Global Warming

Economic Crisis Creates Challenges for Environmental Action

| by NRDC

A recent Gallup poll survey conducted on the priorities for Americans with respect to the economy, energy production, and the environment has concluded that "there is little question that the current economic crisis poses a significant challenge for the environmental movement in this country". The article titled "Americans: Economy Takes Precedence Over Environment" notes that based on its survey, support for environmental protection has slipped below the economy for the first time since Gallup began asking these questions in 1984.

While on the face of it this conclusion may not surprise many given that we are experiencing one of the worst economic slowdowns in recent memory, the issue has more to do with the fact that Gallup is asking a 25 year old question than with what Americans are actually thinking today about the economy, energy, and the environment.

With unemployment expected to rise further this year, Americans' priorities are rightly focused on jobs and more specifically the demand needed to support those jobs. President Obama understands this and his stimulus package aims to create at least 4 million jobs over the next two years. The kinds of jobs he expects to be created highlight why Gallop needs to rethink its questions. NRDC estimates that the $50bln of clean energy investments in the American Recovery and Reinvestment Act will create 1.5 million "green" jobs that will help grow the economy and help to protect the environment at the same time.

In addition to the stimulus bill, the passage of cap and trade legislation, that would fast track investments in a series of low carbon technologies starting today, would create jobs for the millions of Americans needed to transform our multi-trillion dollar energy economy. Engineers, electricians, plumbers, industrial workers, installation specialists, and service employees are needed to get the job done and these are all jobs that help grow the economy, keep our energy dollars in the US, reduce our green house gas emissions, and ensure that America's recovery is sustainable over the long term.

As a specific example, a cap and invest bill will provide the economic and regulatory certainty needed to accelerate investment in the manufacture, installation, and use of combined heat and power (CHP) equipment in the United States. By providing supply-side incentives to encourage domestic production of CHP equipment, which lowers fuel consumption by capturing and utilizing the waste heat from its industrial processes, and at the same time offering demand-side incentives to schools, hospitals, and industrials to install and operate CHP equipment in their facilities, jobs can be created and our overall energy costs can be significantly reduced. In a recent study by Oak Labs, scaling up CHP capacity can reduce US energy costs by nearly $1trln over the next two decades, improving our energy productivity and employing nearly one million people in well paying jobs that can't be exported. ?

Given the recent collapse in global demand, companies aren't just looking for access to capital, but access to customers in order to help re-power the economy. Under a cap and trade bill, incentives can be provided to not only push from the supply side but also to pull from the demand side to achieve the economic stimulus needed to grow jobs and reduce our carbon emissions at the same time.

Another example of how a cap and trade policy can stimulate investment today in low carbon technologies is in the demonstration and deployment of carbon, capture and storage (CCS) at coal-fired power plants. This critical technology is currently being produced in the US by General Electric and others for industrial processes and while it is technologically ready to be deployed at the power plant level to help solve one of our greatest challenges, de-carbonizing the electrical grid, utilities have been unwilling to invest in CCS at their plants due to the fact that carbon emissions have until this time cost them nothing.

Going forward, with a cap and trade policy in place that puts a price on carbon, creates a performance standard for coal, and offers meaningful incentives to deploy CCS equipment to first to market players, utilities are widely expected to accelerate their plans for investment in this technology, opening up a new industry in America. Over the medium term, these utilities would then be able to provide a cheap source of carbon dioxide to oil companies to help them recover an estimated 45 billion barrels of stranded domestic oil through a process called enhanced oil recovery (EOR). This double benefit of climate legislation helps address another one of the problems with Gallup's survey questions. The issue of whether increasing energy production necessarily comes in direct conflict with efforts to protect the environment.

Indeed, if the Gallup poll wished to refine the debate about domestic energy production and the environment, it should be asking Americans the following question: Which of the following statements about the economy and the environment do you most agree with? Protection of the environment focused on reducing our dependence on foreign oil should be given priority, even at the risk of limiting the amount of energy supplied by domestic fossil fuels - such as oil, gas and coal, or the development of US fossil fuel supplies - such as oil, gas, and coal - should be given priority even if that inevitably increases our dependence on foreign oil over time?

In sum, while the Gallup poll survey correctly highlights the impact that the recession is having on the economy, its conclusion that "Americans are more willing than ever to forgo protection of the environment if needed in order to ensure economic growth or the production of energy" is more of a reflection of the out-dated nature of their questions than an accurate reflection of Americans' attitudes about the how the economy and the environment interact today.

Transforming our twentieth century energy economy into a twenty first century energy economy is going to require trillions of dollars of investment and millions of Americans to make it happen. While President Obama recognizes this and is looking to use environmental solutions to stimulate the demand needed to ensure a sustainable recovery, Gallup is still relying on 25 year old questions that have lost their relevance to the debate.