As I See It: The Green Gap
July 13, 2009 Victor Rozek
When the Great Economic Recovery finally arrives, many expect it to be riding a Green mount. No other sector, not even healthcare, has such potential to resuscitate the wheezing marketplace. The employment prospects alone can make a Job Czar tremble with anticipation. Two-and-a-half million jobs have the potential to transform the brown economic landscape into verdant shades of cash. And since IT percolates into all corners of all sectors, some of that employment should inevitably flow our way.
These days, however, America’s problem-solving prowess is more challenged than a German lullaby. Looking for answers to problems too long ignored, the nation finds itself short on doable solutions. The default remedy has been providing universal financial care for the very rich. But occasionally problems get so big they just can’t be solved by tithing billionaires. Climate change is one such problem, and a bold green energy policy might not only walk us back from the thermal abyss, it would take a sizeable bite out of unemployment that officially stands at just under 7 million jobs. (But add the underemployed and those no longer eligible for benefits, and the real number approaches 16 million.)
It’s a no-brainer. We need a Marshall Plan for clean energy. There is unlimited job potential in perfecting non-polluting technologies, manufacturing new generations of products, and constructing a nationwide transmission grid. Denver isn’t waiting. Green energy companies that build thin-film solar cells and wind turbines are hiring; and the unemployment rate is two points below the national average.
The clean energy economy is poised for liftoff, but there are two factions determined to spoil the launch: The ignorant want to kill it; and the greedy want to co-opt it.
Even though the Intergovernmental Panel on Climate Change has established climate change as “an unequivocal reality beyond scientific doubt,” some decision makers remain adamantly contemptuous. Representative Paul Broun of Georgia recently claimed that climate change is nothing but a “hoax” that has been “perpetrated out of the scientific community.” He was applauded by colleagues for his insightful analysis. But while detractors claim scientific endorsement for their position, as Newsweek‘s science editor Sharon Begley notes: “Almost anyone with an agenda can find research that supports it. But not all science is created equal.”
If global warming is a hoax, you have to ask yourself, toward what end? If you had the power to control the world’s scientific community–if you were somehow able to falsify hundreds of studies, fool the media, fool governments, and could produce forged satellite images of shrinking glaciers and collapsing polar ice–what could possibly be your intention? A place in the Guinness Book of World Records for the most elaborate practical joke?
That so an unenlightened a man could ascend to the United States Congress, and be applauded there by other ignorant men, makes one tremble for the future of the nation. The situation is urgent, not just because we’re hemorrhaging jobs, but because those crazy, tofu-munching alarmists at M.I.T. are predicting a 9 degree rise is global temperature by the end of the century–more than doubling previous estimates. Their predictions are rising because climate change is accelerating. But while the planet burns, the obstructionists in Congress stand behind a wall of denial that facts do not penetrate. Like petulant children, they don’t believe in global warming because they don’t want to.
And here’s the dilemma: Although green jobs are an inevitability, if this faction has its way, a half-hearted national energy policy will have ruinous consequences: by the time the jobs are created, what they are designed to accomplish may no longer matter. Once the tipping point is reached, climate degradation will continue without our participation.
As for the greedy, they care little for the planet but see opportunity in buying and selling pollution. Financial markets are gaga over cap and trade, the setting and swapping of pollution allowances. Proposals in Congress are modeled after the European model that has been disastrous for everyone but the speculators. Under the Waxman-Markey bill, pollution allowances are given away rather than being auctioned. The predicted losses to taxpayers are $821 billion in the first seven years alone, money that would spawn much-needed jobs were it reinvested in clean energy.
Merrill Lynch (or rather, Banc of America Securities as of last week) predicts the cap and trade carbon market will be the fastest growing market in history, with volumes comparable to credit derivatives. And since that $35 trillion bubble worked out so well for the country, the folks who brought you the current economy can’t wait to do it again. The logical flaw is that when pollution is made valuable, there is every incentive to keep polluting. In Europe, that’s precisely what happened–emissions have risen every year under the cap, partly because cheating is built into the system.
Cap and trade allows for offsets that provide polluters with the means to meet emission targets without actually meeting them. Plant a few acres of trees in Honduras, claim that the trees will sequester the carbon you produce, and voila, it’s business as usual. A few years later, find another offset, cut the trees (which then release the carbon), and make money on the timber. It makes about as much sense as putting diapers on cows and claiming methane reductions.
Speculators, investment bankers, and hedge fund managers aren’t in business to reduce emissions. History shows that speculation begets market manipulation, bubbles, and higher costs for consumers with no added benefits (think Enron’s fleecing of California). Pollution is not a commodity. A deregulated carbon market will create jobs, but they will be the wrong kind of jobs. They will be non-value added jobs, moving numbers from account to account, creating nothing of use, nothing of intrinsic worth. For IT professionals, the benefit would be negligible. Trading systems are already in place, only the field names will change.
Goldman Sachs, the biggest contributor to the Obama presidential campaign, spent $3.5 million last year lobbying for cap and trade, and it’s likely to get it. But be careful for what you wish. What Naomi Klein dubbed disaster capitalism–large-scale profiteering from manmade and natural disasters such as the war in Iraq, hurricane Katrina, and sub-prime mortgages–has poisoned the American economy. Klein warns that “While the disaster capitalism complex does not deliberately scheme to create the cataclysms on which it feeds. . . there is plenty of evidence that its component industries work very hard indeed to make sure that current disastrous trends continue unchallenged.” Thus, Big Oil bankrolled the climate-change-denial movement for years. Exxon-Mobil alone spent $16 million in the decade ending in 2007. You can bet more money is flowing in support of the coming disaster. And when it hits, some will say it’s God’s will (not our own fault), and the greedy will profit and the rest of us will suffer as the Earth will become less habitable.
But that needn’t happen. From employment to ecology, the green economy has the power to be both transformative and healing. Clean energy is the next inevitable step in the industrial revolution. Solar, wind, biomass, hydro-electric, hydrogen, fuel cells, battery technology, green construction, organic farming, green urban planning, high speed rail, cleantech, sustainable business; the opportunities are endless and the technologies are exportable. Half measures will only inch us toward disaster. This time, if we let the ignorant and the greedy steal the future, there may be no going back.