Brookings embraces American Enterprise Institute’s climate head fake along with right-wing energy myths

I’ll bet you didn’t know that

The success Republicans had killing the climate and clean energy jobs bill means they are now ready to embrace a big new federal spending effort of $15 to $25 billion a year for low-carbon technology.
Such RD&D could, all by itself, bring the cost of new carbon-free power plants below the cost of existing coal plants.
A massive federal RD&D effort, even if it were not politically untenable, could, all by itself, avert catastrophic climate change.
“Liberals often maintain” the “choice” is between “global warming apocalypse or mandating the widespread adoption of today’s solar, wind, and electric car technologies.”
Nuclear power is likely to be a key part of an effort to deliver cheap, low-carbon power.

You didn’t know any of that because none of it is true. But it’s all part of a new report by Steven F. Hayward of the American Enterprise Institute, Mark Muro of the Brookings Institution, and others, amusingly titled, “Post-partisan power.”

It’s no surprise the American Enterprise Institute pushes myths on global warming and clean energy. They are still crazy with climate denial and delay after all these years. And they even compared EPA Administrator Lisa Jackson to Clint Eastwood and carbon polluters to criminals. Heck, last October, Hayward himself wrote:

“The brain waves of the American right continue to be erratic, when they are not flat-lining.”

If this new report was his attempt to restart those brain waves, let’s go to the monitor to see if it did:

You might think it odd that AEI would support a massive government spending program that has no chance whatsoever of getting even one Republican vote in either house — at least not from a member that wanted to avoid a Tea Party primary challenger. It would be great if AEI actually lobbies for these ideas, however pointless that might be to do. The mistitled NYT story on the report, “A Climate Proposal Beyond Cap and Trade,” actually buried the lede at the very end:

Politically, the weakest link in the pro-research argument is that no one knows exactly where the money will come from….

When Mr. Hayward and I were talking, I asked whether he could imagine Republican leaders’ supporting more research spending no matter where the money came from. Probably not in the near future, he acknowledged. For now, Republicans will focus on shrinking government. But at some point, maybe if oil prices spike, Mr. Hayward thinks the party may well be interested in a policy that fosters innovation, creates jobs and helps national security.

At some point in the unknown future, pigs might fly.

For the record, the last time oil prices spiked to $140 a barrel, Republicans didn’t rally around a massive federal clean energy program, possibly built around raising fossil fuel prices (or cutting fossil fuel subsidies). In fact, they did the exact opposite! They called for cutting energy prices and freezing energy spending (see my April 2008 post “McCain reveals cynicism, hypocrisy with call for summer gas-tax holiday, energy budget freeze”).

You can be 100% certain that the a top priority of the Tea-Party-led Republicans, especially if they take the House or Senate, will be to cut funding for clean energy. Whenever conservatives have the presidency or control of Congress, they have gutted or blocked funding for clean energy:

President Reagan gutted Jimmy Carter’s renewable energy program (see “Who got us in this energy mess? Start with Ronald Reagan”).
Newt Gingrich blocked President Clinton’s effort to boost funding for solar PV research and deployment programs.
Even “moderate” conservatives like John McCain and Judd Gregg opposed the kind of funding and incentives that countries like Japan and Germany embraced.

How I wish the Brookings-AEI proposals were “post-partisan.” But they aren’t.

So what’s going on with this dead-end proposal? Some history might shed a little light.

THE TECHNOLOGY TRAP

For some two decades now, many of us have been trying to sharply ramp up federal spending on clean energy, to restore the leadership that President Carter had given us in a host of cleantech industries, to help deal with rising oil dependence, to help fight global warming.

But pro-pollution conservatives from Reagan to Gingrich to Bush and McCain fought that effort bitterly because they didn’t/don’t believe in clean energy and/or because Big Oil and the other dirty energy special interests that back them won’t stand for it. The smarter conservatives — or at least the ones with smarter advisers — did figure out that they should pretend to support cleantech, while basically opposing it, as I detail in my post, Bush climate speech follows Luntz playbook: “Technology, technology, blah, blah, blah”).

Indeed, in his famous 2002 memo on how conservatives could pretend to care about global warming without doing anything about it, Frank Luntz wrote:

Technology and innovation are the key in arguments on both sides. Global warming alarmists use American superiority in technology and innovation quite effectively in responding to accusations that international agreements such as the Kyoto accord could cost the United States billions. Rather than condemning corporate America the way most environmentalists have done in the past, they attack us for lacking faith in our collective ability to meet any economic challenges presented by environmental changes we make. This should be our argument. We need to emphasize how voluntary innovation and experimentation are preferable to bureaucratic or international intervention and regulation.

The point is to use the technology argument to beat down the strategies that might actually solve the problem.

Now let me be 100% clear on this, since I’m quite certain folks will want to take me out of context and claim that I oppose all the ideas in this report. In fact, most of the proposals in the new report aren’t a bad idea — I’ve been pushing similar ones for two decades and wish they were “post-partisan.”

That said, the omission of any federal standards for either energy efficiency or renewable energy is quite glaring. Indeed, for all the report’s emphasis on getting clean energy cheaper, the fact is that energy efficiency is already cheaper than every other form of power. Without a broad set of energy efficiency standards, that large opportunity will be missed. The almost complete neglect of energy efficiency in the report is one of its biggest flaws.

Even odder, the only low-carbon technology singled out for special emphasis is nuclear power. Nuclear isn’t going to be a low-cost climate solution in this country for a long, long, long time no matter how much we spend on it (see Exelon’s Rowe: Low gas prices and no carbon price push back nuclear renaissance a “decade, maybe two” and “Intro to nuclear power” and “Nuclear Bombshell: $26 Billion cost “” $10,800 per kilowatt! “” killed Ontario nuclear bid”). Sure, if you’re going to spend $15 to $25 billion a year on clean energy RD&D, then you’d certainly spend some money on nuclear R&D. But after decades of failed effort to lower prices, nuclear would certainly be among your lowest priorities.

No, my central criticism of this report — beyond the myths it promotes and the apparent rejection of clean energy standards, particularly for efficiency — is that it is just grossly disingenuous to claim that their set of proposals

is somehow more politically tenable than regulations or
could avert catastrophic climate change

But that is precisely the spin this report attempts to push. That is clear from the Conclusion, which begins:

America is once again at an energy crossroads, but the choices it faces are not those that many aligned with either the right or the left have imagined. The choice is not, as liberals often maintain, between global warming apocalypse or mandating the widespread adoption of today’s solar, wind, and electric car technologies.

That second sentence is perhaps the most disingenuous in the entire report. Liberals don’t “often maintain” that. Indeed, the entire energy and climate debate over the last 18 months was over a proposal whose primary strategy for accelerating clean technologies into the marketplace was NOT mandates but a market-based system that set a shrinking cap and a rising price — a system that let the marketplace figure out the most cost-effective strategies for reducing emissions.

Liberals embraced the centrist cap-and-trade approach — a business friendly strategy built around a strategy developed by mainstream economist and embraced by moderate Republicans of the near past, like George Bush’s father — precisely because conservatives had demonized regulations and mandates.

But it is quite clear that if you want to avoid multiple catastrophes from unrestricted emissions of greenhouse gases, then you either must have a rising price on carbon dioxide or mandates. That’s because there is no possibility that R&D could bring the cost of new low-carbon energy below that of existing coal plants — and you can run coal plants for decades and China in particular is building new ones at a rapid pace.

As the executive director of the International Energy Agency said last year, “we need to act urgently and now. Every year of delay adds an extra USD 500 billion to the investment needed between 2010 and 2030 in the energy sector”.

Simply put, whatever this Brookings-AEI report is, it ain’t a “climate proposal.”

Indeed, most of us pursuing the crucial goal of averting the multiple catastrophes that come with unrestricted greenhouse gas emissions came to realize that even large, politically untenable increases in federal clean energy spending, particularly RD&D (research, development, and demonstration) spending, while desirable, could not possibly take us anywhere near what was needed to avert catastrophic global warming. I explained that length in “The breakthrough technology illusion.” And so because a massive ramp up in federal clean energy spending was neither politically possible nor nearly sufficient, most people in the policy arena who were serious about tackling global warming moved on to some sort of means of pricing carbon.

That was the only realistic hope for:

Generating the kind of spending in clean energy (public and private) at the levels needed to match foreign spending (see “The only way to win the clean energy race is to pass the clean energy bill”)
Generating the kind of private sector investment in clean energy deployment need to have a shot at anywhere near 450 ppm (see Must read IEA report: Act now with clean energy or face 6°C warming. Cost is NOT high “” media blows the story).
Have any chance of having new clean energy technologies compete with existing fossil-fuel powered systems.

Now it is quite obvious to any political observer, including myself, we’re not going to get a cap-and-trade bill anytime soon — see “What are the prospects for comprehensive climate and clean energy legislation in the coming years “¦.” But it should also be obvious we’re not going to get a massive federal clean energy program either. In fact, conservative politicians have opposed that idea for longer than they have opposed cap-and-trade. It’s beyond disingenuous to suggest otherwise.

I do think progressives will need to get more realistic about what kinds of energy and climate strategies we pursue at a federal level for the foreseeable future. But if we’re going to be realists, we won’t waste any time on this Brookings-AEI report. And we certainly want to keep open strategies that this report appears to reject but have had bipartisan appeal in the past, including energy efficiency and renewable energy standards.

The central intellectual thrust of this new report is how important it is to lower the cost of clean energy. While RD&D can play a useful role here, even more important is rapid deployment in the marketplace, as I explained at length here. So if a think tank is going to advance a climate proposal but rule out a cap-and-trade, then it certainly can’t also rule out clean energy standards. That smacks of ideology, not post-partisan pragmatism.

The bottom line: The way this report has been framed, it is not a useful contribution to the debate. Quite the contrary — it pushes unhelpful myths and ignores key bipartisan climate and clean energy policies. The overall set of policy proposals it does push are simply not politically tenable today. And if one is going to push proposals that are not currently politically tenable, you might as well push ones that could solve the climate problem.

By DAVID LEONHARDTPublished: October 12, 2010

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Michael Greenstone has said that the cap and trade bill would have disappointed supporters.

Economix Blog: How to Spend on Clean-Energy Research (October 12, 2010)

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Michael Greenstone has the r©sum© of somebody who should be despondent over Washington’s failure to pass a climate bill. An environmental economist who worked in the Obama White House, he is now back to being an M.I.T. professor and also runs the Hamilton Project, the well-connected, Democratic-leaning research group.

But Mr. Greenstone is not despondent. He thinks the benefits of the bills that died in the Senate “” which would have raised the cost of carbon emissions, through a system known as cap and trade “” were sometimes exaggerated. Once the necessary compromises were made, the bills might not have raised the cost of carbon by much. And they obviously wouldn’t have done anything about fast-growing emissions in China and India.

“The first best hope was getting a world price for carbon, and that now looks remote in the coming years,” he says. “But there are ways in which the other options may be preferable to a price only in the U.S.”

To put it another way, the death of cap and trade doesn’t have to mean the death of climate policy. The alternative revolves around much more, and much better organized, financing for clean energy research. It’s an idea with a growing list of supporters, a list that even includes conservatives “” most of whom opposed cap and trade.

On Wednesday, the reliably conservative American Enterprise Institute and the left-of-center Brookings Institution will release a joint proposal to increase federal spending on clean energy innovation to as much as $25 billion a year, from the currently planned $4 billion a year. The proposal would also toughen rules for such money, so that recipients could continue getting it only if they were reducing the cost of clean energy. Today, many subsidies for wind, solar power and ethanol are more lenient.

Along similar lines, Al Gore is working with Reed Hundt and John Podesta, former Clinton administration officials, on a proposal aimed at “lowering the cost of clean,” as Mr. Hundt recently told the Web site Earth2Tech. The current rock-bottom interest rates would help the government finance the investments.

These proposals reflect the political reality that raising the cost of dirty energy is unpopular, especially when the economy is so weak. Finding the money to make clean energy cheaper, even when government budgets are tight, will probably be an easier sell.

The approach does have one big disadvantage, of course. It does not leverage the power of the market, the way that a cap-and-trade system (or direct carbon tax) would. If the price of emitting carbon went up, companies would devote more of their own research budgets to finding new energy sources.

But history shows that government-directed research can work. The Defense Department created the Internet, as part of a project to build a communications system safe from nuclear attack. The military helped make possible radar, microchips and modern aviation, too. The National Institutes of Health spawned the biotechnology industry. All those investments have turned into engines of job creation, even without any new tax on the technologies they replaced.

“We didn’t tax typewriters to get the computer. We didn’t tax telegraphs to get telephones,” says Michael Shellenberger, president of the Breakthrough Institute in Oakland, Calif., which is a sponsor of the proposal with A.E.I. and Brookings. “When you look at the history of technological innovation, you find that state investment is everywhere.”

“¢

The big question for anyone worried about global warming is whether to keep pushing for a cap-and-trade system above all else or to begin looking for alternatives. In many ways, I’m sympathetic to the cap-and-trade crowd. The market “” which is to say, prices “” can be a fearsomely powerful force.

But there are two questions worth asking. First, when will Congress take another shot at cap and trade? Given the gains that Republicans are likely to make in next month’s elections, 2013 seems the soonest that is remotely fathomable. In the meantime, climate change will march on. This year is on pace to tie 2005 as the warmest on record, according to NASA, and the 10 hottest years have all occurred since 1998.

Second, how confident should we be that cap and trade will work as advertised?

Back in March, when a Senate climate bill was still possible, Mr. Greenstone gave a speech in Chicago explaining why it might disappoint its fans. The speech was striking from somebody who supported the bill and had even worked on it as chief economist of the president’s Council of Economic Advisers.

By raising the cost of dirty energy, a cap-and-trade system would give American companies an incentive to use less energy. But the cost would probably not be so high that they would need breakthrough technologies anytime soon, Mr. Greenstone said. Instead of investing in basic research, companies might make more modest changes, using energy sources that emitted somewhat less carbon, like natural gas, or making their offices and factories more energy efficient.

As beneficial as these changes might be, they would not help China and India keep global emissions from reaching levels that scientists consider ominous. As Mr. Greenstone said in Chicago, “All the action is really going to be occurring in developing countries.” And developing countries can’t caulk or insulate their way to a green future. They need breakthrough technologies that can compete on a grand scale with coal and oil “” the kind China is now pursuing and a major research program in this country could, too.

Mr. Greenstone called for $25 billion in annual research money, the same figure that’s in the plan being released Wednesday. (He did not work on the plan.) That’s less than half the estimated net cost of the main Senate cap-and-trade bill. It’s also less than the $32 billion budget for the National Institutes of Health.

The National Institutes are a model in another way, too. It makes decisions based on a rigorous scientific process. The research money for clean energy, on the other hand, is distorted by politics. Iowa’s influential presidential caucus, for example, is one reason the corn-based fuel known as ethanol receives so much money.

The experts at A.E.I. and Brookings specifically suggest making the Defense Department a bigger part of clean energy research. The American military has such a successful record of fostering basic research partly because it ends up using the results of that research. The military also has a clear interest in alternative clean energy, given that it consumes more oil than some entire countries and that the soldiers on its fuel convoys are sometimes killed in action.

Politically, the weakest link in the pro-research argument is that no one knows exactly where the money will come from.

Congress could cancel current subsidies, for both clean and dirty energy, but that would not raise anywhere near $25 billion. Steven Hayward of A.E.I. notes that the royalties that oil and gas companies pay on future projects could also be increased, as Representative Devin Nunes, a California Republican, has suggested. The A.E.I.-Brookings plan even raises the idea of a small cap-and-trade program, charging about one-third as much for carbon emissions as the Senate bill would have “” but no cap-and-trade program will happen anytime soon.

When Mr. Hayward and I were talking, I asked whether he could imagine Republican leaders’ supporting more research spending no matter where the money came from. Probably not in the near future, he acknowledged. For now, Republicans will focus on shrinking government.

But at some point, maybe if oil prices spike, Mr. Hayward thinks the party may well be interested in a policy that fosters innovation, creates jobs and helps national security.

E-mail: leonhardt@nytimes.com

A version of this article appeared in print on October 13, 2010, on page B1 of the New York edition.

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