With oil reserves getting tighter, resource-rich countries becoming more aggressive and climate change prompting louder and broader calls for action, President-elect Barack Obama has promised to invest $150 billion “strategically” to build a clean energy future for America over the next 10 years – and create 5 million new jobs.
Somehow, he needs to show the country how to hit a perfect trifecta of economy, ecology and employment – placing his bets quickly to build momentum, and overcoming political and bureaucratic machinery decades in the making.
His vision compels and inspires: Millions of people working in sophisticated clean tech manufacturing plants. Harvesting, transporting and processing biofuel feedstock. Deploying grid-capable wind and solar farms. Building transmission infrastructure and smart-grid technology. Installing photovoltaic panels and insulation for homes, offices and schools.
We need all of this, and we need it soon. But please, before Congress wraps up its stimulus package for the holidays, can we make it happen without having to watch a bad rerun from the late 1970s?
In the Carter era, $20 billion in taxpayer money (worth $66 billion today) went into research and development for synthetic fuels, energy performance for buildings, fuel cells and clean coal. Almost all of these projects, thanks largely to political interference, failed.
Government can do many things well, but impersonating venture capitalists isn’t one of them.
The biggest lever moving the world of clean tech, rarely discussed with much candor, is government subsidies. Whether you call them reliable incentives or taxpayer dollars depends on whether you’re getting them or not.
Well-intended subsidies to release new technologies and industries amount to betting on horses before you know which end goes into the gate.
Over the decades, we’ve learned that the government has a terrible track record picking winners with public money. In the 1980s, this practice was known as industrial policy, almost forgotten but now oddly coming back, like a sit-com too painful to watch.
The Soviets tried industrial policy. Japan tried it. We tried it. It didn’t work.
Is it working now? At the risk of tipping over some sacred cows:
Highly hyped and subsidized hydrogen cars rely on the most impractical fuel on the planet. Beyond the estimated $2 trillion we’d need to build production infrastructure and filling stations, hydrogen is the most co-dependent atom on Earth (it just hates to be alone).
The energy needed to pry it from water, compress it into tanks and then convert it into electricity in a fuel cell wipes out 80 percent of its energy at the axle.
That energy has to come from somewhere – like a coal-fired power plant. Not to mention the energy needed to truck hydrogen to filling stations. If they existed.
Heavily subsidized corn ethanol generates far more carbon than it saves. Intended or not, almost all biofuel production leads to new land being cleared, directly or indirectly – which (whether scrubland or rain forest) releases 93 times the volume of greenhouse gas saved by fuel from that land, according to a Nature Conservancy scientist published in the journal Science.
None of this is to suggest we can’t do better. But hydrogen cars are 80 percent energy-inefficient and 100 percent unaffordable. And biofuels cause 93 times more global warming than gasoline. Take lines like that out of context, and they sound like Ronald Reagan calling ketchup a vegetable. But such is the state of our subsidized knowledge, as of now.
How many times have we looked back, appalled by everything we thought we knew about energy and the environment?
Right now, biofuels based on algae look promising. Plug-in electric hybrids look like winners.
But please, Mr. President-elect, don’t invest our estimated $150 billion – or the $15 billion down payment proposed this month – “strategically” (as the campaign suggested) into nascent clean and renewable-energy options.
Set aggressive goals and support carefully regulated markets that respond to demand from real customers, and pricing from real providers – not to those engineered by lobbyists and legislators. That will create jobs that last.
Your administration will make history in many ways. May it be the first to create an integrated energy and environmental strategy for America. Managed well, both of those priorities can support rather than impede economic growth and real job creation.
Originally published in the San Francisco Chronicle December 14, 2008