Ted Nordhaus and Michael Shellenberger are two passionate but confused individuals. They lambaste “environmentalists” for being fixated with a “pollution paradigm” that operates by “limiting human power” and by “increasing the cost of dirty energy.” This approach, they argue, will not solve global warming. What is really needed is a five to ten-fold increase in government expenditures on “breakthrough” energy technologies.
While their opinions are strong, their grasp of the facts is not. Unquestionably, we need to shift from dirty energy to clean in order to solve global warming. Groups like NRDC and others active in the fight to prevent global warming are supporting legislation that will speed this shift. We call for a rapid embrace of already developed clean energy resources, spurred by a smart program that guarantees reductions in U.S. global warming pollution. What Nordhaus and Shellenberger fail to grasp is that such technologies exist but are hobbled by the fact that businesses today make more profit supplying dirty energy than clean.
The authors are wrong in their claim that we have to wait for new “breakthrough” technologies before we can move away from dirty resources. And they are wrong in claiming that a big government funded program is the critical missing piece to make the shift to clean energy happen.
Their claim that a “consensus” exists that we cannot cut global warming pollution substantially with clean energy solutions ready today is refuted by Socolow and Pacala’s seminal 2004 “wedges” paper in Science. The Intergovernmental Panel on Climate Change’s reports released earlier this year also documented the large potential of existing energy technologies to meet growing energy needs without increasing global warming pollution.
Between now and 2030 over $17 trillion will be invested globally to meet the growing demand for energy services. Nearly all of this will be spent on fuels and conversion methods selected by private sector actors chasing profitability. The challenge is to focus the incredible power of these private sector actors on energy investments that minimize carbon emissions. To move at the pace and scale required to prevent the worst impacts of global warming we need policies that make clean energy products and services a superior business proposition.
Policies that require a clear and steady reduction in emissions will move the private sector in the right direction faster than any government funded program by itself. With a schedule of declining caps on emissions as the law of the land, entrepreneurs in firms large and small will know there is a growing market for clean energy innovations. They will help the nation meet targeted emissions reduction at the lowest possible cost.
Nordhaus and Shellenberger ignore the reality of the energy marketplace when they argue that the most important policy to drive new technology is a large government funded program. While incentive funding measures can be an important complementary strategy for clean energy deployment, by themselves they will not move the private sector at the required pace.
In arguing for “breakthrough” technologies rather than deployment of today’s clean energy solutions, Nordhaus and Shellenberger are peddling the same false choice the Bush administration has used to justify its retrograde policies for the past seven years. The convenient truth is that with intelligent policies to make clean energy more profitable we can get started today and we can set in motion the forces that will deliver the additional breakthroughs we need in the coming decades.
This is not an “environmentalist” pipe dream. It is the judgment of the leaders of 27 of the largest American businesses, who have joined with NRDC and others in the U.S. Climate Action Partnership (USCAP), calling for a mandatory declining cap on U.S. global warming emissions. Its members include large energy producers and consumers such as Shell, Rio Tinto, Duke Energy, and Alcoa. These Fortune 500 companies recognize that their future business model depends upon the shift to low carbon technologies and efficiencies made possible through a national program of required emission reductions.
While necessary, it is also true that an emissions cap on carbon isn’t sufficient to drive the more profound technology changes we need to harmonize economic growth and climate protection. That is why USCAP has called for a program that combines a emissions caps with complementary policies and measures to speed the deployment of big change technologies in critical areas like power generation, vehicle design, and new fuels. Such complimentary policies include setting standards for renewable energy, high mileage vehicles, low carbon fuels, and energy efficiency.
As a closing example of the sloppiness of the Nordhaus and Shellenberger polemic, consider this sentence: “To be sure, the effort to reduce and stabilize global greenhouse gas emissions will require a major regulatory effort to make sure that everyone is playing by the same rules, provide a stable investment environment for nations and businesses, and increase the cost of fossil fuels relative to cleaner energy sources.” A “major regulatory effort”? Is this the same effort earlier dismissed as not the most important priority? “Increase the cost of fossil fuels relative to cleaner energy sources”? Is this the agenda the authors earlier claimed (incorrectly) that environmentalists were misguidedly pursuing?
Nordhaus and Shellenberger have had some useful thoughts to contribute to the topic of how to best align human goals for economic well being with the reality that all economies depend on a healthy and well-functioning set of complex ecosystems. But this latest broadside misses the mark by a mile.