by Craig A. Severance, via Energy Economy Online
Barack Obama has won, and now his supporters and detractors alike are hoping America can move forward to tackle our toughest problems.
The Bull in the China Shop. With the devastation of Superstorm Sandy still in the daily news, the re-elected U.S. President now has an opening to address our most serious threat. He must finally lead Americans to face the truth that extreme climate disruption is already underway — caused by our excessive use of coal, oil and natural gas. The $50 Billion toll and dozens of lives lost from one storm will only be the beginning if this problem is not addressed.
The very difficult task of weaning ourselves off the unmitigated burning of fossil fuels is the pre-eminent challenge of the 21st Century. Will future generations suffering from destructive hurricanes, droughts, floods, and wildfires look back kindly on a President who ducks this issue?
With a struggling economy foremost in the public’s mind, however, Mr. Obama would be well-served to find climate solutions that also create jobs. There is much work to do — rail lines to be built, homes to be insulated — if we just put money into the hands of the true “Job Creators”.
The need to cut tax burdens on workers and small businesses was another rallying cry for many on both sides of the recent election. The most innovative climate solutions — taxing what we burn instead of what we earn — can accomplish this tax savings goal.
The same old, tired ideas of the Washington Establishment will not work, as they typically pit one group of Americans against another. If Mr. Obama is to be successful in his second term he would do well to listen to the people, and act boldly. He must confront his opponents where they live — by garnering support for local issues and local projects, from local citizens.
New grassroots ideas such as those listed below — which are already very popular with the public — can work together to move us “Forward”:
1. Get Out There and Talk With People. The turning point of the Presidential campaign was when former President Bill Clinton — the “Explainer-in-Chief” — began delivering folksy yet meaty speeches treating Americans as adults who could understand the issues if we just talk about it. Keep it up! Get out there in every Congressional District — even if you have to hire Bill Clinton to do it. On climate, get nationally recognized climate scientists — together with Republicans of good conscience who are bucking their Party on this issue — to hold local meetings describing the droughts, extreme storms, wildfires, and floods likely in each area. When these events actually happen, the public will demand Congressional action.
2. Cut Taxes on Work and Small Business Profits. Originally promoted by Tea Party and other activists, the idea of taxing consumption instead of earnings just keeps gaining traction. It is now championed by Ralph Nader under the slogan “Tax What We Burn, Not What We Earn”. In its most well-crafted form, it would reward a good thing — hard work — and tax only bad things (pollution, and depletion of critical resources). Barack Obama himself enacted a Payroll Tax Holiday as the biggest tax break for the middle class. Instead of now ending the Payroll Tax break, if we are to respond to the needs of a broad spectrum of Americans for a tax cut, we should expand it and replace the lost revenues with taxes on consumption and pollutants.
3. Slash Polluter Welfare Payments. Hundreds of billions of dollars per year are being paid by everyone, for the activities of a few. This is the welfare paid by all, to those whose activities are subsidized. Examples include polluters whose burning causes extreme climate disruption, Wall Street high-frequency traders whose speculative activity has destabilized markets and is discouraging small investors, oil companies who profit from U.S. military activities in the Middle East, and trucking companies who pay far less than the actual road damage caused by heavy trucks. “Connect the Dots” — link fees and taxes to the actual costs imposed — and we can cut the Deficit and replace lost revenues from cutting payroll and business taxes.
4. Put Money in the Hands of the True “Job Creators.” Wealthy businessman Nick Hanauer has written the true “job creators” are the middle class — who create jobs when they have enough money to spend on goods and services. Right now, the middle class is too strapped, underwater, and maxed-out to mortgage their homes to do insulation or renewable energy projects. However, these types of projects pay for themselves and are exactly the types of “good debt” that should be encouraged to revitalize the economy without stressing family budgets. Utilities can solve this financing problem by offering “On-Bill Financing”, and local governments can also pitch in with special tax assessments on just the homeowners who undertake the projects — provided Federal housing agencies cooperate. Getting these financing mechanisms in place will get the energy and climate work done without government help, and create many jobs.
5. Get Tough on China. A little-known feature of the Energy & Climate Bill that passed the full House in 2009 (but failed in the Senate) was an assessment on imports based on the greenhouse gas pollutants in their country of origin. Without this provision, American manufacturers could clean up, but Chinese imports manufactured with dirty coal would overwhelm the U.S. market. (By gosh — that’s what’s happening now!) A climate bill, however, would actually be a profound way to crack down on unfair imports from Chinese polluters.
6. Lay Down Tracks. The future of transportation is moving to the rails, as petroleum prices continue to increase, and electrified rail networks expand worldwide. Researcher Gregor Macdonald has written extensively on this “long-term supertrend”, even noting as an example that with its expanded light rail network, it will soon be possible to live in L.A. without owning a car. Similarly, we must “lay down” an expanded and more reliable electricity grid, to upgrade the nation’s utility network, and pass a national Renewable Energy Portfolio Standard to insure our power comes from America’s abundant renewable energy sources. Utility projects should be privately funded, but where needed, rail transportation projects can be part of a realignment of Federal infrastructure improvement dollars. If we are serious about what is really needed for national security, we can even use such projects for “nation building at home” to take the place of unneeded pork barrel projects in the politically motivated “jobs in every Congressional District” spending patterns of the U.S. Military.
7. Rev Up Research. While we already have the efficient technologies we need to begin a great amount of work, research can expand the possibilities for how far we can go, and how fast. For instance, federal energy research dollars at MIT helped developed the liquid metal battery which now holds great promise for utility-scale energy storage. America’s lead in technology will exist only so long as we continue funding basic and applied research.
Hope for Change? The nation has been through a bruising partisan battle and Americans simply wish to get on with doing what is best for the country. Many of the ideas above have their origin in extremely conservative political circles and conservative economics. Very modest, if any government spending is needed. Perhaps most importantly: these ideas will work.
We have the ideas we need to move forward. Our hope for change will come when citizens stand up and demand that politicians begin to work together.
Craig A. Severance, CPA is co-author of The Economics of Nuclear and Coal Power (Praeger 1976), and former Assistant to the Chairman and to Chief Commerce Counsel, Iowa State Commerce Commission. This piece was originally published at Energy Economy Online and was reprinted with permission.