Obama gets the Ponzi scheme: “The choice we face is not between saving our environment and saving our economy. The choice we face is between prosperity and decline.”

President Obama spoke at a wind tower production facility in Iowa today.  It was another brilliant speech underscoring his commitment to climate action and the clean energy transition.

Like no President before him — indeed, like no major U.S. politician — he has stated again and again that our current path is unsustainable and doomed to fail, using language very similar to the global economy is a Ponzi scheme metaphor.

  • “We cannot rebuild this economy on the same pile of sand.” (4/14)
  • “We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for our lasting prosperity.” (3/19)

His speech today was equally blunt and equally visionary — testimony to the fact that the best messaging on this subject has both the positive vision of the future if we change our path and the painful reality facing us if we don’t.

And don’t miss his extended discussion at the end about “closing the carbon loophole through this kind of market-based cap” and trade system.  Anyone who thinks President Obama is not serious about passing a climate bill in the next year or so, that he is somehow softening on his campaign commitment, is simply not paying attention:

But just as we’ve led the global economy in developing new sources of energy, we’ve also led in consuming energy.  While we make up less than 5 percent of the world’s population, we produce roughly a quarter of the world’s demand for oil.

And this appetite comes now at a tremendous cost to our economy.  It’s the cost measured by our trade deficit; 20 percent of what we spend on imports is the price of our oil imports.  We send billions of dollars overseas to oil-exporting nations, and I think all of you know many of them are not our friends.  It’s the same costs attributable to our vulnerability to the volatility of oil markets.  Every time the world oil market goes up, you’re getting stuck at the pump.  It’s the cost we feel in shifting weather patterns that are already causing record-breaking droughts, unprecedented wildfires, more intense storms….

Now, the choice we face is not between saving our environment and saving our economy.  The choice we face is between prosperity and decline. We can remain the world’s leading importer of oil, or we can become the world’s leading exporter of clean energy.  We can allow climate change to wreak unnatural havoc across the landscape, or we can create jobs working to prevent its worst effects. We can hand over the jobs of the 21st century to our competitors, or we can confront what countries in Europe and Asia have already recognized as both a challenge and an opportunity:  The nation that leads the world in creating new energy sources will be the nation that leads the 21st-century global economy.

… the bulk of our efforts must focus on unleashing a new, clean-energy economy that will begin to reduce our dependence on foreign oil, will cut our carbon pollution by about 80 percent by 2050, and create millions of new jobs right here in America….

My administration has already taken unprecedented action towards this goal.  It’s work that begins with the simplest, fastest, most effective way we have to make our economy cleaner, and that is to make our economy more energy efficient. California has shown that it can be done; while electricity consumption grew 50 percent in this country over the last three decades, in California, it remained flat.

Think about this.  I want everybody to think about this.  Over the last several decades, the rest of the country, we used 50 percent more energy; California remained flat, used the same amount, even though that they were growing just as fast as the rest of the country — because they were more energy efficient.  They put in some good policy early on that assured that they weren’t wasting energy.  Now, if California can do it, then the whole country can do it.  Iowa can do it….

And today I’m announcing that my administration is taking another historic step.  Through the Department of Interior, we are establishing a program to authorize — for the very first time — the leasing of federal waters for projects to generate electricity from wind as well as from ocean currents and other renewable sources.  And this will open the door to major investments in offshore clean energy.  For example, there is enormous interest in wind projects off the coasts of New Jersey and Delaware, and today’s announcement will enable these projects to move forward.

It’s estimated that if we fully pursue our potential for wind energy on land and offshore, wind can generate as much as 20 percent of our electricity by 2030 and create a quarter-million jobs in the process — 250,000 jobs in the process, jobs that pay well and provide good benefits.  It’s a win-win:  It’s good for the environment; it’s great for the economy….

But we haven’t placed any limits on carbon dioxide and other greenhouse gases.  It’s what’s called the carbon loophole.

Now, last week, in response to a mandate from the United States Supreme Court, the Environmental Protection Agency determined that carbon dioxide and other tailpipe emissions are harmful to the health and well-being of our people.  So there’s no question that we have to regulate carbon pollution in some way; the only question is how we do it.

I believe the best way to do it is through legislation that places a market-based cap on these kinds of emissions.  And today, key members of my administration are testifying in Congress on a bill that seeks to enact exactly this kind of market-based approach.  My hope is that this will be the vehicle through which we put this policy in effect.

And here’s how a market-based cap would work: We’d set a cap, a ceiling, on all the carbon dioxide and other greenhouse gases that our economy is allowed to produce in total, combining the emissions from cars and trucks, coal-fired power plants, energy-intensive industries, all sources.

And by setting an overall cap, carbon pollution becomes like a commodity.  It places a value on a limited resource, and that is the ability to pollute.  And to determine that value, just like any other traded commodity, we’d create a market where companies could buy and sell the right to produce a certain amount of carbon pollution.  And in this way, every company can determine for itself whether it makes sense to spend the money to become cleaner or more efficient, or to spend the money on a certain amount of allowable pollution.

Over time, as the cap on greenhouse gases is lowered, the commodity becomes scarcer — and the price goes up.  And year by year, companies and consumers would have greater incentive to invest in clean energy and energy efficiency as the price of the status quo became more expensive.

What this does is it makes wind power more economical, makes solar power more economical.  Clean energy all becomes more economical.  And by closing the carbon loophole through this kind of market-based cap, we can address in a systematic way all the facets of the energy crisis:  We lower our dependence on foreign oil, we reduce our use of fossil fuels, we promote new industries right here in America.  We set up the right incentives so that everybody is moving in the same direction towards energy independence.

Hear!  Hear!

24 Responses to Obama gets the Ponzi scheme: “The choice we face is not between saving our environment and saving our economy. The choice we face is between prosperity and decline.”

  1. Harrier says:

    I’m especially excited about the Interior Department arranging leases for offshore wind farms. We’ve waited for those long enough.

  2. SecularAnimist says:

    The offshore wind energy resources of the USA are huge. Interior Secretary Ken Salazar recently pointed to data from the National Renewable Energy Laboratory showing that the gross offshore wind energy of the mid-Atlantic region alone is greater than all the coal-fired power plants in the US.

    With all due respect to President Obama, and with appreciation for the policy direction that he is establishing, getting 20 percent of our electricity from wind by 2030 is too little and too late, and falls far short of what could be achieved just by the market alone, even without government support. Just for one example, Al Gore’s organization has laid out a pretty detailed and substantive proposal for the USA to generate ALL of its electricity from clean renewable sources within ten years.

  3. paulm says:

    Is C&T going to work in time though?

    Maybe there should be a cap on coal directly. Certainly all subsidies should be removed immediately.

  4. Sustainable says:

    More b.s. I’m afraid, you cannot create a sustainable economy by ‘prosperity’ (which means growth). They are direct opposites of each other.

    If Obama was really serious about dealing with climate change (as you allege), he’d get off his butt and put a stop to the industries that are at the root of the problem.

    The truth is, we CANNOT rebuild this economy as alleged by so many (fools). It’s now impossible. It was built upon the back of cheap, abundant oil, in an age when carbon was ignored. Not anymore, none of these conditions exist. And the environment has precipitously declined, in many places, irreversibly.

    Growth, prosperity — will NEVER equal sustainability. This is bullshit coming from politicians and I’m surprised anybody here endorses this.

    What these clowns are claiming is we can go on consuming — which means go on destroying more of the environment. Their vision of ‘efficiency’ isn’t reduction, it’s consuming at the same, exact pace we are consuming now, or even growing. This is stupid beyond belief.

    What politicians need to understand is we need to chart a path in the opposite direction, less consumption, less growth, smaller populations, more preservation and cleaner living. This is the only sustainable direction there is (but even this is not sustainable until balance is finally achieved, and we are a few billion humans away from that).

  5. Harrier says:

    Sustainable, no leader will ever advocate for a decrease in prosperity. It violates the very model of human social order. We put people in charge because we think their leadership will make our lives better. You might as well say that all society should be abolished, because where there is society there will be a drive for prosperity.

    What you’re tiptoeing around is a need to alter the values of the human race. As Augustine says, if you wish to know the character of a city then you should examine what it loves. We love growth and wealth. If there is to be a more sustainable civilization, it will have to be a civilization that loves differently.

  6. Leland Palmer says:

    Great speech. Wonderful vision in the man. I remember a man whose initials were JFK, with a similar power to generate consensus and with similar vision.

    Advice to Obama:

    Don’t go to Dallas.

  7. Leland Palmer says:

    Hi Harrier-

    Regarding ultimate sustainability:

    There’s no reason that a solar powered civilization need be unsustainable, or unprofitable, for that matter.

    That’s part of the tragedy of what we have done – it is unnecessary.

    If we live, we could easily have a solar powered civilization, live in archologies, put carbon back underground using carbon negative energy ideas, colonize space, and get out into the solar system, at least.

    Carbon negative energy ideas plus the sort of science we have give us the potential to enhance the stability of our climate system, rather than undermining it.

    The McMansion/Hummer model might have to be modified, I’ll admit.

    Plato talked about the “form of the good” and wrote that if we were just able to comprehend the “form of the good” it would illuminate a lot about human nature and philosophy.

    We need to want different things, you’re right. Part of the “form of the good” for us all should be an ethic that puts the survival of the biosphere above everything else.

    Perhaps that ethic is growing, and will expand, as awareness of our dire situation expands. If we live, awareness of our near disaster may color our value systems for as long as humans exist.

  8. Harrier says:

    Leland, a change in our ethics is a fond hope of mine. I believe in the inherent greatness of human beings, and I certainly believe we can sort this climate mess out. Whether we will or not remains the great test.

  9. Phil Eisner says:

    We and the world have no choice but to follow Obama’s prescription for our future energy health. Given the world’s billions of people, their need for food, shelter, clothing, medicine, governments, and the consequent enormous energy required to operate a modern, viable society, there really is no choice. No back to primitive nature philosophy can sustain what will soon be 9 billion people on earth, each deserving good health, freedom, and happiness. Eventually we wil learn to live with abundant solar energy. Meanwhile we will have to confront the terrible disruptions and hardships stemming from a much warmer earth in this century.

  10. Sasparilla says:

    Wonderful speech, just love to see him saying this stuff after all the years in the wilderness the white house has been in.

    paulm said “Is C&T going to work in time though?”

    Absolutely not, especially early on (if Europe is any example – as they build new Coal plants while under their Cap and Trade sham/system). But it will get the ship turned in the right direction finally and that’s probably the most important thing we need for the C&T to do right now.

    Hopefully there will be other things done (energy policy) separate from Cap and Trade that will push things faster/further (already started in the stimulus) and we can start making headway on CO2 emissions here in the US.

    We’re laying the groundwork now to see a peak in US CO2 emissions – which will be a big step from what we’ve been doing. Its a long road after that, but just getting to peak is a big prize (essentially reach the Start Line) and I can’t wait to see us do it.

  11. ekzept says:

    @paulm, regarding:

    “Is C&T going to work in time though?”

    Sorry, *nothing* is going to “work in time” if by that is meant before irreversible climate change occurs. Too late. Global climate has a lot of inertia, so even if anthropogenic carbon emissions were zeroed, it would take time to come back, and equilibriuum may not be below now.

    Best we can do is work things forward from here.

    I am pessimistic. I don’t think Americans will do anything major or care until climate change is linked to hundreds of thousands of Americans dying in a dramatic event.

  12. paulm says:

    Sustainable, absolutely right on.

    But does evolution work with sustainability? It seems to me that life is programed to evolve and this entails die back and resurgence in a more successful form. Maybe ultimately at the ‘end’ there will be harmony, but the sun might supernova by then.

  13. Martin Hedberg says:

    Great speech, but…
    You need to put a cap on the mining (the actual source) of fossil carbon.

    A cap (and trade) on the emissions will create smart incentives for those who are in the system. But the thing that will happen for those who are not in the system (i.e. the world outside of Europe and USA) is that their fossil carbon will be relatively cheaper. Global emissions will stay about the same.

    If you limit the restrictions to your/our own emissions, you will end up in a situation where you eventually will have to force others to not use the oil, gas an coal in order to limit the global emissions. ”Others” will be countries and companies who make business from fossil carbon, for example Russia. And it will be poor countries and peoples who finally got some welfare from the oil that we didn’t use.

    Therefore, in order to make it work, you need to put a cap on the source of the fossil carbon, not the emission. There are to much leakage in the system.

    World leaders don’t talk about this problem.

    I truly appreciate the conversations on this blog.
    /Martin Hedberg. Meteorologist from Sweden.

  14. russ says:

    Al Gore’s 10 years was when he was thinking for himself (though I think Al Gore thinking for himself is an oxymoron) – his script writers would never say something so silly – even as bad as they are.

    Can N Trade is a bad joke – simply a money transfer to allow more carbon into the atmosphere – in much of the 3rd world approval of such a thing is automatic (when the right happiness factor is added – read bribe). It is considered as similar to milking the neighbors cow.

    For ‘Sustainable’ – just go find your cave, live in it and be happy – not what many of us are interested in.

    Let the big 3rd world economies suffer the same consequences – they depend on the US and Europe for a market – they can not sit back and say it is our turn to make a mess.

  15. paulm says:

    anyone started on the plan for a new grid yet??????? come on theres not much time…

    Renewables success requires electricity network upgrade, MPs told
    Network operators warn government plans will fail if provision is not made to connect wind projects to an upgraded power grid

  16. jorleh says:

    There you have a great president!

  17. Leland Palmer says:

    Hi Martin Hedberg-

    The main problem with human activities is that they are all one way – they are all pretty much carbon positive.

    Take breathing. The entire human population breathes out huge amounts of CO2 per year. Since that CO2 comes from biomass, though, in the food we eat, this would be OK, and historically has been carbon neutral. But because of our energy intensive agriculture and transport of food long distances, and because of our meat consumption from cows belching and farting methane, we have managed to turn breathing into a carbon positive activity, in effect.

    So yes, cap and trade is a shell game, in the short term. We need real reductions in CO2 emissions, or we need a way to put carbon actually back into the ground, to compensate for all of our other human activities that are carbon positive, or that we have managed to make carbon positive in effect.

    Carbon negative energy production gives us a way to put carbon back into the ground. By combining biomass power with deep injection of the resulting CO2, the net result is carbon transferred out of the air and back into the ground.

    What a few authors and a couple of websites like biopact have been doing is promoting carbon negative energy – combining biomass power with carbon capture and deep injection.

    Carbon negative energy schemes could have a huge synergistic effect on the whole problem, and biocarbon (compressed biochar pellets) could completely replace coal in existing coal fired power plants. Biocarbon could be made from any sort of waste biomass including insect killed trees, agricultural waste, municipal carbonaceous waste, sewage sludge, animal manure, and so on. And because it is as energy dense as coal, it is as transportable as coal.

    Here is a link to the Bellona Foundation, located in Norway:

    Bellona Foundation: How to go carbon negative:

    What the Obama administration argues about cap and trade is that it allows the money to finance change to flow to the most effective parts of the organization. They look for a huge spurt of innovation, and so on. I certainly hope they are right.

    In my opinion, we’d be a lot better off just nationalizing the coal fired power plants, and forcibly converting them into carbon negative power plants.

  18. russ says:

    Replacing coal with biomass in power plants is not on – the energy density of biomass means transporting immense quantities of material. Sounds nice but not practical.

    Small power plants all over the place are not efficient either.

    Obama is trying to find some kind of sweetener to get anything past congress – a difficult task at best. Virtually impossible to get anything that raises energy costs matter of fact.

    CO2 sequestration and deep injection is done now – the Great Plains Gasification project is an example.

  19. Pangolin says:

    So the banks got how many trillions of dollars and a bank produces nothing. Any functional solar panel, however overpriced, produces usable power.

    I’m waiting to cheer until I see the money shift.

    Also, is it just me or am I seeing CO2 injection schemes tied to every float in the parade?

  20. russ says:

    Everyone loves the latest catch phrase – the Great Plains project started operation in the early 80’s though and is well proven.

  21. Greg Robie says:

    My Representative to Congress (NY, 19th) sent out an EathDay greeting that says:

    “…we now have a President and Congress that will address the most pressing environmental concern facing our nation.

    “As I write, Congress is debating legislation that will lead to a significant reduction in the production of greenhouse gases. This legislation will create jobs, make us a world leader in new energy technologies, and signal a new era in American environmental history.”

    My reply focused on his use of the term “significant” and included this haiku:

    Signal Magnificence (please)

    Significant change
    Is not being talked about
    Where it’s important.

    Do the Democrats really believe that they are concurrently working toward an economic and environmental solution? Given what they are saying, and appear to be believe, such seems to be the case. For “significant” to be significant, the legislation being created in Congress has to be about getting the atmospheric CO2e below 350, and doing so significantly before 2050 (as the climate modeling science behind the IPCC’s 2007 figures lags significantly behind the current climate science and what is significant (but was left out of that report–like significant positive feedbacks).

    IMHO, it is motivated reasoning and mirror neurons that conspire to make a slowing the growth of CO2e feel significant to those who feel there is a common solution to both the debt-based and OPEC oil denominated global capitalistic economy and klimakatastrophe (lethal global overheating). It is a human need to feel moral, even when such is not logical; rational. To be/feel moral invokes oxytocin and dopamine. Such mitigates stress.

    Humanity needs means to deal with both conscious and unconscious stress. The feel-good-while-do-nothing-significant actions of our Democratic political leaders is hard to not believe when one is working inside the beltway; when one’s socio-psychoneuroimmunoendocrinology is awash in motivated reasoning’s oxytocin and dopamine; when one’s mirror neurons are sharing a common vibe (a deluded group head). The physics involved in the lethal global overheating we have effected does not factor our feelings (our neuropeptide addictive systems) as relevant to what is significant for significant change in AGW. The iteration of global capitalism that governments are hoping to save functions as a cancer. Its life requires the death of its host organism as a place of life (at least as “life” is likely to be felt that it “should” be): earth.

    Such are my Earth Day thoughts and this hope that the Democratic leadership “gets it.”

  22. Leland Palmer says:

    Hi Russ-

    Replacing coal with biomass in power plants is not on – the energy density of biomass means transporting immense quantities of material. Sounds nice but not practical.

    Small power plants all over the place are not efficient either.

    Thanks for the input, but biocarbon (pelletized charcoal or biochar) is a fairly new idea, meant to address the transportability of biomass.

    Biocarbon is compressed charcoal pellets, with properties including fuel value and density almost identical to coal:

    Biocarbon, also called biochar or charcoal, is a renewable replacement for coal manufactured for industrial markets. The material can be produced from biomass resources such as wood, municipal and agricultural waste, and tires through a controlled heating process called “carbonization,” which heats organic (carbon-containing) materials to elevated temperatures in an environment of controlled and reduced oxygen levels. During the carbonization process all of the energy necessary to fuel the process can be supplied by the biomass.

    Carbonization is a thermochemical refining technology that involves a myriad of complex reactions of the components of biomass. At temperatures of 300 C, a sharp rise in the carbon content or energy density of the biomass occurs and biocarbon production takes place (Figure II). When temperatures exceed 500 C, gasification of the volatile components in the biocarbon commences and the remaining solid becomes predominately purer forms of graphite-like carbon. At this stage of pyrolysis, activated carbon is generated.

    Biocarbon makes biomass as transportable as coal.

    Small plants are necessary to locally convert the biomass to biocarbon, but the biocarbon produced in these small satellite plants can be burned in existing coal fired power plants.

    Add another “bolt on” technology to existing coal plants – oxyfuel combustion- and it is possible to convert them to carbon capture and storage.

    That is what I am advocating, converting existing coal fired power plants to biocarbon/oxyfuel/CCS, making them carbon negative power plants.

    We would need about 4 billion tons of biomass, to be converted into about a billion tons of biocarbon, to replace our current billion tons of coal production.

    Oak Ridge National Labs, in their “Billion Ton Vision” study, has located 1.2 billion tons of biomass available in the U.S. I propose to make up the shortfall by cutting firebreaks through existing forests and removing flammable undergrowth to protect them from fire. Also we could grow biomass plantations on marginal agricultural land. We could also pyrolyze every scrap of carbonaceous waste, manure, sewage sludge, paper mill waste, and so on we can get our hands on. As well, we could import biocarbon from Canada and shiploads of biocarbon from Central and South America.

    Since we don’t need to build any new power plants, we just need to transform existing ones to carry out this scheme, I don’t see any real need to wait on the market to do this, although a market based conversion is possible if carbon negative energy schemes are rewarded by the system, as they ought to be.

    If recent tests by Jupiter Oxygen Corporation and NREL on a 2 MW retrofitted coal plant are representative, it is possible to make the conversion to oxyfuel combustion and CCS at very low energy cost, by running the boiler at the higher temperatures (and so higher Carnot efficiency) provided by oxyfuel combustion.

  23. David B. Benson says:

    Leland Palmer — Make up the shortfall via algae production.

  24. barbiplease says:

    “Too little too late? A report from M.I.T. and the University of Pennsylvania saying that even if the governments fulfill their obligations to cut carbon emissions 80% by the year 2050, global temperatures will still rise by a minimum of 4 degrees celsius.

    – The “magic number”: 350 parts per million, the level scientists have identified as the safe upper limit for CO2 in our atmosphere.

    – The importance of political activism: and its impact around the world.” (Bill McKibben-Jim Garrison audio)

    –from Bill McKibben-Jim Garrison audio discussion

    Cutting carbon emissions by 80% by 2050 as currently proposed by the President and other world leaders will result in CO2 concentrations of 600 ppm and a +4 C (+8 F!!) temperature rise by the year 2050, right? Isn’t that beyond the tipping point?

    Lester Brown recommends that in order to prevent a “tipping point,” emissions will have to be reduced by 80% by the year 2020 instead of by 2050: (audio, Lester Brown-Jim Garrison)

    If passed, we would have 8-10 years to reduce CO2 by 80% worldwide by the year 2020 in order to prevent a tipping point and catastrophic climate change.

    Needless to say, these new emissions standards and deadlines will have to be decided in Copenhagen in December 2009 (the world’s last “chance”). So the President’s job–so far as I can see it–is to carry on with his sustainable effort, pass this climate legislation (unrealistic as it is), and fulfill his promise to join Kyoto or whatever it is to be called once Kyoto expires. Hopefully, the new treaty will be updated and revised to meet new emission standards and deadlines.

    It seems rather grim though–does it not? Or are my figures off?

    [JR: Figures don’t like right to me on 2050 projections with 80% cut.]