Robert F. Kennedy Jr’s piece, “The New Arms Race,” in today’s Huffington Post, highlights the exigency of the international clean-energy race and indicts obstructionist U.S. groups for hamstringing domestic efforts.
Kennedy begins by calling out the United States Chamber of Commerce, who has “battled every effort to accelerate America’s transition to a market-based de-carbonized economy” because of a constant willingness to put “Big Oil and King Coal ahead of its duty to our country.” Most strikingly, “The Chamber has continued to argue, idiotically, that energy efficiency and independence will somehow put America at a competitive disadvantage with the Chinese.”
Putting aside for a minute the absurdity of the Chamber’s premise that the U.S. would somehow do better by ceding a booming sector of growth to China, this seems like an opportune time to mention the importance of energy efficiency investments. A recent McKinsey study shows that through such investment, the U.S. could save $1.2 trillion by 2020 and reduce energy consumption by a whopping 23%. Thus, the federal “Apollo project” we need on energy must bring efficiency investments in addition to technology innovation and scaling. Doing so might not directly involve competing in an international “market,” but the resulting benefits in economic efficiency, emission reductions, and reduced demand pressures cannot be understated.
In the current market for renewables, Kennedy exhorts us to pay attention to the progress brewing in China, saying:
“The Chinese have shrewdly and strategically positioned themselves to steal America’s once substantial lead in renewable power. China will soon make us as dependent on Chinese green technology for the next century as we have been on Saudi oil during the last.”
The statistics he offers make his point particularly well. By 2012, greentech will account for 15% of China’s GDP as the government continues to pour its excesses of wealth into investment. But not only does China have more money to bring to the table, its prioritizes energy spending more too, as evidenced by the 38% of its stimulus package directed to greentech compared to only 12% in the United States.
The results speak for themselves. On the current path, China’s solar industry will grow 20,000% (no typo) by 2020 while the U.S. industry will grow 33%. Wind turbine installations, which the U.S. has led the world in for several years, will go much the same way:
“At one point the U.S. enjoyed global domination of wind turbine manufacturing with great prospects for job creation. Yet today, of the five leading wind turbine manufacturers, only one is American. While Congress dawdles, China is clobbering us. Shenyang Power Group recently inked a deal to be the exclusive supplier of turbines to the largest wind project in the United States, a 36,000 acre, 600 megawatt development in west Texas. The project will create 2,800 new jobs — 2,400 in China, but only 400 in the United States.”
In short, the situation does not look good. Kennedy says of the race that “We can only prevail with robust investment in and support of U.S.-based greentech innovation.”
He’s absolutely right. Yes, deficits are high and the U.S. government does not have money to spend right now. But we’re spending $3.2 billion per week on our two wars right now. The point here is not whether the wars are worth fighting, but only that there still is money for those things prioritized over everything else.
And with the U.S. economy fighting for its life, not just because of a burst housing bubble but because of deeply-ingrained structural issues, these investments must head the list of priorities. They will pay for themselves – likely many times over – and if we do not catch our infrastructure up to that of the Chinese, if unemployment does not come down and our trade deficit stays sky high, we will never see the tax revenues to justify investment.
But if the federal government really is too cash strapped to start right now, here’s a creative idea for the short-term: pay for it by taxing executive bonuses. Several major organizations, including an editorial in today’s New York Times, have called for a windfall tax on the exorbitant executive bonuses at investment banks that took government bailout money. Other countries, such as France and Britain, have already imposed such measures. The revenues from this measure could total tens of billions of dollars, and if invested in renewable energy, could represent a solid first-step. And after all, isn’t investing in rising industries to help them grow what investment banks are meant for?