Australia Update: Opposition Attempts to Brand Emissions Trading a Tax

Originally posted at The Real Ewbank.

Australia’s new Opposition Leader Tony Abbott has declared war on the Rudd Government. He has kicked-off his leadership by implementing a polarisation strategy, with the emissions-trading policy forming a central part of the political battlefield. The Opposition’s new strategy provides some insight into the way in which the cap and trade politics might unfold in the United States.

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Talking Points for Youth Clean Energy Forum

A friend of mine attending the Youth Clean Energy Forum tomorrow asked me to suggest some talking points (for the administration and fellow youth leaders) and pre-readings. Here’s what I wrote (cross-posted from LeadEnergy):

I. Any successful global climate treaty has to go beyond the traditional framework of binding emissions targets. Kyoto failed. China, India, and the rest of the developing world have made it unequivocal that they will not adopt meaningful targets. The right model is shared government investments in technology development and economic development — as per the creation of the EU and the Marshall Plan — not bindings emissions targets, which allow politicians to commit to distant targets they ultimately have little or no responsibility for achieving. The International Energy Agency says $10 trillion in global clean energy investment is necessary over the next two decades. The UN recently called for $500-600 billion annually in developing countries alone, including adaptation efforts. One alternative that could accommodate a technology and investment-centered strategy is a “carbon cap equivalency” framework, explained here by Julian Wong et al. Another has been dubbed the “Direct Kaya Approach,” a targeted, sectoral-based strategy to directly reduce the carbon intensity of economies. Another is a “national schedules” approach. Regardless, what is demanded now is massive and immediate investment to develop and deploy low-carbon energy technology across the world, without which the next global climate treaty will surely fail.

II. The Senate climate bill must be significantly strengthened, particularly its investments in clean technology development and deployment, and the Obama administration and broader climate movement (including Energy Action Coalition) should support these efforts. These issues must be addressed: (1) The bill’s greenhouse gas emissions cap is effectively non-binding for the first decade or more, due to the authorization of massive levels of offsets, and it is unlikely to drive significant near-term changes in the U.S. energy economy. (2) The bill invests far less in clean energy technologies and industries than either the American Recovery and Reinvestment Act (ARRA) or the direct investments being made by competing nations, including China, South Korea and Japan. (3) The carbon price signal established by the cap and trade program is expected to be modest and insufficient to pull emerging clean energy technologies into the market or spur significant investment in clean energy innovation. (4) The renewable electricity standard established by the bill will not ensure any increase in U.S. renewable energy deployment beyond already conservative business-as-usual projections. For a full summary of Breakthrough Institute’s 20-part analysis of ACES, which the Senate bill is based on, see here.

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Winning the Clean Energy Race: A New Strategy for American Leadership

By Teryn Norris & Devon Swezey

Originally published by The Stanford Review

You know the world is changing when the president’s first trip to Asia is defined by a new U.S. foreign policy dubbed “strategic reassurance” – convincing China that the United States has no intention of containing its growing power or endangering its foreign investments. As the New York Times put it, “When President Obama visits China for the first time on Sunday, he will, in many ways, be assuming the role of profligate spender coming to pay respects to his banker.”

You also know times are changing when China, the world’s greatest polluter, and other Asian nations are poised to dominate the burgeoning global clean-tech industry by out-investing the United States. That’s the conclusion of a large new report we co-authored called “Rising Tigers, Timid Giant (PDF),” released this week by the Breakthrough Institute and Information Technology & Innovation Foundation. The report is the first to thoroughly benchmark clean energy competitiveness in four nations – China, Japan, South Korea, and the United States – and finds the following:

“Asia’s rising ‘clean technology tigers’ – China, Japan, and South Korea – have already passed the United States in the production of virtually all clean energy technologies and over the next five years will out-invest the U.S. three-to-one in these sectors… While some U.S. firms will benefit from the establishment of joint ventures overseas, the jobs, tax revenues, and other benefits of clean tech growth will overwhelmingly accrue to Asian nations… Should the investment gap persist, the U.S. will import the overwhelming majority of clean energy technologies it deploys.”

What do these two changes have in common? They both reflect the accelerating shift of global power from America to Asia, caused in large part by the serious mismanagement of U.S. economic policy.

The Pacific power shift is not a new phenomenon, and the Obama administration is wise to seek stronger ties with the region. The U.S. should applaud Asia’s growth, which is partly an outcome of our own success at promoting economic liberalism and international development. This shift in power is not a zero-sum game, nor should it be: the U.S. and Asia should avoid trade wars at all costs, and we should seize opportunities for partnership on a range of issues, from climate change to nuclear proliferation.

But the growing pace of this power shift should be a cause of major concern for Americans, and it should raise serious questions about our economic policies at the highest level. While the U.S. economy has suffered greatly from a crisis produced by its own financial sector – losing millions of jobs, trillions in economic output, and demanding huge spending packages financed by borrowed money – China has shrugged off the global recession with high levels of growth and self-financed stimulus, all while purchasing billions of Treasury bills to fund a U.S. deficit that has reached historic highs.

Last November, addressing the nation on the evening of his election, President Obama declared that “a new era of American leadership is at hand.” And indeed, his new administration has taken significant steps to remake U.S. foreign policy. But unless the U.S. quickly improves its economic competitiveness, our global leadership will be severely damaged. What is demanded now is a major, coordinated national project to regain our economic competitiveness in strategic sectors while permanently correcting the imbalances that led to the Great Recession.

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Australian PM Ignores Cap and Trade Critique

Less than three weeks from the Australian Senate’s highly anticipated second vote on the CPRS bill, the Australian Government’s Mid-Year Economic and Fiscal Outlook (MYEFO) has revealed new problems with the Rudd Government’s deeply flawed cap-and-trade plan.

Crikey’s national politics correspondent Bernard Keane has found that the Carbon Pollution Reduction Scheme (CPRS) will require a massive $5 billion of taxpayer subsidies in its first five years, not breaking even until 2022. With the Labor Government releasing this crucial data so late in the game, it’s no wonder that Australia’s policy analysts are finding some interesting surprises.

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Fund a National Institutes of Energy

By Juliana Williams, Originally Posted at It’s Getting Hot in Here

Yesterday, Senator Sherrod Brown (D-OH) and Congressman Rush Holt (D-NJ) joined Third Way and the Breakthrough Institute in releasing a new report that calls for the creation of a new “National Institutes of Energy” and a dramatic increase in federal funding for energy research and development.  The report, titled Jumpstarting a Clean Energy Revolution with a National Institutes of Energy, argues that these two measures are necessary to make clean energy cheap and get America running on clean energy.

Modeled after the National Institutes of Health (NIH), a National Institutes of Energy (NIE) would be designed to most effectively channel R&D funding toward the development of new, low-cost commercial clean energy technologies.  The NIE would function as a nationwide network of regionally based, commercially focused and coordinated innovation institutes.

“Clean energy is the future of our nation, but it can also create jobs now,” Sen. Brown said. “Done right and well funded, increased research and development of new clean energy technologies will drive innovation and reduce our dependence on foreign energy.”

The report also calls for a sustained increase of $15 billion in annual federal clean energy R&D funding, as proposed by President Barack Obama.  This would result in a total clean energy R&D budget of $20 billion per year.  The purpose of both the R&D increase and the NIE is to close what the authors call the “clean energy price gap” – the difference between the current low price of carbon-intensive energy production like coal and the comparatively higher price of today’s non- or low-carbon emitting technologies.

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Japan’s New Government Plans to Expand Clean Energy Deployment Incentives

Elected less than a week ago, the Democratic Party of Japan (DPJ) may be new to power but according to a recent Bloomberg piece, it has already acknowledged the urgency of the clean energy race. Centered on an aggressive target to reduce carbon emissions 25% by 2020 from 1990 levels and increasing the share of renewables to 10% of its energy mix by 2020, the DPJ has set forth a proposal to achieve those cuts that is on course to outdo its predecessor, the Liberal Democratic Party (LDP), in both promise and execution.

While many nations’ emissions targets end up as nothing more than empty promises, the DPJ’s proposal outlines plans that include direct investment in clean energy technology that could have a variety of positive impacts on Japan’s clean energy sector and ultimately improve its ability to compete in the clean energy race.

With the intent to expand and improve upon the LDP’s clean energy deployment initiatives and grow the share of renewables in its energy mix, the DPJ is offering increased subsidies for solar photovoltaics as well as planning to extend Japan’s soon-to-be feed-in tariff system, to include all renewables, instead of just solar.

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Foreign Affairs: Policy, not Carbon Caps, for Success in Copenhagen

By Johanna Peace, Breakthrough Fellow

If there’s anything that’s certain as the world draws closer to December’s climate summit in Copenhagen, now less than 100 days away, it’s this: so-called binding carbon caps aren’t working. That failed model–which has created an unproductive air of tension between developed and developing nations in climate negotiations to date–is why chances of reaching a successful and effective global agreement in Copenhagen are “vanishingly small,” as Michael Levi, Senior Fellow for Energy and the Environment at the Council on Foreign Relations, states in the latest Foreign Affairs.

Levi writes:

Americans accustomed to thinking about climate diplomacy within the framework of the Kyoto Protocol may assume that the obvious next step is to translate reduction goals into emissions caps, put them in a treaty, and establish a system for global carbon trading. But this would be problematic for three reasons.

Namely, any carbon caps are certain to be weak and insufficient (just look at the proposal currently being debated in Congress); compliance would be nearly impossible to monitor or verify; and a lack of punitive measures would mean countries could easily shirk on their promises without fear of consequences. In other words, the same reasons that Kyoto is failing now are certain to doom a newer climate deal that’s predicated on the same idea.

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Can U.S. Meet Africa’s Call for Annual $67 Bn in Adaptation Aid?

Recognizing the need for a united stance on climate change in preparation for international negotiations in Copenhagen in December, ten African nations issued a joint draft resolution calling for “rich countries” to commit $67 billion per year in compensation for the deleterious effects of unmitigated climate change, according to a report in Reuters.

Africa, which houses 15 of the 20 most climate-change vulnerable countries, will almost certainly endure the most severe negative consequences of climate change, yet it contributes relatively little to the problem.

This new proposal arrives on the heels of a flurry of Copenhagen related news. The Financial Times reported yesterday that both China and India blame developed nations, such as the U.S., for impeding the progress of a climate treaty. As developing nations, they are demanding financial and technological assistance from the major historic contributors to climate change in order to mitigate the effects of a problem they are not primarily responsible for causing.

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