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On The Dependence of Renewables on Government

"While the points you make certainly resonate with me, I can't help wondering how in practice one avoids that turning into the kind of mess Germany created"

Well therein lies the rub, Geoff! And that's what need to figure that out.
January 28, 2010    View Comment    

On The Dependence of Renewables on Government

Some very good food for thought here.  Thanks Geoff for cogent and clear writing (as usual).  Some things I'll have to mull over. 

I'm not sure I agree with your prescription (e.g. level playing field that doesn't pick "winners and losers"and treats all non-fossil BTUs or KWhs equally); after all techs come into the marketplace at different price points which don't always speak to their ultimate potential to come down price and learning curves and compete without permanent subsidy after early markets are developed. 

We need some way to give every emerging tech an equal chance to thrive, and the conditions to do that may vary by technology. I agree we can't be anointing permanently-subsidized industries, but what we need to focus on is creating the conditions where winners can emerge in the first place.  Markets won't do that on their own, especially given many barriers to emerging clean techs.  And a single carbon price or per-KWH/BTU incentive price won't solve the barriers for each technology.  

For example, if the price is $20 per ton/MWh, wind may win while thin-film solar won't have a chance to emerge at all.  Focus on prices alone and those requiring infrastructures that don't match today's energy system won't emerge at all (like charging stations or biofuel distribution or transmission to wind and solar and geothermal resource areas). After all, our current energy system is built to serve (and thus perpetuate) incumbent techs.  And so on.

You've got the right concerns I think.  But we need more creative thought as to the right solutions.  I welcome your thoughts.  Cheers,

Jesse Jenkins
January 27, 2010    View Comment    

On Tesla Lands $465 Million Loan from Department of Energy for Model S Plant

Geoff:

A) You're not the only one: Marc Gunther has been pretty skeptical as well (prompting several rounds of debate between us about the role of government in our clean energy future!).

B) As far as bets on established companies, Ford gets $5.9 billion. Tesla gets $465 million.  So it would appear the established players are getting bigger bets.  I'd also suggest that given the track record to date of the big players in driving innovation, betting on a few upstarts is probably not the wrong move.


January 22, 2010    View Comment    

On Werbach: Brown's Election Means Time for a Climate Agenda Plan B

Yeah, it's been a pretty damn rough week, eh?!  In times like these, I turn to this:


Enjoy your weekends everyone...
January 22, 2010    View Comment    

On A Naval officer’s “Atomic Insights”

Excellent profile.  Thanks for spotlighting Rod and giving me (who came across Rod's writing relatively recently here at TEC) a bit more background on one of theEnergyCollective.com's most prolific contributors.
January 22, 2010    View Comment    

On Werbach: Brown's Election Means Time for a Climate Agenda Plan B

Well this didn't take long: House Majority Leader Steny Hoyer is already suggesting that cap and trade legislation pending in Congress could be split in two this year (as previously suggested by several moderate Democratic Senators, including Sens. Dorgan and Bingaman) to ensure a push to expand the United States' use of clean and alternative energy sources doesn't "fall victim" to the politics of cap and trade.

"We ought not to let one be the victim to the other, if you will," Hoyer told Reuters today. "I think we can move ahead on energy independence, I'm hopeful we can move ahead on the CO2 issue as well but I don't want to have one be the victim of saying we can't do one without the other."
January 20, 2010    View Comment    

On A CLEAR Look at the Cantwell-Collins Climate Bill, Part 2: Structural Advantages

Thanks Wilmot for the encouraging comment!  Stay tuned for more of what I hope will sufficiently be calm and lucid analysis...
January 14, 2010    View Comment    

On Communicating Climate Change: A Conversation With Andy Revkin

Excellent Q&A.  Thanks for posting this here.
January 12, 2010    View Comment    

On Green China: Friend or foe?

Also, I wanted to encourage you Marc (and anyone else) to take a look at a chapter in our recent Rising Tigers report, "Barriers to Widespread Clean Energy Adoption and the Public Investment Imperative" that explains why we see a more expansive role for government than you prefer as a necessity if we want to see the kind of clean energy innovation and adoption that we need.  Summary version of the report, with the relevant chapter, here.
January 12, 2010    View Comment    

On Green China: Friend or foe?

Marc, I'm in the midst of reading the Atlantic piece you referenced, which I agree is well worth a thoughtful read.

What is worth a refresher though is a look at the historic role government has played in fostering the kind of entrepreneurial and innovative American environment that has secured our competitiveness and prosperity in decades past.  Here's two pieces worth examining:

First, this recent CBS Evening News report highlights how the road to economic recovery requires reinvestment in innovation, education, and R&D.  And what is implicit in the examples they cite (defense and space race spending) is that government traditionally plays a role, not just in basic science and education (which we both agree are critical), but in early market development for emerging technologies.  And this traditionally looks much more like government purchasing or "subsidy" than it does carbon pricing and economy-wide market mechanisms (we didn't get the internet by taxing telegraphs, nor the personal computer by putting a cap and trade on typewriters, as my colleague Michael Shellenberger is fond of saying).

Second, this recent Newsweek cover story by Fareed Zakaria looks at the long history of America's innovative might, and explains why we can't simply count on a continuation of the kinds of conditions that led to the entrepreneurial and innovative culture we both praise, Marc.  Zakaria (citing at one point the Breakthrough Institute's Case Studies of American Innovation document I've repeatedly referred you to Marc), explains the critical and often far more pervasive role government must play in securing such an entrepreneurial culture and America's technological leadership.  Zakaria similarly highlights the role public funding for basic R&D, education and policies to encourage immigration of talented innovators (again, we're all in agreement there it seems), but the examples he cites also identify the role government plays as "early adopter" of critical technologies, through a variety of means that extend far beyond funding for research or eduction, including direct procurement, demonstration funding, and incentives or regulations to create early markets for emerging techs.

Perhaps your next column can react to/respond to each of these pieces.  Thanks Marc,

Jesse
January 12, 2010    View Comment    

On Green China: Friend or foe?

Marc, thanks for the quick response. Yes, we both support a carbon price, and I know you understand the critical role government investment in R&D and education play in innovation and economic growth.  However, I think, as I've pointed out before, that your perception of the history of technology and economy progress is a bit skewed when it comes to the much more expansive role the government has played in partnership with and as the key enabling driver or private sector innovation and industry growth.  

There would be no Silicon Valley, no IT revolution, no low-cost semiconductors affordable enough to enable the personal computer revolution, no nuclear power, no jet engines or gas turbines, no wind or solar power, etc. etc. etc. without a much more active - you might say 'intrusive' - role for government.  That's simply the historic reality.  I don't see how we can expect a clean energy revolution, much less U.S. leadership in that revolution, without a similarly active role for government, and you've yet to give me any confidence that your narrower prescription for government will be at all sufficient.  

You also seem to ignore the fact that it's precisely the kind of proactive government investment and active partnership with industry that is giving China such an edge in the clean energy race.  Their 'green leap forward' isn't fueled by a carbon price and some hands-off tax policies after all!

You write: "Besides, if it's OK for us to export eSolar's software or First Solar's technology (not to mention Microsoft's and Google's and Apple's), isn't is also OK for us to import toys, clothes, iPods or for that matter wind-turbine parts or PV panels from China, not to mention Denmark or Germany. Trade is a two-way street, right?"

Trade is certainly a two-way street, and we'll clearly import clean energy technologies and components from China.  But you cannot ignore the balance of trade and the implications for our economy (let alone for the future of the middle class in America).  

Finally, you write: "Mostly, I think, we should cheer when China goes green. Just like we would cheer for a medical breakthrough invented in India or go see a great movie made in the UK."

We should most certainly cheer.  A green China is unquestionably good for the world.  But after we cheer, it's time to get serious about the implications for America's future.  

Cheers,

Jesse

January 11, 2010    View Comment    

On Green China: Friend or foe?

Marc,

Thanks for highlighting the Rising Tigers report.  I have to say though that I don't find your conclusions here particularly compelling (as you might have guessed!).  

First off, heightened competition between China and the United States doesn't come at the detriment of our "one earth," but rather its benefit.  Think about the kind of resources leveled at the Cold War efforts to dominate defense, IT, computing and semiconductor technologies, but the end result isn't a world with more nuclear weapons, fighter jets and laser-guided bombs; it's a world with more cleaner, cheaper energy technologies.  It's true that the world is much much better off to see China's green leap forward.  But where is the downside in America entering the clean energy race in full force?  And how does the world achieve the clean energy technology revolution we need at the pace and scale demanded without the full might of the United States?  I don't see how our "one earth" can afford to see the U.S. sit this one out.

Second, your post uses one of the few examples of U.S. firms exporting technologies to China.  That's exactly the kind of situation we want to see, but I don't think you can extrapolate from one start-up firm's experience to see the implications for the U.S. clean energy sector as a whole.  Our http://thebreakthrough.org/blog/2009/11/rising_tigers_sleeping_giant_o.shtml>Rising Tigers report takes a far more expansive look at the current state of clean energy competitiveness, and the conclusions are clear: without much greater emphasis and support for clean energy innovation, manufacturing and technology leadership in the United States, we will see far more of the opposite kind of example: U.S. projects importing Chinese made (and probably invented) technologies.  

This isn't just about patriotism, or about the rhetorical tricks that will spur Congress to act.  There are real economic consequences at stake here.  (BTW, China isn't beating us by putting a price on carbon; why should we assume carbon prices are sufficient to keep America competitive?)

With an economy in recovery and looking for new sectors to drive real economic growth and job creation (not just fancy accounting and Wall Street "financial engineering"), there are few sectors more promising than clean energy.  Will we wind up swapping imported oil for imported solar and nuclear plants, plug-in hybrid cars and high-speed rail technologies?  If we cede the manufacturing game to China (as Friedman suggests), what will that do to our trade deficit?  What will it do for the future of Ohio or Michigan?  I don't see how the U.S. economy can afford to sit this one out.

There will be clear opportunities at the firm level for partnership with China.  And joint research and innovation partnerships can proceed as well.  But let's be clear: it's not simply "all good" for our "one earth" if China alone dominates the clean energy sector.  It's a multi-trillion dollar potential sector.  There's room for many firms and multiple national economies to engage fully in the race for leadership in various clean energy technologies and fields.  Real economic consequences will accrue to the winners and losers of that race, and I for one can't stomach the massive lost opportunity and the damage to the U.S. economy that would result if we sit idly by while China races ahead.  The world will benefit. U.S. firms industry will benefit. And the United States' economic future will benefit if the U.S. fully joins the clean energy race.

So this all leaves me very unclear on what exactly you're suggesting Marc.  As always, appreciate your thoughts.  

All the best,
Jesse Jenkins

January 11, 2010    View Comment