WEBINAR: Beyond the Meter: Next Generation Smartgrid

Live Webcast Sept. 8, 1 PM ET / 10 AM PT

Discussing the challenges and opportunities associated with a new energy grid and the data that comes with it.

The modernization of electrical grids presents an opportunity to improve the efficient use of energy through analytics of energy consumption data. Uses of this data can go well beyond efficiency and flexible pricing programs. Energy consumption data is a potential goldmine of knowledge about consumers. And this means that utilities, energy service providers, consumers, policy and regulatory representatives and vendors have interests in access, use, and storage of this data.

The question of who owns consumer data has been resoundingly answered, but many questions remain unresolved. Some of the most intriguing questions center on the types of companies that are most likely to find value in consumer energy data, and the types of products and services that can leverage this data. This webinar will tackle these questions and more, as we take a look at challenges and opportunities for consumers and businesses to create value from energy data.

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Featuring:

Christine Hertzog is a consultant and author focused on navigating the electricity ecosystem of emerging technologies and markets. She is the author of the Smart Grid Dictionary, which explains terminology used by utilities, regulators, manufacturers, and more. Christine has two decades of experience helping companies deliver competitive and cost-effective solutions, and frequently speaks and writes about the challenges and opportunities that Smart Grid solutions bring to the evolving electricity supply chain.

Paul Camuti is President of Siemens Corporate Research, where he is responsible for the Information & Automation Technologies Global Technology Field cluster and is an avid spokesperson for technologies that fall under this domain. Before joining SCR, Mr. Camuti headed the Chemical & Pharmaceutical Industry business for Siemens Energy & Automation, Inc. Paul is a member of the advisory board at the University of California-Berkeley’s College of Engineering, the advisory council of the Department of Energy’s National Renewable Energy Laboratory, and the Siemens Foundation board.

Wes Sylvester is Business Development Manager for Smart Grid at Cisco. Previously, he served as Director, Distribution Solutions and Smart Grid at Siemens Energy, Inc. Wes has been a representative on both GridWise™ and EPRI’s IntelligridSM, where he serves as chair of the Intelligrid Technology Transfer Committee. He is also member of IEEE PES.

Marc Gunther is a writer, speaker and consultant, who focuses on business and the environment. He worked for 12 years as a senior writer at FORTUNE magazine, where he is now a contributing editor. His most recent book, “Faith and Fortune: How Compassionate Capitalism is Transforming American Business,” was published by Crown in 2004.

Click here to register for the free theEnergyCollective.com webinar today.

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WattHead's Fifth Birthday!

Time sure flies! I nearly forgot to note the passage of WattHead.org's fifth birthday as a blog!

Inaugurated August 11, 2005, WattHead now enters its sixth year featuring energy news, original analysis, and opinionated commentary on the critical transition to a clean and prosperous energy future.

The blog has evolved from my personal site to a group format featuring writing from some of the web's smartest thinkers, including a cadre of the brightest young energy writers.

Special thanks is due to our readers, to the many contributors who have joined the WattHead team over the years, to the team at theEnergyCollective.com who have partnered with WattHead.org to syndicate and feature content from this site over at the wonderful Energy Collective community, and to our advertisers, who help generate some extra beer money to keep this blogger coming back for more, year after year.

Here's to five more years!

-Jesse Jenkins, founder and chief editor, www.WattHead.org

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White House Report: Stimulus Driving Clean Energy Innovation, Manufacturing, Markets – But What Comes Next?

With global competition mounting and Recovery Act momentum poised to fade, can the Obama Administration secure a lasting clean energy legacy?

By Jesse Jenkins and Devon Swezey

The American Recovery and Reinvestment Act has funded breakthrough innovation and new growth industries that are driving down the cost of clean energy and building the foundation for competitive 21st century U.S. industries, according to a new White House report released today on the impacts of the U.S. stimulus bill.

The report, “The Recovery Act: Transforming the American Economy Through Innovation,” is notable for highlighting the multifaceted and relatively comprehensive clean economy strategy now underway with stimulus investments, and for the Administration’s welcome focus on making clean energy cheap.

Yet while the White House report highlights the considerable clean energy momentum established by the Recovery Act, it also inadvertently raises the specter of an impending clean tech funding cliff which risks sending U.S. clean energy industries into deep freeze as stimulus funds begin to expire over the coming months.

To achieve the White House’s long-term objectives – driving down the costs of emerging clean energy technologies such as solar power and advanced batteries and building globally competitive American clean energy industries – will require a long-term, comprehensive clean economy strategy and sustained investments in innovation, advanced manufacturing, and competitive market deployment.

The White House report correctly frames the overriding goal of clean energy investment around making clean energy cheap in real, unsubsidized terms. For solar energy, according to the report, the near-term goal is for solar electricity to be competitive with retail electricity rates, with a long-term goal to compete with central fossil fuel power plants. As the Breakthrough Institute has consistently argued, taking clean energy alternatives to scale and building globally competitive clean energy industries will ultimately depend on such improvements in cost and performance.

Cost reductions and performance improvements in solar technology, advanced batteries, and electric-drive vehicles will be driven by a confluence of factors, according to the report, including direct public support for energy innovation, manufacturing and deployment, and by strengthening the linkages across all three areas.

The White House report notes that the Recovery Act is accelerating solar energy innovation by providing funding for greater solar energy deployment, manufacturing and scale-up, and catalyzing needed technological breakthroughs to create novel and more efficient technologies. All told, these measures may help reduce to cost of solar power by 50% in coming years, according to White House estimates, while building domestic manufacturing capacity and investing in next-generation solar breakthroughs that could form the basis of entire new U.S. industries.

Similarly, stimulus investments have helped transform the United States from a bit player in international advanced battery markets to a global competitor with an estimated 20 percent of worldwide manufacturing capacity online by 2012, all while potentially driving down the cost of electric vehicle batteries by up to 70%. The key to success, the White House says, has been “investments across the innovation chain – from retooling current auto factories to new manufacturing and commercial deployment to research and development of electric drives and batteries.”

This multifaceted focus on innovation, manufacturing, and markets, bears a striking resemblance to the comprehensive clean economy strategy the Breakthrough Institute has spent much of the past two years advocating through an ongoing series of reports, policy recommendations, Congressional testimony, and writings.

It is notable, however, how distinct such a strategy is from the dominant cap and trade debate that has consumed essentially the entire Congressional calendar since passage of the Recovery Act in February 2009. The nearly complete focus of the subsequent Congressional energy and climate debate on the primacy of carbon pricing may have ultimately prevented meaningful debate on how to optimize and extend the critical, comprehensive clean energy investments begun under to stimulus and enact a long-term investment strategy to strengthen clean energy competitiveness.

Indeed, while the stimulus was supposed to be a “down payment” on a new clean energy economy, the Congressional cap and trade bills—which would have invested little in clean energy technology—left the country likely to default on long-term clean energy promises.

Meanwhile, our economic competitors are not making the same mistakes we are, and are continuing to publicly invest in their domestic energy innovation systems in a bid to capture the increasing economic rewards inherent to the burgeoning clean energy industry.

China is set to unveil a massive $740 billion, 10-year package of direct investments to secure their economic leadership in emerging clean energy industries. China already dominates global market share for electric batters, wind turbines, and solar panels, and is rapidly boosting its capacity to innovate and produce next-generation clean energy technologies. Japan, South Korea, Germany, Spain, Denmark and a host of other international competitors are also fast at work building domestic clean energy industries with a multifaceted focus on innovation, manufacturing, and markets.

Facing such intense global competition, and with Recovery Act funds poised to expire soon, sending U.S. clean energy markets off a clean tech funding cliff, the U.S. is in dire need of a long-term clean energy investment strategy to regain economic and technological leadership in this new growth sector.

The substantial and successful impact of the public investments in the U.S. stimulus bill point to a way forward, but unless rapidly followed by a long-term, sustained investment strategy, the Obama Administration’s clean energy legacy may wind up tarnished by the continued erosion of U.S. clean energy competitiveness.


Jesse Jenkins is Director of Energy and Climate Policy and Devon Swezey is Project Director at the Breakthrough Institute. Both are co-authors of “Rising Tigers, Sleeping Giant” a comprehensive report on global clean tech competitiveness, and “Strengthening Clean Energy Competitiveness,” a set of Congressional policy recommendations.

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Can the Military Lead the Clean Energy Charge?

Aggressive new efforts are underway to end the U.S. military’s reliance on oil by catalyzing clean energy technology innovation and adoption. That is exactly the right approach to enhance the strategic and tactical capabilities of the armed forces, buttress national security, and help repower the economy, according to a recent report published by an elite group of more than a dozen retired generals and flag officers hailing from all branches of the U.S. military.

“Continued over-reliance on fossil fuels will increase the risks to America’s future economic prosperity and will thereby diminish the military’s ability to meet the security challenges of the rapidly changing global strategic environment,” according to “Powering America’s Economy: Energy Innovation at the Crossroads of National Security Challenges,” a July report published by the CNA Military Advisory Board.

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To read the rest of this column, and an exclusive in-depth interview with Vice Admiral Lee F. Gunn (Retired), a decorated 35-year Navy veteran now working as the President of the CNA Institute of Public Policy Research head to theEnergyCollective.com here.

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Mixed signals from the White House on clean energy investment

By Alex Trembath, originally published at Energetics.

President Obama has been touring the nation, touting his administration's efforts to expand federal investment in clean tech manufacturing. At each stop, clean energy jobs are the major topic of discussion, with international economic competition and environmental goals somewhere on the edges of his stump speech.

At ZBB Energy in Wisconsin, a battery and renewables storage producer, Obama heralded the $1.3 million in federal stimulus dollars invested in the company while calling for 800,000 new clean energy jobs by 2012. On a fundraising trek for Governor Ted Strickland through Toldeo, Ohio, the President applauded local renewables manufacturing, saying, "There is a whole series of huge potential manufacturing industries in which we end up being world leaders and, as a bonus, end up creating a more energy-efficient economy that is also good for the environment." And, at a DCCC fundraiser in Hollywood, the President recounted the imperative of reducing carbon emissions "because we want those clean energy jobs built here in the United States, not in China, not in Germany."

In the meantime, however, critics are taking note of disturbing signals from the White House on clean energy investment. Jesse Jenkins of WattHead and the Breakthrough Institute pointed out yesterday that "a number of (as yet unfulfilled) energy and environmental policy pledges have been removed from the WhiteHouse.gov page in recent weeks." Among the dropped pledges is the President's commitment to invest $150 billion over ten years in clean tech R&D. This follows months of inaction from the President on a comprehensive climate and energy bill, the American Power Act. What remains of that bill is now floundering in Congress without the inclusion of any cap on carbon emissions, environmentalists' dream policy goal for creating a clean energy economy that was thoroughly demolished during the summer.

As Andrew Revkin points out, the recently missing $150 billion in clean tech R&D may be the result of the failure of cap-and-trade to pass the Senate, leaving the White House's assumed funding source for the investment dead in the water. But the source shouldn't matter as much as the policy goal itself; expert energy organizations from the IEA to the AEIC and dozens of Nobel Laureates have called for significant increases in energy technology R&D, on the order of $15-30 billion annually to keep pace with the required rate of decarbonization and to compete with other nations on similar paths.

We can only hope that such mixed signals on energy policy do not become standard operating procedure for the Obama White House. The President's recent (and encouraging) repeated calls for clean tech manufacturing investment may be signs of his attempt to make amends for relative idleness on the climate bill. And perhaps some leeway may be given in anticipation of the November midterm elections, which by many accounts will be some degree of devastating to the President's party. But, fingers-crossed, by the new year the President needs to have developed a powerful and sustained message for decarbonization and clean tech, and the time for broken promises and mixed signals will be over.

As part of a non-emotional response to the BP oil spill, and in anticipation of a $600 billion clean energy industry projected for 2020, Obama must direct the power of his office towards energy competitiveness the way he did with health care last year. Some Republicans have already indicated a willingness to work with Democrats on clean tech, and this effort could mark the first time in his presidency that Obama can successfully unite the parties towards a common policy. But, politics aside, the United States can't afford to sit on the bench any longer.

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Getting it Wrong on Carbon Caps and Clean Tech Investment

By Devon Swezey, originally published at the Breakthrough Institute

In a new article at the Washington Independent, Andrew Restuccia falls into the trap of equating the failed cap and trade bill with a proactive clean economy strategy that would drive considerable private investment in clean energy.

We warned about this last Friday, when we argued that cap and trade advocates would use recent news that Deutsche Bank is moving clean energy investment overseas as evidence that cap and trade would have kept investment in the United States.

According to Restuccia:

"It turns out that an economy-wide cap on carbon emissions really is necessary to spur investment in what President Obama likes to call the "clean energy economy." At least for Deutsche Bank."

Actually, according to Deutsche Bank's own reports, a carbon cap would have done little:

"While emissions targets express an intention and carbon markets might deliver a price signal in the long-term, governments must strengthen underlying mandates and incentives immediately if capital is to be deployed to cover the gap, creating more investment and jobs."

Those underlying incentives are public investments, in the form of feed-in tariffs and procurement policies in countries like Germany and China that have "demonstrated their ability to deliver renewable energy at scale" and earned those countries a "low-risk" investment rating, according to the Bank.

Indeed, in his comments to Reuters, Deutsche Bank Head of Global Asset Management, Kevin Parker, is careful not to mention cap and trade directly. And if he is referring to cap and trade, then he's being disingenuous, as his own reports criticize the "volatile market incentive approach" of the United States.

China planning public investment, not cap and trade

Restuccia also writes that China, which has attracted the bulk of private investment in clean energy, will "begin capping carbon emissions" in the near future. Yet China is not considering absolute emissions reductions targets or an economy-wide cap and trade system, but is considering localized trading systems, similar to the voluntary exchanges we have in the United States. A recent Reuters article on the subject states that China "won't be rushing to launch a national emissions trading scheme or to commit to absolute emissions reduction targets."

The real story that Restuccia and many others miss is the country's planned $740 billion, 10-year investment package expected to be announced soon. Indeed, the reason China has become a hub of clean tech investment is that it's government is very actively promoting the sector through major public investments in R&D, manufacturing, and deployment incentives like procurement and feed-in tariffs.

It's time for clean energy advocates to recognize no congressional cap and trade bill will drive substantial private investment without a targeted, proactive clean economy strategy that prioritizes major public investment in clean energy technology.

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Does New Republican Bill Signal Bipartisan Support for Clean Energy Investment?

By Jesse Jenkins, originally at the Breakthrough Institute

New legislation introduced by Republican Representative Devin Nunes (CA) and backed by several GOP House members would invest billions into renewable energy deployment, signaling an opportunity for bipartisan support for clean energy technology policies.

Over at CNBC, reporter Trevor Curwin has been one of the first to note the significance of the Republican bill, which Nunes' says could "potentially provide hundreds of billions in financing" for renewable energy over the next several decades.

Rep. Devin Nunes' (R-Calif.) who introduced the bill, in late July, wants to use a reverse auction process to allocate future federal oil royalties to the best renewable energy projects and technologies, with the lowest-price-per-megawatt, (MW), bid winning funding.

"It's clear and transparent; the people with the best technology will get the help," Nunes says of the bill, dubbed "A Roadmap for America's Energy Future,"

Depending on how much territory is eventually opened up to drilling, research firms estimate the royalties could be worth $10 billion to $50 billion a year.

As Curwin notes, Nunes' plan would rely solely on new revenues from oil and gas leasing to fund the renewable energy investments, including the always contentious proposals to open up areas of the Arctic National Wildlife Refuge as well as the development of oil shale resources and expanded offshore drilling. While more offshore drilling enjoyed bipartisan support just months ago, in the wake of the BP Deepwater Horizon disaster in the Gulf, the prospects for new offshore oil and gas production are uncertain.

But there are other ways to fund the renewable energy investments Rep. Nunes' and his GOP colleagues envision. Curwin quotes my recent suggestion, along with Breakthrough's Yael Borofsky, that a small fee on each barrel of oil sold could do the trick.

A $5 per barrel fee on all oil consumed in the United States, for example, would raise roughly $40 billion annually for critical national investments in clean energy technologies and industries, and would increase gasoline prices by just 12-15 cents per gallon. That's in the regular 'noise' of gas price fluctuations, which have risen or fallen by 15 cents or more on 14 different occasions in the last two years, according to data from the U.S. Energy Information Administration.

Other alternatives include a very modest fee on carbon pollution ($5 per ton would raise roughly $30 billion annually and increase gas prices by less than a nickel per gallon) a wires fee on electricity sales ($10 billion could be raised annually without costing the average household more than $5 per month on their utility bills), the sunsetting of well-worn subsidies for mature energy sources (including oil, coal, corn ethanol and probably even wind power), or some combination of the above.

At the end of the day, the choice of revenue raiser is important, but not the central issue. With representatives on both sides of the aisle now recognizing the importance of national investments in clean, American energy sources, new opportunities for bipartisan progress on clean energy may be possible where efforts to pass contentious cap and trade legislation have repeatedly failed.

As I told CNBC, Nunes' proposal is a positive step forward, a sign that smart investments to boost U.S. clean energy production, spur innovation to reduce the price of emerging clean energy technologies, and strengthen America's clean energy industries and entrepreneurs are all points that can enjoy bipartisan consensus.

On it's own, a program for strategic, competitive deployment incentives to spur clean energy adoption, similar to that proposed by Rep Nunes and his colleagues, could be a key component of a 21st century clean energy strategy.

A comprehensive strategy to make clean energy cheap and abundant and ensure American leadership in clean energy markets would also include key public investments in clean energy research, energy science and engineering education, advanced manufacturing, and enabling infrastructure, each areas that both Republicans and Democrats can support.

Regardless of what you believe about the urgency or importance climate change, we can agree that making more clean, American energy, making it more affordable, and making it right here in the USA are all in the national interest.

See also:

$40 billion for clean tech at 12 cents per gallon? Yeah, why not?

Time to Bury Cap and Trade and Plan Anew

After "Drill, Baby, Drill," Obama Should Embrace Another GOP Energy Plan

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Unfulfilled Promises on Clean Energy Technology?

By Jesse Jenkins, originally at the Breakthrough Institute

Updated, 8/19/10

There's been some change over at WhiteHouse.gov's energy and environment page, but probably not the kind we had in mind when we heard President Obama's oft-repeated campaign slogan, "Change You Can Believe In."

A number of (as yet unfulfilled) energy and environmental policy pledges have been removed from the WhiteHouse.gov page in recent weeks.

Chief among them: President Obama's pledge to "invest $150 billion over ten years in energy research and development to transition to a clean energy economy," once a central plank in Obama's energy and environment platform, and a feature of his first national budget proposal (in FY2009).

You can see a screen-shot of the old WhiteHouse.gov energy and environment page below, taken in May 2009, and a full archive of the June 2010 site text (sans CSS formatting) via the Versionista internet archives here. The old page was live with this pledge featured prominently as recently as June 10th, when the WhiteHouse.gov site underwent wholesale changes, according to Versionista.


The new page features a short (rhetorical) introduction, followed by a list of White House accomplishments in the realm of energy and environment, and no longer features any forward-looking pledges.

That includes any clear pledge to reduce U.S. greenhouse gas emissions by any particular amount by any particular date, or to establish a cap and trade program to achieve those objectives, other signatures of Obama's earlier policy pledges in the area. Cap and trade legislation is now widely considered dead in the U.S. Senate, after failing to secure anything close to the sixty-vote super-majority needed to clear the chamber.

One could read the changes at WhiteHouse.gov as a simple reflection of where Obama now is in his presidency, with almost two years under his belt and a list of accomplishments to his name to replace a set of campaign-style promises. Equally notable, however, is the list of what has indeed been accomplished, and what, for now, remains an entirely unfulfilled promise.

As of yet, despite strong expert consensus, a clear economic imperative, and the fervent appeals of 34 Nobel laureate scientists, a national ten-year mission to catalyze both public and private sector innovators by investing $150 billion in clean energy R&D remains solidly in that latter category...

Update, 8/19/10: Andrew Revkin at the NYTimes DotEarth blog notes the disappearance of the White House clean energy R&D pledge as well, noting:

Here's the back story. During his election campaign, Obama pledged to invest $150 billion over 10 years in research and development to advance non-polluting energy technologies. That level of federal investment on energy frontiers, after decades of bipartisan disinterest in energy sciences, has been widely seen as a critical component of any meaningful effort to expand the world's energy menu without overloading the atmosphere with heat-trapping gases.

But nearly all of the research money under the Obama plan was slated to come from the revenues generated by auctioning permits for greenhouse gas emissions. So the fate of the new American post-fossil energy revolution was tied to the fate of a cap-and-trade system that was always going to be a tough sell in a polarized Congress and now is on the legislative scrap heap.

Darren Sameulsohn of Politico also notes the disappearance of the climate and clean energy pledges. Samueolsohn writes:

The Web site changes came with little fanfare at the same time environmental groups were pleading with Obama to take a more proactive role in finding the votes for a sweeping climate bill. The president's primetime address from the Oval Office on June 15 drew criticism from activists when he didn't mention the words "carbon," "greenhouse gases," "global warming" or "cap and trade."

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Deutsche Bank's Parker: Senate Clean Energy Policy Failure Driving Investor Exodus

By Devon Swezey and Jesse Jenkins

The failure of the U.S. Senate to pass clean energy and climate legislation has caused investment giant Deutsche Bank to take its clean energy dollars elsewhere, according to Kevin Parker, Global Head of Asset Management for the firm.

"They're asleep at the wheel on climate change, asleep at the wheel on job growth, asleep at the wheel on this industrial revolution taking place in the energy industry," said Parker (pictured right).

Deutsche Bank manages over $700 billion in funds with $6 to $7 billion invested in clean energy markets worldwide.

These blunt comments from the global investment firm have cap and trade advocates renewing the argument that a price on carbon would have made the United States a world leader in clean energy technology.

Yet according to Deutsche Bank's own reports, cap and trade and carbon pricing would have done little to change the investment outlook in the United States relative to its competitors.

In a report released last October, after the passage of the House's Waxman-Markey climate and energy bill (HR 2454), Deutsche Bank ranked the United States as a "moderate-risk" nation for private investment in clean energy since it relied on "a more volatile market incentive approach" and "has suffered from a start-stop approach in some areas."

By contrast, countries like China, Germany, and Japan were "low-risk" nations for investors because they each rely on "a comprehensive and integrated government plan supported by strong incentives."

Mr. Parker is correct that the Congress remains "asleep at the wheel" as international competition for clean energy markets heats up.

The fact that the Senate got nothing done on climate and energy this year is outrageous, and continued policy uncertainty will ensure that the U.S. will keep lagging further and further behind economic competitors in the global clean energy race.

But let's be clear. The cap and trade legislation that Congress spent the better part of two years debating would have had, at most, a modest impact on America's standing in global clean energy markets, and would have been wholly insufficient to keep the U.S. in the game with economic competitors in Asia and Europe.

Is Carbon Pricing Really the Key?

We issued precisely that warning last November when the Breakthrough Institute and ITIF published "Rising Tigers, Sleeping Giant." The comprehensive report documented that the United States already lagged China, Japan, and South Korea in the production of virtually all clean energy technologies, and was poised to be out-invested three to one over five years by the three Asian 'Clean Tech Tigers,' even if the House-passed cap and trade bill had become law.

Deutsche Bank themselves clearly acknowledge that while carbon pricing may be important in the long-term, it is not what is helping governments around the world attract private investment and build domestic clean economies in the near-term.

According to Deutsche Bank's Parker and Global Head of Climate Change Investment Research Mark Fulton:

"While emissions targets express an intention and carbon markets might deliver a price signal in the long-term, governments must strengthen underlying mandates and incentives immediately if capital is to be deployed to cover the gap, creating more investment and jobs."

Deutsche Bank's conclusions are consistent with other analyses of the impacts of cap and trade legislation in the United States. According to the U.S. Environmental Protection Agency (EPA), under the House's Waxman-Markey bill:

"allowance prices are not high enough to drive a significant amount of additional [deployment of] low- or zero-carbon energy (including nuclear, renewables, and CCS) in the shorter-term, excluding the technologies with specific financial incentives (e.g. CCS)."

Similarly, the EPA concludes that the cap and trade system's impacts on transportation markets would be negligible. With potential carbon prices the equivalent of just 10 or 20 cents per gallon of gasoline, "the increase in gasoline prices that results from the carbon price ... is not sufficient to substantially change consumer behavior in their vehicle miles travelled or vehicle purchases..."

What Really Matters

What really matters to create a new clean energy economy and stimulate private investment in the near-term are policy regimes that employ direct and targeted public investments to cover the cost gap between higher-cost clean energy and fossil fuels.

Indeed, China has surpassed the United States as the largest beneficiary of private clean energy investments without a price on carbon. Rather, China, along with Germany, Japan, and other "low-risk" nations, has implemented generous, technology-specific deployment incentives that reduce regulatory risks and are much more attractive to investors, and are backed by aggressive, long-term national targets for clean energy deployment.

China has targeted procurement policies for clean energy, and a variable feed-in tariff for wind power. In Germany, Deutsche Bank credits the nation's generous feed-in tariff policy, not the carbon markets of the European Emissions Trading Scheme (ETS), for Germany's world-leading solar energy sector. These incentives have "demonstrated their ability deliver renewable energy at scale," according to the bank.

If the United States wants to avoid being permanently relegated to the backwaters of the global race for clean energy investment, it needs a new clean energy competitiveness strategy that, like those of its competitors, prioritizes large and sustained public investment in clean energy technology.

That strategy should include robust and long-term investments in areas such as research and innovation, manufacturing, market creation, workforce training and education, and the development of new, globally competitive industry clusters.

Time is short, and the next several years will see first-movers establish dominant positions across a range of clean energy sectors. Already the U.S. is failing to attract significant private-sector investment in clean energy markets, losing out on a key opportunity to grow American jobs, build new high-tech, export-oriented industries, and capitalize on the economic opportunity of a fast-growing clean energy sector.

If Washington continues to ignore this growing economic imperative, the U.S. will remain behind in clean energy investment and will wind up importing the vast majority of the clean energy products needed to satisfy U.S. markets.

Almost as dangerous, however, would be a continued reliance on cap and trade and the modest carbon prices it would establish as they key to building America's clean energy industries.

The message from clean energy investors like Deutsche Bank and the model provided by our global competitors are both quite clear: what the U.S. needs is not cap and trade but a comprehensive clean economy strategy. And it needs one now.


Devon Swezey is Project Director and Jesse Jenkins is Director of Climate and Energy Policy at the Breakthrough Institute. Both are co-authors of "Rising Tigers, Sleeping Giant: Asian Nations Set to Dominate the Clean Energy Race by Out-Investing the United States"

See Also:

• The Challenge of China's Green Technology Policy


• A Clean Energy Competitiveness Strategy for America


• Report: Rising Tigers, Sleeping Giant


• Report: Strengthening Clean Energy Competitiveness

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Bucking the Debate: Clean Energy Industrial Policies At Work

By Matthew Stepp, Breakthrough Fellow, originally posted at the Breakthrough Institute

A vigorous debate about whether the U.S. government should invest in and help manage clean energy industries to spur economic growth is unfolding among academics, policy makers and business leaders. Curiously, a handful of federal, state, and local government officials are forging ahead in spite of the national discussion and formulating targeted industrial policies to create vibrant clean energy innovation ecosystems that include manufacturing, material suppliers, customers, and R&D. Cases like Rioglass Solar, a Spanish glass manufacturer expanding operations in Arizona, as well as the considerable growth of the wind industry across the US show how the public and private sector can collaborate and, more importantly, how effective industrial policy can create well-paying, long-term jobs.

This past week Rioglass Solar, which provides curved glass sheets used in solar panels, decided to build a $50 million headquarters and a 130,000 square foot manufacturing plant in Surprise, Arizona. The project will create 100 new jobs at the headquarters alone and many more in the manufacturing plant - a welcome economic boost for the town.

The chief incentive for the American operations expansion? Local, state, and federal officials provided almost $12 million in tax credits and fee reductions to (successfully) lure Rioglass to the area.

Additionally, a recent analysis of the emerging U.S. wind energy industry found that since 2004 over 200 wind turbine component manufacturing facilities have opened and the number of domestic wind energy companies has tripled. The wind industry's installed energy capacity has rapidly grown from 6.7 MW in 2004 to 35,000 MW in 2009 and expansion continues.

In fact, as the report explains, the expansion of the wind industry has been national in scope:

"The U.S.'s wind manufacturing ecosystem extends from coast to coast and border to border. There are online or planned facilities in rust belt states like Michigan and Ohio, Midwest states like Kansas and Iowa, where youthful rural populations now have an alternative to moving to urban centers for opportunity, and in Southern states like Texas and Arkansas, where manual labor now has an alternative to unemployment."

The chief incentive for the expansion of domestic wind manufacturing - the $2.3 billion Advanced Energy Manufacturing Tax Credits (AEMC) funded through the 2009 American Recovery and Reinvestment Act -- provided support for 183 individual projects and led to $5.4 billion in private investment.

Both Rioglass Solar and the U.S. wind energy industry are shining examples of how government industrial policy can work. In both cases, specific public investments are being made, not to pursue a narrow technology goal like some skeptics worry, but to ensure that a host of clean technology companies have the ability to innovate, compete, and grow in the global free market.

Thus, the real debate should not be on whether industrial policy is good or bad, but what shape it should take. Local actions in Arizona and the one-time funded federal energy manufacturing tax credit should be just a start.

It's time to kick these policies into high gear and luckily, clean energy industrial policy may have a key advocate - President Barack Obama.

A recent Businessweek article dubbed the President "Clean Energy's Venture Capitalist-in-Chief," thanks to his plans to channel $69 billion in tax credits, low interest loans, grants, consumer tax credits, and R&D to thousands of clean tech companies across the clean energy spectrum through 2011. But while these incentives are critical, their short-term focus will not create the market stability necessary to advance sustained growth in the clean tech sector.

A spokesperson for the American Wind Energy Association (AWEA) explains:

"...effective manufacturing incentives [like the AEMC] need to be coupled with a stable, long-term market and even strong programs like [AEMC] can't revitalize the sector if we don't create a market."

The next step for the so-called Capitalist-in-Chief is to make these policies explicit U.S. industrial policy, not just one-time stimulus efforts. Investments and incentives need to be expanded in the long term and centered around growing the "clean energy innovation ecosystems" that are emerging across the country. A long-term strategy would provide a clear signal to private investors that a clean energy economy is a priority for the U.S.

Even with Congress's failure to pass comprehensive energy legislation, a clean energy economy is still a very real possibility once the national debate internalizes already effective industrial policy advances -- as exemplified by wind industry growth and Rioglass Solar -- and focuses on how best to implement sound national industrial policy. Limited local and state policies along with short-term federal funds can only go so far given the competition from countries like China, which may dedicate as much as $740 billion over the next ten years toward building a clean energy industry. It's time for the federal government to consistently and fully support the progress local and state governments are making in order to ensure a robust green economy.

See Below For More on the Breakthrough Institute's series on the National Industrial Policy Debate:

A Needed Debate on Industrial Policy

In Defense of Andy Grove: Toward a More Effective Industrial Policy

In Defense of Bill Gates: Investing in Clean, Cheap Energy

Read more!

In Defense of Bill Gates

By Devon Swezey and Rob Atkinson

Originally posted at the Huffington Post.

If you want to understand why we haven't made any measurable progress on energy and climate change for the last 30 years, there's no better place to look than the visceral partisan reaction to Bill Gates' recent call for major federal investment in energy innovation.

Gates has been speaking out publicly over the last few months--first in a blog post on his website, then in a talk at the TED conference, and now as part of the American Energy Innovation Council--for radical energy innovation to drive carbon emissions to zero. In a climate discourse dominated by targets and carbon caps, Gates has provided a refreshing and clear-eyed look at the first-order importance of direct public investment to develop clean, affordable technologies to replace fossil fuels on a global scale.

But proving once again that no good deed goes unpunished by both the right and the left, Gates was roundly criticized by partisans on both sides for speaking truthfully about the enormous climate and energy challenge.

On the left, environmental advocates attacked Gates for daring to suggest that innovation will be critical to dramatically reducing greenhouse gas emissions, recycling the tired mythology--repeated ad nauseum by Al Gore--that "we have all the technologies we need" and "all we lack is political will."

On the right, libertarians and conservatives, while not hypnotized by the myth that clean energy is an affordable alternative to fossil fuels today, attacked Gates for proposing a substantial role for government in innovation, conveniently ignoring the long and successful history of government investment in developing nearly all the high-tech products we take for granted today.

Both the left and the right are wrong and Gates is right. The intense reaction from both sides to Gates' message shows why so little progress has been made on shifting away from fossil fuel energy over the last 30 years.

The Off-the-Shelf Mythology: We Don't Have All the Technology We Need

After publishing his article and speaking at TED, climate and environmental advocates on the left immediately attacked Gates for centering on the need for breakthrough technologies and radical technology innovation to solve climate change and sustainably power the planet.

Climate blogger Joe Romm of the Center for American Progress called Gates' position "myth-filled," and "suicidal," and dismissed the need for R&D investment on the scale that Gates advocates.

David Roberts of Grist, an influential online environmental magazine, penned an article titled "Why Bill Gates is Wrong," arguing that "new social arrangements" with existing technology are as important as new technology in creating a sustainable future.

The idea that "we have all the technology we need" is not new. Indeed, it has been a mantra for the environmental left for over 30 years. In 1976, Amory Lovins, the President of the Rocky Mountain Institute (RMI) and one of Joe Romm's mentors, predicted that by the year 2000 renewable energy, excluding hydroelectricity, would supply nearly one-third of U.S. energy consumption. The actual contribution of these energy resources in 2000 was 3 percent. In 1984, Lovins, who is considered a national energy efficiency guru, predicted that "we see electricity demand ratcheting downward over the medium to long-term." In fact, America's electricity consumption increased nearly 66 percent over the following 20 years.

Despite the fact that Lovins' many predictions have been so obviously wrong for so many years, he has gained notoriety and attracted high-profile disciples who continue to preach that we don't need new technology. Top of the list is Former Vice President Al Gore, who told the Daily Show's Jon Stewart that "we have all the tools we need" to solve global warming. Joe Romm repeatedly dismisses the need for breakthrough innovations, calling it an "illusion."

Against this view is the consensus among energy experts and scientists that innovation, both incremental and radical, is necessary for a whole suite of technologies in order to achieve global carbon mitigation goals. Most clean energy technologies remain much too expensive to gain the necessary market penetration, especially in low and medium-income countries. This view is shared by leading energy scientists like Nate Lewis of Cal Tech and Secretary of Energy Steven Chu, the latter of who has repeatedly argued that Nobel-caliber breakthroughs are needed in areas like solar photovoltaics, advanced batteries for vehicles and energy storage technologies.

These experts also recognize the need for prioritizing major government investments to develop these technologies and make clean energy cheap. Last year, 34 Nobel prize winning scientists wrote a letter to President Obama calling on him to honor his commitment to investing $150 billion in energy R&D over 10 years, writing that "rapid scientific and technical progress is crucial to...reducing greenhouse gases at an affordable cost."

Take the case of solar. Issues like system reliability, integration with existing systems, control infrastructure, and installation economics pose key technical issues that must be addressed if we want to have greater penetration than the forecasted 5 percent to 10 percent in the next decade. The integration of a high volume of inverter-based photovoltaic systems will require not only a smart grid, but also advances in present-day inverters. Sophisticated algorithms need to be designed to ensure interactive controls like passive monitoring and active control that will allow PV systems to disconnect when necessary but stay on-line when drops in utility voltage and frequency levels occur. Currently, the technology is not there to support massive movement to solar PV.

Perhaps the greatest indictment of the left's dismissal of breakthrough technology is an honest assessment of the scale of the global energy and climate challenge. In 2007, humans consumed roughly fifteen terawatts (trillion watts) of energy. Humans will need to produce roughly 60 terawatts of energy annually by 2100, if every human on earth is to reach the level of prosperity enjoyed by the world's wealthiest 1 billion people. Even assuming an increase in energy efficiency of 30%, global energy demand would still triple by century's end.

To give a sense of scale, providing 10 TW of carbon free power, less than one-third of what will likely be necessary by the end of the century, would require the equivalent of building 10,000 new 1GW nuclear reactors, or a new nuclear reactor every other day for the next 50 years. This is, quite simply, an impossible task with current technology. Radical innovation to reduce the costs and improve the performance of low-carbon energy technologies is the only possible path forward.

The Lone Inventor Mythology: Government Investment is Key

On the right, conservatives and libertarians dismissed Gates for acknowledging a substantial government role in innovation; something they know is better left to the private sector.

James Pethokoukis, a right-leaning business and economics columnist for Reuters, suggested that Gates' "Big Government" plan is "a long-shot at best," arguing that there is "no clear-cut evidence" that government R&D provides any economic benefit.

Robert Michaels, an Adjunct Scholar at the libertarian Cato Institute, urged Gates to remember how he made his fortune ostensibly free from government intrusion:

"Can you imagine where you (Gates) would be now had there been a National Computing Strategy Board to coordinate research and investments? None of us really want to know what might have happened, although there is a chance we would have gotten something better than Windows Vista."

But alas, as with most libertarian critiques, blind disdain for anything involving the government has led them to misunderstand (or deliberately misrepresent) the history of government involvement in technology innovation.

Against the "lone inventor" mythos that is so widely propagated in the United States, it has been clearly documented that most of the U.S. technologies that we now take for granted today, including jet engines, microchips, computers, and the Internet, were the result of direct investment and support from the public sector--the same thing that Gates and Co argue is needed to drive innovation in new clean energy technologies today

There is a pervasive collective amnesia among not just libertarians and conservatives but increasingly mainstream environmentalists like Joe Romm--who perpetually derides massive public investment in clean technology as "Big Government"--about the critical role that the U.S. federal government has played in developing the technologies that have driven waves of U.S. economic prosperity.

Personal computing is one clear example. The story of the PC is consistently misrepresented as the genius of lone inventors tinkering away in secluded garages. In reality, from the beginnings of the computer industry, federal agencies promoted critical research into computing hardware and deployed early computers throughout the federal government. Indeed, the roots of IBM come from early contracts with the Census Bureau. Moreover, not only did government provide the key support for research, including often bringing researchers from the public and private sector together to better share and commercialize results, but computer, semiconductor and software technologies were, according to economics professor Vernon W. Ruttan, "nourished by markets that were almost completely dependent on the defense, energy, and space industries."

The story is the same for microchips, where public procurement played the key role in allowing early semiconductor firms like Fairchild, Texas Instruments and Intel to not only sell enough chips to gain needed revenue to reinvest in R&D but to get the scale needed to bring down prices. Throughout the early 1960's, the federal government bought virtually every microchip that firms could produce--so many that the price of a microchip fell from $1,000 per unit to $20 per unit in the span of a few years.

The Education of Bill Gates

Gates himself was an early preacher of the view that private sector and the magic of the free market created the PC industry. Defending his company on the day the Justice Department brought an anti-trust suit against Microsoft in 1998, Gates declared, "The PC industry is leading our nation's economy into the 21st century...there isn't an industry in America that is more creative, more alive and more competitive. And the amazing thing is all this happened without any government involvement."

Yet, to his credit, Gates has since taken a hard look at the facts and recognized the important role government has played. Indeed, he now willfully acknowledges that he owes much of his career to early government investments in information technology, telling the Washington Post:

"The Internet and the microprocessor, which were very fundamental to Microsoft being able to take the magic of software and having the PC explode, were among many of the elements that came through government research and development."

The private-sector executives of the American Energy Innovation Council point to similar government investments across a whole host of technologies that led to the development of world-leading industries:

"Federal programs have been responsible for a wide range of game-changing technologies: new unmanned aircraft systems save the lives of American soldiers serving overseas; the Internet was born from military programs; and many of the most important medical breakthroughs of the last century came from our world leading investments in medical science research at our universities and laboratories."

This is not to say that entrepreneurial drive and risk taking were not also critical to America's innovation success story in the second half of the 20th century. Of course they were. But what made America the leader of the world is that we combined both factors: brilliant entrepreneurs like Gates and a visionary federal government willing to make the kinds of investments needed to foster technology revolutions.

Why the Left and Right Reject Innovation

So why do both the right and left not only ignore the message but shoot the messenger that we need clean energy innovation? There two main reasons. First, admitting that we need innovation threatens the core project of both: the left's job of getting more government, the right's of getting less.

The left fears, perhaps with some truth, that if policymakers realize that we don't actually have the technology needed to address climate change, they will balk at putting in place carbon caps. In contrast, the right fears, again probably with some justification, that if policymakers realize that we don't have the technology, they will empower government to play a key role in developing it.

But there is a deeper reason for the left and right's attack on the apostles of clean energy innovation. Neither pay much attention to innovation and neither think the government has much to do with it. For the left, government's job is to regulate business, (e.g., cap carbon emissions) not help them. How they meet these caps is their problem, not our problem. For the right, government's job is to get out of the way and let the magic of the market do its thing. For them, if we don't have a technology, by definition it means we don't need it. For to admit anything else is to admit that the market alone is not the final arbiter for technologies; the government is.

But, ironically by attacking the message that we need a robust clean energy innovation policy both the left and right are likely to have their worst fears realized. For the left, without clean energy innovation climate won't get solved. For the right, without clean energy innovation big government regulations, and the significant costs they impose, will be the only, albeit inadequate, path forward.

So how do we go forward? Gates has pointed the way (as has Breakthrough and ITIF). Gates and company call for public investment of a similar scale as in the last half of the 20th century to catalyze both incremental and radical innovation in the energy sector. Their conclusion is the same as a growing "energy innovation" consensus among Nobel scientists, high-tech businesses, and leading think tanks and universities.

To break the deadlock stalling the transition to clean energy technologies in the United States and around the world, at minimum, direct federal funding for energy R&D of the scale that Bill Gates advocates--$16 billion per year--is necessary to make clean energy cheap. Even greater investment would in fact be quite prudent.

If we are ever going to deal with our energy and climate challenges, then both the left and the right need to take a cold hard look at the facts, instead of attacking Bill Gates for injecting a needed dose of realism into the climate debate.

Rob Atkinson is President of the Information Technology and Innovation Foundation, a Washington, DC-based think tank. He is also author of The Past and Future of America's Economy: Long Waves of Innovation that Drive Cycles of Growth. His focus is on IT and innovation and policy to support them.

Devon Swezey is Project Director at the Breakthrough Institute and co-author of "Rising Tigers, Sleeping Giant."

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China Unveils Clean Vehicle Strategy, Builds on $738 Billion Cleantech Proposal

Guest post by Yan Zhu

Cross-posted from LeadEnergy.org

Last Tuesday, China revealed its Clean Vehicle Investment Plan (2011-2020), which would invest over 100 billion RMB ($14.7 billion) in the development of electric and hybrid vehicles. The new investment is aimed to help China reach its annual production goal of 500,000 alternative technology vehicles by 2011.

Through China’s Energy Law and the coming 12^th Five-Year Energy Development Plan, the nation has proven that it intends to lead on both the economic and renewable energy front. China has already surpassed the U.S. as the largest investor in clean energy in 2009. Bloomberg Businessweek also reported that China may spend about 5 trillion RMB ($738 billion) more in the next decade developing cleaner sources of energy. If the plan gets approved successfully by the State Council, some analysts predict an annual increase of 1.5 billion RMB ($220 million) in clean energy production value and the creation of 15 million jobs.

When China recently updated its Renewable Energy Law to include the 15-year Science and Technology Development Plan, it launched talent development programs across the nation and opened 16 new clean energy R&D centers. By taking such action, China sent out a stable signal to local governments as well as domestic and foreign companies, which will attract more private investment and further foster China’s clean energy cluster development. The Washington Post cited China’s foreign investment in the first six months of the year as having rose 19.6 percent to $51.4 billion, after a 14.3 percent increase in the first five months. China’s sustained investments have attracted the world’s biggest energy companies and venture capitalists. A few of the most prominent examples of this are:

• Warren Buffett’s $232 million investment in BYD Co..


• GE’s first wind power equipment assemble factory.


• Goldman Sachs’ investment in local solar water heaters.


• First Solar Inc. is about to build the world's biggest solar power project on 25 square miles of China's northern grasslands.


• American Primafuel is planning to invest in biofuel soon.


• China and Germany also signed a EUR124 million pact to encourage emissions reductions and energy saving by businesses.


• Spanish Wind Power giant Gamesa announced to invest in a wind power engine manufacturing in China Jilin in mid-2011.


• Denmark's Vestas Wind Systems plans to invest $350 million in its Tianjin, China-based subsidiary as it responds to growing demand in China for its turbines. The list continues.

China’s comprehensive technology-based investment strategy has been attracting private investment in a way that leads to clean energy cluster formation. Besides the Baoding, Jiangsu and Tianjin provinces described in the Breakthrough Institute and ITIF report “Rising Tigers and Sleeping Giants”, there are multiple other emerging clean energy clusters. Nanyang City in Henan Province is emerging as a new energy cluster for photovoltaics and bio-fuels, with an estimated vale of 100 billion RMB ($14.7 billion) by 2015 and Hanneng Shuangliu is another green-tech center with an estimated sales revenue of 70 billion RMB ($10.3 billion) from solar power, 20 billion ($2.94 billion) from nuclear power and 10 billion ($1.47 billion) from wind power by 2017. Shizuishan, originally as a big coal city, decided to switch to solar power industries and will reach 40 billion RMB ($5.88 billion) value of production by 2015 and 100 billion ($14.7 billion) by 2020. Not to mention Dezhou, “the biggest solar energy production base in the world.”

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Talking Energy Innovation at the Daily Dish

By Yael Borofsky and Jesse Jenkins, originally at the Breakthrough Institute

Seemingly inspired by the death of cap and trade, over at the Daily Dish Andrew Sullivan has tied together two interesting threads of conversation -- "Waiting on Innovation" and "Why Not?" -- that deal with the issues of energy innovation and energy taxes.

Highlighted in "Why Not?" the Economist's Ryan Avent is on to something when he suggests a $5 per barrel petroleum tax since it could generate about $40 billion in revenue annually. But to suggest, as Avent does, that the tax should rise by $5 each year with the objective of forcing consumers to drive less or purchase more fuel-efficient cars is a strategy that risks falling into the same political trap that ultimately ensnared cap and trade.

The simple fact is that the American public is extremely loath to accept greatly increased energy prices. As indicated in a number of polls, the tolerance point seems to level off at about $100-$175 per year or as little as $8-$15 per month. Gas taxes or carbon prices intended to alter behavior only work by causing financial pain to force the demand response. But the point at which the public feels the pain (or thinks it will) in a way that might actually alter their behavior is precisely when such policies become political nightmares, as we just saw with the Senate cap and trade debate.

In the case of a gas tax, Avent writes that "Americans wouldn't notice" a $5 tax on a barrel of oil and he's right -- the price hike would amount to about 12 cents per gallon. That's low, even for sofa change. But at this level, the tax would have little to no impact whatsoever on consumer behavior and driving habits.

Avent proposes that the tax increase by $5 annually but in reality, it wouldn't take long for the opposition to figure out that ten years down the line the tax would grow to $50 dollars a barrel - about a 65 percent increase over current gas prices or a hike of a little more than a $1 per gallon. At this point consumers would certainly pay attention and it wouldn't be hard to muster the political resistance to kill the policy entirely.

In fact, the Achilles heel of any attempt to increase energy prices to a point necessary to alter consumer behavior is that this is exactly the type of policy that will face serious political opposition, and probably demise, every time.

But this doesn't render Avent's idea worthless.

Instead of raising energy prices, the point of the gas tax should be to raise revenues. In fact, a $5 gas tax could raise about $40 billion annually, as Avent notes, without consumers feeling much financial pain at all.

These revenues could then be dedicated to the kind of public-private partnership that has successfully catalyzed private sector entrepreneurialism and innovation and delivered transformational technology investments throughout America's history.

There is little historic evidence that marginal price signal changes can spur significant innovation -- after all $5 gas taxes throughout the EU haven't given Europeans affordable electric cars or bio-fuel alternatives.

In contrast, the catalytic hand of the public sector lies behind so many of America's corporate success stories, from Hewlett Packard and Boeing to Intel, Microsoft, and Apple, as well as Merck and Dow Chemical.

This is not to downplay the individual genius of so many entrepreneurs, but without the public sector acting as both initial funder and demanding customer, so many brilliant ideas would never have taken root -- or would never have been possible in the first place.

So, is $40 billion enough? Well it's on par with what we spend on biomedical innovation and defense. So yeah, at 12 cents per gallon, why not?

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Dealing with the Electoral (Un)Importance of Climate Change

By Leigh Ewbank. Originally published by On Line Opinion.

Julia Gillard's announcement last Friday marked a new low point for Australian climate change policy. If reelected, a Labor government will fill the void created by its decision to defer the Carbon Pollution Reduction Scheme (CPRS) a collection of low-impact policy measures: miniscule investments in renewable energy; an ill-conceived "cash for clunkers" program; and the much criticised plan for a "citizens' assembly" to establish "community consensus" on climate change. Such measures do not reflect the urgency and scale of the climate change challenge.

In the wake of Gillard's announcement, several climate advocates made the case that community consensus on climate change already exists. Be that as it may, community consensus doesn't tell us whether climate change is a priority issue for Australians. Polling released last week revealed a disturbing truth for Australia's climate change advocates. Contrary to the rhetoric of many, addressing climate change ranks well down the list of the most important issues for voters in the 2010 federal election.

Polling data (PDF 1.51MB) produced by Essential Research shows that "addressing climate change" is a priority issue for just 12 per cent of voters - ranking ninth out of 15 possible issues. This number is dramatically less than the level of support received by the top three priority issues: economic management (63 per cent); health care (55 per cent); and protecting jobs and industries (24 per cent).

This is a shocking outcome. The most important long-term issue facing Australia is not receiving the priority it deserves. With all the money, time and resources invested in climate change advocacy, these results challenge the efficacy of the dominant climate policy proposals and the ways in which the phenomenon is communicated.

Pricing carbon through an emissions-trading scheme is the most important climate policy for many national climate groups. The Australian Conservation Foundation and Climate Institute, among others, have led the charge calling for an emissions trading scheme (ETS) and have undertaken a concerted effort to frame climate change as a pollution problem. Unfortunately, neither the ETS nor pollution framing are election-friendly ideas.

The Labor party will try to keep their proposed emissions-trading scheme off the table during the campaign. The reasons for this are simple. First, the ETS does not appeal to the top concerns of the electorate. Second, and more importantly, an election promise to expedite the implementation of such a scheme would allow opposition leader Tony Abbott to invoke his "great big tax" message.

Cautious Labor strategists won't give Abbott ammunition for a scare campaign on the economic impacts of carbon pricing. Framing the CPRS as a "great big tax" that is bad for our economy and bad for jobs allows the Coalition to appeal to the electorate's concerns while drawing on their strength on economic management to attack Labor's credentials on jobs and industry. Aware of these risks, Gillard will ignore criticism from climate campaigners and stick to her commitment to delay the CPRS and build a "consensus" on the matter.

The limitations of emissions trading are compounded by a problematic communication strategy. Framing climate change as a pollution problem is unlikely to be an effective way of communicating the phenomenon to voters. This is simply because carbon emissions are qualitatively different to the way we experience pollution, which is direct and visible, compared to the indirect and systemic long term impacts of a changing climate. This pollution-centric messaging is of limited value in the context of an election. Admittedly I'm a young writer who hasn't experienced many national elections, but I can't think of an example where pollution was a top concern for the electorate (please let me know if there is a recent example in Australia).

We clearly need an alternative to this flawed approach to climate policy and communication. Instead of waiting for climate change and pollution to become a more significant concern, we must develop ways to fuse the electorate's priorities with the imperative of addressing climate change.

I have argued that a nation-building project for climate change with the scale and vision of the Snowy Mountains Scheme is capable of winning the hearts and minds of Australians. This alternative approach will address climate change while appealing to the concerns of the electorate.

Direct public investments in infrastructure projects will build the foundation of a clean energy economy in Australia. New grid infrastructure can open up renewable energy resources for entrepreneurs and regions for economic development. The construction of large-scale renewable energy projects like concentrated solar thermal power plants can demonstrate the feasibility of the technology and help build new industries. Leadership on renewable energy will help the nation capture a slice of the rapidly expanding global market for renewable energy technology. This will provide valuable export opportunities for Australia, particularly as demand for our coal decreases as the world stops using fossil fuels over the next several decades.

This investment-centred and jobs-friendly strategy would allow Labor to build on its strengths. Director of polling firm EMC Peter Lewis argues that much of Labor's first term success was based on its ability to protect jobs with its stimulus package, and identifies the National Broadband Network as another initiative with excellent job creation and industry building potential. Both the stimulus and NBN meet the electorate's demand for secure Australian jobs and industries. This should be the model for climate policy in the short to medium term, with renewable energy investments matching those allocated for the NBN at a minimum.

So why not just present emissions trading as good for economic management, jobs and industries? Attempts to link them are futile. The carbon pricing reform is too complex and indirect for the public to conceptualise as an economic management or jobs/industry-creation program. Such an approach would be akin to arguing that the GST will create jobs and industries a decade ago. While research reports will be published modelling jobs projections and industry growth, only when Australians experience the benefits of decarbonisation will they support carbon-pricing measures.

When the focus of climate policy is on providing the renewable energy infrastructure projects we need, it is easy to demonstrate the job creation and industry development benefits. This direct approach allows the nation to invest in this critical infrastructure now, rather than waiting for the invisible hand of the market to provide it at some point in the future.

A nation-building approach to climate policy will require Australia's most prominent environment groups to adapt their strategies: to cut their losses and shift their immediate focus away from emissions trading. These groups are capable of adopting an approach that yields are far greater chance of success than business as usual.

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