Jeffrey Sachs and Senator John Kerry on Energy
Let’s talk about energy in the U.S., Professor Jeffrey Sachs and Senator John Kerry discussed this important issue on a recent episode of MSNBC’s Morning Joe:
Professor Sachs and Senator Kerry began the discussion with a reference to the “Pickens Plan,” a plan created by financier and former oil exec T. Boone Pickens to wean the U.S. off foreign oil. The plan encompasses investing heavily in wind, solar, and smart grid technology, as well as the use of natural gas in tractor trailer trucks (aka 18-wheelers) that transport many of our goods. (They currently run on diesel.)
Professor Sachs agreed that natural gas-fueled vehicles are an important step on the path to a green economy, but they are not a long-term solution to our energy problems or climate change. Powering heavy diesel vehicles is a major challenge of getting to carbon neutral; current technology for electric vehicles simply cannot muster enough power for these large trucks. Another possibility is running them on biodiesel , which has its own set of challenges. A switch to either fuel would improve air quality and reduce the number of urban areas that do not meet the EPA’s standards for harmful pollutants like particulates, nitrogen oxides (NOX), and ground-level ozone. It would also reduce asthma and other respiratory diseases.
Professor Sachs was quick to note that use of natural gas in heavy vehicles is one part of the solution to our problems of sustainability, and that we need a concrete plan to transition to renewable energy for the long-term. One reason for this is that tapping more domestic natural gas deposits uses a technology called hydrological fracturing, or hydrofracking, which is controversial because it may damage drinking water supplies. Furthermore, even though there is disagreement on just how many more years of natural gas supply is left, the fact is that it is a finite resource. We will need to switch eventually, and the sooner we do it, the cheaper it will be.
Pickens closely tracks how much we spend on foreign oil, and tells us that in October of 2010 the amount was about $28 billion. That means the U.S. sends over $300 billion overseas annually, which would be better spent domestically. If we want to begin to get out of the financial crisis, we need to increase the amount of energy produced on domestic soil.
On Morning Joe, Senator Kerry said that the U.S. was embarrassingly far behind other countries with regard to renewable energy and reducing oil consumption. China has surpassed the U.S. on high speed rail, and now has some of the fastest trains in the world. China is committed to expanding production of electric vehicles. Senator Kerry noted that just 5 years ago, China only produced 5% of the world’s solar panels. Today they produce 60%. Strong policy is needed to keep the U.S. competitive, transition to green energy, reduce spending overseas, and strengthen our economy. If we do not act soon, other countries will surpass us so far that we will not be able to catch up.
Professor Sachs mentioned feed-in tariffs as an innovative way to decrease our dependency on fossil fuels and increase investments in renewables. They are a fairly simple and cost-effective way to jump-start production of renewable energy. Feed-in tariffs have been used to transition many European countries, particularly Germany, away from fossil fuels. A tax that is initially very small is placed on fossil fuels. The tax is so small that it does not hurt American pockets, but our fossil fuel use is so great that it generates a decent amount of revenue to subsidize the expansion of renewable energy in the U.S. through subsidies. Over the next 20-40 years, the tax on carbon would be raised very slowly, and the subsidies on renewables would continue. This slowly makes solar, wind, and other renewables cheaper relative to fossil fuels. Slowly these technologies replace fossil fuels in our economy. This spurs technological innovation and improved efficiency, making renewables even cheaper. By 2050, we would have a reasonably high tax on carbon emissions, widely available and cheap renewable power, and in the long run Americans wouldn’t even notice a change at the pumps or on their electric bills.
What is the best part about a feed-in tariff policy? Over time, the U.S. will be spending less and less money on foreign oil, and more and more on clean, renewable power that is generated within our borders. This creates domestic jobs manufacturing, installing, and maintaining renewable energy plants. Furthermore, given the U.S.’s history of innovation, and our skilled manufacturing workforce, a policy like this could make the U.S. a global leader in exports of solar panels, wind turbines, and electric vehicles.
Senator Kerry expressed some hesitation about congresses’ ability to pass such a plan. I think there can be broad public support for this idea. Certainly no one would defend maintaining our dependency on foreign oil. Furthermore, the U.S. is beginning to call for a transition to a greener economy. Yale University has been tracking climate change knowledge in the U.S., and their most recent report found that 55% of Americans are either “very worried” or “somewhat worried” about climate change. Another Yale survey, the GfK Roper Yale Survey, found that 7 in 10 Americans were in favor of passing legislation to require utilities to produce at least 20% of their electricity from renewable energy sources, at an additional cost of $8.50 per month. Feed-in tariffs are one policy tool that would address these concerns, and has been shown to work in several other countries.