Climate policy wars: People want affordable solutions

Sustained investment in an energy technology revolution is the only way out of our climate dilemmas. There are no easy answers.
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Demonstrators at the Copenhagen climate summit in 2009

Sustained investment in an energy technology revolution is the only way out of our climate dilemmas. There are no easy answers.

The recent decision by U.S. Senate Democrats to pull the plug on climate legislation led to acrimonious finger-pointing. The Obama administration expressed frustration with environmental advocacy groups, complaining that despite $100 million invested in promoting the legislation, they failed to deliver a single Republican vote. In return, Joe Romm, who covers climate for one advocacy group, the Center for American Progress, declared the entire Obama presidency a failure.

Opponents to the legislation are happy to watch the carnage. As engrossing as it is to watch, the fact that climate change has become such a partisan issue is troubling, because there remains a problem to be addressed.

One of the challenges of climate policy has always been that people simply do not agree on what sort of problem it presents. For some, the threat of a human influence on climate is a sufficient to call for dramatic lifestyle changes. For others, the main concern is government intervention in the global energy system. Not coincidentally, these perspectives fit comfortably with pre-existing world views, making climate another battleground for poisonous partisan politics.

Lost in the debate is a fundamental reality: Virtually everyone agrees that greenhouse gases, primarily carbon dioxide through the burning of fossil fuels, have the potential to influence the climate. As the late climatologist Stephen Schneider explained, 'ꀜUncertainties so infuse the issue of climate change that it is still impossible to rule out either mild or catastrophic outcomes, let alone provide confident probabilities for all the claims and counterclaims made about environmental problems.'ꀝ

In such a situation, we are simply not going to have certainty about impacts or costs on the time scales of decision-making. This would seem to create a bias toward inaction, yet policy makers routinely take action in the absence of certain information such as in the context of the economy, national security and health.

A poll conducted last year found that a majority of Americans supported climate legislation when the cost was about $7 per month, but dropped to only about 10 percent support when the cost was $70 per month. The sensitivity of political support to perceived cost is shared by people around the world, and is particularly acute in developing countries where energy costs comprise a significant part of household expenditures. Appreciably increasing the costs of fossil fuels is simply not a politically feasible option, regardless of its theoretical elegance.

If the ability of policy makers to increase the costs of fossil fuels is limited, the obvious alternative is to reduce the costs of alternatives to fossil fuels. Diversifying energy supply technologies and pursuing efficiency gains makes good sense for reasons beyond the prospect of climate change. The world is going to need vastly more energy in the future, especially as the more than 1.5 billion people worldwide who lack access to electricity seek to attain higher standards of living.

An energy technology revolution will only come about through a sustained and significant investment over decades in innovation on the scale of investments in health (roughly $30 billion annually in the U.S.) or the military (about $100 billion annually in the U.S.). One way to pay for investments in tomorrow'ꀙs energy supply is based on today'ꀙs consumption. Consider that a $1 surcharge per barrel of oil would raise $100 billion and would not be noticeable at the pump. Similarly, a $5 per ton tax on carbon dioxide would raise $150 billion per year, while raising the price of gasoline by only four cents per gallon.

A simplified approach to de-carbonization would focus on establishing such direct mechanisms for investing in energy innovation. To be successful, such an approach would have to avoid noticeably increasing the costs of energy to consumers. Politicians would have to be held accountable for using these resources to invest in innovation rather than for general government expenditures.

Environmentalists will complain that an innovation-led approach does not guarantee certainty in emissions reduction; however, another lesson that we should take from the failures of climate policy thus far is that there are no certainties for any policy proposal. Alternatives to fossil fuels are not going to comprise a significant part of our energy supply until they are cost-competitive. That process can be accelerated by focusing policy on energy technology innovation.

The alternative is continued policy failure, not just with respect to climate, but to meeting tomorrow's energy needs — which should concern everyone today.

The author speaks to a Washington Policy Center event last month.


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