Obama’s Energy Advisor Speaks to Technology Investment

Cross-posted from the Breakthrough Blog.

Obama took a great step last fall when he announced $150 billion over ten years for clean energy. A large and ever-growing number of energy experts believe the number should be at least twice as big, but this was a major improvement over the 2004 Presidential race when John Kerry put a whopping $0 on the table despite efforts by the Apollo Alliance.

It was interesting, then, to read an interview this week with one of Obama’s top energy and climate advisors, Jason Grumet, Executive Director of the National Commission on Energy Policy. It gave a bit of insight into how Obama and his advisers think differently about the energy challenge and the role of technology and infrastructure investment. I took away a few gold nuggets.

On the importance and opportunity of public investment:

There is going to be a new generation of public investment, an opportunity to rethink, retool, and reconstruct some of our core systems, transportation and others. It’s in some ways a tremendous opportunity.

On the role of investment to achieve technological breakthroughs:

But the challenges of getting 30 or 40 or 50 percent of our electric power from renewable resources are also immense. They will require tens and hundreds of billions of dollars of investments in energy distribution. They will require real breakthroughs in battery technology to deal with the intermittency issue. There are going to be human-resource and natural-resource issues we come up against. There is an imagination that distributed energy is somehow easy and friendly, but we’ve seen, as we try to site what many of us thought would be embraced as small, benign windmills and solar facilities, rather strident opposition from many local communities.

On the role of research and technological experimentation:

The last thing I’ll say is that we cannot run a far-reaching national research project to discover those new technologies if we are not willing to tolerate failure. The problem we have right now at [the Department of Energy] is we challenge them to achieve breakthroughs, and every time something doesn’t work, they get dragged up and humiliated. We have to have an honest conversation which recognizes that part of discovery is failure. The stakes of climate change and energy dependence are high enough that we have to go into these efforts recognizing that we will be devoting resources to technologies that will not pan out, and the trick is to be able to recognize that and move on.

However, questions remain on Grumet’s strategy on coal and it’s greatest consumer, China. On one hand, he recognizes that a coal moratorium isn’t a real strategy unless there’s a cost-competitive alternative, especially in China. But he goes on to say that a modest carbon price should do the trick:

Most of the analysis I’ve seen suggests that, with a carbon price starting in the $15 [per ton] range and ramping up over time, it becomes uneconomic to build and operate a new coal facility.

So why is Europe, which has established a significant price on carbon with its emissions trading scheme, building 50 new coal plants?

Grumet doesn’t directly say that China will follow U.S. leadership on cap and trade and carbon pricing — a fairly rosy-eyed assumption. But he seems to imply it:

[Obama] does not believe we are going to have to bludgeon other countries into appreciating their own self-interest… The Chinese are going to suffer the impacts of it much more harshly and immediately than we will…

The U.S.’s inaction has been a real obstacle to the rest of the world. Imagine yourself trying to convince 1.4 billion Chinese people that it’s time to step up while the United States refuses to do so. We have an optimism that once we put a forceful foot forward, that in and of itself will dramatically change the debate in a way that’s less combative and more collaborative.

The better question is, how do you convince people striving to achieve basic material comforts to pay more for energy? As a Chinese government official reminded us recently, “You cannot tell people who are struggling to earn enough to eat that they need to reduce their emissions.”

How about an unwavering commitment to direct Obama’s clean energy investments toward reducing the real unsubsidized price of clean energy below that of coal, and a joint technology transfer program with China and India to make sure these technologies get to scale? Now that would be audacious.

2 Responses to “Obama’s Energy Advisor Speaks to Technology Investment”

  1. 1 Carlos Rymer May 8th, 2008 at 6:49 pm

    It’s been shown many times that the number should be annually if we are going to really avoid tipping points. Otherwise, it’ll be money wasted, in my opinion, because we’ll hit tipping points anyways. We’re not dealing with a curve in which the consequences are directly related to how much we spend. We are dealing with either below or above tipping points. We stay below and we’re probably safe. We go above and we get the same blow as if we did nothing or spent $100 or $1 billion dollars. Obviously the politicans don’t see it that way (which I think is reality).

  2. 2 Roman D. Nov 22nd, 2008 at 9:38 pm

    Not true. There is a very clear difference between investing this much and accept deaths of 1 million people around the globe, and spending that much and cause deaths of 100 million people around the globe. In a way we reached a tipping point already. There is no doubt among scientists that the destructiveness of Katrina for example was amplified by the sea temperature two degrees above its normal levels – caused by the climate change, caused by the dirty energy production. We change our energy policies now, there will be 5 more Katrinas. We change them in 5 years, we’ll have 50 more Katrinas.
    This is not an “either/or” issue. This is “the sooner the better” issue. We will eventually have to change our ways, no question about it. The difference is that if we fully get started on this thing right now, then we can take advantage of the opportunity. If we do not, somebody else will.

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About Teryn

Teryn Norris is a leading young policy strategist and currently serves as President and Founder of Americans for Energy Leadership.

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