Friday, April 22, 2011

An Earth Day Antidote to Republican Pessimism

Always look on the bright side of life

Republicans want to play politics with raising our debt ceiling.  They want to perpetuate the fear that our deficit cannot be addressed without massive and destabilizing cuts in spending.  Republicans are fond of creating doubt about climate change where there should be no doubt whatsoever.  In short, the Republicans are the doubting fear-mongers of our time.  On this Earth Day, let’s examine why.

The motivation behind the GOP is simple:  taking a mature and responsible attitude about the long-term effects of global climate change would threaten their radical agenda to shrink government until it is so small, you can drown it in a thimble.  Republicans (a great majority of them) want to allow the U.S. to be fully dependent on today’s fossil fuels, to fully exploit the cheapest and dirtiest sources of energy, and give only a cursory nod to what they consider “clean” energy (nuclear fission); but, even that is losing public support since the tragedy in Japan.  What the American people need is the truth about Global Climate Change, and the truth about our energy policy options, not the trumped-up hype or lies.

The truth of global climate change can be very daunting to accept for most Americans.  The facts behind the existence of global warming are not in dispute.   What is in dispute is only the severity of the worst effects and when we might encounter these effects during the next century or so.   What does not get enough emphasis in the emotionally charged debate are the win-win solutions that help both our economy and the environment regardless of the severity of the effects of global warming.  This is the optimistic view that Republicans do not want to discuss, because it’s bad for their market share in the industry of political gamesmanship.  The GOP prefers to use the strong influence of fear and pessimism to maintain the status quo business climate which favors their party.  And Republicans get the lion’s share of political donations from the energy sector of our economy.  It is this sector upon which our nation’s future economic and homeland security rests.

I have two suggestions for public consideration.  First, increase tax credits for investments in energy efficiency and renewable energy.  This will have a direct effect on creating good steady job growth.  Second, remove tax credits for oil, gas, and nuclear industries as soon as possible.  Do not make loan guarantees to these dirty, costly, addicting industries.  This will send a strong market signal that will result in a flow of capital from the older, dirtier energy sector to the maturing and expanding renewable energy markets and smart grid sectors of our economy.   Our country needs to be on the right side of history in order to prosper.

Consider these facts.
1.        Already, the number of jobs in the wind industry exceeds the number of jobs in the coal mining industry;
2.        Over 50% of all new expansion of electrical power since 2009 has come from renewable energy (mostly wind);
3.        Energy efficiency and energy conservation are the least expensive ways to expand available energy to meet a growing demand;
4.        Investing in renewable energy is less expensive than retro-fitting 40-year old dirty coal power plants;
5.        The price of solar continues to drop every year while the costs of methane (aka “natural gas”), coal, and nuclear continue going up;
6.        Solar power technologies are already on pace to be less expensive than coal and natural gas within this decade;
7.        Investing in energy efficiency and renewable energy will produce many times more jobs of all kinds than will relying on coal, natural gas, or nuclear;
8.       As benign as “natural gas” sounds (chemically called methane gas), the greenhouse gas potential of unburned methane is 21 times that of carbon dioxide, and the practice of hydro-fracking may rival some of the dirtiest results of extracting and burning coal in terms of polluting water and air;
9.       Nuclear power is arguably the most expensive form of energy in terms of lifecycle costs, health and safety issues, and homeland security issues (anti-terrorism);
10.     Smart grid and renewable energy storage technologies are markets with several decades of strong growth potential, compared to the inevitably declining fossil fuel markets.

Simply put, a steady divestiture from the fossil fuel industries (oil, natural gas, and coal), coupled with a doubling or tripling of federal spending on renewable energy research, tax credits for investments, improving our nation’s building and transportation energy use, and  improving infrastructure relevant to our electrical grid, will do much more to stimulate jobs, revitalize our economy, reduce our federal deficit, improve our homeland security and position us to be more competitive in the emerging energy markets around the world.  

Specific steps to encourage private spending and reduce our national debt are listed below.  These are win-win scenarios for both the economy and the environment:
1.   Create a gradual carbon tax for medium and large polluters of greenhouse gas emissions.  The gradual part is important, since we clearly need to rely on existing dirty energy for a transition period, and we don’t want to create undue hardships for business or consumers.  Phasing-in a carbon tax starting in the next tax year (2012) and slowly increasing it for 10 to 20 years will give a sustainable boost to competing clean energy markets while recognizing the damaging and declining interest in dirty energy as world fossil fuel markets become more volatile.
2.   Create a long-range Renewable Portfolio Standard (RPS) to ‘green’ our nation’s energy mix on a federal level.  Currently, many states have a RPS for a 5 to 15 year horizon.  Creating a plan that boosts clean energy requirements beyond 25% by 2025 will create not only investment opportunities, but a market demand which will further spur new investments and new job growth.
3.   Refine the agricultural side of energy policy to include the life-cycle analysis of all biofuels when determining what qualifies to meet the RPS for biofuels in the marketplace.  This will reward the most efficient technologies, rather than the most popular (corn-based ethanol currently);
4.   Expand and Extend private Investment Tax Credits (ITC) to all renewable energy technologies and energy efficiency measures for 10 years.  This will improve the stability and strategic planning for both small and large-scale projects;
5.   Allow (IRS) Passive Loss exemptions for all renewable energy investments, just as the oil and gas exploration industries have enjoyed for decades.  This will allow smaller stakeholders who make less than $200,000 per year to invest in projects which are not sole-proprietor enterprises and be able to take the investment tax credits on their individual tax returns.
6.   Allow Securities Law exemptions for community-supported investment projects.  This “Crowd-funding” exemption would release investment capital on a wide basis in small amounts, in order for local communities to campaign for projects deemed important to local residents, like retro-fitting homes and buildings or investing in community solar projects or other group-owned enterprises;
7.   Create mandates for state public utility commissions to allow “virtual” net-metering for community energy projects without being defined as a public utility.  This will allow private groups to create clean energy power plants and “credit” the investors who may not be able to install renewable energy on their own property due to inherent limitations on development.

If you look carefully, what you see in these recommendations is the reliance on our market economy with smart regulations in order to spur economic development.  You see clear funding sources for tax credits (by shifting existing subsidies from oil/ gas, and by a gradual carbon tax).  You also see a strong and stable market signal from the federal government to allow state and local communities to invest freely in emerging and expanding energy markets without:  1) Fossil-fuel protectionism on monopolized markets; or 2) Governmental obstructionism in the form of limitations by the IRS and Securities Law rules on how small businesses can behave.  And nothing could be better for growing jobs than to spur small business growth.   In addition, investors of all types will benefit from the long-term market stability (gradual carbon tax and investment tax credits) and a growing demand (renewable portfolio standards) for investments in clean energy technologies.

This is our decade’s space race.  With public support, our country can win the future of prosperity and reduce our reliance on foreign and domestic dirty energy.  We will be setting a precedent for world markets in mitigating the worst effects that global climate change will have on this and future generations.  We will lead the world in peaceful prosperity, and improve the lives of all Americans instead of just the upper classes.  This is how our leaders can inspire consumer confidence in emerging and expanding clean energy markets.  And this is how we can tackle our national debt while growing our economy.  This is the reasonable approach that all politicians should embrace. 

Naysayers not allowed.