Energy Independence


NDN: Week in Review

There's always a lot happening here at NDN, so in case you missed anything, here's what we've been up to in the last week:

A Stimulus for the Long Run - Post-election, Congress will head back to Washington to consider another stimulus package. NDN Globalization Initiative Chair Dr. Robert Shapiro and Green Project Director Michael Moynihan have been weighing in on the need to create a package that jumpstarts the economy now and helps ensure future prosperity by working to create a low-carbon economy. In a recent essay, Shapiro argued for a “Stimulus for the Long Run” that invests in clean infrastructure, worker training, and technology. In a separate memo, Moynihan also made the case for Accelerating the Development of a 21st Century Economy: Investing in Clean Infrastructure. The bottom line: Congress has a limited amount of money to spend on a stimulus.

Election Forum with Joe Trippi and Simon Rosenberg - Yesterday, NDN hosted a special lunchtime Election Forum with NDN President Simon Rosenberg and Internet pioneer, top political strategist and New Politics Institute fellow Joe Trippi. Joe and Simon looked at this remarkable election cycle and also beyond November 4 to the next Administration. For more information and photos from the event, please click here.

NDN Countdown to Election 2008 - With less than a week to go before Election Day, the NDN team continued to weigh in on issues ranging from swinging poll numbers to donation-fueled shopping sprees to early voting. With the media reporting U.S. Sen. Barack Obama with anywhere from a double-digit to a single-digit lead over U.S. Sen. John McCain, Simon asked, "Is McCain Playing to Win?"

Simon's essay echoes what he and the NDN team have been saying for several weeks: we may see an uptick in McCain's numbers as the race enters the final days, but that's because the Arizona senator is gaining ground he already should have held. It's not a sign of McCain's strength; rather, it's a sign of his weakness and disappointing campaign that many in the GOP base are only now coming home. For more on the final days of the campaign, check out this report from yesterday's Newsday, which quotes Simon.

Simon also predicted that increasingly, we will start to hear quiet talk of realignment, blowout, rout, coattails and a new political era. If the trends continue, we are headed toward a true blowout with the top of the Democratic ticket getting its highest vote share since 1964, Democrats having more ideological control of Washington since the mid 1960s and Democrats having the makings of a new very 21st century majority coalition they could ride for the next 30-40 years of politics.

And the other big news last week? What about Gov. Sarah Palin slapping her hockey Mom image right out of the rink by spending $150,000 on designer clothes and make up? Chalk it up the Republicans’ being completely out of touch with the economic struggles of everyday people. Melissa also took a look at an interview Palin did with James Dobson, the immensley popular leader of “Focus on the Family.” While Palin has apologized for some of her more divisive rhetoric as of late, she played to Dobson’s audience in this interview, even seeming to contradict McCain's more moderate stances on several issues, including stem cell research, choice and gay marriage. Is Palin thinking conservative base in 2012?

Back to the here-and-now, Andres Ramirez, Vice President of Hispanic Programs, spent the week focusing on the subject of early voting. With one in three registered voters expected to cast their ballots before November 4, Andres wrote about the record-breaking numbers of early voters, how many of those voters are experiencing very long waits to vote and efforts to prevent people from voting or purge newly registered voters from the rolls.

Keep People in Their Homes - For more than a month, NDN has been arguing that any government response to the financial crisis must include a central provision to keep people in their homes. Momentum to do just that grew last week, as FDIC Chairman Sheila Bair testified before Congress and presented a proposal to keep people in their homes, and the New York Times editorialized on the issue. The Washington Post reported that Bair’s proposal received a warm reception from lawmakers, a welcome sign that the federal government will soon provide necessary leadership in this effort. For more on NDN’s Keep People in Their Homes effort, click here.

Other NDN Thinking - There are no lack of victims from the meltdown of the financial markets and the oncoming economic recession. Will moving toward a low-carbon future, a top priority for NDN, be one of them? Our answer is “no.” Jake Berliner argued that Energy Reform Can Be an Economic Boon. Green Project Director Moynihan further buttressed Jake’s arguments in his essay, Climate Change: Next Steps in a Troubled Economy. Zuraya Tapia-Alfaro looked at Barack Obama’s latest Spanish-language ad about restoring the “American Dream,” following other Spanish-language TV and radio ads on education, health care, taxes, and more. She also wrote about immigration in the presidential race and how the next president can discuss immigration reform using an economic narrative during this time of economic crisis.

New Tools Feature: Go Mobile - In last week's New Tools Feature, TXT 2 GOTV, I highlighted a new study that shows the great bang-for-the-buck efficacy of text-based get-out-the-vote campaigns, which, on average, cost only $1.56 per vote. To learn more about using SMS messaging effectively, be sure to read our New Politics Institute's New Tools paper, Go Mobile Now. While texting has already had a real, measurable effect in this election cycle, and will be critical to getting out key voting blocs next Tuesday, the true potential of mobile-powered politics has yet to be tapped.

NDN Breaking Through - The new VIBE Magazine hit shelves last week. For the first time in its 15-year history, VIBE endorsed a candidate this month. Simon is quoted in the cover story, "The Tipping Point," about race in American politics and the historic implications of the rise of U.S. Sen. Barack Obama.

Simon also provided analysis of the election in the Independent, Reuters (and subsequently on Michael Moore's blog), and in two featured posts on the Huffington Post (here and here). His election commentary also aired on radio stations across the country, and he was featured on WAMU's "Power Breakfast": you can listen to the segment here:

Finally, Rob was quoted in a big story in the New York Times and the International Herald-Tribune about the Treasury backing the consolidation of banks, and Michael had a featured post about dealing with climate change in a troubled economy in the Huffington Post's Green section.

Obama: Clean Tech is Priority Number One Next Year

In an interview with Joe Klein in Time, Presidential Candidate Barack Obama showed that he gets it on the importance of investing in clean energy as an engine of economic growth.

Said Obama: "The engine of economic growth for the past 20 years is not going to be there for the next 20.  That was consumer spending...There is no better potential driver that pervades all aspects of our economy than a new energy economy....That's going to be my No.1 priority when I get into office." 

We are in total agreement with Senator Obama that clean energy can power prosperity for the next decade and beyond. The more you look into the promise of clean energy, the better its characteristics as a transformative industry able to serve as an engine of growth appear. 

First, because much of the work of retiring our old dirty infrastructure and building new clean, energy efficient infrastructure must occur domestically, investments in clean infrastructure should lead directly to new domestic jobs with a nice multiplier effect.

Second, many of the jobs in building new clean buildings and retrofitting old ones are by their very nature construction jobs that provide high wages even for those without extensive education.

Third, like information technology, clean technology is a new industry with the potential to create fortunes for entrepreneurs and high paying jobs for scientists, engineers and others that work at clean tech companies.  The US system of innovation is ideally suited to turn ideas into wealth and the money pouring into cleantech in Silicon Valley suggests this process is already underway.

Fourth, clean technology is also likely to have a strong manufacturing component.  The weight and physical size of many clean technology components from new building materials to solar panels has compelled Chinese firms, for example, to site their factories close to markets in the United States.  Clean energy thus is ideally suited to revive empty factories across Michigan, Ohio, Penssyvlania and America's once great manufacturing belt. 

All told, Senator Obama is spot on that clean energy must be a number one priority next year.  How refreshing it is and how transformative it will be to have new leadership in America focosued on real, not paper, economic growth.

Stimulus for the Long Run

When Congress returns to Washington following the election, its first priority will be to pass another stimulus package for the sinking economy. It’s already clear that the package will involve about $200 billion in new stimulus or a boost equal to about 1.4 percent of GDP. The question is what form the package should take. The path of least political resistance is another round of tax rebates for American families, which they could spend to jumpstart demand and, ultimately, the business investments and jobs to meet that demand. The catch is, that path is very unlikely to work this time. Moreover, the new president-elect and Congress can put that $200 billion to uses that will stimulate long-term growth and income gains much more effectively.

Most people won’t spend small windfalls when they’re worried about losing their jobs or homes next month or finding themselves unable to pay their health care premiums or their kid’s tuition. Instead, they save such windfalls or use them to pay down debts. That’s just what happened this past spring with most of the tax rebate in the last stimulus. With unemployment rising, home values continuing to fall and the stock market down nearly 40 percent over the last year, most Americans are even more anxious today and feeling a lot poorer. In this environment, two-thirds of more of those rebate checks would simply be saved, providing virtually no stimulus.

But we still need that stimulus, if only as an insurance policy against future economic shocks that could deliver serious new blows to the faltering economy, such as a run on the dollar that would drive up interest rates or another wave of financial failures if the deterioration in the housing market gets worse. And since the recessions in countries that suffer financial meltdowns are usually longer and deeper than normal, we should prepare ourselves for another year or more of tight times.

There are better paths for the coming stimulus package than tax rebates. A piece of it should go to ease some of the recession’s immediate pressures and pain: extend unemployment benefits for the millions more Americans likely to lose their jobs in 2009, and give states and cities infusion of funds so they don’t have to make sharp cuts in the payrolls of teachers, police and other public workers, or in Medicaid services for sick, low-income people.

The President-elect-to-be and Congress, however, should direct the lion’s share of the $200 billion in a new direction: investments in the basic elements of growth for the next decade. In effect, we should use the stimulus to drive policy reforms that will affect the shape and strength of the next expansion, rather than simply its timing. A third or more of the new funding should go to infrastructure – and most of that not for traditional roads and bridges, but for the public requirements of the low-carbon, energy efficient economy we know we have to build. The package could provide, for example, the first support for modernizing the nation’s electricity grid. The federal government also could make itself a model of climate-friendly and energy-efficient ways of doing business, with large-scale, new investments to upgrade the heating, cooling and lighting systems of all federally-owned buildings for low-carbon energy efficiency and to shift the federal fleet to hybrid and other energy-efficient vehicles. The package also could include new tax preferences for businesses and households to upgrade their systems. Investments in public transportation could be another important focus for stimulus spending. Today, public transportation accounts for just one percent of U.S. passenger miles, compared to five percent in Canada, 10 percent in Europe and 30 percent in Japan. For the short term, the stimulus package could include subsidies for local transit systems to cut their fares by half or more. For the long term, the package can include down payments on a new national program to promote the construction or extension new light rail systems for metropolitan areas, which can also create jobs quickly.

Through this recession and into the next expansion, wage and productivity gains will increasingly be tied to a person’s capacity to operate in workplaces dense with information and telecommunications technologies. Knowing that, we also can direct some of the stimulus to a plan we developed and which Senator Obama has endorsed, to provide grants to community colleges to keep their computer labs open and staffed in the evenings and on weekends for any adult to walk in and receive free computer training. Since we know that every American student also needs to develop computer and Internet-based skills, the stimulus also can include the first funding for an innovative program to provide inexpensive laptops developed by the MIT Media Lab for every sixth-grade student. Finally, the stimulus package can fund the extension of broadband installation and service for users in every school, local library, and local and state human services offices.

These are all investments which we know we have to make, if we really intend to make the U.S. economy more efficient, innovative, and sustainable. We also know that Congress will pass some $200 billion in new stimulus within a month’s time. The new President-elect can use this coming occasion not only to create more jobs, but to do so in ways that will help drive the development of a real, 21st century workforce and genuine 21st century economic infrastructure. And taking this course could be an early and important opportunity for him to practice both his new politics and a new form of economic leadership.

Climate Change: Next Steps in a Troubled Economy

New York City -- The conventional wisdom is that the financial crisis has claimed yet another casualty in the form of meaningful action in the next year on climate change. According to this argument, putting a price on carbon in a down economy is a non-starter. What's more, collapsing oil prices have taken at least one reason for major action off the table. And lower oil prices, combined with difficulty in getting financing, may take its toll on the entire renewables sector. The argument runs like this: while the presidential candidates are still talking about action on energy, the most likely scenario is for the status quo to continue as the new President and the Congress cope with a recession next year. Today, for example, the Financial Times and the New York Times have articles on the collapse of the biofuels industry.  And even Thomas Friedman writes in his column that he's seen this movie before in the 1900s when lower oil prices led to an abandonment of alternative fuels and the re-addiction to foreign oil.

However, this conventional wisdom is wrong. A downturn does not mean that action on energy efficiency must end or make it more difficult. In fact, the reverse is true. A downturn is more reason than ever to move forward on clean energy investments. Moreover, as long as the climate continues to warm (and last year was the warmest on record), climate change will remain an issue, and this urgency is reflected in the timetable of the Copenhagen process.  Accordingly, the United States not only should, but must, move forward on a whole range of climate and energy related issues.

First, with a recession likely, with interest rates already at low levels and banks impaired in their ability to lend, fiscal policy will have to play a much larger role than in the last few cycles in getting the economy back on track. Any stimulus package, as I have argued and as Friedman endorses today, must have a major green component. That includes support for grid modernization, mass transit, weatherization and green construction. But it also might include a tax credit for the purchase of energy efficient appliances, a tax credit for energy efficient vehicles and, to help the beleaguered American auto industry, as suggested by Jack Hidary and Alan Blinder, a trade-in tax credit to take old gas guzzlers off the road.

Whether or not a stimulus package is accomplished, government needs to create the machinery to retire our energy inefficient infrastructure and replace it with low-carbon infrastrucutre. In this regard, it is vital that Congress move forward on proposals to create a clean infrastructure bank such as those put forward by Senators Dodd and Hagel and the New Democrats with respect to energy.

Second, while oil prices have fallen precipitously, the volatility of gas prices itself is unacceptable for a healthy economy. The long-term trend not only for oil, but for gas, coal and electricity is up. And remember that the OPEC cartel always has the ability to restrain production if prices drop too low.

Third, low energy prices mean that in some ways, it will now be easier to put a price on carbon than it was this summer when the market alone seemed to be raising prices.  A carbon credit or tax regime will quantify the social cost of carbon emissions, improving on signals that vary with the gyrations of the market.

Fourth, Copenhagen is coming in early 2009 and the United States needs to develop a coherent position on how to address climate change before then. The Wall Street Journal recently castigated Jason Grumet for suggesting to Bloomberg Radio that the EPA may, by default, end up regulating carbon. But this very well may happen if Congress does not address the climate issue.

Ambassador Richard Holbrooke recently made an interesting suggestion that the United States should negotiate directly with China to reduce carbon emissions. Together, the two countries account for 60% of the total carbon emissions. Given the high level of complementary interdependency between the United States and China, a bilateral framework may prove more effective than a multilateral one in moving China off its dime. This is an avenue for action that would not require comprehensive cap and trade legislation.

Congress should also move forward on a renewable electricity standard, accelerated depreciation for clean energy investments by corporations and by families

Most importantly, all of these actions on energy are vital to a comprehensive strategy to create a true 21st century economy, raise incomes and get America moving again.  Call it a "Clean Deal."  We can't (and don't want to) compete with the emerging economies on wages. Rather, the United States needs to lead the world in innovation and the development of clean energy technologies. This issue has emerged as a vital challenge of the 21st century.

Far from slowing down, action on climate and energy is heating up.  Next year we need to roll our sleeves up and get to work to begin building the low carbon, but high economy of the future.

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.

Hispanics Hand it to Obama

Obama's most important lead after last night's debate may have come among Hispanic voters, who favored him by a 50-36 percent margin according to the national Politico/InsiderAdvantage survey of undecided debate-watchers. The candidates were evenly matched among white voters, with McCain holding a 49-46 percent advantage - equal to the three point margin of error. African Americans picked Obama as the winner by 88-10 percent. You can trace Hispanics' support of the presidential candidates through Gallup's weekly poll - the poll shows Obama with a consistent comfortable margin of at least 20-25 points ahead of McCain. The latest Gallup poll shows Obama ahead by a 60-31 percent advantage.

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….

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.

Syndicate content