Thanks

So, like you would take the 150 billion dollars Obama is proposing to throw at R&D for climate in the next ten years and throw $140 of it back in his face? How big is the US budget anyway? Let’s see… that’s $3.1 trillion…. that’s three thousand and one billion dollars. And you won’t spend one billion, no matter what the proposal, even the yet to be presented ones, there’s nothing out there and nothing that could even BE out there that you could imagine that might take that much money to develop that you would spend more than one billion of the precious US federal budget on. And you were saying Andy Revkin was a moron for qualifying and hedging on the cause of the Arctic ice disappearing. What kind of bozo are you?

I think there are two issues with what I hear from BI (webpage, Michael’s comments, and your comments). The first is a major policy disagreement. You claim yours is the only way, and I don’t even consider it adequate. That’s a difference of opinion that may benefit from further debate, so I may lay out my reasoning on this in more detail in the future. The second issue is that I see BI as being unclear about their real position. Both of these issues generate rancor between BI and others who care about solving global warming. Much of my subsequent comments are to target the second issue, in the hopes that we can reduce the level of rancor by clarification.

On the lack of clarity you say, for example, you support putting a price on greenhouse gas emissions, but that you’re not confident about developing nations doing so. Later you say that it is not inconceivable that they will. Your statements are not inconsistent, but they don’t paint a clear picture. This issue is central, because a price on greenhouse gas emissions can quickly give a market price advantage to clean energy. The question is which leads to a solution faster: greenhouse gas emission prices or technology development. Since I consider your proposal actually less politically acceptable in the US than the alternatives, I suspect your approach would be slower. Indeed, I doubt your approach can work at all (since I doubt it can address sunk-cost dirty energy and it is necessary to do so), and if you think otherwise, you need to explain that.

As another example, you suggest that portions of your approach will be politically challenging in the US (I strongly concur with this assessment). But later you suggest that your policies are meant to make cap-and-trade more politically acceptable. I don’t buy the latter, but the real point is that you seem to be saying it is politically challenging either way. I don’t find your approach more politically compelling. My feeling is that the world is already pushing for a world cap on emissions, and if the US would only lead in making that happen, we would be making progress rapidly.

I include point-by-point comments on your response below only for completeness, so that you may see how BI’s statements still seem a bit unclear. I suspect only you would be interested in the rest of this message. Following your lead, I have made my text in regular type and left yours in italic.

JJ> Earl, thanks for asking these clarifying questions. I hope these responses help.

EK> Your stated goal, both on your webpage and Michael’s response is to “Bring the real price of clean energy down as quickly as possible.” Does “down” mean below the cost of dirty energy?

JJ> Yes, that means bring real, installed costs of clean energy down below the cost of dirty energy. We believe this is the only way we can ensure developing countries adopting a low-carbon development path. If the alternative is slow or no development, you’ll have a hard time convincing China, India, Brazil, Mexico, Indonesia and the rest of the developing world not to turn to coal and other fossil fuels to power their development. The United States and Western Europe may be willing to accept “artificially” high energy prices – i.e. prices raised by internalizing carbon costs through tax/regulatory codes – but I’m not confident China, India or any other developing country will be. Short answer: yes, our ultimate goal, if we want to leave as much coal in the ground as possible, is to make coal irrelevant. The only way to do that is to ultimately develop cheaper, scalable alternatives.

There appear to be a bundle of assumptions in the above. The biggest problem is the last sentence, but we’ll get to that in later question and response. It is certainly not the only way.

You say “We believe this is the only way we can ensure developing countries adopting a low-carbon development path.” I don’t believe this. I believe the implementation of a strong program in the US can be used to bring the developing countries into an emissions control program. A politically acceptable US program will likely include provisions to level the playing field against imports that benefit from production in uncapped countries, with the uncapped country probably being taxed by more than their advantage. As the world’s largest importer, I suggest that this will create a tremendous incentive for other countries to join a cap. I don’t expect things to go to the point of serious tariffs, as I expect the developing countries will sign on to a diplomatic solution before that point.

You say “If the alternative is slow or no development,” but that is a false dichotomy. It is clear than developing countries can develop with existing alternative energy (indeed they are in some ways better poised to take advantage of it). Competitiveness with the uncapped countries currently pressures developing countries to use the cheapest possible energy, regardless of emissions, but in a worldwide framework with a level playing field, that would not be an issue.

There are many other steps that the US can take to make the building of coal power plants in the developing world less attractive. Banning the export of coal (and getting Australia to do the same) could drive up the world price of coal, for example.

EK> I believe you believe that this policy is necessary, but I would like you to answer whether you believe this policy is sufficient? If it is not sufficient, what other policies are necessary?

JJ> Making clean energy cheaper than dirty energy isn’t a policy. It’s a policy goal. Really, the policy goal is creating and spurring the deployment of scalable, affordable energy sources that can power development across the planet while reducing global greenhouse gas emissions rapidly towards zero. That’s the objective. You’ll note that I’m not sure that’s an explicit objective of most US cap-and-trade policies.

Quibbling with policy vs. policy goal is OK, but you haven’t really answered the question. If you substitute “investing 50 to 80 billion per year to scale up the new energy technologies”, then it becomes a policy (or part of a policy), not a policy goal, no? So I would ask again whether you think this is sufficient, except that I believe you made it clear that this is not sufficient. Unless you object, I’ll go with that.

I see us as already having the technology for scalable, affordable energy sources that can power development across the planet while reducing greenhouse gas emissions rapidly towards zero. Better technology is always welcome, of course.

I disagree with the comment about the objective of US cap-and-trade policies. I believe proponents of such policies believe they are a prerequisite to addressing developing country emissions.

JJ> Global warming is a global challenge that will require an international perspective when developing policy solutions.

Sure. That is for example why the world met in Bali. It certainly seemed as if the US was the major impediment to progress there. If the US had gone to Bali with moral leadership from the White House, you must believe that China and India would have prevented progress. I don’t see it that way. I am very sure they would have wanted something, and very clearly we are going to have to address the equity issue in such negotiations, but I don’t see them as fundamentally opposing an emissions control framework.

JJ> It’s not enough for the United States to simply say “if we lead, others will follow,” or “we’ll do our part, it’s up to others to do theirs.”

The above and cheap clean energy are not the only choices. We can lead, and also make it to others’ advantage to follow.

JJ> We have the resources, we have the ingenuity, and we have the technology base to not just develop policy and technology solutions for the United States, but for the world. If we want to solve this global challenge, it requires us to focus not just on raising dirty energy prices here in the United States so that they are more expensive than clean alternatives. We ultimately need to make those alternatives the FIRST choice in the developing world.

The urgency of the problem suggests that we do not have the time to do this via technology development alone. I believe a diplomatic effort to extend greenhouse gas emission pricing to the developing world is called for. We will get to timing in a separate question and response below. It is also possible for the US to raise dirty energy prices elsewhere with coal export bans. Moreover, greenhouse gas emission pricing can make clean energy the FIRST choice in the developing world.

JJ> My policy suggestions got cut off. Here they are:

I’ve tried to re-integrate them. With luck I haven’t messed up.

JJ> If you make that an explicit design objective of American climate policy, I think a few things change (these are preliminary thoughts; Breakthrough is working to develop a more concrete policy agenda this summer):

JJ> • Yes, you want to price carbon. This is necessary to send the right price signals to private capital, correct market failures, and most importantly, raise the tens to hundreds of billions annually necessary to fuel a clean energy revolution. Use whatever policy works (carbon taxes, cap-and-auction, I’m agnostic) to get the highest price on carbon that is politically possible and sustainable over the long term.

We agree that a price on greenhouse gas emissions is an important component. Right now I think US policy makers are leaning to cap-grandfather rather than tax or cap-auction, and the former does not raise revenue. Not generating revenue seems to be important to some politicians, unfortunately. I would not want revenue to be a prerequisite to having a cap.

JJ> • Re-invest most of the revenue generated by this carbon price into clean energy RD&D (with greater monetary emphasis down that chain, R is less than Dev is less than Depl), public investments in enabling infrastructure (smart grid, high-capacity, long distance “electron superhighway” grid upgrades, electric vehicle charging stations, high-speed electric rail lines, etc.), and direct subsidies (feed in tariffs perhaps, production tax incentives, etc.). The whole idea here being to kick-start as many clean energy technologies as possible on as steep a path as possible down that cost curve towards unsubsidized competitiveness.

Yes, that’s a start. I would say Joe’s proposals are more detailed (though still really an outline), and a possible starting point for your consideration. Given the feuding so far, that may not be in the cards.

JJ> • Implement strong efficiency standards and building codes. This is a very appropriate role for regulation.

Yes. Efficiency seems like the highest priority and leverage item, since it reduces the requirements and costs on all other items. It multiplies the effectiveness of every other initiative. As an example of how much there is to gain, see U.S. Energy Flow 2002. In addition, efficiency is the most important thing we can do to navigate economic trouble brewing from oil and natural gas production.

JJ> • Engage in an international effort to transfer technologies at as low a cost as we can afford to developing nations. At first, this may require direct transfers of wealth in the form of subsidized technology costs. This may be a tough political sell in the US! If our policies are successful though, clean energy will be increasingly competitive in unsubsidized terms with coal in the developing world. We’ll then be exporting clean tech at an economic benefit to the US.

In my opinion, this is setting yourself up for failure; it is too hard a sell in the US. I also think most technology will transfer regardless of an explicit goal. If it were me, I would not burden a program with this, even if it were a good idea.

I think you want to replace the above with diplomatic efforts and tariffs that give teeth to the diplomacy.

JJ> It’s not inconceivable that countries like China and India will one day set a price for carbon. We believe that day will arrive sooner rather than later if we create a new global agreement where the U.S., Europe, and Japan agree to invest $100 billion per year in their countries and in China and India and other developing nations. From this investment we believe China and India would be more likely to consider putting a price on carbon.

Right now we are discouraging them. Your suggestion for encouragement is not the only way. Your suggestion that we invest such a large sum is likely to kill it in Congress. Concentrate on a level playing field. The fast developing countries already know how to exploit that. It is the laggards that are don’t know how to exploit a level playing field, but right now they don’t generate significant greenhouse gases, and that is a development issue, not a climate issue. (I have opinions on that, but this isn’t the forum.)

EK> How many years do you think the investment program on your webpage will take to make new clean energy cheaper than new dirty energy? (Not a firm number, just an educated estimate.)

JJ> It will depend on the technology. And on what happens to the costs of dirty energy sources (coal even is on the rise, as are clearly natural gas and oil). I’m not sure I can answer that question too precisely without doing a bit more research, but it’d better be by 2050, or we’re pretty well hosed as a global society.

Time is the biggest issue with the BI approach. I suggest that 2050 is much much too late. GHGs need to reverse direction (head down instead of up) in something like five to seven years. I believe this is the point on which BI generates so much rancor. My advice to you is to be explicit in two things: immediate deployment of currently available technology and staying under 450 ppm.

JJ> The point is that without achieving this policy objective, cap and trade will be at best, politically challenging to sustain in the United States, as deeper reduction targets drive up energy costs further, and internationally useless, as developing nations forego increased energy prices through carbon pricing in order to sustain economic development and pull billions more out of poverty (a goal we can hardly begrudge them). That argues that we should specifically design our policies to achieve this goal, as quickly as possible. Current policy proposals don’t seem to be oriented towards that objective. That worries me, and I think it should worry you

Some of Joe’s proposed wedges address this issue. For example, efficiency counteracts increased energy prices and greenhouse gas caps. Also, plug-in vehicles dramatically reduce fuel costs (e.g. the electric RAV4-EV is 6 times cheaper to fuel than the gasoline RAV4). California has shown that efficiency need not require large government investment. For example, it decoupled utility profits from revenue, and then the utilities invested in their customers’ efficiency. Feebates are a revenue-neutral way to influence purchasing choices. It seems there is a lot we can do without the government raising and spending billions. I am not personally ideologically opposed to the government doing this, but some are, so this is an issue. I suggest that your claim that yours is the only way is not valid.

I also don’t see why developing countries cannot prosper in on a level playing field, whether that is a high-altitude field or a low-altitude one. The problem is a sloped field, but no one is suggesting that.

EK> What do you think the world should do about GHG between now and then? What level of GHG do you think Earth will experience in this timeframe?

JJ> The United States and the developing world should do what I outlined above, in short: 1) price carbon and raise revenue, 2) invest revenue in driving down costs and rapidly deploying clean energy solutions. 3) engage the international community with an eye towards rapid technology transfer and diffusion as a base of an international climate agreement (ideally in “exchange” for emissions limits in developing countries).

JJ> We’re not saying don’t do anything until clean energy prices are cheaper than coal! That’s President Bush’s line! We’re saying that making clean energy cheaper than coal must be the explicit policy objective of a successful US climate policy, and it’s currently not. We’ve got to get started today in achieving that objective (yesterday really!) and that will mean deploying everything we’ve got at our disposal today while striving to bring down the costs of mature and emerging technologies, and invest in a broad R&D strategy to develop as many more tools in our toolbox as we can get.

You haven’t answered the second question, and it seems that this is a BIG question with your approach. Again, this is why BI generates so much rancor. If it takes until 2050 to accomplish your stated objective, it is too late.

There is of course no single thing that is sufficient to solve our problem. We need to do many things in parallel to succeed. If I distill the concern folks have about BI’s posture, it would be you emphasize (e.g. on your website) a single thing, and that single thing does not seem as important as some other steps. What I am hearing from you is that BI’s policies are broader, which is good, but that means you’ve got a communications problem, since that is not apparent from your webpage.

EK> Is the investment program on your webpage also targeted at reducing the cost of new clean energy to less than cost of old (paid-off) dirty energy? If so, how long is this likely to take? If not, does BI have a proposal to shut down existing dirty energy plants, since you suggest carbon pricing is unlikely? If we don’t shut down existing dirty energy plants, how do we prevent reaching disastrous GHG levels in the atmosphere?

JJ> We strongly favor replacing dirty energy in the U.S. and other developed economies with clean energy sources, efficiency, or CCS. But we emphatically don’t think that effort to simply shut down coal plants without a well-thought out alternative will work because there is too high of a risk of energy price spikes that generate public animosity and make the kind of sustained effort to reduce emissions over the course of the next few decades politically challenging, if not impossible. In other words, “shutting down coal plants” is a tactic not a strategy, and we will imperil the long-term strategy if we don’t focus centrally on replacing dirty paid off energy plants with clean energy sources that create good jobs, increase America’s energy security, advance our economic competitiveness, and bring down the price of clean energy. Of course we need to shut down existing coal plants. The question is how we go about doing it, and what will replace them. What’s your answer? What’s your answer in China?

I don’t consider the above to answer my question, and it is probably the most imporant question I asked. Getting new clean energy to be cheaper than new dirty energy does not prevent disaster in 30-some years, because at 2 ppm per year, the existing plants are sufficient to destroy the atmosphere. There must be a plan to close the dirty plants. Cheaper clean enegy won’t do it! Once the cost has been sunk into a dirty plant, it is no longer feasible to put it out of business without a price on emissions.

You answer also suggests that alternatives don’t already exist. Could you elaborate?

However, a price on greenhouse gas emissions is a method for shutting down old dirty emitters, by making them unprofitable to operate. If the price is high enough, then clean energy becomes cheaper. Since you’ve signed onto greenhouse gas emission pricing, you do have a method to do what I asked, unless you see the price being set too low.

Also, efficiency in the U.S. at least is a way to shut down coal without risk. Even with the expected population increase over the next 30 years, an efficiency thrust would let us shut down or reduce combustion at U.S. coal power plants. We are that inefficient. Consider the population growing from 297 million in 2005 to 392 million in 2040. If the U.S. goes from 12,347 kWh per capita per year to 7,032 kWh during this time period, then annual generation goes from 3667 TWh to 2757 TWh, a decrease of 910 TWh. Since coal generated 1956 TWh from coal in 2005, this is enough to elimate 47% of U.S. coal combustion without building a single alternative energy plant.

JJ> p.s. Michael: We’re not “letting the future of a favorable climate hang on technological breakthroughs.” We need to get started yesterday in deploying every available tool as quickly as is politically possible (while working to advance what is politically possible!).

Amen to that. I just wish it weren’t a postscript.

JJ> We’re simply concerned that the scale of the challenge and the corresponding “technology gap” makes technological breakthroughs (in price and performance of existing, emerging and new technologies) essential. If the climate challenge demands we make that bet, we’d better place our chips down now, on as many of those roulette squares as possible.

Please explain what you mean by a technology gap. As an example, Joe’s 14 wedges are based upon present day technology. Deployment will reduce their price through the standard industrial “learning curve”. All we need are the policies, incentives, and regulations that get deployment started. It may not require large government spending. Sure, development and maybe research might produce even better solutions, but we cannot bet on that. As you agree above, we need to start deployment yesterday.