Toward a New Energy Economy: Part 1, Action in 100 Days

There is no lack of ideas for what President Obama and the 111th Congress should do to address three of the most pressing issues they will face when they take office in January — global climate change, the energy crisis, and economic transformation. It may be winter in Washington, D.C., but it’s springtime in national politics. Policy agendas are blooming like cherry blossoms.

For example, last week alone, Washington, D.C. was introduced to three comprehensive plans to address economy, energy and climate. Two were issued by the Center for American Progress, headed by John Podesta, co-chair of President-elect Obama’s transition team, including an excellent strategy for green recovery by Bracken Hendricks and Benjamin Goldstein.

The Presidential Climate Action Plan (PCAP) was released during a standing-room only briefing on Capitol Hill, after two years of gestation at the University of Colorado. PCAP contains more than 180 proposals for President Obama and the next Congress, across 18 topics, ranging from natural resource stewardship to public health and from farm policy to zero-carbon buildings and transportation systems. All were designed for action during President Obama’s honeymoon period — the six months in which a new president traditionally sets the tone of his administration, between inauguration and the August congressional recess.

Published electronically with hyperlinks to the material behind the ideas, PCAP is the result of 22 months of work involving more than 200 people. Its proposals come from some of the nation’s leading experts on climate and energy policy, from original research, from members of the project’s prestigious national advisory committee and from present and former federal employees who understand the inside workings of government and whose desire to do something about climate has been pent up for the past eight years.

Among the several white papers and studies PCAP commissioned is a keep-it-simple plan for capping and trading carbon emissions, proposed by Yale economist Dr. Robert Repetto, and recommendations from international experts — including Alden Meyer at the Union of Concerned Scientists and Daphne Wysham of the Institute for Policy Studies — on what the president should do to make the United States an honest partner in international negotiations over climate action.

PCAP also includes policy roadmaps from the Alliance to Save Energy for changing America’s building practices and from the Center for Neighborhood Technology on retooling America’s transportation policies. It offers a detailed plan for reducing emissions from the world’s largest single energy user, the U.S. government.

Because we anticipated that the legislative branch might be sensitive about presidential abuse of power in the wake of the Bush Administration, the PCAP team commissioned an extensive analysis of the president’s authority to act on climate and energy without waiting for Congress. Scholars at the University of Colorado School of Law studied the 96 current statutes in the U.S. Code that specifically address climate change; many of our landmark environmental laws; 140 federal court cases and 370 executive orders going back to 1937. They analyzed about two-dozen executive orders proposed by PCAP and identified the specific statutes that give the president the authority to implement them.

The conclusion: President Obama will take office with plenty of power to jump-start federal leadership on climate and energy security and to begin America’s necessary transformation to a safe, sane and secure 21st century economy.

That conclusion doesn’t leave the nation’s lawmakers off the hook. PCAP contains 75 major action items for Congress. At the top of the legislative list is a two-part plan to mobilize the marketplace for the new economy:

    1. A fair, workable, transparent and elegant scheme called “upstream cap and auction” to put a price on carbon, generating between $100 billion and $250 billion annually. Part of the money should be returned to the American people. The rest should be invested in clean energy research, modernization of America’s infrastructure, a training program for green jobs, and grants to states and localities for “energy and climate security plans”.
    2. The repeal of federal subsidies for fossil fuels so that our tax dollars are no longer distorting market signals and paying to ruin the planet.

PCAP also recommends that President Obama do the following:

  • Seek a bilateral agreement with China to reduce both nations’ greenhouse gas emissions and to collaborate on clean energy technology. A concrete commitment in 2009 between the world’s largest developing and developed nations would be an enormous breakthrough before the international community gathers in Copenhagen in December 2009 to figure out what to do after the Kyoto Protocol expires.
  • Reinstitute specific carbon-cutting goals for the federal government (they were removed by the Bush Administration) and mobilize the game-changing procurement power of the government to buy green energy and products.
  • Forbid political censorship of federal climate science and give government scientists the right of last review of their technical conclusions.
  • Set ambitious new energy and climate goals for the country. We should reduce our greenhouse gas emissions 30 percent by 2020; cut our oil imports in half by 2030; raise the CAFE standard to at least 50 mpg by 2025; achieve zero-net-carbon buildings by 2030; and improve the nation’s energy efficiency 50 percent by 2030.
  • Begin regulating greenhouse gases under the Clean Air Act. Regulation will help convince the international community that we’re serious. More importantly, regulation will begin cutting emissions even before cap-and-auction takes effect, and curb emissions that a cap-and-auction system cannot.
  • Order agencies to review the more than 200 financial assistance programs administered by the government and redirect them wherever possible to invest in the new economy rather than the old.
  • Appoint climate experts rather than lobbyists to senior positions. We have provided President-elect Obama’s transition team a list of 250 senior jobs where we believe climate expertise is critical, along with the names of 200 experts who should be considered for appointments.

These investments in a new energy economy — including a market-based system to gradually raise the price of fossil fuels — won’t be easy in this time of economic hardship, but they are necessary. The cost of not acting is much higher and much more painful. President-elect Obama knows that. He also knows that while have promised him a rose garden, no one said there wouldn’t be thorns.

Part 2 examines how the next Congress will have to resolve some tough questions that past Congresses avoided.

— Bill B.

8 Responses to Toward a New Energy Economy: Part 1, Action in 100 Days

  1. Col says:

    I’ve been thinking that a ‘Back to Basics’ theme would go enormously far for the pres-elect when it comes to setting, selling and implementing an agenda on all issues, let alone energy and climate. The removal of government subsidies to the biggest companies is a pretty good example of a ‘basic’ action (i.e. inherently & obviously fair) and I’m glad to see talk of it. Helping push for the removal of these world-wide (the IEA says $310B last year) would also be a no-brainer, easy to sell, & inherently fair thing to strive for internationally (though tricky to accomplish I imagine).

    This is but one example though, and there is no shortage of examples. From democratic reform (especially electoral and lobbying reform), to competition reform, to specific policies knocking down barriers to progress of all kinds, Obama has before him a system that is sufficiently corrupt that just asserting fairness and transparency will go enormously far on a range of problems. Makes you wonder if GHG emissions might be less of a “problem” than a symptom? A physical symptom of social corruption and inequity?

  2. David B. Benson says:


  3. Mark Shapiro says:

    We need to look this over closely, offer improvements where we can, and then get behind it (letters to editors, to Congress, the Daily Show, etc).

    The sticking point will be cap and trade or a tax of any kind. That will need serious support and re-education of the media.

    Remember, the anti-tax noise machine is ALWAYS fired up, and ready to go.

  4. Peter Wood says:

    This is absolutely fantastic news! A reduction of emissions of 30% by 2020 could be consistent with 450ppm. Contraction and Convergence to 450 ppm would suggest this target for the United States if the convergence date was 2050, this date may be at the limit of what developing countries are prepared to accept however. But this is the first sign I have seen for a while that an agreement consistent with 450 ppm may be possible at Copenhagen.

    The upstream approach is quite interesting and quite promising.

    Polluting industries are likely to make a large amount of noise. This has been happening in Australia over the past year. Expect them to hire consultants to write reports predicting that the sky will fall down and businesses will close if these reforms are introduced. Progressives should get ready to debunk these reports when they come out. It is time to educate the American public about ‘rent-seeking’.

  5. Here’s one specific idea I have, to save the automakers and fast track fuel efficient vehicles here:-

    Americans want and need efficient vehicles, Ford and GM don’t make them. So Ford and GM going out of business, taking many Americans with them.

    Solution premise:
    GM and Ford do make fuel efficient vehicles for the EU market, but cannot import them as they met ECE rules, not our different NHTSA rules.

    Two steps to implement solution:

    1. New congress: new legislation. Adopt ECE rules. Accept them in lieu of NHTSA for Detroit’s own EU models of more efficient cars.

    2. Use auto bailout funds to duplicate the factory supply chain that Ford and GM used there to build those fuel efficient models in Europe, and set up “mirror factories” here in Detroit, so Ford and GM can build them here.

    3. Legislate a binding contract with automakers: that this funding is only for use in producing a (minimum of one) specific fuel efficient model.

    (rather like the govt ordered up X many of aircraft Y for WWII)

    I wonder what a complete factory machinery set-up costs? I don’t know what entire auto factory assembly-lines cost to put together. Does anyone know?

    I would think you could set up here to build at least one model for $25 billion. Maybe it doesn’t take all that much money to adapt what they have here now – after all they bring out new models each year anyway.

  6. llewelly says:

    It may be winter in Washington, D.C.

    One of these years … maybe soon … either winter will come really late, or spring will come early, and it won’t be winter in January in Washington D.C.

  7. red says:

    “Two were issued by the Center for American Progress, headed by John Podesta, co-chair of President-elect Obama’s transition team,”

    “mobilize the game-changing procurement power of the government to buy green energy and products.”

    “Further, we will invest $15 billion each year to catalyze private sector efforts to build a clean energy future.” (from Obama speech in earlier post)

    I’m not sure how much Joe or Bill are aware of every position paper from the Center for American Progress, but I wanted to point out one item from a position paper by Neal Lane and George Abbey on space policy that I think is a spectacularly bad idea, with some implications to our energy and climate situation.

    “Specifically, the decision to phase out the shuttle by 2010 should be reconsidered; it should be flown until a suitable replacement becomes available.”

    In case it’s not obvious, they’re talking about the Space Shuttle.
    “First and foremost, the mandate to stop flying the space shuttle in 2010 meant the United States would depend on Russia for human access to space for at least four years, but more realistically a decade.”

    The paper quite rightly points out that the NASA Shuttle replacement, a set of government rockets and space vehicles called Ares 1, Ares V, and Orion, has delays, cost overruns, and technical problems. These expensive government systems should never have been started, and should probably be totally reworked or replaced when Obama gets in office. However, the solution is not to keep the Space Shuttle going.

    – The Shuttle is too expensive. It costs about $4B per year to maintain. NASA could do a lot with $4B/per: double its Earth Science budget, increase its planetary science budget for climate studies with different conditions from Earth’s, start a new type of Earth science observations using low-cost commercial reusable suborbital vehicles, improve power subsystems and power using subsystems on satellites with spin-offs for home/industry use, research improved airplane fuel efficiency, etc (I could but won’t continue) ….

    – The Shuttle has shown that it’s dangerous, and cannot be made safe (eg: no ejection seats).

    – NASA already has a modestly-funded program to encourage commercial vehicles to send cargo to and from the Space Station, in exactly the sense of the quotes at the top of the government encouraging private enterprise to solve national problems. This effort should be expanded to crew (including ISS rescue). Continuing the Shuttle would crush this innovative effort. One of the primary participants happens to spin off environmentally-useful companies like GeoEye; the other is run by Musk of Tesla Motors. Would their other efforts survive if this one was wiped out by Shuttle?

    – The position paper is reluctant to depend on Russian Soyuz for ISS access, but we already do that. Shuttle does not and can not serve as an ISS emergency crew return vehicle unless we only man ISS for a week or so. Thus continuing Shuttle would actually wipe out our efforts to have a U.S. alternative to Soyuz (U.S. commercial vehicles).

    The rest of the paper is fine. I don’t agree with every sentence, but many points are totally right, like increasing NASA’s science and aeronautics efforts (perhaps with a focus on energy/environment). However, continuing the Shuttle would make just about all of the rest quite difficult to fund.

  8. Jay Alt says:

    Bill –
    In your survey of things the federal government should be doing, did you identify areas
    where it would be most helpful for states to initiate their own actions?

    What do you think are the most important items or areas that citizens must urge representatives and govts to address at the state level?