Posted by: Adam Aston on October 15
Last week, I posted some worries about how the high energy prices, the credit crunch and a looming recession are likely to derail progress on climate change. In the days since, the credit crisis has shifted to Europe and brought climate questions to the fore. Reuters reports that France is considering offering its industries opt-outs to soften the pain of a recession. Charles Haneley, writing for AP, says that a success story of the current climate regime -- the transfer of wealth from rich countries to poorer ones to fund greenhouse gas reduction -- is threatened given the growing shortage of funds. A co-bylined piece in the Guardian goes the farthest, bluntly pointing out that European countries may use the economic crisis as an excuse to ditch or delay climate goals.
Posted by: Adam Aston on October 13
My colleague, Cathy Arnst, is up at a Harvard B-school confab this week and sent in the following snapshot. Big business leaders are clamoring for strong green investment policies from the next administration. In Cathy's words:
GE CEO Jeffrey Immelt came out of the managed economy closet this morning. In front of some 1,600 business people at Harvard Business School (HBS), the citadel of capitalism, he had this to say about federal government investment in environmental technologies in order to create jobs:
I've been a Republican all my life. I believe in free markets. But the notion that the government isn't a catalyst for change in this country is purely garbage.
The crowd erupted in sustained applause.
Immelt made his remarks at a giant party HBS is throwing itself to mark its 100th birthday. The confab is called the Global Business Summit. Not the best timing for a celebration of business, perhaps, but some a lot of business folk are still spending Oct 13 and 14 listening to the likes of Bill Gates, Immelt, Larry Summers and other illustrious names give their views. And a lot of them view a full court press to develop environmental technologies a good thing.
Monday morning's panel discussion on leadership sounded like a session at an environmental convention rather than an HBS meeting, given the tone of the remarks. The speakers were Immelt, noted Silicon Valley entrepreneur John Doerr, former EBay CEO and McCain advisor Meg Whitman, Anand Mahindra, Vice Chairman of the huge Indian truck and tractor maker Mahindra and Mahindra, and British financier James Wolfesohn, who headed the World Bank for a decade.
Green technology was one of the main topics of the discussion, with speaker after speaker saying that this is the one sector that could really get the economy moving again. In particular Doerr, who has a lot invested in cleantech startups already, said environmental technologies would be a more powerful engine for growth than Internet or biotech startups, but there isn't venture capital money around to reach the level of investment need in environmental research as a job creation. That's when Immelt threw in his two cents.
Posted by: John Carey on October 07
Convincing local communities to allow wind farms nearby is often not an easy task. There are the obvious concerns about what the turbines will look like, how loud the spinning blades will be, whether birds will be harmed, and what the project will mean for local property values. But when We Energies, the Milwaukee, Wisc-based utility, recently tried to expand its wind production, it ran into an objection most of us hadn’t even thought of.
Some local people complained about the strobe-like effect of sun behind the windmills. When the sun is behind the wind farm, each blade blocks the sunlight long enough to make it seem like giant hand is flipping a solar light switch as fast as once per second.
We Energies’ solution? They were able to get people to accept the wind turbines by agreeing to pay for new window treatments—curtains or shades.
Posted by: Adam Aston on October 07
I think it all depends on just how bad the economy gets. I've been wrestling with this question more and more as election day draws nearer. Congressional Quarterly has a nice piece today outlining the opposite directions in which high energy prices are pulling the debate on climate policy. On one hand, $4 gas has unquestionably raised awareness about the need for smarter energy policy and stokes broader anxieties about climate change. Such worries open the door for big ambitious thinking: national programs to accelerate plug-in hyrbrids, or a national renewable portfolio standard.
Yet pocketbook issues will trump all else. Economic anxieties are skyrocketing as fast as global financial markets have been plunging. If Obama or McCain had thoughts of moving ahead with ambitious climate change policy as a first order of business, the very sick economy will certainly delay those plans. My worry is whether recession could derail US climate plans for a long while, given how hard it will be to sell cap and trade to the public or, more relevant, to overcome delaying tactics from incumbent fossil industries and their Congressional allies.
Here's an example of the hyperbole we can expect to see. I heard an energy adviser to McCain present last night at an off the record meeting. The campaign has some solid energy policies and a track record for taking climate change seriously. Yet in defending the need to give away carbon emission credits (a McCain position) rather than auction them off (Obama's take), the spokesman described the impact of cap and trade on the electricity industry in scary terms. Charging for carbon, he said, is sure to send power prices skyrocketing.
This is wrong in scale, as utility CEOs have told me repeatedly. Given how cheap coal is, even its price doubles, power from coal will remain cheaper than natural-gas fired power (which sets prices in most US electricity customers). Prices will rise, yes, but by percentage points. And that's the point: higher prices steer utilities away from high carbon energy sources, encourage carbon capture and sequestration, and get businesses to invest in efficiency and consumers to buy thriftier appliances, turn off lights and so on.
Yet if McCain's guy was factually wrong, he probably won the emotional point. I bet his assertion is what most anxious listeners will recall from the debate, instead of the more truthful, yet nuanced and complicated answer from an Obama advisor.
Posted by: John Carey on October 03
As the country tries to figure out the impact of the mammoth $700 billion financial rescue plan just passed by Congress, there are a couple of industries that are especially ecstatic—the wind and solar businesses. Just about everyone loves renewable energy. And the vast majority of members of Congress support the idea of tax breaks for these industries. The problem has been that the existing tax incentives for wind and solar were scheduled to expire at the end of this year. Despite the widespread support, Congress turned them down in vote after vote this year. The failure to pass them wasn’t on their merits. Instead, the credits were essentially held hostage by other agendas. The Republicans wouldn’t pass them unless they got more areas opened to drilling too. The Democrats wouldn’t pass them unless the tax credits were paid for (in most proposals, by removing tax breaks for oil and gas), which the Republicans fought. This standoff was beginning to have serious consequences for the industries. Orders for next year plunged. Companies were beginning to plan to cut thousands of jobs if the credits weren’t renewed.
So the irony here is that these credits, long held hostage to other agendas, ended up serving another agenda anyway. They proved to be one of the sweeteners that got the House of Representatives to sign on after the first bailout package was rejected. Of course, this being Washington, it wasn’t a clean victory for renewable, environmentalists say. “It is unfortunate that Big Oil and its allies added incentives for liquid coal, tars sands, and oil shale which will increase global warming pollution and use enormous amounts of water in the arid West,” says Anna Aurilio, director of Environment America.
