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Hope. (Courtesy: Wolfgang Sauber)
President Obama spoke on Capitol Hill on Tuesday about the urgency of the situation that America is in; spiraling health care costs, a less than optimal educational system, dependence upon unsustainable energy sources, not to mention the failing economy, rising unemployment, a collapsing housing market, and rampant unethical behavior on Wall Street were all on his mind and in his speech. In stark contrast to a majority of President Bush’s speeches about foreign threats and fear, President Obama talked about domestic issues and hope.
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President Obama stated clearly and powerfully to a reception of applause that “we will rebuild, we will recover, and the United States of America will emerge stronger than before”. Analysts also have high expectations for the president. In order to successfully manage the complex set of issues before the American people, he will have to “use the urgency of the moment and his considerable political capital to reform that (political) system and transform the way politics is done”.
On the president’s agenda is a list of issues spanning a multitude of problems. While many of these issues are related, the list can seem insurmountable at times, and so a certain sense of optimism is necessary in order to swallow ‘the pill’ that many say will lead America toward economic recovery.
The recession appears to be widening in 1Q’09 with markets dropping to their lowest point in over a decade (falling lower than the Nov.’08 lows), but the American Recovery and Reinvestment Act recently signed into law by President Obama is aimed at picking the markets up when they hit their bottoms sometime later in the year. Progress on the money spent through the Recovery Act can be tracked through Recovery.gov, which aims to hold the current administration accountable and make the process of spending American taxpayers money transparent.
If President Obama’s speech on Tuesday night was any indication of the direction America is heading with respect to energy, it will become even more apparent over the course of the next few months that the cleantech sector is going to be greatly expanded in the next few years. The goal of reaching 25% renewable energy by 2025 is an ambitious target that is going to need the help of a consortium of interested parties that spans the gamut of American capitalism. If his plan is going to work, he will need the help of financial institutions to give low-interest guaranteed loans to renewable energy projects; he will need the help of Congressional leaders to pass sweeping reform legislation aimed at changing America’s energy policy; he will need the help of business executives to institute building retrofits and sustainability analyses into their strategies for the near-term; he will need the help of the American public to be willing to change some of their deepest held beliefs about the power of government; he will need the help of the international community to apply pressure upon America to continue to provide leadership on a multitude of energy and climate related issues; and, most importantly, he will need the help of the oil, coal, and natural gas industries to begin shifting their energy portfolios toward renewable energy. Hopefully, Americans are feeling helpful!
The list of issues and the need for help can leave even the most educated of persons asking, ‘where do we begin’. For starters, the Recovery Act provided a broad framework from which to work; the 2010 budget will nail down some of the particulars and will provide more structure to America’s path forward. The Energy/Climate bill will set American policy for the foreseeable future.
The 2010 budget will focus on energy, education, and health care; the details will undoubtedly follow the outline laid out in Tuesday night’s speech and will seek to build off of the Recovery Act. With a majority in both Houses of Congress, President Obama’s commitment to work with Republicans is commendable. The new era of politics that he speaks about ushering in runs the risk of stalemating his agenda, though, but he has stated that “he would rather engage critics than simply defeat them”.
Republicans have already stated their objections to the amount of spending that President Obama proposes; they say that universal health care and renewable energy are two programs that America does not have the money right now to pay for. There is no doubt that Republicans are upset that tax breaks for the wealthiest 2% of Americans are going to be repealed, and that the new era of financial regulation comes dangerously close to the nationalization of American banks. Regardless of Republican objection, GOP members have to feel a certain sense of responsibility for the position America is in; it was their party that drove the ship into these treacherously turbulent waters.
The fact that Wall Street will be getting much more oversight from federal regulators is seen by many as a necessary step on the road to economic recovery. This oversight is viewed as ‘good’ by some because transparency will eliminate some of the unethical behavior that led to the current economic crisis, and it will be seen as ‘bad’ by others because it is an unwarranted expansion of governmental powers aimed at destroying American capitalism and instituting nationalized principles into the financial system. Regardless of whether it is ‘good’ or ‘bad’, it has become necessary to regulate the financials in order to create transparency because of the fact that the economic system collapsed and needed taxpayer money. Oversight is essential to restoring confidence in the markets.
Once the financial markets begin to thaw and financial firms are lending again, Congress can begin work in earnest on the Energy Bill, which has begun to be discussed in Congress. On the forefront of this discussion is the deployment of the smart grid. Analysts see the smart grid as a necessary first step before renewable energy can come close to the 25% goal. The recovery act attempted to get this initial step started by allotting $11 billion to smart grids. Energy storage is also an important part of the energy matrix; the intermittency problem in the solar and wind industries must be addressed before a large scale build-out in renewable energy begins. Without proper energy storage along the grid, the efficiency increases from renewable energy will all be wasted due to the non-continual nature of solar and wind power.
The U.S. is not the only country that is beginning an ambitious build-out in renewable energy. Over the course of the past few months, nearly $200 billion has been earmarked for clean energy projects across the globe; in the U.S. the figure is around $106 billion, in Europe it is $60 billion. According to a report from Deutsche Bank, “Governments in the United States, Europe and Asia have also developed more than 250 policies since July last year that support alternative energy such as solar and wind power and climate-change mitigation”. This is truly a period of dynamic change going on across the globe with respect to energy development, specifically aimed at cutting the world’s dependence on fossil fuels. With so much money floating around in the cleantech space, you might have to ask yourself what is on your cleantech wishlist.
With the Recovery Act signed into law, the 2010 budget on its way, and the Energy Bill being discussed in the Houses of Congress, the writing may be starting to develop on the wall. Just as the fossil fuel industry used lobbyists in Washington to push their agenda, the climate change lobby has been working feverishly to peddle their message to representatives in Congress. According to a report by the Center for Public Integrity called ‘The Climate Change Lobby’, “More than 770 companies and organizations hired some 2,340 lobbyists to work on climate change and spent at least $90 million lobbying in 2008”; the Clean Coal lobbying group accounted for nearly $10 million of that figure. Cities, counties, and public agencies in the U.S. are beginning to focus on how Congress might distribute money in an energy/climate policy. The recent moves in all three branches of government seem to be centered on creating an energy and climate policy that work hand-in-hand, not one that pits the two against each other as though they were mortal enemies.
The future is coming at us like a freight train; the message from reading the tea-leaves is becoming more readily apparent. America is moving in the direction of creating a clean energy economy. President Obama is playing a game of high-stakes chess, moving pieces around in an effort to put America on track to assume its rightful role of leader on the path toward a global renewable energy economy.
The words of President Obama are inspiring maybe because he is a great orator or maybe because we have grown to have low expectations for presidential speeches, but probably they are inspiring because America is at a position in its history where the words simply ring a truth that we all long for. “The weight of this crisis will not determine the destiny of this nation. The answers to our problems don't lie beyond our reach. They exist in our laboratories and our universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest working people on Earth. Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure. What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more.” The simple truth of the matter is that we are in control of our own destiny.
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