UPDATE: Gunther thinks my critique of his piece goes too far. But then, he also thinks my critique of George Will goes too far. Anyway, read the piece, his comment, and my response. I’d love to hear your thoughts.
Apparently all federal efforts to develop clean technology should be banned — at least that’s what Reuters and the oddly named website “Greenbiz.com” seem to believe.
If they gave out awards to columnists for advice that would cause the most harm to the nation if anybody actually followed it, then Greenbiz.com, Reuters, and Fortune contributer Marc Gunther would be a serious contender with his astonishingly uninformed piece “Beware of Obama’s ‘Battery Gold Rush’.” Let’s call this award the “Willie” named after George Will.
You might think it would be hard for anyone to seriously oppose a competitive federal technology grant-making program run by Nobelist Steven Chu aimed at restoring US leadership in battery technology — since “Plug-in hybrids and electric cars are a core climate solution” and “electricity is the only alternative fuel that can lead to energy independence.”
And that’s especially true since major trading competitors are aggressively pursuing dominance in advanced batteries and electric vehicles, including Japan, South Korea, and especially China (see “World’s first mass-market plug-in hybrid is from “¦ China, for $22,000?” and “China begins transition to a clean-energy economy“).
But Marc Gunther, a “longtime writer on business and the environment” manages to “cringe” at the notion, inspired by those (politically) right-thinking folks at the WSJ:
Obama Administration Sparks Battery Gold Rush
Companies, States Vie for $2.4 Billion in Funding Aimed at Turning U.S. Into Top Maker of Fuel Cells for Electric Cars
The story went on to say that the Department of Energy has received 165 applications from companies seeking some of that $2.4 billion. which is “aimed at turning the U.S. into a battery-manufacturing powerhouse.” The Journal‘s William M. Bulkeley reports:
“Companies vying for the federal money include General Motors Corp., Dow Chemical Co., Johnson Controls Inc. and A123 Systems, a closely held battery maker backed by General Electric Co. and others. States including Michigan, Kentucky and Massachusetts are also weighing in with applications, usually in alliance with their favored battery makers.
“When the winners are decided, as soon as the end of July, the Energy Department may anoint Livonia, Mich., or Indianapolis or Glendale, Ky., as the future U.S. hub of car batteries.”
Reading carefully, it’s clear that The Journal (“free people, free markets”) is not happy about this news. Note the use of the word “anoint,” hinting that the government is assuming divine powers. The article characterizes the DOE grants as “one of the government’s biggest efforts at shaping industrial policy” — fighting words in Journal-speak.
Who ever would have guessed that the Wall Street Journal doesn’t like a government program — especially one launched by a Democrat? But this apparently is a big shock to Gunther, who manages to repeat pretty much every conservative talking point on technology policy:
And if electric cars are going to be as big a business as a lot of people think, then why should government investment be needed at all?
Uhh, because the issue isn’t whether electric cars are going to be a very big business — they are — the issue is whether the US is going to be exporting them or importing them.
Conservatives — and business reporters — simply don’t seem to care if the United States keeps inventing stuff that other countries commercialize, generating GDP growth and jobs (see “Solar PV market doubled to 6 Gigawatts in 2008 “” U.S. left in dust, having invented the technology“)
I thought the whole idea behind cap-and-trade (which I strongly favor) is to capture the externalized cost of global warming pollutants, and then let the market figure out how best to reduce greenhouse gas emissions: regulation that would have a light touch but a profound impact.
Setting a price for carbon is a key strategy for dealing with global warming, but, again, if that’s all you do — while all of your trading competitors aggressively fund technology commercialization and deployment efforts — then the net result once again is you import the low-carbon technologies (see “Why other countries kick our butt on clean energy: A primer“).
Just to be clear here, according to The International Energy Agency, which has one of the best global economic/energy models in the world, avoiding catastrophic global warming requires spending some $2 trillion a year on low carbon technologies over the next few decades (see “Must read IEA report, Part 1: Act now with clean energy or face 6°C warming. Cost is NOT high “” media blows the story“). About half that money is new investment and half that money is planned investment shifted from inefficient polluting technologies toward clean efficient technologies.
So averting catastrophic global warming is going to be the single biggest source of new industries and job-creation this century. Obama gets this, repeatedly stating, “Now, the nation that leads the world in 21st century clean energy will be the nation that leads in the 21st century global economy” (see Obama: “Our future on this planet depends on our willingness to address the challenge posed by carbon pollution,” vows “we will exceed [R&D] level achieved at the height of the space race.”)
But not Gunther:
Much as I admire Steven Chu, the energy secretary, do we really want to entrust him and his staff to decide which battery technologies are likely to succeed and which companies can most wisely spend that $2.4 billion?
If we’re talking basic research, that’s fine, I suppose — the private sector can’t be asked to underwrite that, because the potential payoffs are so uncertain and long term. But this battery program is explicitly about picking winners and losers in one industry sector, which may or may not turn out to be a real business.
“I suppose”??? Even hard-core conservatives support basic research. It’s Gunther’s attack on applied research that conservatives have been advancing for decades in order to gut all of the applied clean energy development and demonstration programs in the federal government whenever they were in charge.
Indeed, it’s why Anti-wind McCain had to deliver his climate remarks at a foreign wind company. Reagan and than the Gingrich Congress destroyed US leadership in many technologies that we either invented or had world dominance in by 1980, such as wind.
Worse, Gunther seems unaware of the fact that the U.S. Department of Energy has been running competitive technology grant-making programs for decades — although with far less money than is needed to address our major energy and climate problems, thanks to conservatives. Picking the best technology proposals using an independent panel of experts is hardly controversial. And the DOE does it quite well, at least in the area of clean energy (see “Energy efficiency, Part 5: The highest documented rate of return of any federal program“).
Thankfully, team Obama and a progressive Congress understand the crucial importance of investment in clean energy research, development, demonstration, and deployment. And they may well be able to make us the leader in clean energy that we once were.