Energy

As the global financial crisis deepens, one question being debated is how the world will deal with urgent environmental issues.

On the one hand, we can seek a “green transformation” through public investment:

In the face of economic catastrophe, yesterday’s controversial assertion has become today’s conventional economic wisdom. That lack of regulation is one root of the current depression is not only the view of liberals and moderates, but also of sensible conservatives. And the need for public investment to fight the depression is no longer in doubt either. There are really only two tools in the conventional economic toolbox to fight a depression: lower interest rates, and public investment. Given that real interest rates are close to zero, that doesn’t leave a whole lot of alternatives. …

The bottom line is that we have about $275 billion a year we could productively invest in a green transformation, rising over the course of 20 years to $475 billion, and then dropping down to $265 billion for a decade after the transformation was complete, to pay off the last of the “green debt.” Those subsidies would make up for any difference in cost between green energy and dirty energy.

On the other hand, governments can resort to short-term economic fixes over long-term environmental solutions:

The world must avoid a “cheap and dirty” fix for the economy that could undermine the fight against global warming, the U.N.’s top climate official said on Sunday.

Yvo de Boer said the world risked a second financial crisis if governments reacted to economic slowdown by building cheap, high-polluting coal-fired power plants that might then have to be scrapped as climate impacts hit.

“What concerns me most is that the financial crisis will lead to a second set of bad investment decisions,” he told a news conference before Dec. 1-12 talks involving 186 nations working on a new climate treaty.

“I hope that the second financial crisis is not going to have its origins in bad energy loans,” he said.

Let’s hope we have the foresight to heed De Boer’s warning.
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by Jana Gastellum, Associate Director, Energy Future Coalition

Among churning financial markets, two international organizations, the United Nations and the International Energy Agency, recently called for green growth as a solution to the current economic crisis.

Last week, Secretary General Ban Ki-Moon promoted the UN Environment Programme’s call for a Green New Deal. Coupling solutions to poverty, energy security, and the environment, Secretary Ban says,

A solution to poverty is also a solution for climate change: green growth. For the world’s poor, it is a key to development. For the rich, it is the way of the future… At a time when the global economy is sputtering, we need growth. At a time when unemployment in many nations is rising, we need new jobs. At a time when poverty threatens to overtake hundreds of millions of people, especially in the least developed parts of the world, we need the promise of prosperity. This possibility is at our fingertips.

We have experienced great economic transformations throughout history: the industrial revolution, the technology revolution, and the era of globalization. We are now on the threshold of another — the age of green economics.

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Suzlon Green Power, one of the top five producers of wind turbines worldwide, just announced the biggest commitment (dollar-wise) of CGI. Suzlon has committed to bring 3,500 megawatts of electricity to nearly 10 million people, primarily in India and China, over five years. The projected cost of the project is $5 billion, and Suzlon will contribute $1.5 billion in equity. The increase in capacity represents roughly a third of the current capacity of GE, the current world leader.

Suzlon estimates that the these projects will cut 7 million tons of carbon dioxide equivalent a year, roughly the equivalent of what 350,000 Americans consume — nothing to sneeze at. READ MORE

I’m sitting in on a very enjoyable panel on Climate Change and Energy Security hosted by Reid Detchon from the UN Foundation and featuring J. Michael Davis, former Assistant Secretary of Energy under Bush 41; Robert McFarlane, former National Security Advisor to President Reagan; George Pataki; and R. James Woolsey, former CIA director under Clinton.

Piece of advice, if you get a chance to catch a panel hosted by Detchon (excellent dry wit) or featuring the others, particularly Woolsey or Davis, you should.

My battery’s dying, so I’ll have to upload some more thoughts later, but the first thing that struck me was how the ideas of those on the panel very closely match what I have heard being said about or by Obama recently. READ MORE

I just want to highlight the fact that Obama said this last night:

And for the sake of our economy, our security, and the future of our planet, I will set a clear goal as President: in ten years, we will finally end our dependence on oil from the Middle East.

The desire to truly repeat Kennedy’s call to reach the Moon within a decade has long been a dream of politicians, actual and fictional.

The end goal, in this case, is undeniably admirable (and politically savvy). It is somewhat broader than Gore’s call for clean electricity within the decade and more clearly beneficial to our economy and foreign policy than Bush’s call to reach Mars. As Obama says, it is securely at the nexus of economic, foreign policy, and environmental concerns. (I would also add humanitarian.) I’m sure I don’t need to rehash to this audience why such an action helps us reach major goals in each of these areas.

Only time will tell whether Obama will be able to do so. It is a major challenge. As Governor Schweitzer so entertainingly laid out on Tuesday, we currently consume 25 percent of the world’s oil output and only 3 percent of the reserves.

His strategy?

As President, I will tap our natural gas reserves, invest in clean coal technology, and find ways to safely harness nuclear power. I’ll help our auto companies re-tool, so that the fuel-efficient cars of the future are built right here in America. I’ll make it easier for the American people to afford these new cars. And I’ll invest 150 billion dollars over the next decade in affordable, renewable sources of energy — wind power and solar power and the next generation of biofuels; an investment that will lead to new industries and five million new jobs that pay well and can’t ever be outsourced.

The $150 billion is a good start. Hopefully, in the near future, we’ll see more details.

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