Fighting economic decline and climate change simultaneously
As a new administration took over in Washington in the midst of a massive economic decline, the media kept asking members of the new energy and environment team if the U.S. could “afford” their agenda in light of the economic condition of the nation. (Witness the Washington Post interview with Carol Browner.) The New York Times reported on Jan. 18:
Given a choice between stimulating the economy and protecting the environment, 58 percent of Americans said it was more important to stimulate the economy, compared with 33 percent who chose protecting the environment. In April 2007, 36 percent said it was more important to stimulate the economy, compared with 52 percent who chose the environment.
No doubt the priority given the economy today would be greater, given Friday’s numbers on job losses and unemployment.
But it’s a silly question and a false, unnecessary choice. It hides the most rational course of action: doing both simultaneously.
The question ignores the fact that a public dollar — or $1 trillion such dollars — can be spent in ways that simultaneously:
- produce new jobs and incomes,
- help fight global warming, and
- save money for people on tight budgets.
Public investment in the energy efficiency of homes and other buildings can do all of that — and might even make it easier for budget-strapped homeowners to pay their mortgages, so it could stabilize neighborhoods and help unfreeze the lending system as well. That’s a pretty powerful answer to those who say we can’t afford green concerns because of economic problems.
A dollar can accomplish more than one objective at a time. The problem is that we have come to think of “efficiency” as pursuing a single objective at the expense of all others, even those that might logically be complementary. Environmental advocates see industry only as sacrificing the environment to the efficient pursuit of profit maximizing. Industry for too long has seen environmentalists only as regulating and constraining their pursuit of profits. Of course, it is difficult for private parties — businesses pursuing profits, or neighborhood residents protecting their air or well water quality — to pursue multiple objectives at once. That’s a role for government. It’s a role government plays exceptionally well.
This brings us to the U.S. in 2009: facing huge government deficits, uncertain energy costs, rising unemployment and growing poverty, and a threat from global warming that requires action sooner rather than later. The spending legacy from 2008 includes a $700 Billion “Toxic Assets Relief Fund,” of which half has been spent in ways that seem to have had no effect, and plans going forward include spending the other $350 Billion of TARF money and implementing a massive, ~$800 billion stimulus plan.
If there was ever a time we needed efficiency in pursuit of multiple goals, it’s now.
Economists are well aware of the need to make each dollar do more. See Principles For Economic Recovery And Financial Reconstruction From Progressive Economists (PDF). Among the most efficient ways to do so are investments in energy efficiency and related infrastructure, as well as in technology development to promote renewables and new forms of efficiency not yet imagined. This is not news: The Political Economy Research Institute and Center for American Progress released Green Recovery: A Program to Create Good Jobs and Start Building a Low-Carbon Economy (PDF) way back in September 2008. My background is in state and local economic development as well as environmental protection, and I find their arguments appealing.
Yes, we can have economic revitalization that serves long-term sustainability. But we need to transition carefully and avoid generating unnecessary economic, political, social, and environmental costs in the process. Like it or not, that is likely to mean:
- Not closing all coal mines and coal and nuclear generating plants tomorrow, or next week, or next year. (Yes, we can stop building them, but we need to be building their alternatives.)
- Not calling for federally mandated congestion pricing or anti-sprawl measures or other actions as conditions for federal aid to states and cities (at least not yet … the time will come).
- Not telling people to drastically change their lifestyles now (though eventually they probably will have to, and we should shift technology priorities to make it easier).
- Not spiking CAFE standards for auto fuel efficiency as far as we’d like and know to be technologically feasible, because U.S. manufacturers will find it harder to jump that high than will their competitors, and we can’t afford more U.S. job losses right now.
- Not taxing carbon or oil or gas anywhere near what their externalities (economic as well as environmental) would suggest, unless we can protect households and businesses from additional costs when they don’t have the capital to invest in avoiding them.
- Recognizing that the distributional consequences of proposed environmental policies are important, that environmental justice has to be pursued, and that equity breeds efficiency by, at a minimum, lowering resistance from possible allies.
Change is coming, folks, and I’m all for that … but it won’t be easy, and ideological or environmental purity won’t get us where we need to go, not without autocratic control. (Do you want that? We had a taste of tendencies in that direction for the past eight years.)
So let’s not forget some long-standing and well-worn advice from the consummate politician:
“It must be considered that there is nothing more difficult to carry out … than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who could profit by the new order, this lukewarmness arriving partly from fear of their adversaries … and partly from the incredulity of mankind, who do not truly believe in anything new until they have had an actual experience of it.”
You’ve may well have seen the first sentence of that quote from Niccolo Machiavelli in The Prince. It’s the most quoted section. But it is the rest of the argument that is the key to moving forward on climate change and economic redevelopment in the Obama era.