Green Project

Markets work. And so does policy. That's the optimistic message from Guy Caruso, head of the Department of Energy's statistical arm, the US Energy Information Administration who told the Financial Times that US dependence on foreign oil after rising for 30 years will drop from 60% to 50% in the next seven years. Caruso estimates that US imports will fall through 2030 thanks to lower consumption as prices rise and as biofuel mandates tighten. Caruso's prediction is likely to reduce calls to drill in the Alaska National Wildlife Reserve and provide support for biofuel targets.

But is this optimism justified? Today's FT has a secong long article on peak oil, the idea introduced by Shell geologist, Marion King Hubbert that oil production is bound to peak and then decline. Hubbert accurately predicted the peak of US production in the 1960s. His followers see global oil production peaking in the next decade or so, followed by shortages--and according to some--panic in the streets. Even sober analysts believe that the capacity of Saudi Arabia to increase oil production at its mammoth Ghawar field is limited. And such knowledgeable Texans as T Boone Pickens are believers in peak oil. Last week, Pickens plunged down $2 billion as a one quarter downpayment, on 2500 turbines he is installing in the Texas Panhandle to build the world's largest wind farm.

Optimist or pessimist, it's clear that oil capacity is under stress and high prices are probably here to stay. Even under the most optimistic scenarios, renewable sources won't replace oil for decades. The key question is how quickly will markets work to lower oil usage and drive investment in the technologies needed when the wells begin to run dry.

Is the exurban era over? For the last sixty years, American urban development has been characterized by a relentless, outward surge of population to the edge. While the reasons are complex, the top two are easy loans courtesy of Federal programs like Fannie Mae and cheap gas. With housing stalled and gas prices soaring, the peculiar American invention of sprawl may be approaching a crisis. The car culture that supports sprawl made sense at $1.50 a gallon. But now that prices are rising, there is a very real possibility that today's exurbs could be tomorrow's wasteland.

Paul Krugman addresses this question today in an oped that finds the future of urban development, not in India or China but in old Europe. Why? Europe embodies precisely the high density, transportation-oriented-development that may be the answer to sprawl. Krugman points out that Berlin has about as many people as Atlanta but they get around by bus or train, not by car. German families own cars; they just get higher mileage and drive less. The result is a sustainable-and not too shabby--style of living that is less harmful to the planet and a lot easier on the family budget.

Smart growth, as it is known in America, has been around for a while but it has yet to get real traction. Besides cheap gas and plentiful cheap land at the edge, the ideal of high density, eco-friendly development has repeatedly run into the US preference for highways instead of rail, the suburban homestead as opposed to apartments and our system of federalism that has wrought a patchwork of tiny, competing jurisdictions. With low gas prices no longer supporting sprawl, however, the other supports may not sustain it.

What could save the exurbs? High mileage cars will help, but they are not enough. America needs to make a massive investment in rail and other forms of public transporation to link exurban centers which still tend to radiate outward from cities together. To do that, a reform in infrastructure finance is needed. In turn, zoning codes need to change as well to promote higher density development and open space preservation. Currently the very definition of sprawl-separation of residential housing form commercial stores-is baked into tens of thousands of zoning codes around the country. Model zoning codes that promote smart growth should be enacted nationally.

It's a big challenge. But America should start now if it has any chance to forestall what may be major dislocation down the road.

John McCain has a new ad up and is giving a speech today in Oregon on climate change, a signature distinction that he likes to draw between himself and President Bush. McCain’s strategy on this issue is to try to position himself as a moderate, and this will be a key issue for him to build his maverick image upon.

Take a look at the new ad:

This ad places McCain in the middle on climate and strikes at others as being "extreme," presumably mainstream Republicans on one side and Democrats on the other. Look for more messaging like this out of the McCain team as the campaigns move into general election mode and McCain tries to neutralize climate change as an issue for the Democrats as he hunts for the middle that he will need to win in November.

McCain’s plan, which David Roberts at Grist calls "better than expected but behind the curve," is part of an important moment in American politics, as it means that the next president will surely do something about Climate Change. It is important to remember, however, that the something on climate all the candidates offer is not the same.

Update: Today's Washington Post features an excellent article by Julie Eilperin entitled "Environmental Stances Are Balancing Act for McCain." A sample:

But an examination of McCain's voting record shows an inconsistent approach to the environment: He champions some "green" causes while casting sometimes contradictory votes on others.

The senator from Arizona has been resolute in his quest to impose a federal limit on greenhouse gas emissions, even when it means challenging his own party. But he has also cast votes against tightening fuel-efficiency standards and resisted requiring public utilities to offer a specific amount of electricity from renewable sources. He has worked to protect public lands in his home state, winning a 2001 award from the National Parks Conservation Association for helping give the National Park Service some say over air tours around the Grand Canyon, work that prompts former interior secretary and Arizona governor Bruce Babbitt to call him "a great friend of the canyon." But he has also pushed to set aside Endangered Species Act protections when they conflict with other priorities, such as the construction of a University of Arizona observatory on Mount Graham. 

China’s poor stewardship of the environment in pursuit of economic gain has gotten to the point that the World Bank estimates that damage to the environment costs China 5.8% of its GDP annually. However, the costs of poor environmental stewardship are also political. China's leaders are starting to feel the wrath of NIMBY (Not In My Back Yard) syndrome, as Chinese people rise up to protest polluted water and dangerous factories. Recent noted protests have been covered closely by the western media, the first in a New York Times article by Edward Wong over a multibillion dollar PetroChina plant in Chengdu and the second in the Economist over heavily polluted Tai Lake, the third largest lake in China.

These protests are significant, not only because the Chinese people are rejecting their government’s poor environmental record, but because of how they are organizing protests. These, like other political protests in Egypt and Tibet, are being put together by blogs and mobile phones. Mobile phones, especially, allow organizers to put together spur of the moment action in political issues in a way that the Chinese government cannot monitor in the same way it monitors the internet.

From the New York Times:

The recent protest, which was peaceful, was organized through Web sites, blogs and cellphone text messages, illustrating how some Chinese are using digital technology to start civic movements, which are usually banned by the police. Organizers also used text messages to publicize their cause nationally.

From the Economist:

The same internet and mobile-telephone technology that is helping China's angry young nationalists organise protests and boycotts is also helping other aggrieved citizens to unite. The past year has seen the first large-scale, middle-class protests in China over environmental issues: in the southern coastal city of Xiamen in June over the construction of a chemical factory, and in January this year in Shanghai over plans to extend a magnetic levitation train line.

These Chinese political organizers are developing a movement of their own, one that will ultimately make their government answer hard questions about democracy, human rights, and the environment. In large part, new technology, especially mobile, will be responsible. Simon Rosenberg recently wrote about the power of mobile to reduce global poverty, one of the many exciting broader applications for mobile technology that will be able to bring an improved standard of living to people in developing nations in every corner of the globe.

Senator Clinton has not run a flawless race this year but as Denver gets nearer, each mistake grows more critical. If one stands out in yesterday's results, it was not just proposing but pressing for a cut in the gas tax this last week. The idea suffered from so many flaws it is hard to imagine the conversations that led her advisors to propose it, let alone run ads on the issue.

First, John McCain had the idea first. While her addition of a windfall profits tax on the oil companies made sense enough, that was not enough to differentiate her version. In a race where Obama has been dying for chances to link her with Republicans, adopting one of McCain's ideas should have been strike one.

Strike two, neither she nor McCain will be President this summer. Voters want to hear what she will do as President after January 20, 2009.

Third, the idea was clearly bad policy, guaranteeing its universal panning by economists, energy analysts and pundits. No doubt her own policy staff probably argued that a tax cut will not relieve upward pressures on oil prices, will encourage more use of gas that may actually increase prices and undermines her strong message on global warming and energy security.

Strike four is that the controversy completely doused the firestorm around Senator Obama's former pastor, the Reverend Wright that was lifting her in the polls as recently as last Thursday.

Senator Obama will probably talk about this issue as long as he can. As for Senator Clinton, the episode should be a reminder that in a complex world, good policy is the truest signpost of good politics.

Clinton and Obama have released a new round of gas tax ads in advance of Indiana and North Carolina. Clinton's argues that she will fight the oil companies and make them pay the gas tax, while Obama's argues that her propsal is "bogus" and "a gimmick."

Clinton's ad:

On the gasoline tax, the survey underlined the risk Mrs. Clinton is taking in embracing a position that most Americans — including a majority of her own supporters — appear to view as political pandering. More than 60 percent of voters in the poll said that Mrs. Clinton said what people wanted to hear, rather than what she believed. Forty-three percent said that about Mr. Obama, and 41 percent about Mr. McCain.

Update 2: Obama's latest ad going into tomorrow's primaries says Clinton is taking "the low road."

NDN gas tax coverage round up:

• Obama goes after Clinton on gas tax
• More on the gas tax - including a quote from Globalization Initiative Chair Dr. Robert Shapiro
• Ads focus on gas tax
• Energy Insanity - coverage of Thomas Friedman's column by Green Project Director Michael Moynihan
• Candidates talk energy policy

Download the latest version of Internet Explorer, plant a tree.  In its newest marketing drive, Microsoft will help you reduce your carbon footprint by planting a tree in CarbonGrove when you downlod the free upgrade of IE.  For the company that leveraged its operating system to gain almost 100% share of the brower market, this is an interesting move that testifies to the traction that carbon consciousness has achieved.  To learn more, click here.

Who would have thought that the gas tax would be a top political issue going into the Indiana primary? Both Democratic campaigns have used the issue to push their narratives: Clinton's that she is a fighter for the working class and Obama's that he represents a new kind of politics. Both have been running ads in Indiana on this policy difference, and Obama has released a new one taking on Clinton directly on her support for John McCain's gas tax holiday proposal.

Watch "Pennies"

Also, today's New York Times has an interesting article entitled "Unlikely Allies Campaign for a Gas-Tax Holiday."

Senators John McCain and Hillary Rodham Clinton found themselves taking a lonely stand on the campaign trail Thursday, defending the proposed gasoline-tax holiday while critics from both parties lined up against it.

Three times, twice unprompted, Mr. McCain, of Arizona, brought up the idea, which Senator Barack Obama's campaign began calling "the McCain-Clinton gas-tax holiday."

Their proposal would suspend the federal excise tax on gasoline, 18.4 cents a gallon, for the summer travel season.

Mrs. Clinton, campaigning in central and southern Indiana, championed her plan as a boon to commuters, truckers and summer vacationers.

At an event in Jeffersonville, Ind., on Thursday evening, Mrs. Clinton amplified her frequent pledge to introduce legislation to suspend the gas tax, saying she wanted to put members of Congress on the spot on the issue.

"Do they stand with hard-pressed Americans who are trying to pay their gas bills at the gas station or do they once again stand with the big oil companies?" Mrs. Clinton, of New York, said. "That's a vote I'm going to try to get, because I want to know where they stand, and I want them to tell us - are they with us or against us?" (Some Clinton supporters and superdelegates in Congress are among those who oppose a gas tax holiday.)

In Iowa, sounding more exasperated as the day went on, Mr. McCain grimaced slightly when a questioner at a town-hall-style meeting asked him about the plan.

"You'd think that I was attacking Western civilization as we know it," Mr. McCain replied. "The special interests, ‘Oh, my God. This will destroy our transportation system in America. This will have disastrous consequences.' Look, all I think is we ought to give low-income Americans, in particular, a little relief."

Mr. McCain did not say which special interests he meant. But by Thursday afternoon, opposition to the plan was robust and bipartisan, including Senator John Thune, Republican of South Dakota; Senator Tom Harkin, Democrat of Iowa; and Speaker Nancy Pelosi, Democrat of California.

Even lawmakers in Mrs. Clinton's backyard, including Mayor Michael R. Bloomberg of New York City (a former Republican, now an independent) and Gov. David A. Paterson, a Democrat, expressed doubts.

"It's about the dumbest thing I've heard in an awful long time from an economic point of view," Mr. Bloomberg told reporters, adding that he did not see "any merit to it whatsoever."

The Wall Street Journal also has an article on the issue today, entitled "Will Voters Accept Obama's Gas Plea?" which points out that Obama's arguments on the issue are not always getting through to voters.

NDN gas tax coverage round up:

• More on the gas tax - including a quote from Globalization Initiative Chair Dr. Robert Shapiro
• Ads focus on gas tax
• Energy Insanity - coverage of Thomas Friedman's column by Green Project Director Michael Moynihan
• Candidates talk energy policy

UPDATE: Senator Clinton is reportedly introducing legislation today to suspend the gas tax for the summer. With broadbased opposition to the measure, including Speaker Pelosi, this legislation probably is not going anywhere, but Clinton has said that she wants to "get every member of Congress on the record," on this issue. The Obama campaign is arguing that Clinton is overplaying her hand and risks alienating the members of Congress (read: super delegates) she needs to win the nomination.

Dr. Robert Shaprio, Chair of NDN's Globalization Initiative, was quoted by Sam Stein in the Huffington Post on the gas tax holiday proposal. The article, entitled "Expert Support for Gas Tax Holiday Appears Nonexistant," comes on the heels of a Thomas Friedman column and New York Times editorial that both deride the proposal.

From the Huffington Post:

"Stated as clearly as I can," [Shapiro] wrote, "it's utterly misguided both environmentally and economically. Environmentally, it does actual harm, since it reduces the price of producing greenhouse gases. And economically it's trivial or worse -- by reducing the price of driving it encourages more of it, thereby increasing demand for gasoline, which inevitably pushes the price back up - the consumer gains nothing, and the oil companies and OPEC collect the extra bucks instead of the government."

On another note, the conferees on the upcoming farm bill agreed to reduce the subsidy for ethanol. Corn based ethanol has been blamed, among many factors, for the rise in food prices.

The past two days have seen a back and forth from Senators Clinton and Obama on the proposal to suspend the gas tax for the summer. Green Project Director Michael Moynihan blogged on a Thomas Friedman column on the subject today, and the New York Times covered the debate yesterday. Now, both candidates have ads airing in Indiana on the subject.

Senator Clinton hits Obama:

Senator Obama's response:

Obama has said he was going to avoid going negative in the coming weeks, while Clinton has not shied away from her strategy. Both ads clearly reflect that, and stay on message: Clinton's of being a fighter and Obama's change in Washington argument. We will see if this issue can score points for either one.