I spoke about climate policy and politics on a half hour radio segment that aired March 27th on KPFA radio in the Bay Area. I joined Clear Air Watch's Frank O'Donnell to discuss the hard realities of climate politics and outline a policy strategy to make clean energy cheap that can overcome these realities.
Listen to the archived segment as streaming audio here (only available through April 10, 2009):
Energy efficiency is so hot right now! Here's a little lighter fare for your Friday...
This is apparently the winner of a film competition for www.grassfedfilms.org by folks from Stanford University.
Performed by: Megan Kerins, Nick Schlag, Will Bishop,
Lyrics by: Will Bishop,
Directed by: Matt Harnack
The big news on the mountaintop removal front just keeps coming (see recent posts here and here): today, our friends at Appalachian Voices report that two U.S. senators from coal-producing states introduced bipartisan legislation yesterday to protect Appalachian streams, mountains and communities from the devastating impacts of mountaintop removal coal mining.
According to a recent press release, Senators Benjamin Cardin (D-MD) and Lamar Alexander (R-TN, pictured at right) introduced the Appalachia Restoration Act (S.696), which would amend the Clean Water Act to prevent the dumping of toxic mining waste from mountaintop removal coal mining into headwater streams and rivers. As incongruous as it seems, this practice of dumping the debris from entire decapitated mountains onto valleys, streams and watersheds (see image below) is commonly allowed under current (lax) interpretations of the Clean Water Act.
"It is not necessary to destroy our mountaintops in order to have enough coal," said Senator Alexander. "Millions of tourists spend tens of millions of dollars in Tennessee every year to enjoy the natural beauty of our mountains-a beauty that, for me, and I believe for most Tennesseans, makes us proud to live [there]."
As AppVoices explains:Mountaintop removal coal mining is an extreme form of surface mining where explosives are used to blast up to 1000 feet of mountaintop in order to reach thin seams of coal. The remaining rubble, or overburden-which contains toxic heavy metals-is dumped into adjacent valleys, contaminating headwater streams where drinking water supplies originate for millions of Americans. More than 1200 miles of streams and over 500 mountains in the central and southern Appalachians have been devastated due to mountaintop removal.
"My goal is to put a stop to one of the most destructive mining practices that has already destroyed some of America's most beautiful and ecologically significant regions," said Senator Cardin, Chairman of the Water and Wildlife Subcommittee of the Committee on Environment and Public Works. "This legislation will put a stop to the smothering of our nation's streams and water systems and will restore the Clean Water Act to its original intent."
The new Senate bill is a companion bill (although not quite identical) to the Clean Water Protection Act (HR 1310) in the House of Representatives. The House bill was introduced March 4th by Demonctrats Frank Pallone (NJ) and John Yarmuth (KY) and Republican Dave Reichert of Washington and now has now has 134 bipartisan cosponsors. According to Ken Ward Jr. of Coal Tattoo, Like the Clean Water Protection Act, pending in the U.S. House, the Appalachian Restoration Act would overturn the Bush administration’s changes to the CWA fill rule. But, this bill is much more narrow — it would not affect slurry impoundments, for example.
According to AppVoices, a number of recent studies, such as one by the Appalachian Regional Commission, report on the tremendous potential for employment growth in green jobs sectors, while employment in coal has been on a downward trajectory for decades. In West Virginia alone, coal mining once provided over 120,000 jobs, but that number has dropped to less than 20,000, a precipitous decline in employment driven in part by the replacement of traditional underground mining jobs with explosives-intensive and heavy-equipment-reliant mountaintop removal mining practices.
"This is not an either/or choice, it's about saving the environment and creating new jobs," said Dr. Matthew Wasson, Director of Programs at the environmental non-profit group Appalachian Voices. "Mountaintop removal does the same thing to our economy that it does to our mountains. Ending mountaintop removal will allow sustainable, long term economic growth to flourish in Appalachia."
According to U.S. Census Bureau data, counties with a high concentration of mountaintop removal mines are some of the most impoverished in the United States. (See recent post, "Mountaintop Removal Blow-Back" for more on jobs and mountaintop removal mining).
To learn more about the impacts of mountaintop removal coal mining (and to take action), visit ILoveMountains.org.
Related posts:
After yesterday's emotional roller-coaster ride on mountaintop removal, fueled by some bad reporting from the AP and two dueling and somewhat contradictory press releases from the EPA, we're happy to run this post from Appalachian Voices' Matt Wasson (originally posted at HuffingtonPost) taking a closer look at what's at stake in the fight over mountaintop removal. Jobs, ecosystems and communities are all on the line, so delve deep with Wasson's posts here...
If you're a reader of the Huffington Post Green Page then you are almost certainly aware that the Obama Administration signaled a major shift yesterday in how mountaintop removal coal mining will be regulated. In brief, Obama's head of the EPA, announced a decision to delay and review permits for two mountaintop removal mining operations, an action that calls into question more than 100 additional valley fill permits now pending that threaten to bury hundreds more miles of headwater streams and destroy dozens more Appalachian Mountains.
In making this decision, President Obama also took another step in fulfilling his campaign promise to bring science back to it's rightful place in guiding the decisions of federal agencies. Over the course of eight years, the Bush Administration ignored the advice and analysis of the best scientists and systematically re-wrote the rules to allow companies to dump mine waste indiscriminately into streams. They also sought to allow higher levels of arsenic, selenium and other toxic metals from mine runoff in drinking water.
Realizing that Bush's policies were wrong from the start, the coal industry and supporters in Congress quickly and conveniently rolled over and died.
Not.
Actually, the blow-back was immediate and fierce from the mining industry.
Here's the response of the National Mining Association:
This action, which applies to all mining-related 404 permits in the region, puts thousands of mining jobs and coal production in Appalachia at risk. While on the one hand the administration is spending billions in stimulus jobs, it is taking away the highest paying jobs in the region by delaying needed permit approvals. This is not good for jobs or for energy security.
All of this pressure appeared to elicit an immediate backpedaling by the EPA, which issued a statement last night that seemed to contradict the early media reports. Moreover, West Virginia Governor Joe Manchin quickly took to grandstanding and went straight to Washington today to talk with Administration officials about impacts on West Virginia's economy.
All of these conflicting reports have left opponents of mountaintop removal with a little whiplash, but they should not be distressed. There is no question that the EPA's move signaled a seismic shift from the Bush Administration's lax enforcement of environmental laws, and the back-pedaling doesn't change the fact that EPA is going to bring actual science back into the permitting process.
One of the most valuable aspects of all of this is that we now have a very complete picture of the coal industry's justification for why Obama should allow the destruction of the nation's oldest and most biologically diverse mountains, and the pollution of the headwaters of many eastern rivers to continue under the Bush Administration's rules. Here's their reasoning:
14,000 mining jobs are at risk.
The savvy Huffington Post reader will probably be thinking: "14,000 jobs? Didn't the auto industry just layoff 100,000 employees? You're telling me that we are turning the oldest mountains in America into a parking lot for the sake of 14,000 jobs?"
On the surface, this would certainly be a justifiable reaction. The numbers are miniscule compared to the total number of jobs in the region and the numbers we've been hearing about mass layoffs across the country over the past 6 months. According to a report from the Bureau of Labor Statistics,
Employers took 2,769 mass layoff actions in February that resulted in the separation of 295,477 workers, seasonally adjusted, as measured by new filings for unemployment insurance benefits.
But this misses a number of important points. In defense of the mining industry, 14,000 fairly high paying jobs mean a lot in this region, which is among the poorest in the country and already suffers rampant unemployment.
But the most important point is that no jobs are being lost right away as a result of the EPA's decision. Anyone who says otherwise is posturing or bluffing.
All the EPA's announcement means is that they will temporarily maintain the status quo that has been in place since March of 2007 when a federal district court judge suspended the permitting of most valley fills until the lax Bush Administration enforcement and evaluation standards were improved. There is not a single mine that will be shut down as a result of the EPA's decision.
Presumably, mountaintop removal enthusiasts are really more concerned that new mountaintop removal mines will not come online as older mines reach the limits of their economically productive capacity and shut down. That is certainly what the author of this post would like to see happen, which may or may not make it a legitimate concern from the coal industry perspective, but it certainly changes the discussion dramatically in terms of impacts on the local economy.
To be precise, if the EPA cracks down on mountaintop removal permitting what we're talking about is phasing out some proportion of 14,000 strip mining jobs in Appalachia over the next decade. But is this a significant number? Significant enough to justify what Vanity Fair has called "the greatest act of physical destruction this country has ever wreaked upon itself?"
As an exercise - the EPA is not clear on how far they will go in reining in mountaintop removal - let's look at what might happen if the EPA completely eliminated all forms of surface mining, including mountaintop removal, in Appalachia over the next decade. I have created a number of PDF summaries of studies and reports on this subject that can be downloaded individually for those who want more detail, but here's a quick synopsis.
1. The only study that directly addresses the question of how restricting valley fill permits would affect the economy was conducted by a well-respected coal industry consulting group called Hill & Associates (H&A) in 2001. According to the study, restricting valley fills to watersheds no larger than 35 acres in size (basically cutting the amount of mountaintop removal mining in half) would decrease overall coal production by about 15% in Central Appalachia. This reflects a 65% decrease in mountaintop removal with a 10% compensatory increase in underground mining.
The employment impact of this change would be 1,345 jobs. Here's a graph showing the difference between a baseline projection and a projection based on restricting valley fills to less than 35 acres (again, meaning mountaintop removal coal production would be reduced by about 65%):
Another important point made by the H&A study is that even if no restrictions on permitting were put in place, both production and employment were projected to decline by 20-25% anyway because the most of the high-quality, easy to get coal is already mined out. Here's a quote from the study:
"... the general downward trend of total tonnage from the study region under all cases is a result we see across many modeling projects.. [it]is exacerbated toward the end of the 10-year study period by the fact that significant blocks of higher-quality Central Appalachian reserves are starting to be exhausted. The better-quality coals in this region are slowly but surely being mined out."
A final fascinating aspect of this study was that it also looked at how restricting mountaintop removal would affect the electric rates of consumers that rely on this coal for electricity. The impact would be somewhat less than 1% on electric bills.
Let me repeat: reducing mountaintop removal by 65% would lead to a wholesale electric rate increase of less than 1% in states relying on this coal and an increase in residential electric rates even smaller than that.
Here is my summary of the H&A study
And here is the original study
2. According to several coal industry insider publications, the decline in coal demand resulting from the recession is likely to lead to many more underground mines being idled. According to the February 16th edition of the Coal & Energy Price Report:
Given the weak economy and downward pressure on coal prices, in general, the table suddenly has tilted in such a way that more underground mines will be in danger of falling off the cliff. Deep mine operators who have been reluctant to idle mines in the face of a potential forced shut- down of surface jobs might re-think their hesitation.
Given that underground mines employ 1.5 times as many miners per ton produced as surface mines do, this almost certainly means that EPA's action will actually protect jobs in the short term. But other industry reports show why relying on more mining jobs is a poor response to the economic crisis anyway. Here's a quote from the March 23rd edition of the U.S. Coal Review:
Most large producers have already announced sizeable trimming efforts, and reductions by smaller operators, while more difficult to estimate, are no doubt taking place. But in the current market environment in which demand is seriously slumping, the cutbacks are expected to continue in fairly big numbers.
Here is a link to some more excerpts of recent coal industry news
3. According to a 2005 report from the Appalachian Regional Commission, employment in the mining industry is one of the best predictors of poverty and other elements of "economic distress" in Central Appalachia. Here's an excerpt from the study:
"Of all the regions in this analysis, Central Appalachia has been one of the poorest performers in relation to the ARC's economic distress measure over time. Furthermore, and unlike all other regions in the U.S., current and persistent economic distress within the Central Appalachian Region has been associated with employment in the mining industry, particularly coal mining."
But people in Appalachia have long known that it's more than just "coal mining" that's the problem and that mountaintop removal specifically destroys far more jobs than it creates. If mountaintop removal created prosperity it should have done so decades ago. Instead, the counties where mountaintop removal occurs are among the poorest in the nation, with high unemployment rates and rapidly dwindling populations. The stark reality is that few industries want to follow mountaintop removal. After all, what entrepreneur wants to open a new business in a community where massive blasts are cracking the foundations of people's homes, where hundred-year floods are an annual affair, and where the tap water looks like tomato soup and smells like rotten eggs?
This map, produced by Appalachian Voices, shows the dramatic correlation between mountaintop removal and poverty rates in Central Appalachia:
This ARC study also offered an excellent roadmap for Central Appalachian coal counties looking to improve their economic conditions:
"The counties that have emerged from distress in the region have consistently had fewer jobs in mining and a greater number of jobs in manufacturing when compared to the counties that have remained persistently distressed."The study also said:
"...regional economic development is most likely to take place when national policies create the conditions to support it. As such, addressing persistent distress would seem to require a renewed national commitment, similar to the one that inspired the establishment of the ARC and the regional development policies of the 1960s."
Sounds like President Obama is already on the right track with his green jobs and economic stimulus plans (unlike the coal state politicians that have a remarkably single-minded focus on an industry that supplies less than 2% of the jobs, but a much higher proportion of campaign contributions).
Here is a link to some more excerpts from the 2005 ARC report
That sums up the first part of the argument why President Obama should ignore the sky-is-falling predictions, disingenuous arguments and plain, old-fashioned rigged numbers that the coal industry and their supporters are throwing at him. The subject of a later post will be all of the opportunities there are and initiatives already underway in Central Appalachia to create new green jobs and diversify the economy beyond such a heavy reliance on coal.
As a preview, here's a link to another recent study by the Appalachian Regional Commission that came out just a few weeks ago. According to the story by Ken Ward at the Charleston Gazette:
An estimated 15,000 jobs per year for the next five years could be created, for a total of 60,000 new jobs, the study said. Annual energy bill savings would be almost $800 million, with that amount rising to more than $27 billion per year by 2030, the study concluded.
Now there's some job numbers that might really start getting out of the economic doldrums.
More tomorrow...
Originally posted at the Breakthrough Institute
Both speaking to the public yesterday at separate events, President Barack Obama and Energy Secretary Stephen Chu highlighted the administration's plans to make unprecedented investments in clean energy innovation.
Speaking at the White House, President Obama continued to advance his post-environmental, innovation and investment-oriented energy agenda.
After a spot-on introduction from articulate energy innovation advocate and MIT President Susan Hockfield (see related post), President Obama highlighted the unprecedented energy innovation investments in the stimulus bill and reiterated his pledge to invest $15 billion annually in the development of new, clean and efficient energy technologies.
Obama also promised a ten-year commitment to make the federal Research and Experimentation Tax Credit permanent in order to encourage greater private sector investment in the kind of innovation that truly drives long-term economic growth.
Obama's speech yesterday though was less notable for the policy announcements, which outside of the pledge to make the federal R&D tax credit more reliable were hardly news. What was more remarkable was that the President appears to be refining and committing to a truly post-environmental energy agenda, one focused on energy innovation and spurred by public investments to support our nation's best and brightest minds.
Obama has not only surrounded himself with advisers who truly get the energy innovation challenge -- both formal advisers like Secretary of Energy Steven Chu and his newly-confirmed chief science adviser, John Holdren, as well as informal advisers like MIT President Susan Hockfield and UC Berkeley energy expert Dan Kammen -- but he has repeatedly decided to put them front and center, as he did again yesterday, giving them the spotlight as chief advocates of the Administration's clean energy agenda.
Furthermore, the President couches his clean energy plans in arguments about economic recovery, global competitiveness and energy security with increasing skill.
In this latest speech, Obama even issued a Sputnik-Moment-like call for the nation's best and brightest innovators to tackle our energy challenges:"[I]nnovators like you are creating the jobs that will foster our recovery -- and creating the technologies that will power our long-term prosperity.
President Obama now appears poised to make unprecedented and much-needed investments in energy R&D on the scale of $15 billion annually, exactly what is necessary to truly spark the kind of revolution in clean energy technology needed to overcome the climate and energy challenge.
So I thank you for your work. It's said that necessity is the mother of invention. At this moment of necessity, we need you. We need some inventiveness. Your country needs you to create new jobs and lead new industries. Your country needs you to mount a historic effort to end once and for all our dependence on foreign oil.
And in this difficult endeavor -- in this pursuit on which I believe our future depends -- your country will support you. Your President will support you."
What remains to be seen is if he plans to pledge the full support and scale of public investments necessary to quickly take these technologies from the lab to the marketplace and rapidly drive the deployment of emerging clean energy sources; if he will usher in critical investments in enabling infrastructure, like a new 21st century electrical grid; and if he will coordinate all of these efforts to truly make clean energy cheap. Still, Obama's increasingly powerful calls for energy investment and innovation are highly encouraging.
Backing Up Obama, Secretary Chu Speaks on Energy Innovation As Well
While President Obama spoke in Washington, Energy Secretary Steven Chu spoke at Brookhaven National Laboratory in Long Island to highlight a new $1.2 billion investment in basic science and innovation at the National Labs funded by the stimulus and continue to flesh out the Obama Administration's plans to spur economic recovery through energy innovation.
Andy Revkin at the New York Times' Dot Earth blog summarizes Secretary Chu's remarks:After visiting various research buildings, he gave a pep talk on the energy revolution he said was vital if the United States and the world are to avoid conflicts over limited supplies of oil and eventual disruptive impacts from human-caused global warming.
Revkin reports that Dr. Chu concluded his remarks by (again) echoing our call for a National Energy Education Act to train a new generation of talented scientists, engineers and entrepreneurs:
Over and over, in examples from the first transcontinental telephone call to the transistor to methods for synthesizing ammonia (and thus nitrogen fertilizer), Dr. Chu pointed out how great technological advances benefiting society grew out of fundamental breakthroughs in basic science.Now, [Dr. Chu] said, the country's challenge is to grow a generation of energy innovators, a challenge made harder because innovation has never been much of a priority within the energy industry.
To ensure we have the intellectual and human capital needed to tackle the grand energy innovation challenge, it seems Secretary Chu is in 100% agreement that it's high time for a major public investment in energy education.
[Update and correction posted, 3/25/09:
It seems that AP and about a dozen other news reports misinterpreted EPA's statements on mountaintop removal. EPA issued a grumpy and disheartening clarification statement late yesterday afternoon stating that they were only putting a hold on two permits filed by the US Army Corps of Engineers and as far as the hundred or so other permits held up until recently by 4th Circuit Court litigation, EPA says they "will take a close look" but they "fully anticipate that the bulk of these pending permit applications will not raise environmental concerns."
WTF?! So EPA doesn't think that decapitating entire mountains then dumping their remains on top of verdant valleys, streams and watersheds might raise any “environmental concerns?!” I'd of course expect this from Stephen Johnson and Bush and Co's EPA, but I sat there at Power Shift 2009 when Lisa Jackson promised that EPA was "back on the job" and vowed that science, not industry interests would rule again at EPA. Guess some things don't change much...
See the related stories at end of post for more analysis of yesterday's roller-coaster ride, courtesy of the EPA's dueling press releases.]
BREAKING NEWS: EPA Administrator Lisa Jackson announced today that her agency would put the breaks on hundreds of permits for new coal mining projects using the devastating practice known as mountaintop removal. The process decimates entire mountains to get at the coal inside before dumping debris in adjacent valleys, burying watersheds and streams and displacing neighboring communities.
According to AP:
The Environmental Protection Agency is putting on hold hundreds of mountaintop coal-mining permits until it can evaluate the projects' impacts on streams and wetlands.This brief but much needed respite gives time for activists and affected communities to redouble efforts to press for a permanent end to mountaintop removal. Passage of the Clean Water Protection Act in Congress or administrative action by President Obama and the EPA could severely curtail or even permanently end this destructive practice.The decision was announced Tuesday by EPA administrator Lisa Jackson. It targets a controversial practice by coal mining companies that dump waste from mountaintop mining into streams and wetlands.
It could delay more than a hundred permits being sought by companies wanting to begin blasting mountaintops to access coal.
The EPA also denied two permits the Army Corps of Engineers was planning to issue that would allow companies to fill thousands of feet of streams with mining waste in West Virginia and Kentucky.
The agency says the projects could damage aquatic resources.
In the first of what will be regular monthly posts written exclusively for the Energy Collective, I explore the need for a new strategy to make clean energy cheap. I am now a featured blogger and editorial board member at the Energy Collective and will be joining the discussion there regularly. Power. Policy. Climate. The Conversation happens at the Energy Collective.
Renewing America’s economy, responding to the threat of global climate change, and finally securing the nation’s energy independence all compel the transformation of United States energy system. Accomplishing this transformation requires the rapid development and deployment of a suite of clean, affordable, and scalable energy technologies.
In short, we must make clean energy cheap, a strategy that represents a significant departure from traditional approaches to climate policy...
For the full post, head to the Energy Collective here.
I've recently been working in St. Paul Minnesota on how we're applying the stimulus funding around efficiency. I wanted to call a tension to a potential hurdle for successful climate solutions: We need to make sure that initial investments actually help change the market.
Minnesota is slated to receive about $131.5 million in federal stimulus funding for weatherization and energy efficiency to be spent over the next 18 months, plus about another $54 million in conservation block grants for the state. That's a lot of money coming in quickly, and energy efficiency is just one small part of a series of investments in renewable energy, job training, infrastructure improvements, and economic aid in the recent federal stimulus package.
This is all very good news. Major investments in efficiency and weatherization are an excellent idea (I explain why at a note at the end of this blog post). The problem is that current market barriers are keeping energy efficiency, which ought to be a no-regrets, win-win-win solution, from being adopted at scale. No one in their right mind would let a 20% low-risk financial return go by, especially these days in a falling economy, yet we do exactly that every day by throwing money out the cracks in our doors and the cold drafts that blow through our un-insulated walls. There are many reasons that we are missing these opportunities - lack of information, lack of access to capital, obscure and complex auditing and contracting services, and little feedback as to how much energy, money, and carbon one is wasting. If we can solve these barriers, hundreds of billions of dollars of investment will flow towards this sector on a sustained basis, helping all Americans cut their energy costs and carbon emissions while creating long-term sustainable jobs. If initial investments (even the roughly $200 million dollars that the stimulus package might provide to Minnesota) only go towards paying for efficiency in some more houses, we will have just scratched the surface and end up with the same stunted efficiency market we have right now. The stimulus funding will only help solve that problem if it is deployed rightly.
Part of the problem is the speed at which the money must be spent - within the next 18 months. For efficiency, this scale of funding means a factor 5 or more expansion of the workforce, meaning that several thousand new efficiency contractors will need to be trained and employed in record-breaking time (this also risks low-quality works). The problem is that unless funds are invested strategically to change the way the market works, in 18 months the funding will be gone, demand for efficiency will drop, and those thousands of people will be back out of work. $200 million just scratches the surface of the changes we could make in Minnesota alone.
What we need to make the efficiency market work is:
Basically, the stimulus should do more than throw money at the problem. It should invest strategically in the infrastructure that will provide a solution in the long term. A solution that will be many times larger than the quick infusion of funding provided by the stimulus, and that will put us on track for a revitalized economy.
As my recent blog posts mention, I have been working with hundreds and thousands of young people for these types of solutions at both the state and national policy levels. In the realm of residential energy efficiency in particular, I have been going much deeper, working over the past year and a half to launch a start-up phase co-op (Cooperative Energy Futures) working with residents and neighborhoods to improve energy efficiency using a model that seeks to transform the energy efficiency market as described in the 4-point plan above. Recently, this adventure has taken me to the state legislature as the stimulus allocation plan is being developed, which is when I started to worry about the short-sightedness of the quick-fix stimulus approach.
If you are interested in linking up with Cooperative Energy Futures to start applying this emerging approach with your neighbors or any group of interested friends, or want to work with us to figure out how to implement efficiency at scale, please contact us through our Interest Form.
Here's why major investments in energy efficiency make so much sense:
America's 112 million housing units make up 35% of our electrical consumption, about 1.145 trillion kilo-watt hours per year. If you multiply that by the 11.47 cents per kilowatt hour that the average American paid for electricity in 2008 (according to the DOE), that's $131.3 billion that residents are throwing to the coal industry, the nuclear industry, and other big energy providers (incidentally the fossil energy sector is the sector of the economy controlled by the fewest, biggest companies that have virtual control on the market, and create fewer jobs per dollar than most sectors of the economy while causing massive negative costs on society through air and water pollution, land degradation, and the wide economic impacts of climate change). And this isn't even counting small businesses, or other sectors of the built environment, or natural gas and other sources of home heating. If the big numbers make your eyes glaze over, go look at your energy bill for a reminder of how much money you are losing. For most Minnesotans, it is upwards of $2,000 per year - much more for very large homes. The impacts of this energy cost disproportionately affect lower-income Americabs, both because their energy bill takes up a larger percentage of a smaller paycheck, and because low-cost housing tends to be inefficient and poorly insulated - making it high on energy costs. Similarly, the long-term impacts of burning all of this fossil fuel hurt people without the resources to compensate the most - like lower-income residents of New Orleans or places you are less likely to hear about, like flooded Bangladesh or drought-stricken areas in Africa.
The reason that investing so much stimulus money in efficiency is a great idea is that simple improvements (with paybacks less than 5 years) in home energy efficiency can cut energy usage in the range of 20-30%, helping keep money in our communities and reduces our collective investment in energy dependency and global warming. Deeper investments, with paybacks on the range of less than 10 years, can cut home energy usage by over 50%. The dramatic increases in home improvement trades like energy auditors, insulation contractors, and furnace replacers is also a huge boon for job creation - efficiency improvements yield far more jobs per dollar than any other source of energy (renewable energy creates several times more jobs per dollar than fossil fuels, and efficiency creates even more). It makes excellent sense to invest federal funds in this sector - it saves money for those who are struggling most in a tight economy, creates lots of job, improves our built infrastructure over the long term, and helps us start the journey to a post-carbon economy.
[Updated: 3/20/09 at 2:20 pm PST, see below]
I'm not sure how, but I missed this excellent editorial in the New York Times on Monday. The Times editorial board seems to have fully grasped the horror and tragedy of mountaintop removal coal mining. Remarking on an upsetting recent court ruling that paves the way for the devastation of more mountains, ecosystems and communities in Appalachia, the ed board writes in "Appalachia's Agony:"
"The longstanding disgrace of mountaintop mining is now squarely in President Obama’s hands."
Indeed it is. And it's high time for President Obama, who said during the campaign that he "did not support" the dastardly practice, to direct his administration to take action and end Appalachia's agony. Read on for the full editorial...EditorialBravo to the New York Times ed board. You can take action to urge President Obama to put an end to mountaintop removal here.
Appalachia’s Agony
Published March 16, 2009
The longstanding disgrace of mountaintop mining is now squarely in President Obama’s hands.
A recent court decision has given the green light to as many as 90 mountaintop mining projects in Appalachia’s coal-rich hills, which in turn could destroy more than 200 miles of valleys and streams on top of the 1,200 miles that have already been obliterated. The right course for the administration is clear: stop the projects until the underlying regulations are revised so as to end the practice altogether.
Mountaintop mining is just what the name suggests. Enormous machines — bulldozers and draglines — scrape away mountain ridges to expose the coal seams below. The coal is then trucked away, and the leftover rock and dirt are dumped into adjacent valleys and streams.
Both John McCain and Barack Obama vowed to end the practice during the 2008 campaign — even though no recent administration, Democratic or Republican, has been willing to take on Robert Byrd, West Virginia’s senior senator, or the coal companies, which insist without proof that there is no other cost-effective way to dispose of the waste.
There is a long and tortured legal history surrounding mountaintop mining, but the essential question is this: Is dumping mine waste into streams a violation of the federal Clean Water Act?
On its face the answer is yes, but various regulatory maneuvers have allowed this practice to proceed. The worst of these was a 2002 rule by the Bush administration that in effect removed mining waste from the list of the law’s prohibited pollutants. The rule has made it easy for the Army Corps of Engineers to issue mining permits and hard for the courts to deny them.
A bipartisan group of 119 members of the House recently reintroduced legislation that would redefine mining waste as a pollutant. In so doing, Congress would reassert the original intent of the Clean Water Act and end the practice of dumping waste in valleys and streams. Until that bill becomes law — if, indeed, it ever does — a great deal more damage could occur in Appalachia. Two companies that have been awaiting the court’s go-ahead have now said that they will resume mining operations.
The Obama White House can prevent that damage. Under the law, the Corps of Engineers can suspend the mining permits in the public interest. This in turn would give the administration time to review the rules and issue new ones that would be more protective of the environment. But the Corps of Engineers, always reluctant to reverse itself and historically friendly to industry, will not act without orders from on high.
Mr. Obama promised to find better ways of mining coal “than simply blowing the tops off mountains.” The time to do so is now.
President Barack Obama’s top aides will be making a decision “very soon” about what they will do about mountaintop removal, according to congressional testimony today from Nancy Sutley, chairwoman of the White House Council on Environmental Quality.
Sutley told lawmakers her staff have been meeting with EPA, the Corps of Engineers, the Department of Justice and the Office of Surface Mining, discussing the issue, reviewing the February decision by the 4th U.S. Circuit Court of Appeals, and examining a flood of pending permits at the corps office in Huntington.
“We’re trying to get a handle on what’s out there and what we may be able to do about it,” Sutley told the House Appropriations Committee’s Subcommittee on Interior, Environment and Related Agencies.
Originally posted at the Breakthrough Institute
A high hurdle: of the 37 Senators identified as swing votes, all but seven must be convinced to vote "Yes" in order to secure passage of any climate policy in the U.S. Senate.
There's been a spate of recent public announcements from moderate Democrats and Republicans alike, voicing caution about a proposed cap and trade program to place a price on carbon dioxide and cut global warming pollution. More than one third of the U.S. Senate now joins the fifteen moderate Democratic Senators we've dubbed the "Technology Fifteen" as vocal swing votes in the upcoming debate on climate policy.
Below the fold is an updated tally of where the Senate stands on climate policy by my assessment, based on recent public announcements and past voting histories. With using budget reconciliation to bypass the 60-vote filibuster hurdle off the table, to secure passage of any climate policy in the U.S. Senate, all but seven of the 37 Senators I identify as swing votes must be convinced to support the proposal (joining the 30 Senators I classify as "Assumed Yes" votes).
I provide the vote count below without further comment, and will delve into the implications of this tally in further detail in an upcoming post...
The following codes after their names indicate factors considered in assembling this vote tally:
*- Voted "Yes" on Lieberman-Warner cloture vote; ^- newly-elected Senator; T- "Technology Fifteen" (aka "Gang of Fifteen"); M- new group of moderate Democrats announced by Senator Bayh; B- Publicly opposed to using Budget Reconciliation process to override filibuster; italic- Republican SenatorsSwing Votes: 37
Likely Leaning Yes: 9
Baucus (D-MT)*B
Tester (D-MT)*
Carper (D-DE)*M
Kohl (D-WI)*M
Nelson (D-FL)*M
Begich (D-AK)^M
Hagan (D-NC)^M
Shaheen (D-NH)^M
Lieberman (I-CT)*M
On-the-Fence: 20
Stabenow (D-MI)*T
Levin (D-MI)*TB
McCaskill (D-MO)*TM
Rockefeller (D-WV)*T
Lincoln (D-AR)*TMB
Pryor (D-AR)*TB
Webb (D-VA)*T
Bayh (D-IN)*TMB
Bingaman (D-NM)*T
Brown (D-OH)T
Dorgan (D-ND)T
Johnson (D-SD)T
Conrad (D-ND)T
Warner (D-VA)^M
Bennett (D-CO)^M
Udall (D-CO)^M
Casey (D-PA)*B
Specter (R-PA)
Collins (R-ME)*B
Snowe (R-ME)*
Likely Leaning No: 8
Byrd (D-WV)TB
Landrieu (D-LA)MB
Nelson (D-NE)*TMB
McCain (R-AZ)
Corker (R-TN)
Murkowski (R-AK)
Gregg (R-NH)
Martinez (R-FL)*Assumed Yes Votes: 30
Boxer (D-CA)*
Reid (D-NV)*
Cantwell (D-WA)*
Cardin (D-MD)*
Dodd (D-CT)*
Feingold (D-WI)*
Feinstein (D-CA)*
Inouye (D-HI)*
Kerry (D-MA)*
Klobachar (D-MN)*
Lautenberg (D-NJ)*
Leahy (D-VT)*
Menendez (D-NJ)*
Mikulski (D-MD)*
Murray (D-WA)*
Reed (D-RI)*
Akaka (D-HI)*
Durbin (D-IL)*
Harkin (D-IA)*
Sanders (I-VT)*
Schumer (D-NY)*
Merkley (D-OR)^
Whithouse (D-RI)*
Wyden (D-OR)*
Udall (D-NM)^
Kaufman (D-DE)^
Gillibrand (D-NY)^
Burris (D-IL)^
Kennedy (D-MA)
Franken (D-MN)^
(Depending on Kennedy's health and the results of the contested election in Minnesota, these two may or may not be able to cast votes in support of climate legislation; if they cannot, two more Swing votes must be convinced to support the policy)Assumed No: 33
Alexander (R-TN)
Barrasso (R-WY)
Bennett (R-UT)
Bond (R-MO)
Brownback (R-KS)
Bunning (R-KY)
Burr (R-NC)
Chambliss (R-GA)
Coburn (R-OK)
Cochran (R-MS)
Crapo (R-ID)
Ensign (R-NV)
Enzi (R-WY)
Grassley (R-IA)
Johanns (R-NE)
Hatch (R-UT)
Hutchinson (R-TX)
Inhofe (R-OK)
Isakson (R-GA)
Kyl (R-AZ)
Lugar (R-IN)
McConnell (R-KY)
Roberts (R-KS)
Sessions (R-AL)
Shelby (R-AL)
Thune (R-SD)
Vitter (R-LA)
Voinovich (R-OH)
Wicker (R-MS)
Cornyn (R-TX)
Risch (R-ID)
DeMint (R-SC)
Graham (R-SC)
Originally posted at the Breakthrough Institute
It was with much fanfare and bravado that then-newly-elected Prime Minister Kevin Rudd of Australia announced at the 2007 Bali climate talks that his nation would abandon opposition to climate action and ratify the Kyoto Protocol. Better late than never, Rudd said and bravely declared, "I can unite the world on climate."
To deliver on that bold promise, Rudd directed his ministers to put together a cap and trade program to limit greenhouse gas emissions and put a price on CO2. The outline of an Australian "Emissions Trading Scheme" was rolled out last week with plans to implement a cap and trade program in June 2010 aimed at cutting emissions 5 to 15 percent below 2000 levels by 2020.
Now, the Australian Prime Minister's efforts to put a price on carbon and cap emissions are under fire from both Right and Left, and cap and trade is going under Down Undah.
The pro-climate action blog SolveClimate has an honest report on the political opposition to Prime Minister Kevin Rudd's carbon pricing plans. [Editor's note: keep in mind as you read this that the Australian "Liberal" Party is the nation's major conservative, center-right party and the "Labor" Party is the real liberal, center-left party.]The battle offers a window into the complexity of making climate laws in a coal-fired country.
Federal opposition leader Malcolm Turnbull is leading the charge on behalf of his center-right Liberal party, stepping up attacks on a scheme he once favored. He wants to delay ETS until at least 2012, and pile on extra industry hand outs. And he's employing a familiar weapon to win over Australians, the threat of job loss.
It's a particularly cynical ploy on Turnbull's part in a drowning economy. Said Turnbull to Rudd this week:
"Why are you putting people out of work?"
There is no evidence that the ETS will "put people out of work," even in mining towns. But the story caught fire in the Australian media.
And now it's clear that a majority of senators will vote against the ruling government's ETS, complicating all prospects for legislation that has yet to be introduced into Parliament.
Rudd's in trouble. His center-left Labor party doesn't have a majority in the upper-house Senate. If the opposition blocks the bill, then he will need the support of Australia's swing-vote Greens.
But the Greens now say they won't endorse the ETS, unless it is substantially "greened up."
Specifically, they want the industry-friendly legislation to auction 100 percent of the emission permits -- a vital aspect of any effective cap and trade scheme -- rather than giving polluters a free ride, as the bill now does. They also want a strong reduction goal of 40 percent by 2020, not the current 5 percent target, or up to 15 percent in the event of a new global climate pact.
SolveClimate's reporter chocks the failure of the Australian ETS plan up to "lobbying, partisan politics and the usual suspects (i.e., big coal)." The implication being, "Those darned knuckle-dragging champions of the status quo got the best of us again." Of there's truth to that. But it's also all to easy to dismiss the challenges facing Rudd's plans and conclude, "We've just got to battle harder and overcome the industry opposition next time."
But that kind of response dismisses this story without grappling with the real lesson behind it. After all, this is the exact same situation facing cap and trade or carbon pricing plans in Canada, the EU and of course, the good old USofA.
The story is fundamentally the same everywhere carbon pricing programs have been attempted. Carbon pricing plans run smack dab into an unshakable reality of the political economy of climate and energy: the public and policymakers (not to mention industry) are resistant to efforts to significantly increasing the price of dirty energy. That resistance is clearly even stronger in the midst of the worst global economic crisis in decades.
The result: even when shot through with loopholes and industry giveaways, cap and trade and carbon pricing schemes are still not able to pass political muster, especially in coal-heavy economies like Australia (or much of the United States... or Eastern Europe... or China or India... or just about everywhere we need to reduce emissions most!).
Kevin Rudd is thus stuck in a political dilemma that should be familiar by now to champions of carbon pricing proposals everywhere (a dilemma we call the Gordian Knot of climate policy): he must either further weaken the proposal (as the Liberal Party opposition calls for) in order to win passage while ensuring that the carbon price is insufficient to drive the major emissions reductions needed; or he can strengthen the proposal (as Australia's Green Party is calling for) and guarantee the bill's political failure.
SolveClimate's reporter worries, "Any way you slice it, there will be a disappointing end to this cantankerous process," and concludes, "Let's just hope it's not a preview of what's to come in America, in the nation's own congressional battle over global warming legislation." But of course, this is exactly what will happen in the United States if President Obama and his green allies continue to push cap and trade and carbon pricing as the centerpiece of climate action. The Gordian Knot is most certainly not a uniquely Australian phenomenon, and it will inevitably ensnare U.S. carbon pricing plans as well.
But there's a way out of this dilemma, a way to cut free of the Gordian Knot.
If only at least one world leader (*cough*Obama*cough*) was willing to break from the carbon pricing orthodoxy and start leading a new emerging climate consensus, a strategy centered on the critical effort to make clean energy cheap, a strategy driven by innovation and investment, one finally able to overcome the fundamental constraints of the political economy of climate and energy and the powerful resistance to efforts to price our way to a clean energy future... If only...
Writing today for the New York Times, Matthew Wald looks at the increased prospects for new coal plants that capture and store their CO2, due to investments in CCS demonstration plants included in the American Recovery and Reinvestment Act. Writing about Duke Energy's plans to build a new coal gasification plant that would demo carbon capture and storage (or CCS) technology in Edwardsport, Indiana, Wald writes:
"Duke Energy has high hopes for this two-acre plot: If all goes right, and there is a happy convergence of technology, money and federal energy policy, the construction project could become the first environment-friendly coal-fired power plant in the nation."Mnnnggggg! Sorry, wrong answer!
[Image: Scenes from a mountaintop removal coal mining site. Does this look clean to you, Mr. Wald?]
[Image: The Marsh Fork Elementary School in Raleigh County, West Virginia sits just below a major coal slurry impoundment like the one that burst in Kingston, Tennessee. Over one billion gallons of toxic coal sludge sit behind an earthen dam just 400 feet from the elementary school. Is this insane or what?]
Here's some news to brighten your Friday! Proposed new coal plants have been dropping like flies over the past month, and yet another one bites the dust today, this time in Nevada. Citing strong local opposition and increased certainty that global warming pollution from coal plants will be regulated, energy developer, LS Power announced they will be "indefinitely postponing" plans to build the controversial 1,600 MW coal-fired White Pine Energy Center near Ely, NV.
The news is even better than that though: after dumping their coal plant plans, LS Power has made the wise decision to instead turn to clean renewable energy to meet it's energy needs. The energy developer plans to focus its attention and investments on a new transmission project that will strengthen the intermountain region's ability to harness the area's abundant wind, solar and geothermal energy potential.
Here's the full story...Another Nevada coal plant project bites the dust
In a related story, utility regulators in Louisiana ordered the utility Entergy to reconsider plans to build two coal and petroleum coke burning unites at a power plant near New Orleans. SolveClimate has the full story...
By Stephanie Tavares, In Business reporter
Fri, Mar 13, 2009 (2 a.m.)
LS Power has announced it is shelving plans to build the controversial White Pine Energy Center near Ely.
The planned 1,600-megawatt coal-fired power plant received initial permits from the Bureau of Land Management three months ago.
But the project has faced setbacks as business partners jumped ship, the BLM permits were appealed to the Interior Department’s Board of Land Appeals, public opposition mounted in two states and expected federal carbon-capture legislation threatened to drive skyward the price of generating electricity from coal.
LS Power said in a statement it would shift its focus to completing the Southwest Intertie Project, a planned 500-kilovolt transmission line that will extend 500 miles from southern Idaho through eastern Nevada to the Las Vegas area.
The project would allow developers to move forward with planned renewable energy resources in several rural areas, move electricity between Nevada’s two grids and fill a troublesome gap in the intermountain area’s electric transmission grid.
The company expects to begin construction on the transmission line this summer.
“As demand for renewable energy increases we are focusing more and more of our internal resources on providing transmission solutions for both renewable project developers and load serving entities,” LS Power President Paul Thessen said in a statement.
The announcement that the coal plant would not be built in the immediate future was hailed by environmentalists, conservationists and renewable energy advocates, including Sen. Harry Reid.
“I’m glad to see LS Power has seen the light and is now focusing its resources on creating clean energy economic opportunities, rather than the old combustion technologies of yesterday,” Reid said in a statement that praised the transmission line. “Nevada has an incredible opportunity to grow thousands of new jobs through increasing renewable power production from our solar, wind and geothermal resources and by encouraging strategic investments in improving transmission to get that power to the people.”
The announcement came just days before two Public Utilities Commission hearings on whether the coal plant is needed.
The company notified the PUC on March 5 it was suspending its application for a permit with the commission until it can obtain the necessary air permit from the Nevada Environmental Protection Division.
Nevada law requires that before facilities of this type can be built, the PUC must determine there is a need for the plant, all regulatory approvals have been granted and the need for the plant balances any adverse environmental effects.
Although the plant has strong support in the Ely area, it is opposed by environmentalists, health activists and clean air advocates across the West as well as supporters of National Parks and renewable energy.
The company said in previous interviews that it anticipated a long and tough legal battle with groups opposing the plant.
Dynegy, a company that partnered with LS Power under the moniker White Pine Energy Associates to build the plant, announced in January it was abandoning all coal plant development because of the lack of public support and regulatory uncertainty.
The White Pine Energy Center is one of dozens of coal plants across the country to be postponed indefinitely or canceled outright in recent years.
It is the second planned Nevada coal plant in as many months to fall victim to political and economic uncertainty.
NV Energy announced last month it would not pursue the planned Ely Energy Center until emission controlling carbon capture technology could be deployed at a reasonable price.
The third coal plant, planned near Mesquite, is still under environmental review by the BLM. It is widely opposed by residents.
Meanwhile, federal permit activity for all three coal plants continues, according to BLM Nevada spokesman Chris Hanefeld.
LS Power and the BLM are still preparing to defend the BLM’s permission to build the White Pine Energy Center.
The decision was appealed last month by a consortium of environmental, health and parks groups wishing to get the project canceled.
If construction on the White Pine Energy Center doesn’t begin within five years, the company would need to apply for a BLM extension of the permit or abandon plans to build the coal plant.
NV Energy’s Ely Energy Center has an active BLM file, which is expected to be amended soon as the utility seeks to split the postponed coal plant from plans to build a large cross-state transmission line connecting the state’s electrical grids.
Originally posted at the Breakthrough Institute blog
It appears that there is an effort underway (whether coordinated or just coincident) from the Obama Administration, Intergovernmental Panel on Climate Change (IPCC) and United Nations to place a reality check on expectations for United States climate policy progress in advance of the international climate negotiations in Copenhagen this December.
Yesterday, IPCC chairman Rajendra Pachauri told UK newspapers that Barack Obama would have a "revolution on his hands" if he tried to implement binding cuts in emissions on the scale that the IPCC's scientific consensus recommends.
"He [Obama] is not going to say by 2020 I'm going to reduce emissions by 30 per cent," Pachauri said. "He'll have a revolution on his hands. He has to do it step by step."
Pachauri's word's echo those of U.S. special climate envoy, Todd Stern, who recently stated that the 25-40% emissions cuts called for by the IPCC are "beyond the realm of the feasible" in the U.S. Congress. Stern called for a focus on "the art of the possible," saying "we need to be guided both by science and by common sense."
Now, UN climate czar, Yvo de Boer tells Bryan Walsh in a TIME interview that he doesn't expect cap and trade from the U.S. before Copenhagen either.
Here's the key excerpt from Walsh's interview with de Boer (emph. added):"[Walsh:] The conventional wisdom is that, with everything else on the government's plate, we're unlikely to see carbon cap and trade legislation passed in Congress before the Copenhagen summit at the end of the year. How important is it that something is in place by then?
This I would say is good news. The UN's climate point person is essentially telling Obama that victory doesn't necessarily equal passing cap and trade before Copenhagen. De Boer seems to be trying to (subtly but critically) redefine expectations and reset the goal posts for Obama, giving him room to maneuver.
[De Boer:] I'd agree that legislation is not going to be passed by Copenhagen, but it will be well advanced by then. The international community is keenly interested in seeing what steps America is making at home to get its emissions under control, but it also wants to see what the Administration says it will do. If the Administration in Copenhagen commits to a target that is good enough for the international community, that will work. It's up to the U.S. see how the target will be implemented nationally."
De Boer is basically saying that it would be enough for Barack Obama to say the U.S. is aiming for a reduction of some target by some point, but the international community is going to give Obama some flexibility about what policies he wants to use to get there. Obama could even presumably say, "We're doing a national renewable electricity standard, efficiency standards and investments, and investment in clean energy technology development and deployment to get there and drop cap and trade" (for now, or forever).
It seems there is a growing recognition that the widespread expectation that Obama would deliver a comprehensive climate bill before Copenhagen has set an impossible deadline for the American President. Now, key members of both the Administration and the international community are seemingly trying to temper expectations and open up some critical space for Obama to maneuver in.
On expectations for the Copenhagen meeting itself, here's the excerpt: "Is Copenhagen still an "all or nothing" deadline? Or is there still wiggle room if the world fails to agree on a new treaty?
When asked if the global economic crisis will present a challenge for international climate efforts, de Boer says "don't think the enthusiasm has been dented. ... But clearly this is a difficult time to mobilize the financial resources for international cooperation, and that poses a challenge."
You have to do it in Copenhagen. There is tremendous political momentum internationally to come to an agreement, and if you let that slip the momentum and enthusiasm will gradually dissipate and things will become more difficult. But having said that, I'm not under the illusion that every final little detail of how the agreement will work in practice will be finalized in Copenhagen. A certain amount of engineering has to be done."
Montreal Protocol or Global Marshall Plan?
Finally, Walsh asks an excellent pointed question about the role of technology innovation and asks if the global transition to a new, low-carbon energy infrastructure should really be the primary focus, rather than commitments to emissions targets and timetables. De Boer unfortunately responds with rather conventional thinking about the role of regulation and carbon pricing in driving innovation, without even touching the potential of an international technology development effort to rapidly accelerate our transition to a low-carbon energy economy. There are those who say that climate change is primarily a question of technology -- that we need to change the way we use energy, and only research and development will do that, not UN mandates. Why is the UNFCCC process important?
You're right Mr. do Boer, technology doesn't happen by itself. Nor does it happen without an active, engaged government role, making major public investments to drive innovation and the commercialization and widespread deployment of new technologies.
It's important because you have to drive change. Automakers will only begin to look for low emissions technology if they think the government is likely to regulate toward low emissions technology. There has to be a sense of urgency out there. We still live in a world where the cost of pollution is not yet part of the price, where you can as a factory emit unlimited greenhouse gases, without having to pay for the environmental consequences. Unless we begin to change that, there is no incentive to switch to more renewable energy and energy efficiency. Technology doesn't happen by itself.
De Boer and the rest of the leaders in the international climate talks should be reading up on the history of technology innovation and the relative roles of regulation and investment before they meet again at Copenhagen. And they should put aside the Montreal Protocol on CFCs and instead look for more relevant models of international technology, industry and economic partnerships. At it's root, the international climate and energy challenge is more about a new kind of sustainable global development partnership than it is about coming together to control something as trivial as an ozone-depleting refrigeration chemical, after all.
We should be looking to initiatives like the Marshall Plan and the European Coal and Steel Partnership for more relevant models of international cooperation. These initiatives saw nations who were killing each other in the battlefields of World War II just a few years prior come together to make major common investments in their collective future, leading to decades of sustained peace and shared economic prosperity. After looking at examples like these, de Boer would likely have a different answer to Walsh's excellent question.
After all, underneath all of the debates about targets and timetables lies the critical challenge of replacing the entire global energy infrastructure with a low-carbon energy system, all while increasing global energy supplies to power development in the Chinas, Indias and Brazils of the world. In short, our climate targets all rest on the success of a global effort to make clean energy cheap. It's still unclear if a discussion about how to accomplish that critical objective will even be on the table at Copenhagen. Stay tuned...
That's the question considered in the latest annual report on clean energy sector trends from Joel Makower and his colleagues at CleanEdge. With an unprecedented investment in clean energy in the stimulus bill passed by Congress last month, you'd think things were looking up for the sector. They are, Makower concludes, but when you're climbing out of the general meltdown gripping the U.S. economy, there's a long way to climb. As Makower writes:
As Makower writes, despite the challenges gripping the sector, overall trends in three core clean energy sectors - wind, solar and biofuels - look robust:The good news is that clean energy continues on a blistering rate of growth — increasing 53 percent from $75.8 billion in 2007 to $115.9 billion in revenues in 2008, based on our study of three key technologies: solar, wind, and biofuels. And the growth will continue. We forecast that by 2018, these three technologies will have revenues of $325.1 billion.
The bad news: The clean-energy sector faces considerable challenges moving forward. A sinking stock market continues to plague the initial public offering markets, with only a small handful of energy-related IPO listings on U.S. exchanges in 2008. This means that venture capitalists and other investors are faced with a dearth of exit opportunities for their current portfolio companies, making it harder for new companies to garner investments.
Severely tightened credit markets also began to take their toll. In late 2008 and early 2009, the extent of constrained credit became apparent, with a range of clean-energy companies delaying plans, laying off staff, or scuttling projects entirely.
Solar photovoltaics (including modules, system components, and installation) will grow from a $29.6 billion industry in 2008 to $80.6 billion by 2018. Annual installations reached more than 4 GW worldwide in 2008, a fourfold increase from four years earlier, when the solar PV market reached the gigawatt milestone for the first time.
Wind power (new installation capital costs) is projected to expand from $51.4 billion in 2008 to $139.1 billion in 2018. Last year's global wind power installations reached a record 27,000 MW. In the U.S., which accounted for more than 8,000 MW, wind installations represented more than 40 percent of total new electricity generating capacity brought online in 2008 — and moved the U.S. ahead of Germany as the world's leading generator of wind energy.
Biofuels (global production and wholesale pricing of ethanol and biodiesel) reached $34.8 billion in 2008 and are projected to grow to $105.4 billion by 2018. In 2008 the global biofuels market consisted of more than 17 billion gallons of ethanol and 2.5 billion gallons of biodiesel production worldwide. For the first time, ethanol leader Brazil got more than 50 percent of its total national automobile transportation fuels from bioethanol, eclipsing petroleum use for the first time in any major market.
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