April 17, 2017
The Way Forward
By Daniel Kammen
Professor of Energy at the University of California, Berkeley

A pair of environmental proposals, put forth by Democrats and Republicans, offer the best economic and environmental benefits for the majority of Americans. Implementing both plans would maximize those benefits.

The U.S. Clean Air Act became law in 1970 with virtually unanimous bi-partisan approval in the houses. Such a reality would be shocking today. Think that was too long ago to remember?

So, how can we return today to a shared vision of the value of investing in and of trusting science, and valuing the benefits of a healthy and clean environment for all?

One place to start is to see and act on the domestic benefits and global leadership opportunities which come from investing in science and technology and jobs that are awaiting a bipartisan approach to environmental quality.

Over the past two years, two thoughtful, innovative, and dramatically different yet complementary plans to address global warming have been presented to the American public by the Democratic Party and the Republican Party. Both plans would move the nation significantly toward a sustainable future.

The first, the Clean Power Plan (CPP), introduced by President Obama, calls on states to reduce carbon pollution from the power sector by 32 percent below 2005 levels by 2030. The CPP makes a further $8 billion available to retrain and aid coal workers and their families. This is a sizeable transition fund for an industry now valued in total at less than $50 billion, a tenth of what it was just a few decades ago.

The second is the Carbon Dividend Plan (CDP) that was recently proposed by the Climate Leadership Council, which is headlined by former Republican Secretaries of State James Baker and George Shultz, as well as former Treasury Secretary Henry Paulson, two former Chairmen of the President’s Council of Economic Advisers, and a former Chairman of the Board at Walmart. The CDP calls for a modest and incremental carbon tax, with dividends paid directly back to American families amounting to roughly $2,000 per year for an average family of four.

Both plans have a great deal to like.

But what is more interesting is that both job creation and industrial leadership will benefit most not by choosing between the CPP and the CDP, but by adopting both. The federal government estimates that the CPP will yield climate benefits to the U. S. economy of $20 billion, and health benefit savings of $14 billion to $34 billion. This is on top of preventing an estimated 3,600 premature deaths, 1,700 heart attacks, 90,000 asthma attacks and 300,000 missed work and school days every year. With so many of these illnesses rampant in lower-income areas and in minority communities, the CPP is of tremendous benefit to poorer Americans.

The CDP includes a provision for border taxes on foreign imports from nations that do not implement some form of carbon pricing, presumably with a dispensation for the world’s poorest nations. This provision empowers the U. S. to enforce standards of clean manufacturing on imports that force trading partners to “up their game” to match U. S. standards, something that will significantly benefit the American economy and domestic job creation.

Together, the CPP and the CDP will build a vibrant, job-creating energy sector that would be far larger than either plan accomplishes alone. The CPP does not pit one state against each other, but pushes each state to develop its own carbon reduction plan. Both red and blue states are finding this easier and more profitable than previously imagined. The power sector reduced its carbon emissions 21 percent between 2005 and 2015, primarily by switching from coal to gas. It is well on the way to complying with the Clean Power Plan.

The CPP will accelerate the transition to money-saving energy efficiency, and to a job-rich renewable energy sector. Countries such as China, Bangladesh, Denmark, Germany, Kenya, South Korea and Portugal have all seen tremendous manufacturing and job growth as they made their electricity sectors more diverse and clean.

As innovations spread in the energy sector, the benefits of the CDP come into play. The carbon dividend to U.S. families is estimated by the U.S. Treasury to directly benefit financially the poorest 70 percent (some 223 million people) of Americans. A federal infrastructure investment would further stimulate this deal, bringing jobs to the capital-intensive energy sector across the country.

Of equal or greater importance, however, is the fact that the U.S. and European Union energy sectors are growing by less than 1 percent per year, but in many other nations energy demand is growing by 5 percent or more.  The CDP pushes and encourages other countries to adopt carbon policies, making them ready markets for the products that the invigorated U.S. energy sector will deliver.

Because the energy industry is about systems integration, not simply individual technology components, countries need company partners that are expert and trusted to deliver integrated packages. This is a hallmark of the U.S. energy sector, from the complex and extensive oil and gas industry to companies like Bechtel and Johnson Controls, to the fastest growing part of the U. S. economy, the clean energy innovators.

The real beauty of the two proposals is how well they can work together for the benefit of all Americans and, at the same time, the global environment.

Daniel KammenDaniel M. Kammen is a professor of energy at the University of California, Berkeley, with appointments in the Energy and Resources Group at the Goldman School of Public Policy, and the Department of Nuclear Engineering. He is the founding director of the Renewable and Appropriate Energy Laboratory at UC Berkeley, and currently serves as Science Envoy for the U. S. State Department. He has previously served as the Chief Technical Specialist for Renewable Energy and Energy Efficiency for the World Bank Group.