Today, the President Obama and the EPA – bolstered by recent
court rulings - will announce rules for carbon dioxide emissions targets. Reports vary from 20% reduction by 2020 to a
30% reduction by 2030. Regardless of the
actual target chosen, we should all remember one thing…
We will beat that target easily.
Politics, we should all remember, has as its foundation the
“art of the possible”. Most everyone in
industry, except for those whose commodities will have less value because of
reduced demand for carbon-based fuels, recognizes that energy efficiency and
renewable energy have a better economic trajectory than fossil fuels or even
nuclear. In setting this goal, the
current administration simply identifies where industry easily thinks they can
get. Just as they did with the
automobile efficiency standards, they have put in place a benchmark that we
will meet far before the target date.
Lest pure political analysis prove unpersuasive, consider
the economic argument. For years,
analysts claimed that we needed to tax fossil fuels in order to capture
externalities and make renewable energy more competitive. What we got instead was an energy market that
remained depressed by a combination of stagnant demand and temporarily
increased supply. That should have
spelled a death knell for renewable energy.
Instead, we have seen wind and solar have their most successful years
economically in a time when low energy prices should push them out of the
market. Recent long-term contracts and
court rulings in the Midwest have bolstered this fact that even as of today,
renewable energy-based electricity generation betters coal and nuclear, and
competes with natural gas.
On the technology front, current building codes currently
restrict energy use in new buildings to levels about half of what they were a
decade ago. Over the next ten years, we
will see this decline even further, and that will carry over into the existing
building marketplace. We will see even
more efficient use of energy in buildings (a sector that uses about 1/3 of the
energy in the economy), and continued reduction in vehicle emissions. Industrial use (the final 1/3) already has
stagnated as industry continues to find excellent investments in efficient ways
to update equipment and processes to use less energy. Our economic growth no longer relies on
increased energy use, and in fact, we may see the opposite hold true for
decades to come.
On an even more important front, most politicians recognize
that energy efficiency and renewable energy technologies create more jobs per
dollar than the fossil fuel industry.
Few groups take the “sky is falling” approach to carbon regulation, but
the some continue to flap their wings and claim that regulating carbon will
cause economic collapse. Thankfully, most
recognize that pollution limits actually create jobs by shifting capital (human
and financial) from extractive industry to productive ones. Spending money on new wind turbines,
smart-grid technology, weatherization of homes, or pollution capture technology…these
all put people to work and shift expenses from one sector to another, but it
does not threaten the economy as a whole.
One need look no further than the acid rain policies of the
80s and 90s to see a parallel. Back then
we sought to reduce sulfur and nitrogen oxide emissions from power plants
because these reacted with the atmosphere to produce rain that damaged crops,
buildings, and communities. Industry
predicted it would create a $1,500 per ton drag on the economy. What happened instead was that it cost only
$250 per ton, and the savings from increased property value, reduced medical
expenses, and job creation more than paid for the investment.
For years, we have had to choose between the more
economically stable sector and the higher-priced, but better-for-us
sector. Especially in tough economic
times, asking anyone to make that choice is tough. Now, we have reached a tipping point where we
do not have to sacrifice anyone’s quality of life in order to cost-effectively
provide the energy that supports our lives.
Challenges lie ahead, but we should take solace in the fact that the
Obama administration is taking this step today.
If there’s one thing we know about politicians….
They rarely stick their necks out unless they’re certain of
the outcome.
