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The Budget: Not Serious Yet About the Environment

? The Case of the Missing Productivity |


| Could low interest rates stick around? ?

February 05, 2007

The Budget: Not Serious Yet About the Environment

Michael Mandel

I won't believe that the U.S. is serious about global warming until I see the feds start throwing real money into R&D into energy and environment-related R&D. After all, no matter what your political views, everyone can agree that more R&D in energy and the environment can only be a good thing.

Unfortunately, that's not happening yet. Bush's 2008 budget, released today, proposes a 1% increase in real R&D spending on these four categories--energy, atomic energy, natural resources and environment, and transportation. That's 1%.

Our commitment of resources looks even more meager in historical perspective. In real terms, proposed environment and energy R&D is 17% below where it was in 1993, and more than 40% below its peak in 1979. As a share of GDP, environment and energy R&D is half what is was in 1993.

Here's two charts that shows where we are:

11:22 AM


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Are the oil companies doing any real amount of research in this area?

Posted by: Joe Cushing at February 5, 2007 02:42 PM

I agree with putting more money into nuclear energy, but not to prevent global warming. It is a theory, and only that. We don't know enough to decide whether it is actually manmade, or if it will be as devastating as people say. We have enough things to spend money on in the US, the last thing that I want is to have the government's hand in my pocket because Al Gore scared some college kids silly... It's a theory... nothing but that... Why should our government have a knee jerk reaction to it. We have proven to be a nation of rational thinkers, why does this not apply to the global warming debate? There are two sides to this, and many climatologists believe global warming to not be as severe, or man made as WaPo might have you believe.

What I mean is... Good for Bush not cowering to Al Gore...

Posted by: Jeff at February 5, 2007 11:48 PM

I have yet to see definative research that there is anything such as global warming.

Posted by: Rick at February 6, 2007 07:08 AM

You know President Bush doesn't get it when he says "technology" will replace oil, which he has stated more than once. Technology can not replace oil; oil is *energy* and only energy can replace energy. All the technology in the world is a pile of junk without energy to run it. I've come to the conclusion recently that mankind has only made two great advances in its history. The first was harnessing fire, which gave us the advances of the first million and a half years, or so. The second was harnessing electrons, which has given us the advances of the past 200 years. We probably have a very long time to go before the next real, great advance. We might not even survive as a species long enough to acheive it. Having said that, our modern energy is still primarily based on fire: gasoline engines, coal-burning electric plants, etc. The exception would be nuclear power plants. Therefore, if we are to truly research a "next step" form of energy - particularly for automobiles - then it ought to be purely electron-based. Electric cars, charged up by electricity generated at nuclear power plants, are the real "next step". Ethanol, biodiesel, and the like are nothing more than band-aids until we get to that stage, as they are still fire-based energy sources.

But I don't think the government - particularly Bush - understands any of that. And now he wants to spend over 20% of our national budget on wars to secure more fire-based energy? Clueless.

Posted by: Brandon W at February 6, 2007 08:30 AM

Brandon W,

Quit your infantile leftist screeds. If you think the US goes to war for oil, you have not only drunk the kool-aid, you are certifiably incapable of intelligent thought.

I suppose you think Clinton's wars in Kosovo, Bosnia, Somalia, etc. were for oil too. The US military budget was a higher share of GDP at the time, you know.

When people like you insist Bush doesn't understand something but offer no new ideas, but offer no intelligent discourse at all, you merely convince thinking people that Bush is the more knowledgeable of the two sides.

Posted by: Tester at February 6, 2007 10:37 AM

@Joe Cushing. Its really naive to think that mankind can continue polluting the enviromet without any consequences. The simple fact is, we are just part of the eco-system. Any imbalance will be balanced someday natures powerful forces.

Bush and the Americans should really be responsible for much of the disasters in the world due to climate changes now, and in the future soon.

If global warming is more dangerous than terrorist like what Stephan hawking said, Bush is more dangerous than terrorists.

He is a danger to mankind.

Posted by: ricos at February 6, 2007 12:33 PM

My view on global warming is that we, every people on earth has to act on it. Whats the point, even thought the world strongest economy acts but the rest continue polluting it. Someone with authority like UN should set up a governing body, rules that every country must follow to cut down & starts saving the planet.

Posted by: Ethan at February 6, 2007 02:37 PM

Anthropogenic global warming is a total farce and to even consider spending tax money on this subject is idiotic. The environmentalists continue to hype new supposedly lethal threats that given closer scrutiny turn turn out to be nothing more than snake oil. The U.S. should allow Exxon and other oil companies to develop real oil resources off-shore and in Alaska as well as expand nuclear power production to provide for true future energy independence.

Posted by: Ed C. at February 6, 2007 04:41 PM

Tester, you don't have to be a leftist to think Bush is wrong... Have you listened to half the GOP lately? You say I offer no new ideas... did you actually read my post? (Or did you just not understand it?) I didn't say Clinton was right about anything; I'm not talking about Clinton, I'm talking about G.W.Bush and energy. Stick to the topic at hand and don't try to divert attention by attacking an irrelevant individual because you think it will annoy me. It won't. I don't care about Clinton. I care about the issue at hand and the person who is President now, not a decade ago.

Posted by: Brandon W at February 6, 2007 10:33 PM

When I woke up this morning the actual temperature was -20 F. Throw the wind into the mix and it ranged from 35-70 BELOW zero. Does this mean that someone forgot to invite us to the global warming party? You all have some good points. I don't really subscribe to the whole global warming theory myself. More importantly, however, is that the supply of oil in the world is limited. Even if we aren't destroying the environment by burning it, we will run out some day. Jeff and Brandon W are right on the money when they discuss nuclear energy. Once powerplants are built they are less expensive and more efficient than other ways of harnessing energy. I understand that many will argue that nulear fission is unsafe. It does have it's dangers, but it is the best alternative we have right now. Best solution? Figure out cold fusion!

Posted by: M.T. Paige at February 7, 2007 04:46 PM

I wish that our energy situation cold be solved by more goverment spending. It would be a nice easy answer. But if you look at the history of most federal goverment spending, they seem to put bandaids on things and hope they go away. I believe free market ideas have gotten us this far and are the most likely way of our world arriving at a long term energy answer. As energy costs go up, there will be more financial gain to have more efficient, and probably cleaner, forms of energy. Be a little patient. We don't need a so;ution tomorrow. We just need the right one. Or ones.

Posted by: Jack K at February 10, 2007 07:24 AM

Global warming is not about warmer temperatures per se. So, let's not confuse the absolute temperature around the world with climate changes, which may endanger the natural habitat. I would not pretend that I am an expert- I am not an expert on the topic and I think most of us aren't. But my sense is that talking about the environment is beneficial-- that is, regardless of whether or not the story on global warming is completely true. Only a careful analysis supported by the proper amount of research can provide definitive results on the most efficient energy methods and then the discussion can move to a different level. In addition, digging for more physical resources doesn't necessarily convey a sustainable focus. You can have them for a while, and they will be depleted in the long term. Not paying attention to the environment, on the other hand, it seems to me, suggests a short-term focus- we only live about 70-80 yrs, and the environment has been around for much longer-- so why worry about it now? Our needs just keep expanding, though, it seems. There is no left and right-- it's the environment that is under discussion and not our views on politics.

Posted by: Sophia at February 10, 2007 01:01 PM

In the 1960s, we had visual pollution along our highways. In the 1970s, we had water and land pollution. In the 1990s, landfill overflow syndrome.

Today, we have an "Inconvient Truth" about Global Warming leading to man made catastrophes.

In the 2020s, we will have some Disparity--Food becoming Fuel, perhaps-- leading to a Civil War or Anarchy.

In retrospect, each of these Life threatening issues was improved dramatically within 15 years. Will any of these problems ever go away? No, but they can be corrected individually and as a Society.

Posted by: Frank at February 11, 2007 11:42 AM

It would be interesting to see some comparative R&D numbers for the private sector. How much did GE spend developing the new combined-cycle turbines? How much R&D did Toyota put into hybrid vehicles? How much R&D money is being invested by the several companies that make solar cells, and by the ventures working on improved batteries and ultracapacitors?

As another point of comparison: from 1980-2000, the computer industry achieved tremendous innovations. How much was the government R&D spending during this era, and of that total, how much of it actually proved relevant to the innovations accomplished?

Posted by: david foster at February 11, 2007 11:14 PM

As Sophia points out, the issue isn't so much "global warming" as global climate change. The source - global warming - is relatively tiny on a percentage basis, making it easy to dismiss as normal variance or even irrelevant. After all, what's the big deal about a .5% change when we're constantly talking about 10% yearly gains in the stock market or 5% drops in home prices in a quarter? However, the effects are more dramatic. Precipitation patterns across the U.S. have changed substantially in the past 25 years alone. Wild swings of temperature - hot *and* cold - are an effect. Intense cold swings aren't an indication of "no global warming", but can be an indication that a .1% change in ocean temperature can completely change a planetary climate pattern. So let us not confuse cause and effect. The problem is Global Climate Change. Global warming, as absolutely small as it might appear statistically, is just the cause we need to address to impact the greater effect of Global Climate Change.

Posted by: Brandon W at February 12, 2007 10:25 AM

I am absolutely convinced that nobody that posts here has any sense of humor at all.

Posted by: M.T. Paige at February 12, 2007 01:08 PM

It's BusinessWeek...we are a serious publication...we are not supposed to have a sense of humor...

(though if you are good, I will give you the secret url for all of our really funny stories)

Posted by: Mike Mandel at February 12, 2007 01:20 PM

Personally, I think economics is *hilarious*.

Posted by: Brandon W at February 12, 2007 01:49 PM

Hmmmm...I take back what I said. The sarcasm from Mike and Brandon W renews my faith. If the extremely cold weather I have been dealing with for the past couple of weeks is a result of climate change, I WANT IT TO STOP! Seriously, have you ever walked across a parking lot at -20F with the wind blowing at 25 mph? Not exactly the time of ones life...

Posted by: M.T. Paige at February 12, 2007 03:44 PM

Mike, in the last couple of years I've noticed a strange trend...cartoons appearing in business pubs that are actually kind of funny. Never used to happen...

Posted by: david foster at February 12, 2007 03:46 PM

For those who are in favor of the nuclear option because it is cheap, I've heard the over all cost including fixed costs for nuclear power is more expensive than other options. In other words the NPV of nuclear energy is negative. This is why we haven't built a plant since the 70s. This might change in a couple hundred years when we run out of coal and oil if we don't find something cheaper than nuclear to replace it with. The reason we continue to operate old nuclear power plants today is because most of the fixed costs are sunk. We would need new R&D for building the plants in order to make nuclear a viable energy competitor.

Posted by: Joe Cushing at February 13, 2007 04:20 PM

Capitalists are looking around government expense to accomplish world transformation. It is new but, business and other NGO's are now embracing sustainable business models, and sustainable business processes. Sustainability end with how you get to a balanced level of production and consumption, how do you have production and use that does not add to the carbon footprint. Selling sustainability to business is not that hard in capitalist western nations, because of impact on business process, business will always demands tax offsets to gain compliance. And forget just beneficial environment reasons the competition for commodities will also force part of the sustainable business investment. Business can see this, even if it is mandated it is one more chance to gain tax advantage. You need look no further than beneficial environmental mandates that arise to accomplish sustainability by business.

Posted by: Mike Reardon at February 13, 2007 05:25 PM

I'm late to the discussion but I thought you might find this McKinsey study on abatement costs interesting/useful:

Posted by: Andy Joyce at February 26, 2007 12:55 PM

This McKinsey study on abatement cost is well-worth reading, if only to move thinking away from "is/ain't" that predominates the topic.

Posted by: Andy Joyce at February 26, 2007 12:59 PM

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