Combating Climate Change: A Proposal

Jun 4, 2010Wallace Turbeville

idea 150In honor of World Environment Day on June 5th, a day focused on action across the globe, New Deal 2.0 asked leading thinkers in climate change to describe what they see as the single most important step that can be taken right now.

In the war on climate change, tactics which can be implemented practically and promptly are important.

idea 150In honor of World Environment Day on June 5th, a day focused on action across the globe, New Deal 2.0 asked leading thinkers in climate change to describe what they see as the single most important step that can be taken right now.

In the war on climate change, tactics which can be implemented practically and promptly are important.

Extracting the cost of carbon emissions is important. Credits are intriguing, but effectiveness could be questioned.

A tax is certain, but politics could be difficult. We should explore the political issues.

Tying the tax to a popular result could address several political issues. The tax could fund a trust which is devoted to specific purposes which are politically popular and tangible. These could include:

• Subsidies for green power generation, allowing facilities and equipment to be financially feasible even though current market power prices are insufficient.

• Power transmission designed to decrease power losses and connecting remote green power generation to demand.

• Energy efficiency in new construction and refurbishments.

• Infrastructure to enable battery powered and hybrid vehicles.

In addition, transitional carbon-friendly fuels must be encouraged as a practical matter. Because current green generation as a percentage of the total is so low, the practical rate of growth will require transitional cleaner generation. Natural gas is the obvious answer. This will also attract important political allies.

The closer the connection between the tax and the results, the better. The funds generated and the popular expenditures might be hydraulically related. It strengthens the connection. It also allows generators to offset carbon tax liabilities with subsidies by participating in the green programs. A utility could build a wind farm somewhere and balance out carbon taxes with subsidies. The hydraulic relationship would require a set of rules to set tax levels and funding demands in a balanced cash flow. It would also require administration of the rules.

Tangible assets are politically the most defensible. Research and development may be politically more feasible if funded from general revenues.

Wallace C. Turbeville is the former CEO of VMAC LLC and a former Vice President of Goldman, Sachs & Co.

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Meeting the Climate Change Challenge: Forging a New International Financial Architecture

Jun 4, 2010Paul Epstein

spending-money-150In honor of World Environment Day on June 5th, a day focused on action across the globe, New Deal 2.0 asked leading thinkers in climate change to describe what they see as the single most important step that can be taken right now.

spending-money-150In honor of World Environment Day on June 5th, a day focused on action across the globe, New Deal 2.0 asked leading thinkers in climate change to describe what they see as the single most important step that can be taken right now.

Climate change will affect the lives and lifestyles of nearly every person who inhabits the planet. Today's international institutions are incapable of managing such a complex and far-reaching problem. New funds, rules and institutions are needed to constitute the financial architecture needed to propel the clean energy transformation -- the first necessary, though insufficient step toward sustainable development.

Funds

A large international fund is needed to provide the push and pull on the global economy. The International Energy Agency projects that $500 billion a year is needed for 20 years -- a reasonable investment in our common future.

But its sources must be denationalized. Relying on nations -- especially given the current contraction of economies in many nations -- for contributions is not feasible. Among the sources available is a tax on intentional currency transactions -- the Tobin Tax.

In addition, subsidies for fossil fuels (misaligned negative incentives) must be abandoned.

Rules and regulations

In order to direct funds toward healthy, sustainable development, new rules of trade and regulations are necessary. Bretton Woods (1944) established three monetary rules:

1. Fixed exchange rates,

2. Free trade in goods, but

3. Constraints on the international flow of capital.

In 1971, rules 1 and 3 were abandoned. The Washington Consensus -- deregulation, privatization and liberalization -- has meant the free movement of capital as well as goods.

Free trade in capital (that Adam Smith wrote would nullify healthy competition and distort comparative advantages) has contributed to unpayable national debts and has destabilized nations in the 1990s, and continues to do so today.

Institutions

An international body is needed to provide support for climate mitigation and adaptation through financial incentives, regulations and assuring compliance. The Global Environmental Facility -- established in 1992 as a collaborative among the United Nations Development Programme, the United Nations Environment Programme and the World Bank -- makes grants, not loans and provides a guide for an institution to oversee enhanced global governance.

Preparing for the coming climate and stabilizing it will require realigning rewards, rules and regulations to redirect the international economy onto a sustainable path.

Paul R. Epstein, M.D., M.P.H. is Associate Director of the Center for Health and the Global Environment at Harvard Medical School.

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More Carbon Dioxide, Please

Jun 4, 2010Robert Bryce

electric-tower-150In honor of World Environment Day on June 5th, a day focused on action across the globe, New Deal 2.0 asked leading thinkers in climate change to describe what they see as the single most important step that can be taken right now.

electric-tower-150In honor of World Environment Day on June 5th, a day focused on action across the globe, New Deal 2.0 asked leading thinkers in climate change to describe what they see as the single most important step that can be taken right now.

Nothing. That's the single most important step that can be taken right now to combat climate change. Yes, that's a heretical position, but stay with me for a moment and consider these numbers:

-- About 1.6 billion people on the planet do not have electricity in their homes.

-- India alone has 400 million people who live without electricity.

-- The entire continent of Africa, a region with a population of about 1 billion people, about 14% of the world's population, uses just 3% of the world's electric power.

In their 2005 book, The Bottomless Well, authors Peter Huber and Mark Mills made clear the case for more electricity production, writing "Economic growth marches hand in hand with increased consumption of electricity -- always, everywhere, without significant exception in the annals of modern industrial history."

That's it exactly. More electricity equals more wealth. Period.

The countries of the world must -- repeat, must -- pursue cheap and abundant electricity as a primary goal. For without electrical power, the world's poorest residents will never be able to obtain the education and employable skills that they need to become productive. Unfortunately, rather than focusing on cheap abundant energy, policymakers here in the US and in Europe are fixated on the belief that they can achieve drastic worldwide reductions in carbon dioxide emissions through taxes, mandates, and subsidies for expensive "green" energy projects. The results of those overly intrusive policies could be disastrous, particularly for the energy poor.

Sure, countries like China, India, and South Africa are burning lots of coal in order to produce more electricity. The result: lots of new carbon dioxide in the atmosphere. But that electricity is freeing millions of people from lives of dire energy poverty. In 2007, Freeman Dyson, a renowned professor of physics at the Institute for Advanced Study at Princeton University wrote that "The greatest evils are poverty, underdevelopment, unemployment, disease and hunger...The humanist ethic accepts an increase of carbon dioxide in the atmosphere as a small price to pay, if world-wide industrial development can alleviate the miseries of the poorer half of humanity."

To that, I say amen.

Robert Bryce is a senior fellow at the Manhattan Institute and the author of four books, the latest of which is Power Hungry: The Myths of "Green" Energy and the Real Fuels of the Future.

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Building a Greener Future: Let's Stay Together

Jun 4, 2010Jon Rynn

skyline-150In honor of World Environment Day on June 5th, a day focused on action across the globe, New Deal 2.0 asked leading thinkers in climate change to describe what they see as the single most important step that can be taken right now.

skyline-150In honor of World Environment Day on June 5th, a day focused on action across the globe, New Deal 2.0 asked leading thinkers in climate change to describe what they see as the single most important step that can be taken right now.

Residents of New York City contribute less than 30% of the greenhouse gases of the average American, according to David Owen in his book, "Green Metropolis". Therefore, if everybody lived in a New York City, U.S. greenhouse gas emissions would plummet by 70%. This is because the way we place buildings in relation to each other has a profound influence on the way we use energy.

In a dense urban structure, where buildings are large, close together, and serve many different uses, a transportation system that is composed mainly of trains is very effective at bringing people and goods into, out of, and around a city or town. A train-centered passenger and freight transportation system can use electricity for 100% of its energy needs, and an electrical system can be supplied by wind and solar energy.

There are other advantages. Economies of scale can be realized in recycling and the installation of ground source heat pumps for heating and cooling -- which apartments buildings retain better than single-family homes. Actually-existing electric car and trucks can be used that are slow, low-range, and small, which is fine for a dense city or town.

There is a growing, unmet demand for walkable neighborhoods on the part of about 30% of the American population, while only 5% are currently able to live in one. Let's assume, for the sake of simplicity, that 25% of the 100 million American households would gladly live in a 250-unit apartment building in a walkable neighborhood. Then if a government-financed program built 100,000 such units, at $50 million each, spread among the downtowns of dozens of cities and towns, the cost over 10 years would come to about $500 billion per year - and most of it would be paid back by the buyers of such units. And we would lay the groundwork for a truly sustainable society.

Jon Rynn is the author of the book "Manufacturing Green Prosperity: The power to rebuild the American middle class", available from Praeger Books, Summer 2010.

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