Green Project

Energy Reform Can Be an Economic Boon

Critics of moving toward a low-carbon economy generally argue that doing so is far too costly. That frame, that energy transformation will hurt the economy, is alive and well in the media. Today's Washington Post features a front page article asking, "As Fuel Prices Fall, Will Push For Alternatives Lose Steam?" The analysis, in which Steven Mufson talks to energy experts from Greg Kats (who spoke to NDN on August 1) to Shai Agassi (March 12), makes the point that lower cost conventional fuels (oil), will hurt the ability of alternatives to compete.

This analysis is fine, but, as Kats points out, lower energy costs should not be thought of as a reason to place a hold on changing energy policy. The Post’s editorial page also goes after the cost of enacting climate legislation, arguing that cap and trade may be difficult because of the current recession. This is a political problem, not an economic one, as any climate change legislation will not actually begin capping emissions for well until after a recession has passed. (The Post’s solution, incidentally, of recycling revenue from cap and trade, is a novel idea, and is similar to a tax shift that has been studied extensively by NDN’s Dr. Robert Shapiro.)

The real point here is that moving toward a low carbon economy must be done to ensure future prosperty. When enacted properly, energy policy shifts can be game changing. Today’s New York Times tells us that California’s energy policy, which, since the late 1970’s, has kept per capita energy use stable while the rest of the country’s has increased, has been a boon for the state.

California’s energy-efficiency policies created nearly 1.5 million jobs from 1977 to 2007, while eliminating fewer than 25,000, according to a study to be released Monday.

The study, conducted by David Roland-Holst, an economist at the Center for Energy, Resources and Economic Sustainability at the University of California, Berkeley, found that while the state’s policies lowered employee compensation in the electric power industry by an estimated $1.6 billion over that period, it improved compensation in the state over all by $44.6 billion.

"Consumers were able to reduce energy spending," the study said, adding that "these savings were diverted to other demand."

"When consumers shift one dollar of demand from electricity to groceries," the report said, they create jobs among retailers, wholesalers, food processors and other businesses.

So, instead of being afraid of changing energy policy in the midst of a recession, we must realize that the status quo has far greater costs. Congress and the president-elect will have an excellent opportunity to begin this crucial transition in mid-November, when a lame duck session is likely. They must pass a stimulus package that invests in clean infrastructure, which will both create jobs now and ensure future prosperity. Moving forward, policy makers must consult with leaders in the energy field like Kats and Agassi, as their innovation will be key in creating the 21st century economy.

Obama Puts Energy First

One of the most daunting challenges any new president faces is prioritizing all the programs that were promised as a candidate. Last night, despite all the grumblings about format, Tom Brokaw got in a very important follow up, when he asked the candidates to prioritize energy, healthcare, and entitlement reform.

Obama, who went second (after McCain argued that we can handle three of the largest issues in a generation at the same time) and made a choice:

We're going to have to prioritize, just like a family has to prioritize. Now, I've listed the things that I think have to be at the top of the list.

Energy we have to deal with today, because you're paying $3.80 here in Nashville for gasoline, and it could go up. And it's a strain on your family budget, but it's also bad for our national security, because countries like Russia and Venezuela and, you know, in some cases, countries like Iran, are benefiting from higher oil prices.

So we've got to deal with that right away. That's why I've called for an investment of $15 billion a year over 10 years. Our goal should be, in 10 year's time, we are free of dependence on Middle Eastern oil.

And we can do it. Now, when JFK said we're going to the Moon in 10 years, nobody was sure how to do it, but we understood that, if the American people make a decision to do something, it gets done. So that would be priority number one.

This debate had a tremendous amount of discussion on energy, which, Americans have realized, is at the center of almost every major issue of the day, from getting the country out of a recession to limiting the power of an emboldened Russia. The fact that Obama has made it clear that energy is his first priority is an extremely welcome sign, and the strong focus on energy policy last night is a watershed moment in Presidential politics.

As Simon pointed out, current proposals on how to reform energy policy illustrate that we may need to come to a much different understanding of the urgency of reducing our dependence on fossil fuels and exactly how much that might cost. If one wants to put energy reform in the context of the Apollo project, it is worth noting that Apollo, in its peak year, represented 2.2% of the federal budget. The proposed $15 billion per year would be more like 0.005% (compared to the 2007 spending). If energy reform is to truly be a major national priority, it must be thought about in that context. 

Dingell and Boucher Release Cap and Trade Legislation

Today, U.S. Rep. John Dingell, Chairman of the House Committee on Energy and Commerce (D-MI) and U.S. Rep. Rick Boucher (D-VA), Chairman of the House Subcommittee on Energy and Air Quality released a much anticipated 461 page discussion draft of their climate change legislation. From their statement to the members of the House Energy and Commerce Committee:

Politically, scientifically, legally, and morally, the question has been settled: regulation of greenhouse gasses in the United States in coming. We believe that elected and accountable representatives in the Congress, not the Executive Branch, should properly design that regulatory program. The only remaining question is what form that regulation will take.

Indeed, as we learned from the debate on Boxer-Lieberman-Warner in the Senate, the remaining question – what form the regulation will take – is the hardest one to answer. The Dingell-Boucher proposal is a welcome addition to the conversation that will occur in Congress next year.

With the economy in a recession, the political feasibility of passing climate legislation appears tougher now than just a few months ago. Maybe in a forum with presidential candidates, someone can ask a question about it. I believe there’s one coming up sometime soon….

Friday Buzz: Fox News, Bailout Blues, and More

It's been quite a week for NDN in the media.

Yesterday, Fox News gave Michael Moynihan and NDN's Green Project a lot of the credit (or blame? You Decide...) for getting legislation to create a Clean Energy Investment Bank into the House. Michael also got good mentions from the Carbon Tax Center and Carbon Control News.

Rob and Simon's critical work on solving the financial crisis and keeping people in their homes was covered in The Wall Street Journal, The Associated Press (twice, here and here), The Chicago Sun-Times, The Huffington PostThe Hill, and The Phoenix.

NDN's work on immigration reform and Hispanic issues was covered by several major news sources this week, including Newsweek, The Guardian, and NPR, as well as Fort Collins Now, The Miami New Times,, and Scoop.

The Washington Post and covered the expansion of NDN affiliate The New Policy Institute's Adelante campaign, which has new ads airing in the DC Metro area in addition to Colorado and Nevada. The Statesman also covered the campaign.

Finally, Simon is quoted in The American Prospect this week on the internal dynamics of the evolving Democratic majority in Congress.

Senate Bailout Bill Challenges Pay-Go

With news coming that the Senate has loaded up the bailout bill with a number of tax provisions, including an AMT patch and crucial tax credits for renewable energy, the House vote on the proposal, should it pass the Senate, looks to be a defining moment for pay-go.

Pay-go has been the largest stumbling block in extending renewable energy tax credits – a package so popular that it recently passed the Senate with a vote of 93 to 2. Now, a bipartisan agreement by Leaders Reid and McConnell to include these provisions in the bailout bill, which is predicted to pass the Senate tonight, will only be derailed if some in the House continue to insist on pay-go.

NDN has long argued that pay-go creates far too much arbitrary, artificial rigidity in the legislative and governing processes, and this bailout serves as a perfect example. Should a bipartisan bill designed to rescue the economy on the order of $700 billion fail due to a pay-go fight over far less costly tax provisions that are partially offset, the legacy of pay-go, a provision that doubtless has limited life to it anyway, will go from murky to downright laughable.

As the economy slides into recession, one can only hope that the popularity and job creation benefits of the tax credits, especially those for renewable energy, will garner enough votes to more than offset the votes lost from pay-go proponents.

Launching a Clean Infrastructure Investment Agenda

Last week, NDN Fellow and Green Project Director Michael Moynihan released an essay calling for an investment in new, clean infrastructure. Clean infrastructure investment, which includes electricity grid modernization, public transportation, renewable energy and efficiency, and a variety of other ideas, is crucial in both ensuring near-term economic growth and long-term prosperity, as we create a low-carbon economy.

Saturday in the New York Times, Thomas Friedman issued a similar call, arguing to "Green the Bailout."

The point is, we don’t just need a bailout. We need a buildup. We need to get back to making stuff, based on real engineering not just financial engineering. We need to get back to a world where people are able to realize the American Dream — a house with a yard — because they have built something with their hands, not because they got a "liar loan" from an underregulated bank with no money down and nothing to pay for two years. The American Dream is an aspiration, not an entitlement.

Indeed, when this bailout is over, we need the next president — this one is wasted — to launch an E.T., energy technology, revolution with the same urgency as this bailout. Otherwise, all we will have done is bought ourselves a respite, but not a future. The exciting thing about the energy technology revolution is that it spans the whole economy — from green-collar construction jobs to high-tech solar panel designing jobs. It could lift so many boats.

A national agenda focused on investing in new, clean infrastructure has the potential to begin to pull America out of the current economic downturn, enhance energy security, confront climate change, and ensure future prosperity through the creation of dynamic new 21st century, low-carbon economy. Stay tuned to the Green Project’s work on clean infrastructure moving forward.

NDN in the (New) Media

This election cycle, many people have complained that the traditional media has not been doing its job all that well. The general complaint is that instead of giving voters the information they need to make informed and intelligent decisions, the ratings-driven mainstream media increasingly focuses on distractions and sound bites. Some have called for the reform of our traditional media; others have simply bypassed it.

We believe in engaging the non-traditional media. Here are a few of our new-media mentions from the past week:

DailyKos, The Latino Journal, and The South Chicagoan referenced our recent polls of Hispanic voters in key battleground states.

Simon and Rob Shapiro are featured in The American Prospect’s blog, Tapped, as well as Biodun Iginla’s BBC weblog, for their joint statement, “Keep People in Their Homes.” Shapiro also appears in Campaign for America’s Future.

Finally, Michael Moynihan, Director of NDN’s Green Project, has posts in The Huffington Post and Gristmill.

Senate Passes Renewable Energy Tax Credits

Last night, the U.S. Senate passed tax credits for renewable energy, including extending crucial tax credits for solar and wind energy. NDN congratulates the Senate for mustering overwhelming bipartisan support for this legislation, and encourages the House to follow suit and deliver this legislation to the President's desk as soon as possible.

WASHINGTON (Reuters) - The U.S. Senate Tuesday approved a package to extend $18 billion in tax credits for using renewable energy sources like wind, solar and geothermal and also provide incentives to cut energy consumption.

The move, which alternative energy companies had been lobbying for all year, sent shares of solar power companies higher in after-hours trade. The delay in extending the tax credits had been a major damper on those stocks this year. The Senate was seen as the biggest roadblock after it shot down the extension eight times this year.

"Getting past what has been largely the deal-breaker in the past should be positive," Wedbush Morgan analyst Al Kaschalk said of the impact the vote would have on solar stocks.

Under the proposal, which will be part of a much bigger tax bill, the tax credit for producing electricity from wind would be extended for one year. The credit for other renewable sources, such as wave and ocean tide projects that generate power, would be extended for two years.

The residential and business tax breaks for solar energy would be extended for eight years.

"Solar is the winner here," Raymond James alternative energy analyst Pavel Molchanov said.

For more on the importance of solar energy to the American economy, read Solar Energy: The Case for Action, an extensive report released in August by NDN Green Project Director Michael Moynihan.

Agreement Reached on Renewable Energy Tax Credits

It appears that an agreement has been reached in the Senate on an extenders package that includes the tax credits for renewable energy.

From the Senate Finance Committee's statement:

Deal combines Finance leaders’ key energy priorities with top tax issues for 110th Congress

Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) today announced an agreement with the Senate’s Democratic and Republican leadership to move legislation accomplishing the Finance panel’s remaining major objectives for the year: passage of clean energy tax incentives, the protection of millions of Americans from the alternative minimum tax (AMT), and extensions of expiring family and business tax cuts.  Last week, Baucus and Grassley unveiled a $40 billion package of clean energy tax incentives for Senate consideration this month.  Today, the Finance leaders combined key objectives of that legislation with an agreement to update alternative minimum tax rules and continue tax cuts for college tuition, state and local sales taxes, and research and development for U.S. businesses.  Senators should vote this week on amendments to replace the current text of H.R. 6049, energy tax legislation approved in the House of Representatives earlier this year.

More on the agreement here

Fundamental Lies

U.S. Sen. John McCain’s new ad on the economy is interesting mostly because of its frighteningly weak economic fundamentals. It is similarly weak on truth – nothing new from the McCain camp, but these lies, some recycled and some fresh out of wherever they come up with this stuff, come in the policy field and not, as most of the others have been, in the personal.

The ad is called "Crisis." Take a look:

The ad promises three actions the McCain campaign would deliver on to improve the economy. The first is "Tougher rules on Wall Street." The credibility of this promise is low, as it comes from a campaign advised by Phil Gramm, who authored much of the deregulation of Wall Street that got us here to begin with, and from a man who, as the New York Times points out, "has consistently characterized himself as fundamentally a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms."

The second promise is "Lower taxes to create new jobs." Now, John McCain probably honestly believes that lower taxes do create new jobs, and, functioning under the rule of Costanza, "It's not a lie, if you believe it," then perhaps McCain is not a liar. Under any other standard, however, the cause – effect relationship he posits between lower taxes and new jobs simply isn't true. One doesn't need to look into ancient economic history for proof: Under the Bush administration’s tax cuts, job growth has been far, far slower than the Clinton years of relatively higher taxes.

Finally, McCain promises, "Offshore drilling to reduce gas prices." Things get especially un-truthy for the senior Senator from Arizona here. Granting expanded leases for offshore drilling will not provide a meaningful reduction in gas prices for Americans any time soon. Period. That’s it. This flat out lie has been debunked time and time again, but McCain continues to present a cause and effect relationship that just is not true as a central plank in the rationale for his presidency. Hopefully someone asks him about it soon. (For example, in a presidential debate in 10 days.)

The lies the McCain campaign has been throwing around about everything from kindergarten, to pigs, to pigs in kindergarten have certainly caught the media's attention. But isn’t lying to the American people about what one's governing agenda will do for them even worse?

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