, the French Prime Minister, according to The Financial Times.

The idea of a carbon tax had been widely opposed by France's business lobby, which argued that it would increase costs, as well as by members of the governing party which opposed the idea of a new tax. A law was initially voted by parliament last year but was censured by France's top court, the Constitutional Council because it was too weak on polluting industries.

American climate policy advocates should watch our neighbor to the north closely. With social and political values not too distant from our own and an economic makeup broadly similar, Canada's experiments with climate policy - particularly carbon pricing schemes - offer a real-world laboratory we would be wise not to ignore. While Canadians are broadly supportive of actions to address climate change, proposals at both the federal and provincial levels to establish a price on global warming pollution have met with difficulty. We covered the failure of the national Liberal Party's "Green Shift" carbon tax proposal in the October 2008 elections here, and have watched closely as British Columbia battles over their controversial, first-in-North American carbon tax system. Now, social values research firm Environics (the sister firm to our colleagues at American Environics) has new research findings that shed light on the difficulties facing 'environmental pricing reform' proposals like carbon taxes, cap and trade, and congestion pricing. Environics' Keith Neuman presents their findings in this piece, originally posted at Green Business...

By Keith Neuman, Ph.D.

Environmental pricing reform (or EPR) is the term now used to describe the various types of market mechanisms (e.g. carbon pricing, cap and trade, congestion fees) which are now being given serious attention as the most promising strategy for addressing climate change and other pressing environmental challenges such as water scarcity and traffic congestion. This concept has been around for some time, and is now finally receiving serious attention on the North American policy agenda. Economists have long been making a persuasive case for harnessing market forces to achieve environmental objectives, but only recently has this cause been adopted by major players, such as the Canadian Council of Chief Executives and the National Roundtable on the Environment and Economy. The idea that society puts a monetary price on environmental "goods" and "bads", and then letting market forces do their work (as they do with most other forms of business and consumer behavior) is compelling.

Governments and industry now seem ready to move forward with environmental pricing strategies, but is the Canadian public ready to buy in? The limited experience to date is hardly promising. Over the past year, the B.C. provincial carbon tax has been implemented but remains highly controversial (it has become a major issue in the current provincial election), and the Federal Liberal Party's touted "Green Shift" election platform failed spectacularly with the electorate. These early examples suggest there is sufficient citizen resistance to make EPR a difficult political sell. Why should this be the case, given the clear evidence that EPR can be an effective environmental policy? There are three central reasons.

First, is it axiomatic that consumers prefer not to pay more for goods and services, and will resist at varying levels when asked to do so. This is the most commonly understood basis for resistance to EPR, and many policy makers mistakenly believe it is the overriding obstacle. But in fact this dilemma is by no means limited to environmental policy, and has not prevented other successful economic policy measures that shifted costs to consumption, such as the GST and the Ontario Health Premiums. Such measures do not succeed because they are popular, but when they are deemed acceptable given their purpose by a sufficiently critical mass of relevant constituents.

Second, the public is skeptical about the effectiveness of EPR, in terms of how paying more for gasoline, water or consumer goods will actually benefit the environment. Research has shown that public resistance to B.C.'s carbon tax has as much to do with doubts about its effectiveness in reducing the province's greenhouse gas emissions as it does with paying a few more cents per litre at the pump. Consumers can readily understand how stiffer regulations or new technologies can make a difference in cleaning up pollution, but it requires a greater act of faith to believe that higher prices or trading systems will accomplish the same goals. Such faith requires confidence in both the intentions and efficacy of governments and industry, and neither has been seen to have done much to justify this level of confidence. Moreover, there continues to be a widely-held public sentiment that market-based environmental policies, such as cap and trade systems, favour industry by giving it a "license to pollute."

Third, at a deeper level environmental pricing reform is not currently well-positioned in terms of how it fits within Canadians' social values and broad world views. This conclusion comes from a research study Environics recently completed for Sustainable Prosperity, a multi-stakeholder non-profit initiative dedicated to promoting EPR policy in Canada (www.sustainableprosperity.ca). This research revealed that Canadians generally view environmental pricing mechanisms in narrow economic terms (akin to other conventional financial levers), without much appreciation of the broader principles of "polluter pays" and the positive force of the market to achieve important social goals.

The research identified distinct segments or groups of the Canadian population, based on their orientation to EPR and their broader social values. It found that among supporters of EPR, there is only a very small group (4%) who understand and support EPR in the same way as the economists and policy-makers who promote it. Most of the Canadians who express support for EPR (13% of the population) do so for very different reasons - they put much less priority on environmental solutions but rather are pro-market enthusiasts who accept the inevitability of market forces whatever their effect (e.g. they are very strong on a social value Environics defines as "social darwinism", and weak on one called "primacy of environmental protection"). While this latter group is on-side with environmental pricing, they are hardly the kind of supporters sought by EPR advocates.

On the opposite side of the issue, the strongest opponents of EPR are those Canadians who make up the most vulnerable parts of society, including women, older Canadians, and those with the lowest levels of education. This group (21% of the population) sees EPR more as a threat than as a solution to anything. They may care about the environment, but tend to be more focused on day-to-day concerns. There is little potential for building support for environmental pricing initiatives within this group, but it is hardly one that can be ignored if EPR policy is to succeed in Canada.

In the middle is a sizeable group (33%) which is on the fence about EPR. This group (we call them "responsible citizens") has a high degree of social responsibility and concern about the environment. These Canadians are open to the potential of market mechanisms to offer solutions to issues like climate change because they are truly worried about these issues and feel strongly that progress is essential. But they are also concerned about how EPR might affect those more vulnerable than themselves; they are unlikely to support pricing policies that do not treat everyone fairly and make provisions for those who are disadvantaged. The size and composition of this group makes it a critical constituency for building public support for broad-based environmental pricing initiatives, and attracting its support will require demonstrating how such initiatives address social and economic equity issues.

What does this research tell us about what it will take to build the necessary public support in Canada to move forward with environmental pricing reform? EPR will continue to be a tough sell to consumers until such market mechanisms are framed in ways that are more in tune with Canadians' social values, and in particular address the discomfort many citizens have with using market forces to address environmental objectives. This cannot be accomplished through facts and arguments alone (which rarely sway established public attitudes), but through developing a new narrative that more effectively defines EPR in what it will accomplish, in meeting broadly held environmental, economic and social aspirations.

Keith Neuman (keith.neuman@environics.ca) is Group Vice-President, Public Affairs, for Environics Research Group Ltd.

A major new climate bill hit the House of Representatives this week and was met with deft political maneuverings from Senate Republicans that could render cap and trade dead on arrival. The Breakthrough Institute team has the angles covered:

Jesse Jenkins says this new climate bill is proof of misplaced priorities as the leading green groups setting the climate agenda walk away from billions of dollars in critical clean energy investments in favor of regulations, standards and carbon pricing. See also "Climate Bill is All About the Coal Hard Cash" at Huffington Post and listen to Jenkins talk about the Markey-Waxmen bill on KPFA radio.

Meanwhile in the Senate, two Republican amendments may leave cap and trade with no where to go. In reaction to the House climate bill, the Senate this week voted 89-8 to preemptively reject any cap and trade bill that increases consumer energy prices and voted 98-0 to ensure that any climate bill protects middle-income taxpayers from any tax increases.

Roger Pielke jr. thinks the Thune Amendment may have preemptively killed cap and trade and says Republicans have outflanked Democrats on climate already with the Ensign Amendment.

Michael Shellenberger sees these votes as the clearest rejection yet of the pollution pricing paradigm and examines the artful political maneuverings at play.

Ted Nordhaus is left worrying that the climate bill is on a crash course for compromise that will leave us stuck with the worst of both worlds: a climate policy lacking both a price signal sufficient to drive private investment anywhere near the scale we need and NO money for public investments in an RD&D strategy sufficient to make clean energy cheap.

Teryn Norris and Jesse Jenkins outline what Democrats can do to regain the political high ground and win the climate debate in this op ed, featured at Huffington Post. If Democrats want to win, they should quickly follow President Obama's lead by shifting the focus of climate legislation from pollution regulation to bold government investment in the clean energy economy.

As Congressional Democrats and DC greens gear up to fight for cap and trade, yet another another public opinion poll shows voters want investments in clean energy, not new taxes or regulations.

While Congressional Democrats and leading green groups insist that what the public wants is cap and trade to deal with climate change, yet another poll was released today showing voters want investments in clean energy, not new taxes or regulations.

If I were a Republican, I'd be relieved to have climate legislation to attack right about now...

Here's a quick look at the highlights from the new Public Agenda/Yankelovich poll...

Continue reading "Congress Debates Pollution Pricing; Public Wants Clean Energy Investment" »

Cross posted from Prometheus: The Science Policy Blog

As I mentioned yesterday, some stark political lines are being drawn in the Senate on cap and trade legislation. The Thune Amendment had 89 members of the Senate going on record opposing any increases to electricity or gasoline prices as a result of cap and trade legislation. In the Senate yesterday another important amendment to the Budget Resolution was approved unanimously, 98-0, sponsored by Senator Ensign (R-NV), chair of the Republican Policy Committee. Here is its text:

To protect middle-income taxpayers from tax increases by providing a point of order against legislation that increase taxes on them, including taxes that arise, directly or indirectly, from Federal revenues derived from climate change or similar legislation.

What does this amendment mean?

It means that money raised from cap and trade (or even a carbon tax) cannot lead to a net increase in the overall tax burden on the "middle class." What is "middle class"? According to Senator Ensign in a press release trumpeting the amendment, it includes those households earning less than $250,000 per year. Senator Ensign cites the President on this point, referring back to his campaign promises not to raise taxes on this group.

Politically and practically, this amendment could then mean that proponents of cap and trade will need to pursue an explicit "cap and dividend" approach with any such policy being tax neutral for those earning less than $250,000 per year. In other words, the costs of cap and trade will have to be fully borne by those earning above $250,000 per year. Some of the challenges of the distributional effects of cap and trade are discussed in recent CBO testimony (PDF). Whether or not legislation can be written that allows supporters to claim to have met the spirit of the Ensign Amendment, it is clear that the Amendment makes the political challenge that much more difficult.

Continue reading "Senate Republicans Outflank Dems on Climate" »

Cross posted from Prometheus: The Science Policy Blog

The ability of Congressional legislation on cap and trade to result in actual emissions reductions was dealt a serious blow yesterday. An Amendment was introduced by Senator John Thune (R-SD) on the Budget Resolution and its text is as follows:

To amend the deficit-neutral reserve fund for climate change legislation to require that such legislation does not increase electricity or gasoline prices.

What is this? Climate change legislation cannot increase electricity or gasoline prices? The entire purpose of cap and trade is in fact to increase the costs of carbon-emitting sources of energy, which dominate US energy consumption. The Thune Amendment thus undercuts the entire purpose of cap and trade.

Continue reading "Did the Senate Just Preemptively Kill Cap and Trade?" »

Republicans deftly succeeded in calling greens and Democrats on their bluff that cap and trade won't cost anything, winning yesterday an 89 to 8 vote on a resolution stating that any climate legislation must not raise gasoline or electricity prices. The Senate vote is timed to coincide with yesterday's release of a climate bill "discussion draft" in the House (more on that bill from the Breakthrough Blog coming soon).

The implications of this vote are that just eight out of 100 senators believe, and have the courage of their convictions, to openly state that fossil fuel prices should rise to deal with climate change. That is to say, there are only eight senators who agree with Thomas Friedman, EDF, NRDC, David Leonhardt, AEI, and all the others who believe that the most important, and perhaps only thing we should do to combat climate change and drive clean energy innovation is to set a price on carbon.

Continue reading "Senate Says No to Pollution Pricing Paradigm" »

The American Recovery and Reinvestment Act is not sailing through the legislative process quite as easily as many pundits had anticipated. The stimulus received no votes from House Republicans last week, and this week GOP Senators are joining the tumult. The bill has become embroiled in a few debates that are more political than economic, and is certainly demonstrating what President Obama means when he says he wants to bring a spirit of bipartisanship to Washington.

Yesterday, Senate Republicans proposed an incredible array of tax cuts and incentives--some trying to encourage consumers to make bigger purchases like tax credits for car and home purchases, as well as a big increase in plain tax cuts. The GOP has been in the media criticizing the spending aspects of the bill as not being timely enough or just generally less preferable then tax cuts (although it's pretty clear there's a healthy dose of ideology mixed into this economic-sounding argument).

Meanwhile, a bipartisan group of conservative Democrats and moderate Republicans have also come together to try their hands at reshaping the stimulus. The New York Times reports:

Continue reading "The Politics of Bipartisanship Stimulates Debate over Stimulus" »

The American Recovery and Reinvestment Act of 2009 passed through the lower chamber of congress today, putting the stimulus on track to be signed into law before Presidents Day Weekend. The entire Republican caucus was joined by 11 Democrats in opposition of the bill, passing with a vote of 244-188.

The voting record represents a setback to President Obama's vision of bipartisan governance. Despite meeting with the GOP caucus in order to field questions and hear concerns, Obama was unable to get any House Republicans to vote for the stimulus. TheHill.com reports:

Despite hinting that they might agree with Obama's initial call for a stimulus bill, Republicans in the end balked, and did so forcefully and unanimously, especially after the addition of more than $350 billion in spending by House appropriators.

It seems that Obama's decision to back off tax cuts that drew initial criticism from Congressional Democrats may have played a role in the complete lack of support from the Republican Caucus.

However, there are signs that a provision that has been added into the Senate's version of the stimulus, an adjustment of the alternative minimums tax, could succeed in garnering the votes of House Republicans when the bill arrives back for a final vote in the House. The tax code adjustment would hold down middle-class income taxes for 2009.

A version of the bill is currently working its way through the Senate, and is expected to garner more bipartisan support in its vote next week.

Read more about Breakthrough's thoughts on the stimulus:

• Passing the Recovery Test or: The Basic Political Reality for Climate Legislation in 2009
• Obama Stimulus: For Clean Energy, a Patchwork of Investments
• Obama Backs Off from Controversial Tax Cuts
• On Obama's Stimulus: Don't Look Back, Forge Ahead to a New Century of Prosperity
• How Deep is Public Support for Obama's Stimulus?
• Obama's Stimulus Plan: A Foundation for Growth?
• The Danger of Green Stimulus
• Forget Roads and Rebates: Why the Stimulus Should Invest in Innovation and Productivity

Rumblings on Capitol Hill indicate that Barack Obama is backing off some of the more controversial - and potentially least effective - tax cuts that he had planned on fitting in to a stimulus bill. Democrats in both houses viewed the inclusion of so many tax cuts in Obama's stimulus plan as an overplay for Republican votes on a critical piece of legislation that could set the tone for the President-elect's subsequent four years in office.

According to the New York Times, Obama now plans to scale back some of the tax cuts and reinvest that money in clean energy incentives:

"After Senate Democrats complained last week that the tax package proposed by the Obama team did not focus enough on job creation or on the energy sector, lawmakers said that the incoming administration had agreed to drop a proposed $3,000 tax credit per new employee and to add more energy-related tax breaks."

Continue reading "Obama Backs Off from Controversial Tax Cuts" »

Last week, Obama announced his stimulus package, a plan to spend nearly 800 billion dollars on infrastructure projects, modernizing schools and health records, expanding clean energy production, providing much-needed relief for state budgets, and extending tax cuts to 95% of working Americans.

By most standards, this is a big stimulus plan that could do a lot to bolster confidence, increase consumer spending and unfreeze credit. And yet, as Paul Krugman put it last week,

"To close a gap of more than $2 trillion -- possibly a lot more, if the budget office projections turn out to be too optimistic -- Mr. Obama offers a $775 billion plan. And that's not enough.

... The bottom line is that the Obama plan is unlikely to close more than half of the looming output gap, and could easily end up doing less than a third of the job."

Continue reading "On Obama's Stimulus: Don't Look Back, Forge Ahead to a New Century of Prosperity" »

In Northern Virginia today, President-elect Barack Obama addressed the nation, introducing a few basic goals and guidelines for an economic stimulus package that could cost as much as a trillion dollars.

Well aware that the large price tag on the stimulus, referred to as the "American Recovery and Reinvestment Plan," Obama included language about setting a foundation for economic growth now in order to return to a place of fiscal responsibility as the economy gets back on its feet. However, Obama was not shy about the need for the government to step in and spend, now:

"It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy - where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit."

Continue reading "Obama's Stimulus Plan: A Foundation for Growth?" »

Last week in response to Michael and Ted's piece in The American Prospect, Bradford Plumer at The New Republic's "The Vine" wrote a piece called "Should We Forget About Carbon Pricing? (No.)" The post, which mischaracterizes the stances Michael and Ted take in the Prospect piece, also propagates the myth of successful emissions reductions in Europe.

Plumer writes:

"Ted Nordhaus and Michael Shellenberger have yet another essay arguing that environmentalists should abandon all hope of trying to cap or tax carbon emissions, and instead focus solely on subsidizing clean-energy sources if they want to avert drastic global warming.

...Simply having the Energy Department dole out $50 billion per year to clean-energy producers (as Nordhaus and Shellenberger suggest) will pale beside the amount of private-sector money that will flow to alternative energy and efficiency improvements if carbon is priced properly."

This characterization of S&N's positions in The American Prospect and the Breakthrough Institute in general is a strawman.

Continue reading "In "Vine" Veritas? (No.)" »

In a move that may not be seen as surprising to many critics of the reigning financial oligarchy, a recent New York Times piece divulges that many banks are using the initial injections of capital from the Treasury not to buck up the ailing small business sector, but to purchase their stumbling competitors.

For those with the biggest appetites, the free lunch continues! And why should we as taxpayers be surprised by this?

From the New York Times:

"On Thursday, at a hearing of the Senate Banking Committee, the chairman, Christopher J. Dodd, a Connecticut Democrat, pushed Neel Kashkari, the young Treasury official who is Mr. Paulson's point man on the bailout plan, on the subject of banks' continuing reluctance to make loans. How, Senator Dodd asked, was Treasury going to ensure that banks used their new government capital to make loans -- "besides rhetorically begging them?"

"We share your view," Mr. Kashkari replied. "We want our banks to be lending in our communities."

Senator Dodd: "Are you insisting upon it?"

Mr. Kashkari: "We are insisting upon it in all our actions."

And yet, the article continues, unlike Great Britain, which has mandated lending requirements in return for the cash, our own government has stipulated no such return. Instead, they have merely requested it. As a favor.

Continue reading "No Loans for the Little Guy" »

Over at CAP, Matthew Yglesias has coined the term neo-Hooverite to describe politicians like incumbent Senators Saxby Chambliss and Norm Coleman, or GOP candidate John McCain, who are proponents of reducing the deficit and cutting spending in a time of economic downturn. I completely agree with Yglesias' argument that focusing on a balanced budget in this economic climate is almost completely wrong headed. He captures the argument here:

"But if consumers cut spending at the same time businesses are reducing investment and state and local government are cutting spending and then the federal government also reduces spending well, then, everyone is going to be spending less and less. Which means everyone is going to be earning less and less. And things are just going to get worse and worse."

Continue reading "Cognitive Dissonance Among Progressives and Greens" »

Yesterday was election day in Canada, a fact that I hope I'll be forgiven for missing amidst the frenzy of election politics here in the States. However, this stunning headline from the UK Telegraph grabbed my attention:

"Canadian election: Carbon tax proposals sealed Liberal defeat"

That's right, the opposition Liberal party was just dealt a stunning defeat, and their Achilles heal turned out to be their proposal to enact a carbon tax on coal, natural gas, gasoline and home heating fuels.

Continue reading "Carbon Tax Seals Liberal Party's Defeat in Canada" »

By Breakthrough Senior Fellow Roger Pielke Jr., cross posted from Prometheus

Yesterday's New York Times had an article on the upcoming carbon dioxide auction of the Regional Greenhouse Gas Initiative (RGGI) of 10 northeastern U.S. states participating in this new cap and trade program (h/t Adam Zemel at the BT blog). The evolving performance of RGGI should add weight to the argument that cap and trade is simply not up to the challenge of reducing greenhouse gas emissions. Here is an excerpt from the NYT article:

The program is due to get off the ground in nine days, but already there are worries that it may fail to reduce pollution substantially in the Northeast, undermining a concept that is being watched carefully by the rest of the country, by Congress and by European regulators. . .

The concept has been praised by environmentalists and state officials. But the emissions cap was based on overestimates of carbon dioxide output, which has dropped sharply from 2005 to 2006 and is on a lower trajectory than anticipated.

Continue reading "Tax-and-Charade" »

For 20 years, liberals and conservatives have been locked in a debate about the relative seriousness of climate change. Conservatives have either denied that it was happening or played down its significance, while liberals and environmentalists have tended to see it as ecological apocalypse meriting either extreme personal sacrifice or a supposed cost-free regulatory fix.

That debate is now undergoing a major shift. Conservatives like Jim Manzi, Newt Gingrich and others recognize that humans are affecting the climate and that something should be done about it. Liberals and environmentalists, like Joe Romm and most recently Al Gore, are beginning to recognize the political futility of peddling sacrifice, and have started emphasizing the need to make clean energy cheap. To be sure, both camps are still far apart in their view of global warming, with Romm seeing it as a future hell on earth and Manzi viewing it as little more than a rounding error. But if we fixate on these radically divergent views of the problem we risk missing some signs of agreement over what should be done about it.

Continue reading "Why We Can Disagree to Agree" »

This is a response to Max Epstein's guest post, "In Defense of Carbon Pricing: Why Clean Energy RD&D Isn't Enough." Our response is written by Breakthrough Generation fellow Zach Arnold.

Before anything else, I want to thank Max for his thoughtful post. His arguments have been a big help in clarifying our own thinking.

In my response, I'm going to try to define the problem we're trying to solve, and clarify the differences I see between a carbon price driven regime (as Max advocates) and an investment-led regime (as we're more fond of at Breakthrough). I'm then going to explore the political feasibility of a carbon price, and what a politically sustainable carbon price can and can't do to address climate change. In doing so, I hope to show that, for now, we can't rely on carbon pricing to drive the shift to a clean energy economy.

Continue reading "Breakthrough Responds: Why Carbon Pricing Won't Cut It" »

We've asked our friend, UMD student, and occasional Washington Post editorialist Max Epstein to contribute his thoughts on carbon pricing to the blog. Our response, by Breakthrough Generation Fellow Zach Arnold, is here.

In the wake of the failed Lieberman-Warner Climate Security Act, there has been a widespread reevaluation of whether Cap & Trade is the most effective strategy to avert catastrophic climate change. At first many promoted a carbon tax instead, but recently there has been a call to reconsider the central focus on pricing carbon itself. Following Lieberman-Warner's abrupt death in the Senate, Michael Shellenberger wrote that the new way forward should focus on making renewable energy cheap, not polluting sources expensive. In "Scrap Kyoto," Shellenberger and Nordhaus call for a massive public investment in clean technology research and deployment. Joseph Romm in Nature calls for massive subsidized deployment of existing renewable technology, relegating R&D to the "longer-term effort aimed at a new generation of technologies for the emissions reduction effort after 2040." However, such efforts would be insufficient without a price on carbon as well.

Continue reading "Guest Post: In Defense of Carbon Pricing: Why Clean RD&D Isn't Enough" »

In his first major speech on global warming since he accepted the Nobel Peace Prize, Al Gore today finally acknowledged the need for major public investments to make clean energy cheap, rather than simply increase the cost of dirty energy through pollution regulation. This represents a major step forward in his own thinking, and a break from the dominant environmental approach to global warming.

At the same time, Gore failed to address the central concern of policymakers in Washington: what to do about rising energy prices.

Continue reading "Will Google Gore Overcome Gaia Gore?" »