Clean Air and New Jobs: A Breath of Fresh Air

One of the more contentious challenges in the ongoing effort to move to a cleaner mix of fuels to run our modern world has been addressing concerns about the jobs that are lost, and the people who are affected, as we transition from the current mix of energy sources to a more advanced mix.  

 

And truly, that is a serious problem.  We can look at the world and say that we made such transitions before--from horse-drawn carriages to automobiles; from burning wood to burning coal and then oil; etc.  Those transitions, too, changed the mix and location of jobs.  But most of those transitions occurred over longer periods of time than we are now envisioning, allowing people more time to adjust.

Therefore, I was very pleased to hear former Michigan Governor Jennifer Granholm's responses to questions in her Senate hearing for the position of Secretary of the Department of Energy about the job implications of efforts to move to cleaner energy sources: 

 

“We can buy electric car batteries from Asia, or we can make them in America,” Granholm told senators. “We can install wind turbines from Denmark, or we can make them in America.″

 

One can argue that these are easy statements to make and harder measures to implement.  And they may certainly mean that some people will have to move.  But, it is also true that many of the jobs in the nuclear and renewable energy industries are good, high-paying jobs, and if measures like training and other support can be offered to those affected by closures of old facilities, then we potentially have a win-win.  In addition, if jobs are made an important part of the plan to transition to cleaner energy, then efforts can be made to locate some of the manufacturing centers for the new products needed in the very places where mining and other jobs are being lost.  

 

There are still many challenges ahead.  It is easy to say that we will build the factories here, but it is harder to compete against the cheap labor in some parts of the world.  It is easy to say that factories will be built in mining communities, but those decisions are not directly in the hands of the government.  And this is not a short-term issue; we will need sustained attention to the impacts on jobs.

However, if the recognition of need for job creation is made an integral element of the planning process, then a balanced approach to the energy transition can developed, one that considers the people as well as the environment.  It will not be easy, and there will not be perfect solutions, but Secretary Granholm's statements at the Senate hearing are a very encouraging sign that we will plan in a holistic way that addresses both the needs of the overall population and the needs of the individuals most affected by the changes.

 

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Energy Subsidies:

What is Fair?

In the past few weeks, I have been seeing a variety of articles on the issue of subsidies for energy sources.  The first one I saw was a call for the end of subsidies for nuclear power plant operation.  This article particularly criticized the recent initiatives by several states to provide support to assure the continued operation of nuclear power plants.  Nowhere did that article address the existence of other subsidies, such as those for renewable energy sources.  The other article was a much more comprehensive analysis by James Conca, writing in Forbes, that pointed out that there are a variety of different kinds of "subsidies" for energy sources, and analyzed their characteristics and their impacts.

Seeing the two articles almost at the same time brought to a head some thoughts I've been struggling with for some time as I have heard vastly contradictory accounts of which energy sources are being favored, and as I've tried to square these viewpoints with what is good for the public and good for the country.

First, as Conca makes clear, tax and other incentives may reduce the cost for the user or the provider, but they do not change the total costs.  The taxpayers absorb the difference, effectively redistributing the costs.  This is largely invisible to most people, of course.  And it makes it much harder to understand the true costs, or the true consequences of the measures when they are applied in a complex, interacting environment.

For example, tax and other incentives to use renewable energy sources are designed to incentivize behaviors that are considered good for the country.  Thus, the various kinds of incentives outlined by Conca in the Forbes article are intended to encourage the use of forms of energy that reduce air pollution and carbon emissions.

But when such incentives are written narrowly, they may exclude other sources of energy that can achieve the same end.  In this case, most of the measures designed to incentivize the use of solar and wind energy do not offer the same, or similar, benefits for nuclear energy, even though nuclear energy offers equivalent environmental benefits.

Some might point to other considerations, such as the radioactive waste from nuclear power plants, as a reason to treat nuclear power differently.  However, all sources have other potential issues--land use, materials requirements, and yes, waste products, and each needs to be dealt with in an appropriate and equitable manner.  Trying to use a clean-air measure to address other issues selectively is ultimately not the best approach. 

To add even further to the complexity of the situation, since solar and wind energy are intermittent, some backup power is needed, and recent developments in the production of natural gas have led to abundant, and cheap, supplies of gas.  This is a relatively recent development and may not have been anticipated when some of the measures for renewables were developed.

The problem is that natural gas, while it is cleaner than coal, still has more emissions than nuclear plants.  So, if the result of the tax incentives for renewable energy sources and the sudden abundance of cheap natural gas is to end up causing nuclear power plants to shut down prematurely, then the tax and other incentives for renewables are, in a sense, helping undermine a part of the reason these measures were developed in the first place.

Ideally, one might say that the incentives for renewables should just be eliminated.  However, this is too simplistic.  In the first place, many individuals and companies have now made decisions based on the existence of those incentives, and cutting off the incentives might be unfair to those people.  Secondly, cutting incentives might not have the desired effect anyway, since natural gas prices are still cheap.  In fact, such a measure might even accelerate the dependence on natural gas--and increase the emissions as gas plants replace closing nuclear plants.

Furthermore, for many reasons, it is desirable to maintain a mix of energy sources.  This helps mitigate sudden disruptions in supply and helps mitigate any negative environmental impacts of one source.  Therefore, while natural gas is much cleaner than coal, there are downsides to allowing current costs alone to dictate the future energy mix.

Thus, some state governments are gravitating toward considering incentives to keep nuclear power plants in operation.  I don't think anyone views having more incentives as the ideal approach, but the states are dealing with a complex and evolving reality.  This type of measure effectively helps level the playing field for all energy sources that have low carbon and other emissions without pulling the rug out from under those who have invested in solar and wind systems based on government tax and other programs. 

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Energy, Economics and Correlation versus Causation:

Drawing the Right Conclusions

I recently came across an article that left me scratching my head.  Entitled "Economic development does mean a greater carbon footprint," it reports on a study by Max Koch, a professor in Social Work from Lund University in Sweden, and Martin Fritz from the University of Bonn in Germany, on the connections between growth, prosperity and ecological sustainability in 138 countries.  Professor Koch is quoted as saying that he conducted the study in an effort to test the assumption "that extensive investments in green production and sustainable consumption can increase economic growth without increasing the emissions of greenhouse gases."

That sounded like an interesting idea, so I read on.  They divided the world's countries into four groups based on their gross domestic product (GDP) per capita: poor countries, developing countries, emerging countries, and rich countries.  That's pretty standard, I thought.  But then they identified a category of 8 countries they called "overdeveloped."  These are countries in which the average annual income exceeds $50,000 (US) per person.  Five of the 8 countries in this group are identified:  the United States, Singapore and Switzerland, as well as "rich oil nations, such as Norway and Qatar."  Although the article didn't state the other three countries, it did include an infographic with a map that indicates the other 3 countries are Saudi Arabia, Kuwait and the United Arab Emirates. 

Hmm, I wondered, seeing the word "overdeveloped."  That seems to have a bit of a negative connotation, as in "more developed than they need to be."  Is a bit of bias creeping in?   And given the diversity of these countries, should the same designation really apply to all of them--as opposed to, for example, most of the rest of Western Europe, which merely falls in the category of "rich countries."

But I read on.  They then looked at the prosperity of the different groups of countries according to several metrics: ecological sustainability, social inclusion and quality of life (including life expectancy, literacy rates and subjective well-being).  Their conclusion was that there was greater social inclusion and the quality of life as the countries became increasingly wealthy at the expense of environmental sustainability such as greater emissions and carbon footprint.


While they acknowledged in some sense that the GDP and the environmental emissions might be separable, saying, "We are not saying that it is impossible to separate economic growth from ecological issues," they nevertheless go on to say that there is "a clear connection between economic development and increased greenhouse gas emissions that cannot be ignored."

From this, they conclude that, because of the urgent need to reduce emissions globally, "the possibility of economic degrowth should be seriously considered"--in other words, that economic growth should be given less priority as a policy objective than has been the case.

I had to wonder about this conclusion on several grounds.  In the first place, I don't think that the study ever really made the projections that had been promised.  I could see what the emissions are today, but I could not see an analysis of how different levels of investments in some of the many possible options--nuclear power, renewable energy, biofuels, energy-saving devices, etc.--might affect economic growth--and environmental conditions--in the future.

In the second place, it is likely that that the greatest impact of trying to achieve environment sustainability by curbing economic growth would be to condemn the poorest countries in the world to continued poverty.  Yes, I suppose the conclusion implies that the overdeveloped countries may have to shave their own growth, too, but clearly, the impact on richer countries will be much more modest than the impact on the poorest countries.  In effect, the benefits of an improved global environment will accrue to all countries, but the poorest countries would bear a disproportionate share of the burden. 

Therefore, while the kind of data gathered in this study can be very useful, I believe that the authors have not looked at all the dimensions of the issue.  Given the seriousness and importance of the issue, I think that is a serious shortcoming of the study.  While I do not expect to find a solution that allows the world to "have its cake and eat it, too," I think far more exploration is needed of all the issues and options before we conclude that we need to move civilization backwards. 

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