By Teryn Norris & Daniel Goldfarb

President Obama’s exclusion of “climate change” from the State of the Union, combined with Carol Browner’s exit as the administration’s top climate advisor, has sparked wide debate across the climate movement. On one hand, many climate advocates are backing the president’s strategy. As Senator Barbara Boxer (D-CA) put it, “He’s trying to unify… I think it was very smart of him.”

On the other hand, climate advocates like Joe Romm of Climate Progress and David Roberts of Grist are criticizing the president for not using climate change as a central justification for his clean energy proposals.  Unfortunately, even after the collapse of cap and trade legislation, Roberts and other critics continue to follow a type of policy literalism that has undermined environmentalists and climate advocates for years.

The argument goes something like this.  First, Roberts claims that without climate change as the central justification, the case for federal investment in the clean energy industry “is no stronger than the argument for supporting pharmaceuticals, or telecom, or any other industry that’s likely to be big in the 21st century.” (Roberts wrote partly in response to Norris’ article on the rise of “innovation hawks.”)

However, as the American Energy Innovation Council and the President’s Council of Advisors on Science and Technology recently explained in their reports, other industries like pharmaceuticals, aerospace, and computer electronics spend far more on research and development than the energy industry, due to a variety of market and non-market barriers.  The underinvestment is dramatic: whereas pharmaceuticals invest about 18.7% of sales in R&D, the U.S. energy industry only invests 0.3%.  The federal government already invests over $30 billion annually in health research, and $80 billion on military R&D, but only $3-5 billion in energy R&D.

Moreover, the current economic challenge from China and other “rising tigers” in clean-tech is clearer than any other industry, and it remains one of the most powerful motivating factors for the U.S. public and policymakers alike (analysts predict the global clean-tech market could surpass $600 billion by 2020). The importance of clean energy technology for the Department of Defense, and for saving the lives of American troops, is creating a new imperative in the defense community. Rising oil prices and instability in the Middle East are simultaneously strengthening the energy security consensus to reduce U.S. reliance on oil. And disasters like Deepwater Horizon and Massey Energy continue to highlight the public health and environmental benefits of reduced fossil fuel consumption.

So much for the argument that only climate change can seriously justify major federal investment in clean energy technology over other industries. The case for expanding these investments for economic competitiveness, national security, and public health reasons is stronger than ever before.  (And beyond domestic concerns, cheaper forms of clean energy can help alleviate the poverty of billions who lack electricity access and already suffer from the vagaries of the climate.)

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A Lesson from the History of Clean Energy Research

The focus on innovation in Obama’s State of the Union marks a new high point for clean energy R&D advocacy. In the coming months, politicians and policy makers will likely align around proposals to encourage everything from basic research to putting solar panels on our roofs and hybrids in our garages. It is easy, in such an environment, to forget the barren stretch of time between the oil crisis induced renewable energy craze of the 1970s and the present day. During this time, funding dried up, programs were cut, and renewable energy research and deployment was forced to go abroad or wither in an apathetic United States.

Politicians, policymakers and enthusiasts talk about ways that new programs will help America race past its competitors as it did in the space race, but there is not enough attention on how the old programs died and what was the full impact of their disappearance. There are important lessons to learn, the biggest of which is that inconsistency in policy can be crippling to research. While proponents of clean and renewable technologies should welcome the renewed interest and funding, it is important that they learn from the past and focus on creating a support system that is not only robust but also provides some assurances of long-term commitments.

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The Rise of Innovation Hawks

By Teryn Norris
Published by National Journal
January 26, 2011

Last night, President Obama crystallized a new moment in U.S. political and economic history. The president is declaring it the “new Sputnik moment,” but whatever the label, it represents a major development in U.S. politics.

The catalyzing force behind this trend is the rise of China and the aftermath of the Great Recession, which is quickly producing new political fault lines. Just as the rise of the Soviet Union caused a fundamental political realignment in the United States, so the rapid rise of China is causing another today.

This realignment is just beginning, but one of the clearest implications is the rise of a new national economic strategy based on “innovation economics.” Instead of emphasizing spending cuts, even in the face of the Tea Party and new Republican House, Obama strongly promoted an active, innovation-centric federal strategy at the front and center of his agenda – a first for any modern president.

The key to American leadership in the face of China, Obama argued, is to make large-scale federal investments in the three pillars of economic competitiveness: innovation, education, and infrastructure. “We need to out-innovate, out-educate, and out-build the rest of the world,” he declared. “That’s how we’ll win the future.”

By embracing an investment-centric strategy, Obama adopted a growing expert consensus: modern economic growth primarily emerges from technological innovation, and the federal government plays a central role in innovation. The information technology revolution was grounded in federal investments in microchips and the Internet – especially by the Department of Defense – and so were major growth sectors like aviation, biotech, and others.

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A Lesson from the Great Australian Floods

Renewable energy has been put forth as the solution to a myriad of problems, some of which have received more attention than others. Perhaps most prominently, the implementation of renewable energies has been touted as a method of abating CO2 emissions and climate change, alleviating energy poverty in developing nations, as well as the boon to employment in the United States. Focusing on a small subset of benefits of renewables certainly has its advantages but also leads to the neglect of other benefits perceived at one time to be less important. One such neglected benefit, though, now merits much greater significance than has been previously accorded it given the tremendous floods that ravaged eastern Australia earlier this year: a hedge against marketplace volatility.

Marketplace Volatility

The world stands at a crossroads when it comes to market volatility. Historically, market volatility has largely been a result of anthropogenic influences, such as geopolitical conflicts (e.g. the 1973 oil crisis) or abrupt surges in supply or demand as new reserves are discovered or nations rapidly industrialize (e.g. China’s recent rise to power). However, in the 21st century, these historic drivers of market volatility may be dwarfed by a growing player on the world stage, natural disasters. Certainly, natural disasters have always caused market fluctuations, but as climate change escalates and increases the frequency of extreme weather events and shifts global weather patterns, these events will have an even greater effect on the world’s economy.

The effect of the recent floods in Australia provide a perfect illustration of this claim. First and foremost, while true that climate change has not been (and perhaps cannot be) linked to the floods, the Intergovernmental Panel on Climate Change (IPCC) nevertheless found that the likelihood of heavy precipitation events becoming more frequent over most areas is “very likely”. Thus, although climate change may be entirely unrelated to this instance of flooding, it almost certainly will drive other instances in the future. Furthermore, floods are not the only severe weather event that will be impacted by climate change; tropical cyclones, droughts, heat waves, and fires will most likely all be exacerbated as well. In other words, expect to see considerably more naturally-induced disturbances to supply chains as in Australia earlier this month. (more…)

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China’s President Hu Jintao recently ended his 4 day visit to the United States, leaving many questions as to the future of Chinese, American relations over clean energy and climate change mitigation.  The U.S. and China have numerous public and private partnerships on energy issues, but a recent complaint to the Word Trade Organization filed by the U.S. Trade Representative (USTR) against China could stall progress.

In September, the United Steelworkers Union (USW) filed a 5,800 page complaint with the US Trade Representative against China. The USW argued that China’s renewable energy policies violated international trade agreements by favoring domestic manufacturers.  The USW released a statement saying:

“These practices include discriminatory laws and regulations, technology transfer requirements, restrictions on access to critical materials, and massive subsidies that have caused serious prejudice to U.S. interests. Together, these practices have given Chinese producers an upper hand in accessing investment, technology, raw materials and markets, while foreclosing these same opportunities to U.S.producers.”

The USTR investigated the USW’s claims and in December filed an official complaint with the World Trade Organization against China’s wind power subsidies. The complaint lodged by the USTR specifically refers to China’s “Special Fund for Wind Power Manufacturing.” Under this program grants are available to Chinese manufacturers of wind turbines and manufacturers of parts and components for wind turbines ranging from $6.7 million and $22.5 million. Recipients can receive multiple grants as the size of the wind turbine model increases and the USTR estimates that since 2008 the grants awarded under this program could total several hundred million dollars. The USTR claims this program violates WTO regulations because the grants awarded are dependent upon Chinese wind power equipment manufactures using components made in China as opposed to foreign products.

China’s Commerce Ministry responded by saying:

“All countries are developing new energy sources to deal with the climate changes. China’s measures on wind power development help save energy, reduce emission, and protect environment, which are important measures for sustainable development, and comply with WTO rules. China show grave concern on U.S. request , and will make serious study of it., and deal with the request based on WTO rules, and also reserves her relevant rights.”

After a complaint is lodged with the WTO, the two parties have 60 days to resolve the dispute on their own. If the two parties do not come to a mutually agreeable resolution on their own, the WTO will review both parties’ arguments before making a ruling. The WTO panel’s review process can take anywhere from a year to 15 months. Should the WTO side with the U.S., then the U.S. would be allowed to impose penalty tariffs on Chinese goods to make up for lost revenue. On the other hand, should the WTO find that China’s wind grant program is not in violation of international trade agreements; it could be an embarrassment for the U.S., not to mention a waste of resources and time. (more…)

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Andrew Revkin, who runs New York Times Dot Earth and formerly served as the lead NYT environment/energy reporter, has a new post, “America’s Energy Challenge, and Opportunity,” asking what people would say to President Obama about energy if he were to launch a national energy listening tour with his State of the Union tomorrow:

“As I asked on Sunday, if he does this, and the Obama Energy Road Show came to your town, what would you say? Below, you can read “Obama moment” statements on energy from industry representatives to climate campaigners, scientists to investors… When President John F. Kennedy announced plans to send men to the Moon, it was not because people were marching with signs demanding a space race. There were a host of reasons – strategic, economic, military, visionary and more. Kennedy wove them into a comprehensive, challenging and extraordinarily productive technological journey.”

He invited several scientists, advocates, and pundits to kick off the discussion with a few sentences, including Bill McKibben, Nathan Lewis, Andrew Karsner, Roger Pielke, Marty Hoffert, Paul Hawken, and others, and it’s worth reading their thoughts. He posted my contribution here alongside theirs, where I spoke to the “new Sputnik moment” the president is declaring:

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Community solar is a concept that has lots of cheerleaders. And what’s not to love? At it’s best, this market-based deployment strategy can expand access to clean energy, create jobs, spur local investment, and help drive down the cost of solar panels.

But while the concept of community solar has had strong support from policymakers and clean energy advocates for several years, actual community solar projects have been slow to materialize. Now, two statewide community solar programs and a host of other new state and local policies to encourage community solar may be catalyzing a wave of new projects. Will the reality of community solar live up to the ideal?

Community Solar Spreads the Benefits and Rewards of Clean Energy Investment

Community energy carries all the environmental, economic, and national security benefits of clean energy in any form, but with a distinct advantage. A review of research by Northwest SEED suggests that community energy projects deliver 2-5 times the economic benefits of projects built by out-of-state investors. And, in places that import electricity from outside the area, community energy can also keep utility dollars in the community, with multiplier benefits for the local economy. Community energy provides distributed generation, with associated benefits such as increased system reliability and resilience, lower peak power requirements, minimal transmission requirements and reduced line losses.

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US-China Energy Cooperation: The Case of CODA Automotive

Coda Automotives Kevin Czinger (left) discusses electric-car batteries in Tianjin, China, with U.S. Commerce Secretary Gary Locke (middle).

Coda Automotive's Kevin Czinger (left) discusses electric-car batteries in Tianjin, China, with U.S. Commerce Secretary Gary Locke (middle).

Much of the dialogue surrounding Chinese President Hu’s visit this week, at least from a media reporting perspective, has centered around Sino-U.S. energy deals—including players like Boeing, GE, Duke Energy, who launched China partnership announcements timed to coincide with Hu’s visit and the Brookings U.S.-China Strategic Forum on Clean Energy Cooperation. While there is much to cheer in these agreements, especially when it comes to job creation, there is also much to question as we move forward.

These energy agreements pose some rather obvious risks, in that U.S. companies will be sharing intellectual property with Chinese firms—and that any collaboration with China in an industry integral to U.S. national security presents some level of risk. But the deals also represent a laudable, long-awaited step forward in the Sino-U.S. relationship, affording market access and substantive China learning opportunities to U.S. firms.

While welcoming the collaboration that these announcements represent, it is perhaps important to recognize that the US-China narrative is multilayered—that these well-trumpeted corporate announcements come in the midst of some thought-provoking setbacks for some notable US-based energy companies which extended China operations over the past few months.

One of these companies is CODA Automotive, a US electric car company based in Santa Monica. CODA has been an intriguing story for journalists. The company was formed in 2009; that fall, CODA representatives came to Beijing to participate in the U.S. Department of Energy’s first US-China Electric Vehicles Forum, spearheaded by DOE Assistant Secretary for Policy and International Affairs, David Sandalow.

As you might imagine, CODA’s vision seemed especially apropos to Americans in Beijing in late 2009: China’s Chery Automobile was producing new models left and right, and China’s BYD (which has since experienced some notable setbacks) had announced its investment from Warren Buffet’s Berkshire Hathaway a little over 6 months prior. At that time, Americans in the region were left looking for a leader on the other side of the Pacific.

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The Hidden and Not-So-Hidden Benefits of Rail

A Chinese high-speed rail station in Tianjin.

The energy and emissions savings associated with better fuel economy are large and obvious, as I covered in my last piece, but driving more efficiently is not synonymous with reducing our nation’s transportation fuel consumption.  In addition to promoting more efficient cars, we should create transportation options that enable Americans to drive less altogether.

According to a report from the U.S Department of Transportation, transportation currently accounts for 29% of America’s greenhouse gas emissions.  Similarly, transportation accounts for about 27% of America’s energy consumption.  Given that our country’s population will grow about 35% to an estimated 420 million by 2050, lowering or even maintaining our transportation emissions is going to involve more than just modest technology upgrades.

Rather than just pursuing marginal advances in fuel efficiency and alternative power sources for cars, in the next four decades we will need to rethink the assumptions underlying our transportation infrastructure.  After all, the structure of our transportation not only affects the amount and type of energy we use for transit, but also shapes our metropolitan areas.  If private vehicles and airplanes are still the hegemons of both intra- and inter-regional transportation by 2050, it will be difficult to curb not just transit emissions but the crippling affects of sprawl as well.

Evolving our transportation systems and moving away from the car is always a politically charged matter, and seems to have emerged as even more of a poignant sort of culture war in recent months.  Anti-cyclist angst seems to be on the rise and, of course, the new governors of Wisconsin and Ohio recently sent back about $1.2 billion in federal rail funding.  The stated reasons for canceling these rail plans were that the passenger rail projects would have been costly and weren’t expected to turn profits in their initial years.  Indeed, many have referenced the “hidden” and “not-so-hidden” costs of passenger rail as cause for worry.  To be sure, revamping America’s transit infrastructure is a large undertaking, and we should be frank about the level of investment it will require.  But why don’t we also talk about the hidden and not-so-hidden costs of not investing in rail?  What about the hidden costs of driving, such as car maintenance, congestion, and the missed opportunity cost of the valuable urban real-estate we devote to parking?  Certainly these matters deserve consideration as well.  Below I’ll outline what many see as some of the “hidden” or “not-so-hidden” economic benefits of a more advanced American rail system.

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Cars, trucks, and planes account for about 32% of American greenhouse gas emissions. These can be harder to accurately measure and control then the 40% of emissions produced by industrial and power generating sources, since the sources number in the millions and are individually insignificant. Clearly, to drastically reduce U.S. greenhouse gas emissions in the long term, we must deal with emissions from mobile sources. A number of solutions including increasing efficiency, switching over to electric cars, using hydrogen fuel and powering cars with natural gas have been proposed, each with their individual strengths and weaknesses.

For now, petroleum products like gasoline, diesel, jet fuel, and bunker fuel account for about 95% of U.S. transportation fuels, making U.S. transportation almost entirely dependent on oil. As we look for ways to reduce emissions from transportation, a two part solution emerges: focus on making vehicles use fuel as efficiently as possible and focus on using cleaner fuels. Advanced materials like carbon fiber can be used to make lightweight, safe vehicles, regardless of the fuel being used. New Corporate Average Fuel Economy (CAFE) standards are a good step towards regulating greenhouse emissions from vehicles – though they are usually explained as bringing minimum fuel efficiencies up to 35.5 mpg, the standards are actually based on greenhouse gas emissions per mile traveled.

The discussion becomes contentious when discussing which cleaner fuels to move towards. Recently, natural gas has been discussed as an alternative fuel that could cost effectively reduce greenhouse gas emissions from the transportation sector. Because natural gas is so widely used in buildings (for cooking and heating), expanding infrastructure for using natural gas in vehicles could be less burdensome than creating distribution lines and everything else a new national (or even regional) fueling system would require. Natural gas burns cleanly, is domestically available, and is cheap, at least for now.

Those advantages are exactly why we shouldn’t burn it in our cars. If we put natural gas in cars, the price of natural gas will likely start to track the price of expensive gasoline. This could make it hard for natural gas to compete with cheap coal in the power sector. Coal-fired power plants emit about 33% of U.S. carbon dioxide (about 28% of total greenhouse gases), not to mention their non-greenhouse emissions, cooling water use, and the upstream environmental impacts of coal mining. Since natural gas burns far more efficiently in a power plant than in vehicles, those focused on reducing greenhouse gas emissions should focus on displacing coal before petroleum. And if we want to innovate our way to a more environmentally sound transportation sector, we should focus on electric cars before natural gas cars: natural gas can power vehicles more efficiently as electricity than as compressed natural gas (CNG), and an electric fleet can run on electricity from renewable sources without massive downstream infrastructure changes. Natural gas cars, on the other hand, are far less flexible.

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