Bleeding Edge Blog

Once again, as the western world seems to teeter on the edge of catastrophe, mankind begins fearfully to wonder: “What on earth is to be done?”

Practically speaking, the vast unemployment rolls worldwide, the nuclear disaster in Fukushima, the Lehman collapse, the global economic crisis, the Sovereign debt debacle, the Eurozone stress, Japan’s stagflation and her lost decades, Arab Spring and the revolutions in the Middle East, the unending wars, Islamic phobia and terrorism resurgence, lack of economic growth — all are huge problems that are greatly interconnected under the surface of things.

To the untrained eye, the connections are hidden. But to the seasoned professional the signs are all there. Same as the urgent, even desperate, question of global warming and unsustainable fossil fuel economics we have been living off and continue to depend upon to solve this crisis.

And although Climate Change may be high on the international conference circuit agenda — it’s in words only.  Because large business, global industry, banking & finance, still takes oil, coal, nuclear and all other dirty polluting fossil fuel power sources for granted and demand to be able to continue business as usual their nasty habit. Clean Coal and fracking are their latest crystal meth and crack habits. Tar Sands are their mainstay heroin shot in the arm. And King Coal their standby smack. That’s their choice of fix…. Can’t help addicts right?  Once a junkie always a junkie…

I disagree. We can help people and whole societies to change, because we’ve got a twelve step program here to kick addiction in the shins… All condensed in five easy steps. We call it  a GREEN NEW DEAL and the Doctor to prescribe it is the President of these United States.

Millions upon millions have died in Afghanistan, Iraq, Somalia, Horn of Africa, Darfur, Sudan, Sahel & Sub-Sahara, and elsewhere because the West sees everything through a myopic lens of special interests often centred on oil flowing and bugger all else. And us westerners seldom do we bother to note the realities of people clinging to the margins of survival and really see the Peoples a they are: Humans desperate for a most basic level of comfort & security, will follow any preacher or demagogue or armed militia just to stay alive. Ask the Jews following Moses in the desert for 40 long years… how they felt. That picture is being played out today still…

And if John Maynard Keynes were alive today, I have no doubt he would second me and would go on propose this New Green Deal to President Barack Obama. Same like when he proposed the New Deal to FDR as the only “strong economic medicine” solution for the ills that ravage our economy. Especially growth resumption and unemployment remediation… He got the US out of the Great Depression didn’t he?

A New Green Deal is what we all need to get out of this crisis. America more than ever it needs this. Some simple steps are good but not enough. Same like the subsidies of renewable energy and technology, we need to up the ante. We urgently need to face reality and invest massively to create new green jobs and help get our renewables to grid parity with coal. And only then we can move ahead of all others boldly into the enterprising future of our mercantilist nation. Only with a New Green Deal. Even Bernanke understands that too…

Old Europe needs this too but will never get it as long as America and President Obama do not exhibit leadership. Because – you see – old Europe is led up by undecided little dwarfs, who would rather wait for someone else to show them the way than take any bold steps themselves. Small feet, small steps but even that it’s all in the right direction.

So Sir, we need a bold New Green Deal now and you shall be remembered as the Man who solved it all.

And here is how we can achieve this in simple easy steps:

When Mr President you publicly renewed your oath of office on Monday, January 21, You highlighted the urgency of addressing climate change as a priority of your second term in office with these words.

“The path towards sustainable energy sources will be long and sometimes difficult,” you said. “But America cannot resist this transition; we must lead it.”  Totally agree that the transition will be difficult, yet we must continue to explore strategies to address the issues, remove obstacles, and solve the knots as we pursue our vision of a clean energy future.

And here is a simple HOW TO MANUAL to move forth in Five Easy Steps:

1) Electrify the Automobile Fleet:
Fleet electrification offers an important step toward scale manufacture of clean vehicles and clean energy infrastructure that in turn will enhance the demand and incentivize power & utility companies to offer clean electricity at many points of the grid. This is like a Trojan horse to get the intransigent utilities to budge away from the dirty coal addiction
The nation’s fleet vehicles electrification also offers the opportunity to help drive the initial ramp-up of scale for electric & green vehicles manufacture, renewable energy stations, new type of bodies, batteries, drivetrain components, and a smart grid at many stations for fast charging along the nation’s motorways, highways and byways.  The operational norms of certain fleet segments—such as centralized refueling, high vehicle utilization rates and predictable routing—may allow them to rapidly surmount the most difficult challenges facing electrification in the passenger market.  Perhaps most significantly, fleet owners may be more willing to focus on total cost of vehicle ownership as opposed to upfront cost.

By driving initial capacity, providing practical business experience with both private and public charging infrastructure, and demonstrating the reliability of electric drive vehicles to consumers throughout the United States, electrified fleet vehicles would provide substantial spillover benefits to the broader consumer market.

To facilitate the wider deployment of GEVs by fleet operators, the Coalition recommends:

• Expanding the tax credits for light-duty grid-enabled vehicles purchased to include private-sector fleets
• Creating tax credits for medium – and heavy – duty grid-enabled vehicles deployed in private-sector fleets with more than 10 vehicles in operation
• Creating clean renewable energy bonds for fleet vehicle charging infrastructure, and make municipal and regional transit authorities eligible for the bonds
• Extending the existing tax credit for electric vehicle charging infrastructure through 2018 and expand the range of eligible costs to include necessary utility and facility owner upgrades
• Incentivizing the establishment of special purpose entities to facilitate fleet bulk purchasing of electric drive vehicles

2) Decarbonize the Power & Utility Electricity Generation Sector: 

Limiting carbon dioxide emissions from the transportation, industrial, buildings, and electricity sectors is critical. These sectors are responsible for the majority of the United States’ anthropogenic CO2 emissions, the primary driving force behind the devastating impacts of climate change. But past lessons point out what is clear: it will not be easy process. Any type of regulation is likely to be very contentious, as we saw with the sulfur dioxide debate of the 1990s. Despite the eventual success of the program—driving innovative market solutions that reduced sulfur dioxide emissions far beyond targets while achieving significant cost savings—businesses and utilities initially vigorously opposed the emissions trading scheme.

Past cap and trade programs, carbon taxes, and hybrid legislative proposals have met with very limited success in reducing carbon emissions across the US. From the Senate’s failure to ratify the Kyoto protocol in 1997, to the Climate Stewardship Acts in 2005, to the Waxman Markey Bill in 2009, the nation’s legislative process has yet to advance any major climate legislation. Utilities and other industry stakeholders are concerned that emissions limitations will drive electricity prices up and will be difficult to implement. So while reducing carbon emissions is critical and it is encouraging that President Obama has indicated commitment to do so, it is imperative that business and political leaders find creative strategies that are effective and achievable, and perhaps most important that the EPA has to become a strong regulator of CO2 and enforce all relevant laws and regulations limiting the toxic carbon as defined by the Supreme Court decision and as is emitted by all the power generation factories across the land.

3) Offer a Market-based Approach to Pricing Carbon with the Bank & Finance industries involved:

There are myriad options on how to do this, but a Tobin like tax for Utilities is a good one with zero chance of passing. Cap & Trade have been nicked in the neck too. So time for smart approaches, such as this other recent proposal from the Environmental Parliament Grid Parity Group: The proposal highlights how the White House under President Obama and the Environmental Protection Agency (EPA) can act in tandem with States & Industry to limit carbon emissions from existing power plants without having to go to the House.

You can start by using a business-led approach and existing authority under the Clean Air Act. Under the proposal, the EPA would set state-by-state carbon emissions reductions standards based on the carbon intensity of each state’s current electricity generation portfolio. Instead of regulating plant-by-plant, both states and utilities that own multiple carbon-emitting power plants can aggregate electricity generation facilities into a fleet when calculating compliance. The proposal offers broad flexibility for meeting emissions reductions standards through technological solutions, such as installing CO2 capture systems; switching to lower – or zero – emitting sources, such as wind and solar; and giving credit for energy efficiency, a low-cost energy resource and emissions reduction option.

As with most strategies, this approach is fraught with danger because it requires massive cooperation and has many moving parts. But nothing worthwhile comes easy. So we can deal with the challenges, because there are a number of very positive implications for businesses and for the financial sector that will drive this forward and thus make it an effective solution. After all — when you’ve got a difficult problem and you want solutions, You hire a Business that understands complexity to solve it: A) Market & Business Leadership: Private-sector collaboration and innovation can yield solutions that are cheaper and more efficient than if command-and-control regulation is used. B) State Leadership: By empowering each state to essentially formulate its own plan, the proposal enables “fast-learning laboratories” where states can collaborate and learn from one another. C) Technology Neutrality Fosters Innovation: By targeting statewide emissions reductions—rather than regulating plant-by-plant or mandating certain technologies—the proposal fosters and rewards innovative market solutions. D) Driving Adoption of Efficiency and Distributed Resources: By giving credit for “negawatts” (energy efficiency) and clean sources, such as distributed wind and solar, the proposal helps drive the business-led decarbonization of the electricity sector.

4) Alternatively, You can Move Beyond Carbon Pricing for Effective solutions:

The glacial pace of progress in passing and implementing carbon legislation over the last several years makes it clear that we need to move beyond the limit-carbon-emissions approach of NRDC’s proposal, which may be necessary but not sufficient. In parallel, the country needs to further explore and implement creative strategies to minimize cost impacts and allow for ever-increasing reliance on the adoption of efficiency, renewables, and other distributed demand-side resources. Removing key barriers that are slowing the adoption of efficiency and renewables is critical.

Here are just a few strategies to consider, each of which has the potential to drive change and reduce carbon emissions: A) Strengthen and expand energy efficiency standards: Establishing more efficient building codes and increasing standards for appliances has historically been very effective in driving demand for more efficient options and reducing energy use and customer energy costs. B) Drive down the installed cost of solar photovoltaics: Reducing specific balance of system solar costs through innovative racking designs, streamlined local permitting requirements, and new customer acquisition channels such as retail partnerships and online bid platforms will help make solar energy affordable without subsidies in more places throughout the nation. C) Develop creative financing options: Developing innovative financing options that reduce risk, upfront capital investment requirements, and hassle for the customers and financiers will make efficiency projects more accessible to individual utility customers. Examples include on-bill financing, solar leasing, repayment via property taxes, and community-financed solar projects. D) Level the playing field so that all resources can compete fairly: Allowing distributed resources to participate in wholesale markets and increasing access to relevant information on the functioning of the transmission system and wholesale markets, will level the playing field and allow the economic benefits of renewables and distributed resources to be more accurately recognized.

5) Look Boldly into the Future:

What actions the Obama administration will take remain to be seen. Regardless, there is a tremendous opportunity for business-led innovation to set a price for carbon and help reduce the barriers slowing the adoption of efficiency and renewables. Businesses need not wait for the current administration to make its next move; they can take action today. RMI’s vision is a 158 percent bigger economy by 2050, at a cost savings of $5 trillion compared to business-as-usual, all while weaning the U.S. completely off oil, coal, and significantly reducing natural gas. Whether via a strategy similar to NRDC’s proposal, another proposal, or one of our strategies to increase the adoption of efficiency and renewables, a collaborative government and business-led push can help bring that future closer…

This way the economy wins and the people win. And to boot, we have the makings of a Green Deal in place without much of a cost to the treasury besides some Tax Incentives. And the state and federal Politicos can take credit for bridging the partisan and ideological divide and thus gain support as leaders unafraid of the political cost, the President’s will stand strong by delivering strong economic results, and the business leaders can create enduring value by pursuing private shareholder advantage — rather than fighting progress or being reactionary as so often in the past, and then being forced by government mandates to commit acts perceived as difficult in the marketplace.

All Good – All Around – One Happy President

Multiple Bottom Lines satisfied…

Indeed

Yours,

Pano

PS:

The Future Looks Bright through the New Green Deal

And this call for the Green New Deal by John Maynard Keynes…

Where did it come from?

It surely wasn’t a product of a séance with a turbaned psychic. You know I don’t swing that way…

Nor was it a medium’s suggestion from a Soho rabbit hole.

Nor did it come to me during one of my famous walking the dogs at Highgate and paying homage to his grave session.

I wasn’t keen on hearing his quiet whispers… graveside coming from tall grasses and ivy creeper in the overgrown hedge of the dead economist’s row.

The man’s ashes were scattered over the Downs at Tilton in Sussex after all, and it’s a long journey – dogs and all…

My suggestion of a New Green Deal is well known after all because I’ve been creaming for it for at least five years now. And maybe more – for as long as we had the Green Bonds Conference at the United Nations HQs and before. But knowing that John Maynard Keynes supports that it was news to me. And it came entirely unexpected from another distant spiritual realm all together:

It came from the Golden Mountain top no less…

Wisdom from up above. The wise mountain men and all that dribble…

Davos Fiction as everything else that comes down from the cheesy Swiss Alps. It all is some form of fiction or another when generated at the WTF – WEF and the greatest concentration of pundits per square inch of snow the world over.

So that’s where Keynes imaginary quote came from…

And here is the whole fictional quotation of Maynard Keynes from a fictional Davos panel discussion, in pure fiction posted at the Guardian’s econo-blog.

To quote:

”

“How about this for a panel?

Karl Marx, John Maynard Keynes, Milton Friedman and Fritz Schumacher, all no longer with us, kept in line by the IMF’s Christine Lagarde – thankfully still alive and kicking, in one of the standout performances last month in Davos: The fictional panel debate of the leading and long dead economists moderated by Christine Lagarde of the IMF.

…..

….

…

Lagarde: “Fritz, you have been sitting there patiently listening to Karl, Maynard, and Milton. How do you assess the state of the world?

Fritz Schumacher: “I am greatly disturbed by the way the debate is being framed. There is an obsession with growth at all costs regardless of the environmental costs. Climate change was rarely mentioned in Davos: this after a year of extreme weather events. It is frightening that so little attention has been paid to global warming, and almost criminally neglectful of governments not to use ultra-low interest rates to invest in green technologies.

“As has been the case in the past, recessions have pushed green issues down the political agenda. In good times policymakers say they are in favour of sustainable development, but the pledges are forgotten as soon as unemployment starts to rise. Then it is back to business as usual: more roads, expanding airports, tax cuts to encourage consumption. When scientists are warning that global temperatures are on course to rise several degrees above pre-industrial levels on unchanged policies, this is the economics of the madhouse.”

Lagarde: “Maynard, what’s your response to that?”

Keynes: “I agree with him. If I were advising Roosevelt today I would be calling for a Green New Deal. I find it hard to envisage a world without growth, something that is politically unacceptable in the developing world in any case. But Fritz is right, we need smarter, cleaner growth. As you yourself said last week, Christine, if we carry on as we are the next generation will be ‘roasted, toasted, fried and grilled’.”

Fritz Schumacher: “I couldn’t have put it better myself.”

”

So fiction aside – after all is said and done – the basic question is this:

Are You gonna join us to demand a New Green Deal and stand with me, John, and all intelligent sentient life forms ?