How We Can Survive the Age of Energy Anxiety

This article is reprinted from the American Prospect.

The camera pans in on a scene in a simple American bedroom. An elderly woman sits on the bed, getting dressed to venture out into the cold. She puts on an old coat, over the top of another coat, and then a scarf and hat. Just when we think she's going to get up, she turns off the lamp, lies down, and pulls the covers up.

Fade to black.

Imagine this 30-second ad, narrated by a familiar-sounding voice, describing the higher electricity bills and hardship millions of Americans will face if Congress votes to take action on climate change. Remember how quickly the insurance industry overcame widespread public support for health care reform and destroyed the Clinton plan for universal coverage? Meet the Harry and Louise of global warming.

The Other Global Warming Lesson from California

Environmentalists point to California's new regulations on greenhouse gas emissions, signed into law by Republican Governor Arnold Schwarzenegger, as a sign that federal action on global warming is inevitable. But, last November, California voters offered us another lesson about what it will take to craft politically sustainable solutions to global warming. This lesson has largely been ignored, but is arguably more important.

Proposition 87 would have imposed a tax on oil production in California to support $4 billion in expenditures to develop and promote alternative energy technologies. The ballot initiative, which began with strong approval ratings, and whose proponents spent almost $50 million to secure passage, was defeated by a ten-point margin. Why? Oil companies succeeded in convincing voters that it would increase gas prices.

A recent survey of public opinion research conducted by American Environics for the Nathan Cummings Foundation reveals just how sensitive voters are to energy costs.

It also clarifies the complexity of Americans' views on the interconnected issues of energy independence, global warming, taxes, public investment, and jobs. What begins to emerge from the data is a path through, an approach and a vision that might attract sustainable majorities of Americans bringing the power to enact and then defend comprehensive policies to solve global warming.

What the Data Reveals

Americans' anxiety over rising energy costs is a serious challenge to anyone seeking a solution to global warming. The anxiety is real, and the vast majority of Americans perceive these costs as causing financial hardship for their families. Proposals that raise energy prices risk triggering populist anger; Americans uniformly reject government efforts to increase the cost of gasoline or electricity as a way of encouraging certain kinds of behaviors.

Nobody disagrees that regulatory strategies alone will raise energy costs. And raising the price of carbon high enough to have a real effect on global warming -- by cutting emissions and by providing sufficient motivation for industry to invest in new technologies -- will raise energy costs significantly.

One example: The price for carbon debated in the 2007 Senate energy bill would set a price of $7.00/ton, rising to $15.00/ton by 2050; experts estimate that it would take a cost of $150.00/ton to produce the technology necessary to make clean coal a viable future energy source.

With a regulatory-only approach, we will end with a debate between environmentalists arguing about the cost of global warming, and industry economists telling Americans how much more they'll pay for everything from electricity to gasoline to consumer products. And they'll argue that these higher prices will result in job losses.

Policy makers are aware of this challenge and have added provisions to their regulatory bills that are aimed at easing voters' fears. There are proposals for tax rebates and offsets and even the creation of a "Climate Change Credit Corporation" to help voters with the anticipated increase in consumer energy costs.

The trouble is that the bills either provide tiny amounts to authorize studies of the problem, or they remain silent about how much help voters can expect. It's important to remember that the proponents of Prop. 87 made a well-supported case that the initiative wouldn't raise energy costs at all. Its defeat demonstrates that it's going to take more than good intentions about global warming and vaguely-worded proposals to convince voters.

The Debate to Come

A recent NPR segment noted that the non-partisan Congressional Budget Office released a report on environmentalists' preferred regulatory approach that says "low-income Americans and coal miners might suffer the most if the government adopts a so called cap and trade program to reduce emissions of green house gasses." The NPR report said, "Consumers will bear the cost of this kind of program. They would face higher prices for electricity, gasoline and other products. Since low-income Americans spend a higher portion of their incomes on such costs, they'll be hit the hardest."

Keep in mind that this was NPR -- not Fox News.

The "right-wing populist vs. liberal elite" frame is dropping into place with the help of those calling for the deepest cuts in carbon. The deep-cut mantra, repeated without any real understanding of what might be required to get to 60 or 80 percent reductions in emissions, ignores voters' anxieties. It also reflects the questionable view that these changes can be achieved with little more than trivial disruptions in our lives -- a view easier to hold if you're in a financial position to buy carbon credits for your beachfront house.

Labor has indicated a willingness to support action on climate change, but it won't support deep cuts if working people are the most affected. This will leave environmentalists up against the well-financed business lobby. Good luck holding onto moderate Democrats, let alone Republicans -- even those who are beginning to understand the need for action on global warming.

History teaches us that regulatory proposals that fail politically often lead to legislative paralysis. In 1993, the public was adamant that action be taken to address health care, and it seemed inevitable that some sort of reform would soon be signed into law. In 1994, the Clinton health care reform proposal failed before coming to a vote. In 1997, the Senate voted 95-0 to reject the United Nations Kyoto framework before it was even fully developed. Voters are still waiting for action on health care and global warming.

A More Expansive Approach

Ultimately, the global warming crisis will be solved by the emergence of a new clean energy economy that is also capable of meeting the needs and aspirations of America's -- and the world's -- growing population. Regulation should be only one piece of a larger set of strategies designed to speed the emergence of that economy, with interlocking investment, tax, and fiscal policies also designed to send the right market signals and prompt private-sector investment and innovation. These policies must both solve the problem of climate change and have the political support to be enacted and sustained.

Good policy is therefore inseparable from good politics. Long-term success will require a broad-based coalition of Americans who see their values in alignment with the transition to the green economy and who will form a political base of support powerful enough to see this transition through decades of well-resourced opposition. This formation is beginning to emerge from some unexpected places.

Witness Mayor Michael Bloomberg's PlaNYC, a 30-year policy blueprint to make New York City a world leader in environmental sustainability. The plan shows an understanding that global warming will be solved as part of a comprehensive package of initiatives to improve the quality of life by simultaneously addressing the need for housing, jobs, clean air, clean water, and public parks. It calls for spending to re-build the city's antiquated infrastructure, retrofit buildings for energy efficiency, and expand public transportation, all while returning what Goldman Sachs estimates will be a 14 percent return on investment.

Compare this bold call to make New York "Greener and Greater" to the mantra of "80 percent cuts" in carbon; there's no doubt which is more likely to inspire a political coalition capable of taking on powerful industry opposition over the course of decades.

Much of the inspiration for the Bloomberg plan came from the Apollo Project, an alliance of trade unionists, grassroots community activists, progressive intellectuals, and local environmentalists. (Full disclosure: Apollo is funded in part by the Nathan Cummings Foundation).

Apollo operates nationally and in over 20 locations around the country, including New York City. It has provided much of the basic policy work as well as the relationships and organizing that brought environmental justice, civil rights, faith, labor, and business interests to the table in New York, and is doing the same in places as disparate as Los Angeles, Washington State, Oakland, and Pennsylvania.

At Apollo's core is a common demand for a ten-year, $300 billion public investment in the transition to a clean energy economy. And the Apollo Alliance has produced credible studies showing that this investment would more than pay for itself in increased revenues to the treasury, without even tallying the multiple economic benefits of millions of new jobs, a revitalized manufacturing sector, and reduced reliance on foreign oil.

When compared to the Apollo demand or other budgetary line items, the global warming commitment made by the various presidential contenders looks paltry. Senator Clinton leads the pack, with a new call for a $50 billion energy R&D fund to be spent over an unspecified number of years. But the recent transportation bill authorizes $286 billion, the 2002 farm bill authorized nearly $100 billion in spending, and of course, we've spent over $500 billion on Iraq and Afghanistan since 2001. Global warming experts like U.C. Berkeley's Dan Kammen suggest that the current energy R&D budget, which is less than half what it was in 1979 (in real dollars), should be increased ten-fold, to roughly $30 billion annually.

The Case for Investment

Mayor Bloomberg's plan calls both for new fees and regulations to cut greenhouse gas emissions and for a $5 billion investment in the city's new green economy. This is in keeping with recommendations from the UN's Intergovernmental Panel on Climate Change (IPCC), as well as virtually every public policy expert on global warming, for a two-pronged approach to deal with the crisis: limit the amount of heat-trapping gases released into the atmosphere and invest in new renewable energy technologies.

From the IPCC to the British Government's Stern Review on climate change to last September's special issue of Scientific American on energy policy, energy experts acknowledge the need for major public investment, as well as putting a price on carbon.

Strangely, environmentalists are more quiet on the need for investment, preferring to argue that regulation will drive innovation, which will in turn create jobs and economic opportunity. To the extent that public investment in innovation is mentioned (a survey of environmental web sites and public statements found little on the subject), it seems to be regarded as a hoped-for by-product of the regulatory scheme rather than its core intention. But with a narrow focus on regulation, environmentalists and liberals risk alienating poor and working people with a discredited reliance on the magic of markets -- albeit regulated markets -- to give us the solutions we need.

What's more likely to happen is what is happening. Regulation, or the promise of regulation, is sending billions of dollars in venture capital chasing short-term gains in the alternative energy field. This investment is as unlikely to produce the long-term technological breakthroughs we'll need as it is to result in the broadly-shared benefits that would drive the creation of sustainable political majorities.

The Politics to Get Us from Here to There

The kinds of large-scale, long-term investments that were instrumental in producing the Internet, the interstate highway system, and the biotech revolution came from government, and for a reason: Private capital won't stay in the game long enough, and the benefits of private investment are likely to be largely private.

On the other hand, broadly shared costs have led to broadly shared benefits, and that's a recipe for strategies that can be maintained over time, politically and financially. Fortunately, the investments that are likely to speed the development of the right mix of new technologies, create a hundred-year's-worth of good jobs retrofitting our infrastructure, and take current technologies to commercial scale are also the key to a successful, long-term political strategy.

Prior to the 2004 presidential election, the Apollo Alliance asked voters in Pennsylvania what they thought of the proposal to spend billions of taxpayer dollars to speed the transition to a clean energy economy. The results were surprising -- 74 percent approved, and among white, non-college educated males, classic "Reagan Democrats," the approval rating was 81 percent. In fact, the higher the dollar figure, the more these voters liked the idea. These were the very people who were thought to have bought the conservatives' anti-tax, anti-spending, anti-government message lock, stock, and barrel.

These results were confirmed and our understanding deepened by American Environics' recent review of public opinion data. The analysis revealed that, while the public sees global warming as a threat, they see many other issues as a higher priority.

Among those high-priority concerns are the nation's dependence on foreign oil, jobs, and energy costs. Fortunately, these concerns -- combined with concern about global warming -- create an appetite for the kinds of investments experts agree will be necessary. A policy with enough investment to credibly claim to lead to increased energy independence, reduced energy costs, and job creation will generate the widespread public support necessary for sustained, serious action to solve global warming.

The analysis also reveals that shifting public opinion on the size of government makes it easier to build a case for investment. To be sure, there is no evidence that any sizable segment of the electorate is calling for a dramatic expansion of the size of government.

But it appears we have reached a point where the public is less sensitive to congressional spending than they are to regulations that will increase the cost of energy. Today energy costs seem to generate the kind of ire taxes did a decade ago. Based on this analysis, we believe that investment as a frame can help build support for comprehensive global warming legislation.

Where are the advocates for large-scale public investment in the transition to a clean energy economy? Who will make the Churchillian call?
You ask, what is our aim? I can answer in one word: It is victory, victory at all costs, victory in spite of all terror, victory, however long and hard the road may be; for without victory, there is no survival.
Many proponents of global warming legislation have convinced themselves that a solution containing substantial public investment is not politically viable. But this fear of proposing serious investments backs them into a reliance on regulatory policies that will drive up both energy costs and voter anger.

The public opinion data and California's experience with Prop. 87 suggest that it will be better for proponents to risk conservative name-calling, stand up for spending commensurate with the threats and opportunities, and adapt Mayor Bloomberg's vision to the national stage: They should become the champions of a Greener, Greater America.

This article is available on The American Prospect website. © 2007 by The American Prospect, Inc.

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