Jobs, Energy and Global Warming: Can We Fix Them All At Once?

Since Barack Obama’s election on November 4th, the press has become obsessed with his transition plans. Who will Obama choose to help him lead us out of the deepening economic crisis that confronts America? The nation’s current number one concern is jobs. In October, the unemployment rate rose to a 14 year high of 6.5% and many predict that it could go as high as 8.5% by next year, which would make it the fastest jump in trough to peak joblessness since WWII.

However, while unemployment has shot to the top of list of priorities, the next administration cannot afford to wait to act on other pressing matters; namely energy independence and climate change. Inflation, while tame at the moment, will again rear its ugly head as the hard realities of population growth, economic recovery in parts of the developing world and ‘peak oil’ drive up the price of energy. Also, with carbon dioxide emissions increasing by 3% per year (which exceeds even the most pessimistic predictions of the 2007 Intergovernmental Panel on Climate Change report on climate change), time is running out before global warming reaches a precarious tipping point beyond which we will lose our ability to stabilize global temperatures.

A Golden Opportunity for Change?
As many commentators have pointed out in recent weeks, America seems to be caught in the throes of a once in a generation transition. Like most generational transitions, this one has been sparked by a severe crisis. Just as the Great Depression transformed the relationship between government, industry and the American people, our current crisis has the potential to both grow our economy and reinvent our relationship with the planet.

The Chinese use a two character phrase to express the concept crisis, weiji. The character wei is variously translated as unsafe, harmful or dangerous, while the character ji can be translated as ‘key link’ or opportunity. In other words, with crisis comes opportunity. In a rare moment of clarity, most Americans seem to be aware of the reasons behind their present predicament and are open to change. So, with a little creative thinking and strong leadership, all three of our most pressing challenges; jobs, energy and global warming can all be dealt with in one fell swoop. Here’s how.

Stop Subsidizing High Carbon Emitting Industries
First and foremost, the Federal government must immediately stop subsidizing high carbon emitting industries (oil, gas, mining, etc.) and their allies. They should no longer be allowed free or near free use of public ‘commons,’ i.e. Federal lands, our atmosphere and public waterways to deposit their damaging byproducts. Polluters should be required to pay to clean up their own messes. New, tougher restrictions on all types of pollution should include immediate imposition of a hard greenhouse gas (GHG) emissions cap and trade system with 100% auctioning of GHG emissions credits and point of use carbon taxes similar to those currently in place in British Columbia. Economists estimate that these initiatives alone could generate $100-150 billion per year in revenue. And, don’t feel sorry for the oil and mining industries. They will still make money. In 2007, the top five US oil companies made more than $100 billion in profits. I think they can get by on a mere $50 billion, don’t you?

Invest in New Energy Industries
Second, the Federal government should make massive new investments in alternative energy research and development (cellulosic bio-fuels, wind, solar, tide, geothermal, etc.) and provide tax subsides, loans and grants to alternative energy producers. Governments at all levels should also provide incentives for firms and citizens to conserve energy. Encouraging energy efficiency is the fastest and cheapest way to wean ourselves off of fossil fuels and also provide financial relief to cash strapped families.

There are plenty of things high carbon emitting firms can go do clean up their acts and embrace a greener future. Dozens of former auto factories and industrial foundries have already been converted into assembly lines for solar panels and wind turbines. Long existing industrial powerhouses that have already committed to offering lower carbon products and services such as General Electric are growing much more quickly than their more environmentally challenged competitors. If Ford, GM and Chrysler want government bailouts, they should have to commit to higher CAFE standards (and start selling the high fuel efficiency autos they already produce in Europe and Asia). They should also be forced to replace senior managers who, for decades, have fought all forms of environmental regulation and embraced SUV production until their last dying breath, even as global competitors innovated and produced more fuel efficient and popular vehicles.

Enlist a New ‘Green Corps’ to Build Low Carbon Infrastructure for America
Low carbon companies will not only help to build a more sustainable economy, but can also provide millions of jobs to former employees of failing high carbon industries. We do not have to repeat the mistakes of the early 1980s, when heavy industry collapsed under the stress of foreign competition, and many hard working Americans found themselves unemployable because their old skills did not match the new needs of the global marketplace. Ronald Reagan chose to let these victims of globalization fend for themselves. What I am talking about here is a massive jobs training program that helps workers transition into ‘green collar’ jobs. Government should also provide resources to schools at all levels to help them prepare workers for a low carbon future.

Many government buildings, schools, roads and bridges that we still use today were built under the auspices of the Works Progress Administration, a 1930s government program that provided employment to millions of Americans during the dark days of the Depression. While those investments have served us well, to grow a low carbon economy both government and the private sector must reorient their investment dollars to build infrastructure that will help us wean ourselves off of fossil fuels. America needs railroads and bike paths not freeways; subway systems, not airports. Virtually all American cities lack adequate public transportation. And public transportation projects should be designed to encourage higher density in urban cores and discourage suburbanization. This will not only save energy, but also revitalize cities and strengthen communities. And all of those still standing WPA buildings could greatly benefit from energy efficiency upgrades.

Another critical investment we need to make is to update the nation’s aging power grid. The current configuration does not allow efficient transfer of power from one part of the country to another. This is a critical issue because an updated grid would help low carbon power providers, say hydroelectric power producers, to sell energy to regions which currently depend on coal to power their cities and towns. An updated grid would permit universal implementation of ‘net metering,’ or the two-way transfer of electricity from would-be micro-energy producers who have installed solar panels or wind turbines on their own property back to electric utilities and then on to other consumers. Also, our current electric grid is not configured to provide sufficient juice to run the millions of electric plug in vehicles that may hit American roads during the next decade allow vehicle batteries to be used as temporary storage repositories for electricity produced during evening non-peak hours that is presently wasted.

We Must Change the Status Quo
No doubt, many naysayers will do whatever they can to convince us that there is no way we can simultaneously fix the triple barreled threat of unemployment, energy scarcity and global warming to the future health of our nation. But it is also clear that we cannot accept the status quo. Whatever direction we take, government will need to invest to put people back to work and stimulate the economy. Whether we choose to prop up high carbon industries or build a new low carbon economy, it will cost lots of money in the short term. But the long term benefits gained from following a cleaner, greener path into the future are great. We owe it both to ourselves and our progeny to begin building a low carbon economy now.