For more information on Michael Shellenberger, please visit www.tedxberlin.de. Michael Shellenberger is co-founder and Senior Fellow at the Breakthrough Institute, where he was president from 2003 to 2015, and a co-author of the Ecomodernist Manifesto.
Over the last decade, Michael and his colleagues have constructed a new paradigm that views prosperity, cheap energy and nuclear power as the keys to environmental progress. A book he co-wrote (with Ted Nordhaus) in 2007, Break Through: From the Death of Environmentalism
to the Politics of Possibility, was called by Wired magazine “the best thing to happen to environmentalism since Rachel Carson’s Silent Spring,” while Time Magazine called him a “hero of the environment.” In the 1990s, he helped protect the last signi cant groves of old-growth redwoods still in private hands and bring about labor improvements to Nike factories in Asia. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at https://www.ted.com/tedxNuclear energy is the only practical alternative that we have to destroying the environment with oil and coal.-Ansel Adams, 1983 (14 min)
Saving planet, creating jobs are noble ideas—but by combining them, Green New Deal exacts too high a cost
The Green New Deal that Democrats unveiled last week is actually two deals: one to combat global warming, another to create millions of well-paid jobs for targeted groups.
Individually, both goals have their merits. But by combining them, the Green New Deal promises to make climate mitigation both absurdly expensive and deeply partisan and is thus more likely to set back than advance the climate cause.
The premise behind the Green New Deal is right. While the world may not spontaneously combust in 10 years, global carbon-dioxide emissions need to start dropping soon, by a lot, to keep temperatures from rising more than 1.5 degrees Celsius from 1800s levels, according to the Intergovernmental Panel on Climate Change. Increases beyond that raise the probability of extreme weather, deadly heat and rising sea levels.
Because the private market has no incentive to reduce carbon emissions, government intervention is necessary. But not all interventions are created equal, and the Green New Deal’s seem engineered to be as expensive as possible.
Consider its goal of massive public investment to achieve 100% renewable energy in as little as 10 years. Kevin Book, head of research at ClearView Energy Partners, a research firm, estimates replacing the 83% of current U.S. generation that is not renewable with solar photovoltaic, wind and biomass would cost $2.9 trillion—nearly a full year’s tax revenue.
This excludes any cost for interest, operations, maintenance, new transmission lines or compensation to private investors for writing off natural-gas and coal plants with plenty of useful life left. It assumes cheap battery storage that doesn’t yet exist. Even so, this works out to $83 to avoid one metric ton of carbon dioxide.
The Green New Deal’s plan to upgrade every building in the U.S. to “maximum energy efficiency” is even more questionable. A study by Meredith Fowlie, Michael Greenstone and Catherine Wolfram in the Quarterly Journal of Economics found the federal government paid an average of $4,585 each to weatherize homes in Michigan. Extrapolate that to 95 million homes nationwide, and the bill tops $400 billion. The cost of avoided carbon dioxide: up to $285 per ton.
To understand how high $83 to $285 per ton of carbon dioxide is, consider that Barack Obama’s economists put the economic harm of a ton of CO 2 at $50. Or that you can pay a power producer
- $6 to reduce emissions by one ton in New England,
- $15 in California, and
- $25 in the European Union,
based on emission permit prices in those jurisdictions, notes Mr. Greenstone, an economist at the University of Chicago.
Yet in the Green New Deal, trillion-dollar price tags are a feature, not a bug. That is because its mission is to create “millions of good, high-wage jobs” in “front-line and vulnerable communities.” The higher the price tag, the more jobs it creates. How to pay for it? Its Democratic sponsors would raise taxes on the rich and borrow the rest, including from the Federal Reserve, just as the U.S. did during World War II, dramatically boosting output and employment.
But in 1941, the U.S. had plenty of unused resources to mobilize: just 28% of prime-aged women had jobs. By 1945, 35% did and today, 74% do. (The data aren’t strictly comparable due to changing definitions.) The war effort still spurred intensive inflation pressure, contained only with wage and price controls. The U.S. is now close to full employment and its debts are far higher. Even in today’s world of low inflation and low interest rates, the scale of deficit spending the Green New Deal implies would likely push both higher.
Republicans and business groups have long fought even modest costs to mitigate climate change. Jacking up the price to finance left-wing Democratic priorities will only intensify their opposition. Indeed, Republicans and President Trump are itching to run against the Green New Deal. This guarantees inaction on climate unless Democrats win the White House, House of Representatives and 60 Senate seats.
What the U.S. needs is the Green New Deal’s sense of urgency combined with market mechanisms that incentivize carbon reduction at the lowest price, such as a carbon tax, carbon credits or tradable emission permits. This will also spur innovation that other countries can adopt to tackle their own emissions, which will be 88% of the global total by 2040.
.. Now it is the focus of a distinctly 21st-century challenge: turning the dam into a vast reservoir of excess electricity, fed by the solar farms and wind turbines that represent the power sources of the future... wants to equip it with a $3 billion pipeline and a pump station powered by solar and wind energy. The pump station, downstream, would help regulate the water flow through the dam’s generators, sending water back to the top to help manage electricity at times of peak demand.
The net result would be a kind of energy storage — performing much the same function as the giant lithium-ion batteries being developed to absorb and release power... The Hoover Dam project may help answer a looming question for the energy industry: how to come up with affordable and efficient power storage.. when solar and wind farms produce more electricity than consumers need, California utilities have had to find ways to get rid of it — including giving it away to other states — or risk overloading the electric grid and causing blackouts... The target for completion is 2028, and some say the effort could inspire similar innovations at other dams... Using Hoover Dam to help manage the electricity grid has been mentioned informally over the last 15 years. But no one pursued the idea seriously until about a year ago, as California began grappling with the need to better manage its soaring alternative-electricity production — part of weaning itself from coal-fired and nuclear power plants... estimated that utility-scale lithium-ion batteries cost 26 cents a kilowatt-hour, compared with 15 cents for a pumped-storage hydroelectric project. The typical household pays about 12.5 cents a kilowatt-hour for electricity... engineers propose building a pump station about 20 miles downstream from the main reservoir, Lake Mead.. “Hoover Dam is ideal for this,” said Kelly Sanders, an assistant professor of civil and environmental engineering at the University of Southern California. “It’s a gigantic plant. We don’t have anything on the horizon as far as batteries of that magnitude.”.. “With lithium-ion batteries, you have durability issues,” Mr. Narayan said. “If they last five to 10 years, that would be a stretch, especially because we expect to use these facilities at full capacity. It has to be 10 times more durable than it is today.”.. its proposal would increase the productivity of the dam, which operates at just 20 percent of its potential, to avoid releasing too much water at once and flooding towns downstream.
President Trump is increasingly intervening in the economy, making decisions about corporate winners and losers in ways that Republicans for decades have insisted should be left to free markets — not the government.
.. On Friday, citing national security, Trump ordered the Energy Department to compel power-grid operators to buy from ailing coal and nuclear plants that otherwise would be forced to shut down because of competition from cheaper sources.
.. The order came one day after the president imposed historic metals tariffs on some of the country’s strongest allies and trading partners. Now the Commerce Department is further picking winners and losers as it weighs thousands of requests from companies for waivers from the import taxes.
“It replaces the invisible hand with the government hand,” said Mary Lovely, a Syracuse University economist. “You’re replacing the market with government fiat.”
.. The president has chastised individual companies, second-guessed the U.S. Postal Service’s business arrangement with Amazon and put pressure on Boeing and Lockheed Martin over the cost of their products.
No world leader has tried harder to get on President Trump’s good side than Japanese Prime Minister Shinzo Abe. Whether racing to New York the day after the 2016 election and presenting Trump with a $3,755 gold-plated golf driver, or taking him out on the golf course and serving hamburgers for lunch, Abe has cultivated a close personal relationship with his American counterpart.
.. But now, Japan, which is not just led by a friendly politician but also is a key security ally of the United States, looks likely to be slapped with tariffs on its steel exports to the United States. And to add insult to injury, the reason, Trump says, is rooted in national security.
“The U.S. is suddenly treating Japan as a target,” said Tsuyoshi Kawase, a professor of international trade policy at Sophia University in Tokyo. “The Japanese side is bewildered and confused.”.. countries that figured, no matter the bumps in relations with Washington, they would wind up on the same side against China in any dispute over steel or unfair trade practices. And yet suddenly there is talk of a trade war between the United States and its supposed friends... Even those leaders who have grown accustomed to the zigs and zags of the Trump White House say this could be different. The consequences of Trump’s targeting other priorities — the Paris climate agreement and the Iran nuclear deal chief among them — have not had an immediate, concrete effect. But the tariffs could soon put citizens in ally nations out of work, and if a trade war escalates, all sides could feel the pain, officials from Brasília to Brussels to Seoul say.“The impulsiveness of the decision caught us by surprise,” said Diego Bonomo, the head of foreign trade at the National Trade Association of Brazil. His country is the second-largest exporter of steel to the United States.
“It’s an economic shot in the foot,” he said. “When they impose tariffs to hurt Brazilian steel, they hurt their own coal exports and exports of products that use steel.”
.. Trump’s order came hours after Japan and 10 other countries formalized a new Pacific free-trade agreement
.. The announcement also upended a Saturday meeting of the top U.S., E.U. and Japanese trade negotiators, who were originally scheduled to convene to talk about how to take on what they say is China’s unfair support for its steel industry. Instead, officials say, the meeting may turn out to be the first salvo in an unfolding and escalating trade skirmish.
.. The frustration is compounded by Trump’s national security rationale. In fact, say U.S. allies, there is no national security risk to importing steel and aluminum from one’s closest military partners. And any move that damages their own industries also hits at overall NATO readiness and hurts trust among allies, they say.
.. But that response could backfire, some analysts say. If the WTO rules against the White House, and Trump chooses to ignore the ruling, that could effectively spell the end of the organization.
.. “To be honest, everyone kind of agrees with us,” said the official, who spoke on the condition of anonymity to discuss closed-door European efforts. “I haven’t found anyone who says, ‘No no, the president is right.’ ”
.. The prospect of steel tariffs follows on the heels of similar levies on solar panels and washing machines. But it comes at a sensitive time on the front of North Korean diplomacy.
.. tariffs could have a “negative impact on South Korea-U.S. relations,”
.. Many in Japan worry that Trump’s effort may ultimately undermine global security, not bolster it.
“When trade friction grows between allies, the alliance is weakened,” Watanabe said. “But it’s unclear if Trump understands that.”
About washing machines: The legal basis of the new tariff is a finding by the United States International Trade Commission that the industry has been injured by rising imports. The definition of “injury” is a bit peculiar: The commission admitted that the domestic industry “did not suffer a significant idling of productive facilities,” and that “there has been no significant unemployment or underemployment.” Nonetheless, the commission argued that production and employment should have expanded more than it did given the economy’s growth between 2012 and 2016 (you know, the Obama-era boom Trump insisted was fake).
.. Everything we know about the Trump administration suggests that hurting renewables is actually a good thing from its point of view. As I said, this is an administration of dirty old men.
.. Over all, there are around five times as many people working, in one way or another, for the solar energy sector as there are coal miners.
.. Last fall, Rick Perry, the energy secretary, tried to impose a rule that would in effect have forced electricity grids to subsidize coal and nuclear plants. The rule was shot down, but it showed what these guys want. From their point of view, destroying solar jobs is probably a good thing.
.. what’s good for the Koch brothers may not be good for America (or the world), but it’s good for G.O.P. campaign finance. Partly it’s about blue-collar voters, who still imagine that Trump can bring back coal jobs. (In 2017 the coal industry added 500, that’s right, 500 jobs. That’s 0.0003 percent of total U.S. employment.)
.. It’s also partly about cultural nostalgia: Trump and others recall the heyday of fossil fuels as a golden age
.. But I suspect that it’s also about a kind of machismo, a sense that real men don’t soak up solar energy; they burn stuff instead.
.. You shouldn’t even call it protectionism, since its direct effect will be to destroy far more jobs than it creates. Plus it’s bad for the environment. So much winning!
So California especially, they balance solar with natural gas. In Germany, they balance wind with coal. And this leads to this very ironic situation where the places with the highest penetration of renewables also have greenhouse gas emissions which are going up.
DAVIES: And this is a fascinating thing that you describe where a utility will literally have an old plant running on fossil fuels – coal or diesel – and it sits idle until there’s a decline in some other energy source. And then they fire up this expensive, antiquated, polluting equipment?
BAKKE: Exactly. Yeah, either a dip in another energy source or a big surge in use. So we usually use – they’re called peakers, and we usually use them, for example, on a very hot August day when everyone turns up their air conditioning. So that’s another case where the plants that are making electricity aren’t making enough. And so these plants have to get turned on.
But you need all the coal sitting around to run them. You need the people sitting around to be called in to run them because they’re complicated machines – giant complicated machines.
DAVIES: So if we – if the people, if the utilities, if the grid could figure out a way to manage all this renewable energy coming in and not have to have these old, antiquated plants at the ready, it would save a lot of money, effort and pollution, right?
BAKKE: Absolutely. Absolutely. And one of the things, for example, that Texas is doing right now, they have the highest amount of wind energy in the country. And they – their – Texas wind blows at night, so they’ve done two funny things. One is that there’s one utility that just gives away electricity after 9 p.m.
So the electricity is free, again, because they need people to use it. So everybody at 9:00 p.m., everybody sort of stands up and turns on their dishwasher
.. I think that this idea – the idea that with either zero or we’ve failed needs to be put aside a little bit to say, what would it look like if we could get to 80 percent? How would we have to revive – what would we have to do to the system in order to get to 80 percent renewables – because once we can do that, then we can look at and say, how do we get to 90 percent – as opposed to this sort of we’re going to completely eliminate any kind of fossil fuel, leave it all on the ground, and we’re going to run all on renewables.
The upside of renewables is that they can for sure make more electricity than we need. There’s not – there’s not a shortage problem. There’s, in a way, an excess problem. But that is not – that’s not the issue. That’s in part why I feel like this book actually matters is because it’s not about generation. That’s not the end of the story. That’s the beginning of the story. And the rest of the story is about the ways in which we use that power, the ways in which we transmit that power, the ways in which we care for that power, we store that power or we don’t store it, we balance it – all of these grid-related sort of human questions.
So, yes, absolutely, I think it’s absolutely possible. But let’s get to 50 percent. Let’s get to – I think 80 percent – by the time we get to 80 percent renewable and integration, we are going to have confronted all of the big problems that are facing us right now.