2Sustain

We are in the political season, and that means public policy debates are front and center in the media, in Washington, and on the campaign trail. While we are used to partisan disagreement on debates around climate change and energy policy, and for that matter most issues, I must say it is a bit disappointing to see the Presidential candidates politicize these issues as has happened in recent weeks. I’m speaking about the recent calls by Senators McCain and Clinton for a national gas tax “holiday” this summer. This proposal speaks directly to what is wrong with our approach to national energy policy, and our government’s response to climate change. 

For those not following the debate here is a short summary. Senators
McCain and Clinton favor suspending the Federal gasoline tax for the
summer driving months — roughly 18.4 cents per gallon. The cost to the
government would be about $9 billion in lost tax revenues which would
otherwise be used to fund infrastructure projects like roads and
bridges. The savings, ostensibly, would reduce the strain on American
families this summer as $4.00/gallon gas arrives across the nation.
Sounds like a sensible enough idea right? Well, no actually. In fact it
is an incredibly bad idea that will likely wind up increasing gas
prices, reducing much needed tax dollars for infrastructure, and
increasing carbon emissions. Obama, for his part, is against the
proposal. But rather than discuss the candidate’s positions, my point
here is to observe that the mere fact that this “gas tax holiday” has
become a front-and-center issue says a lot about the seriousness – or
lack of thereof — with which we are addressing climate change and
energy policy.

Rather than paraphrase what every economist and energy policy expert in the nation is saying about the issue, I’d like to refer you to one of the nation’s foremost thinkers for his take on the matter — Thomas Friedman. I would suggest the piece below as essential reading for anyone seeking to understand what is wrong with our national energy policy. Friedman lays out not only a clear case as to why the gas tax “holiday” is a ludicrous idea, he also ties this election-cycle issue back to the larger issue at hand — what he calls the “national policy brownout.”

I could not agree more strongly with Friedman’s sentiment that we as a nation are never going to make progress on climate change without getting serious. Serious means aggressive goal-setting, massive investment, shared sacrifice and a multi-generational commitment. Unfortunately by politicizing issues such as national energy policy we not only convey to the rest of the world our reluctance to meaningfully address these issues, we actually go backwards as a society as the expectation is set that complex problems can be solved with puerile solutions.

Thomas Friedmans’ piece is upsetting in that it speaks to just how many miles we have to go on this journey…and it is really worth reading:   

Thomas Friedman — “Dumb As We Want To Be” — April 30, 2008:

"It is great to see that we finally have some national unity on energy policy. Unfortunately, the unifying idea is so ridiculous, so unworthy of the people aspiring to lead our nation, it takes your breath away. Hillary Clinton has decided to line up with John McCain in pushing to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this summer’s travel season. This is not an energy policy. This is money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks. What a way to build our country.

When the summer is over, we will have increased our debt to China, increased our transfer of wealth to Saudi Arabia and increased our contribution to global warming for our kids to inherit.

No, no, no, we’ll just get the money by taxing Big Oil, says Mrs. Clinton. Even if you could do that, what a terrible way to spend precious tax dollars — burning it up on the way to the beach rather than on innovation?

The McCain-Clinton gas holiday proposal is a perfect example of what energy expert Peter Schwartz of Global Business Network describes as the true American energy policy today: “Maximize demand, minimize supply and buy the rest from the people who hate us the most.”

Good for Barack Obama for resisting this shameful pandering.

But here’s what’s scary: our problem is so much worse than you think. We have no energy strategy. If you are going to use tax policy to shape energy strategy then you want to raise taxes on the things you want to discourage — gasoline consumption and gas-guzzling cars — and you want to lower taxes on the things you want to encourage — new, renewable energy technologies. We are doing just the opposite.

Are you sitting down?

Few Americans know it, but for almost a year now, Congress has been bickering over whether and how to renew the investment tax credit to stimulate investment in solar energy and the production tax credit to encourage investment in wind energy. The bickering has been so poisonous that when Congress passed the 2007 energy bill last December, it failed to extend any stimulus for wind and solar energy production. Oil and gas kept all their credits, but those for wind and solar have been left to expire this December. I am not making this up. At a time when we should be throwing everything into clean power innovation, we are squabbling over pennies.

These credits are critical because they ensure that if oil prices slip back down again — which often happens — investments in wind and solar would still be profitable. That’s how you launch a new energy technology and help it achieve scale, so it can compete without subsidies.

The Democrats wanted the wind and solar credits to be paid for by taking away tax credits from the oil industry. President Bush said he would veto that. Neither side would back down, and Mr. Bush — showing not one iota of leadership — refused to get all the adults together in a room and work out a compromise. Stalemate. Meanwhile, Germany has a 20-year solar incentive program; Japan 12 years. Ours, at best, run two years.

“It’s a disaster,” says Michael Polsky, founder of Invenergy, one of the biggest wind-power developers in America. “Wind is a very capital-intensive industry, and financial institutions are not ready to take ‘Congressional risk.’ They say if you don’t get the [production tax credit] we will not lend you the money to buy more turbines and build projects.”

It is also alarming, says Rhone Resch, the president of the Solar Energy Industries Association, that the U.S. has reached a point “where the priorities of Congress could become so distorted by politics” that it would turn its back on the next great global industry — clean power — “but that’s exactly what is happening.” If the wind and solar credits expire, said Resch, the impact in just 2009 would be more than 100,000 jobs either lost or not created in these industries, and $20 billion worth of investments that won’t be made.

While all the presidential candidates were railing about lost manufacturing jobs in Ohio, no one noticed that America’s premier solar company, First Solar, from Toledo, Ohio, was opening its newest factory in the former East Germany — 540 high-paying engineering jobs — because Germany has created a booming solar market and America has not.

In 1997, said Resch, America was the leader in solar energy technology, with 40 percent of global solar production. “Last year, we were less than 8 percent, and even most of that was manufacturing for overseas markets.”

The McCain-Clinton proposal is a reminder to me that the biggest energy crisis we have in our country today is the energy to be serious — the energy to do big things in a sustained, focused and intelligent way. We are in the midst of a national political brownout."