The Next President’s First Task [A Manifesto]
May, 2008 - Robert F. Kennedy Jr - Vanity
Last November, Lord (David) Puttnam debated
before Parliament an important bill to tackle global warming.
Addressing industry and government warnings that we must
proceed slowly to avoid economic ruin, Lord Puttnam recalled
that precisely 200 years ago Parliament heard identical
caveats during the debate over abolition of the slave trade.
At that time slave commerce represented one-fourth of Britain’s
G.D.P. and provided its primary source of cheap, abundant
energy. Vested interests warned that financial apocalypse
would succeed its prohibition.
That debate lasted roughly a year, and Parliament,
in the end, made the moral choice, abolishing the trade
outright. Instead of collapsing, as slavery’s proponents
had predicted, Britain’s economy accelerated. Slavery’s
abolition exposed the debilitating inefficiencies associated
with zero-cost labor; slavery had been a ball and chain
not only for the slaves but also for the British economy,
hobbling productivity and stifling growth. Now creativity
and productivity surged. Entrepreneurs seeking new sources
of energy launched the Industrial Revolution and inaugurated
the greatest era of wealth production in human history.
Today, we don’t need to abolish carbon as
an energy source in order to see its inefficiencies starkly,
or to understand that this addiction is the principal drag
on American capitalism. The evidence is before our eyes.
The practice of borrowing a billion dollars each day to
buy foreign oil has caused the American dollar to implode.
More than a trillion dollars in annual subsidies to coal
and oil producers have beggared a nation that four decades
ago owned half the globe’s wealth. Carbon dependence has
eroded our economic power, destroyed our moral authority,
diminished our international influence and prestige, endangered
our national security, and damaged our health and landscapes.
It is subverting everything we value.
We know that nations that “decarbonize” their
economies reap immediate rewards. Sweden announced in 2006
the phaseout of all fossil fuels (and nuclear energy) by
2020. In 1991 the Swedes enacted a carbon tax—now up to
$150 a ton—and as a result thousands of entrepreneurs rushed
to develop new ways of generating energy from wind, the
sun, and the tides, and from woodchips, agricultural waste,
and garbage. Growth rates climbed to upwards of three times
those of the U.S.
Iceland was 80 percent dependent on imported
coal and oil in the 1970s and was among the poorest economies
in Europe. Today, Iceland is 100 percent energy-independent,
with 90 percent of the nation’s homes heated by geothermal
and its remaining electrical needs met by hydro. The International
Monetary Fund now ranks Iceland the fourth most affluent
nation on earth. The country, which previously had to beg
for corporate investment, now has companies lined up to
relocate there to take advantage of its low-cost clean energy.
It should come as no surprise that California,
America’s most energy-efficient state, also possesses its
The United States has far greater domestic
energy resources than Iceland or Sweden does. We sit atop
the second-largest geothermal resources in the world. The
American Midwest is the Saudi Arabia of wind; indeed, North
Dakota, Kansas, and Texas alone produce enough harnessable
wind to meet all of the nation’s electricity demand. As
for solar, according to a study in Scientific American,
photovoltaic and solar-thermal installations across just
19 percent of the most barren desert land in the Southwest
could supply nearly all of our nation’s electricity needs
without any rooftop installation, even assuming every American
owned a plug-in hybrid.
In America, several obstacles impede the kind
of entrepreneurial revolution we need. To begin with, that
trillion dollars in annual coal-and-oil subsidies gives
the carbon industry a decisive market advantage. Meanwhile,
an overstressed and inefficient national electrical grid
can’t accommodate new kinds of power. At the same time,
a byzantine array of local rules impede access by innovators
to national markets.
There are a number of things the new president
should immediately do to hasten the approaching boom in
energy innovation. A carbon cap-and-trade system designed
to put downward pressure on carbon emissions is quite simply
a no-brainer. Already endorsed by Senators McCain, Clinton,
and Obama, such a system would measure national carbon emissions
and create a market to auction emissions credits. The supply
of credits is then reduced each year to meet pre-determined
carbon-reduction targets. As supply tightens, credit value
increases, providing rich monetary rewards for innovators
who reduce carbon. Since it is precisely targeted, cap-and-trade
is more effective than a carbon tax. It is also more palatable
to politicians, who despise taxes and love markets. Industry
likes the system’s clear goals. This market-based approach
has a proven track record.
There’s a second thing the next president
should do, and it would be a strategic masterstroke: push
to revamp the nation’s antiquated high-voltage power-transmission
system so that it can deliver solar, wind, geothermal, and
other renewable energy across the country. Right now, a
Texas wind-farm manager who wants to get his electrons to
market faces two huge impediments. First, our regional power
grids are overstressed and misaligned. The biggest renewable-energy
opportunities—for instance, Southwest solar and Midwest
wind—are outside the grids’ reach. Furthermore, traveling
via alternating-current (A.C.) lines, too much of that wind
farmer’s energy would dissipate before it crossed the country.
The nation urgently needs more investment in its backbone
transmission grid, including new direct-current (D.C.) power
lines for efficient long-haul transmission. Even more important,
we need to build in “smart” features, including storage
points and computerized management overlays, allowing the
new grid to intelligently deploy the energy along the way.
Construction of this new grid will create a marketplace
where utilities, established businesses, and entrepreneurs
can sell energy and efficiency.
The other obstacle is the web of arcane and
conflicting state rules that currently restrict access to
the grid. The federal government needs to work with state
authorities to open up the grids, allowing clean-energy
innovators to fairly compete for investment, space, and
customers. We need open markets where hundreds of local
and national power producers can scramble to deliver economic
and environmental solutions at the lowest possible price.
The energy sector, in other words, needs an initiative analogous
to the 1996 Telecommunications Act, which required open
access to all the nation’s telephone lines. Marketplace
competition among national and local phone companies instantly
precipitated the historic explosion in telecom activity.
Construction of efficient and open-transmission
marketplaces and green-power-plant infrastructure would
require about a trillion dollars over the next 15 years.
For roughly a third of the projected cost of the Iraq war
we could wean the country from carbon. And the good news
is that the government doesn’t actually have to pay for
all of this. If the president works with governors to lift
constraints and encourage investment, utilities and private
entrepreneurs will quickly step in to revitalize the grid
and recover their investment through royalties collected
for transporting green electrons. Businesses and homes will
become power plants as individuals cash in by installing
solar panels and wind turbines on their buildings, and by
selling the stored energy in their plug-in hybrids back
to the grid at peak hours.
Energy expert and former C.I.A. director R.
James Woolsey predicts: “With rational market incentives
and a smart backbone, you’ll see capital and entrepreneurs
flooding this field with lightning speed.” Ten percent of
venture-capital dollars are already deployed in the clean-tech
sector, and the world’s biggest companies are crowding the
space with capital and scrambling for position.
The president’s final priority must be to
connect a much smarter power grid to vastly more efficient
buildings and machines. We have barely scratched the surface
here. Washington is a decade behind its obligation, first
set by Ronald Reagan, to set cost-minimizing efficiency
standards for all major appliances. With the conspicuous
exception of Arnold Schwarzenegger’s California, the states
aren’t doing much better. And Congress keeps setting ludicrously
tight expiration dates for its energy-efficiency tax credits,
frustrating both planning and investment. The new president
must take all of this in hand at once.
The benefits to America are beyond measure.
We will cut annual trade and budget deficits by hundreds
of billions, improve public health and farm production,
diminish global warming, and create millions of good jobs.
And for the first time in half a century we will live free
from Middle Eastern wars and entanglements with petty tyrants
who despise democracy and are hated by their own people.
Environmentalist Robert F. Kennedy Jr.
is president of the Waterkeeper Alliance, a non-governmental
organization that promotes clean water throughout the world.