A low-carbon national energy agenda

By Daniel M. Kammen, January 16, 2009

The United States must begin immediately retooling its economy to build a low-carbon, environmentally sustainable future, which in turn can strongly influence the global economy and geopolitics. With the production and consumption of energy the largest component of the U. S. economy in terms of both the flow of money and the movement of goods, this task will require a well-coordinated, interdisciplinary focus across federal and local governments and the private sector. Our current reliance on fossil fuels–the annual U.S.

The United States must begin immediately retooling its economy to build a low-carbon, environmentally sustainable future, which in turn can strongly influence the global economy and geopolitics. With the production and consumption of energy the largest component of the U. S. economy in terms of both the flow of money and the movement of goods, this task will require a well-coordinated, interdisciplinary focus across federal and local governments and the private sector. Our current reliance on fossil fuels–the annual U.S. imported fuel bill is on the scale of the recent $700 billion financial sector bailout–means we start out each year already in the hole.

The recent economic downturn makes it even more politically challenging to launch significant new programs. Yet, a U.S. energy agenda focused on innovation and sustainability could result in significant job creation and stabilized energy costs, and could reposition the United States as a global leader. The focus of the recent congressional economic stimulus package on energy research and the need for expanded investment in the electric grid to enable a low-carbon mix of power options is a strong, positive signal that Capitol Hill is taking the opportunities and needs of the energy sector to heart. This is good news for the economy and the environment.

The international scientific community and the Intergovernmental Panel on Climate Change agree that humans need to reduce global greenhouse gas emissions by at least 80 percent over the next five decades. Even with reductions of this magnitude, however, global warming could still cause significant ecological and environmental harm. As such, the United States should take an organic approach and begin curbing emissions at once, while closely participating in the evolving climate science that will be the ultimate guide to the dangers that lurk in the global greenhouse. Among its many tasks, Barack Obama’s administration will likely prioritize the following actions:

1. Devise and enact a clear overall vision of an integrated energy and climate policy framework.

This is job number one. The scope and complexity of the energy sector demand that any effort to make such a profound change reach across all government agencies, from national to state, regional, and local, and across all aspects of our society. This degree of integration requires a framing vision. President-elect Obama voiced an inclusive and clear vision in campaign statements and in the exceptionally clear message he delivered to the November 2008 Bi-Partisan Governors Climate Summit in Los Angeles. The challenge for the next several years is to make operational this exceptional vision.

2. Develop and utilize metrics that permit policy makers and the public to evaluate the climate and energy security impacts of energy and economic choices.

Today, the environmental and economic implications of decisions–from the personal to the household level, and from the city to the federal level–are hidden from view. Without metrics that make the life-cycle impacts of their choices explicit, government agencies, citizens, and businesses will not be able to integrate low-carbon planning into their decision-making processes. Life-cycle or “cradle to grave to cradle” methods also facilitate the vital expansion of sustainable energy and other economic activities, such as water management, agricultural practices, and consumer purchases.

3. Invest in energy research and development–and deployment.

Approximately 3 percent of U.S. gross domestic product is invested in all areas of research and development in the United States; for energy research, the total is only about one-tenth of that level. By contrast, research and development investments in medical and biotech fields total roughly 15 percent of industry sales, 40 times greater than the amount invested in energy. The U.S. government needs to dramatically increase–and sustain–its investment in energy research and development. A research and development, or “demand push,” portfolio is vital, but such investments won’t be effective without offering a clear market opportunity, or “demand pull.” Setting a price for carbon emissions will provide sufficient pull in the long term, however, emissions targets for industrial sectors and policies such as renewable energy portfolio standards or feed-in tariffs can be expanded as effective interim policies. Past public investments of this sort have been repaid many times over. A well-organized and successful 1990s campaign to double the federal medical/biotech research and development budget increased private-sector investment and innovation eleven- to twelve-fold.

4. Implement a price for greenhouse gas emissions.

Without a price on greenhouse gas emissions, the United States faces an uphill battle toward energy security. A price signal would reward clean-energy decisions and unleash diverse powers of innovation. The ongoing debate about the best mechanism to set this price–either through a cap and trade system, a cap and dividend (return to individual citizens) system, a direct carbon fee, or some other mechanism–is vital, but stakeholders must not let the difficult task of agreeing on how to implement this policy spiral into endless and destructive political infighting.

5. Encourage, reward, and learn from low-carbon innovations at all scales.

More than 700 cities worldwide and a majority of U.S. states have implemented innovative low-carbon policies. These efforts are vital to instituting a sustainable energy economy, serving as a test-bed for programs before they are adapted and implemented at national and international levels. For example, cities are developing “municipal financing districts” where a bond offering provides the up-front costs for property owners to install renewable energy systems and efficiency measures. This is paid for through increased property tax assessments. The federal government can dramatically facilitate these efforts by changing tax law to extend the program to renters and facilitating both residential and commercial properties. My laboratory developed and maintains a set of online calculators and resources to aid cities in evaluating the financial carbon abatement and job-creation potential of this program.

6. Invest aggressively in energy efficiency.

Energy efficiency efforts have proven to be exceptionally good investments. Even without aggressive and pervasive efficiency efforts, annual savings from the best lighting, heating, and insulation programs save the nation several hundred billion dollars per year. A national commitment to energy efficiency–as laid out, for example, in the American Physical Society’s “Think Efficiency” report–can save huge amounts of money and reduce carbon emissions. Importantly, a national commitment will send the strongest signal to the global consumer electronics, appliance, and lighting industries that want to sell their products in the United States.

7. Prioritize research, planning, and deployment of clean-energy enabling transmission and storage technologies.

Growth of the renewable energy sector is critically dependent on the expansion of transmission capacities that link the areas of best solar and wind energy supply to population centers and industry. A national planning effort to identify these critical low-carbon transmission corridors and to construction them will require the integrated efforts of the Energy Department, the Interior Department, the Environmental Protection Agency, and the Federal Energy Regulatory Commission.

8. Focus on sustainable transportation.

A range of low-carbon transportation options exist, but federal agencies and businesses need to develop further technologies and practices. Low-carbon and ecologically sustainable fuels, plug-in hybrid and fully electric vehicles, and expanded mass-transit options all could reduce the environmental (and economic) impact of transportation. Significant federal investment, however, is needed to compensate for the slow turnover of vehicle fleets and the high-costs of many new technologies (e.g. batteries). Federal and state officials should consider and deploy a range of mechanisms to support sustainable transportation, including federal insurance programs against plug-in hybrid electric vehicle battery failure, “feebate” programs that tax polluting vehicles and reward the purchase of efficient and low-carbon vehicles, and congestion charging.

9. Assert a global leadership role in climate protection.

It is vital for the United States to embrace fully this issue. The United States and China together account for almost half of all greenhouse gas emissions today. Coal power production remains a major climate problem for each nation, but both also have exceptional wind and solar thermal energy resources. Coordinated research and deployment efforts in each nation could transform the global carbon equation. To assert its leadership on these issues, the United States should also help to shape the successor treaty to the Kyoto Protocol and engage enthusiastically in the International Renewable Energy Agency initiative.

10. Make sustainable communities a hallmark of U.S. development assistance.

The poor suffer most immediately from current global energy trends. Sustainable energy services for the poor should be more central to U.S. foreign aid and development projects and use the same metrics of cost and carbon effectiveness that are needed for U.S. projects and agencies. Sustainable energy–from improved stoves to locally produced and managed solar, wind, hydropower, and biofuel resources–can also directly improve the social and economic opportunities for disadvantaged minority groups, women, and children.

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