The Next
President’s First Task [A Manifesto]
by Robert F. Kennedy Jr. May 2008
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 strongest economy.
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.
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