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Energy Policy as the Solution to Climate Change

John KerryThe issue of climate change arose during Senator John Kerry’s confirmation hearing for Secretary of State yesterday and the senator provided several thoughtful comments. Senator John Barrasso initiated the discussion when he expressed concern that action on climate change “could do significant harm to the U.S. economy.” Senator Kerry replied thusly:

The solution to climate change is energy policy. And the opportunities of energy policy so vastly outweigh the downsides that you’re expressing concern about. I will spend a lot of time trying to persuade you and other colleagues of this. You want to do business and do well in America? We’ve got to get into the energy race. Other countries are in it… This is a place for us to recognize what other countries are doing and what our states that are growing are doing, which is there’s an extraordinary amount of opportunity in modernizing America’s energy grid.

First, Senator Kerry is absolutely right that the solution to climate change is energy policy. As Matthew Stepp and Jesse Jenkins detail in their Future of Global Climate Policy series, “To rapidly decarbonize the economy requires greatly accelerating the replacement of fossil fuels with low or zero-carbon clean energy substitutes.” Period.

Second, as the senator alludes, aggressively developing new clean energy technologies is not just about mitigating climate change – there are multiple long-term economic benefits. In fact, a clean energy race is ongoing and global competitors like China, Germany, and South Korea have invested billions in recent years in winning that race. Unfortunately, there are serious warning signs that America is losing.

To be sure, successfully fostering energy innovation will primarily involve domestic policy initiatives, such as institutional reform at the Energy Department, which will be out of the purview of the nation’s likely next chief diplomat. Nevertheless, Secretary of State Kerry can strike a blow for energy innovation by pressuring nations in general – and China in particular – to curtail their green mercantilist policies. As ITIF has consistently documented, China has wreaked havoc on the global clean energy market – and arguably acted against its own long-term interest – by employing a host of unfair trade practices to artificially boost its energy industry. Convincing the Chinese government to roll back mercantilist policies would help level the global playing field and thus boost efforts to innovate clean energy technologies that are both cost and performance competitive with conventional alternatives. Recognizing that energy policy is the solution to climate change, as Senator Kerry has done, is a step in the right direction. Recognizing that energy policy is the solution to climate change, as Senator Kerry has done, is a step in the right direction. The next step is designing and employing the right kinds of energy policy, both here in the United States and around the world.

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Jessee McBroom's picture
Jessee McBroom on Jan 27, 2013 12:20 pm GMT

The Solutions To Climate Change can certainly come from a Nations' Energy Policy. Just as any Nations' Energy Policy can and probably will affect the Solutions to Climate Change.

Randy Voges's picture
Randy Voges on Jan 27, 2013 2:47 pm GMT

Get off the hopium and stop using the word 'solution' in the context of a policy discussion.  No matter what 'solution' you dream up, you are immediately confronted with multiple problems, even if your 'solution' is to do nothing.  The right term is 'tradeoffs', because all policies will come with undesirable but unavoidable consequences that must be mitigated for effective policy.  Period.

Chris Cook's picture
Chris Cook on Jan 31, 2013 11:03 pm GMT

Kerry is absolutely correct, and the best example is Denmark, who while increasing GDP by 78% since 1980, have kept energy consumption flat and cut carbon fuel use and hence emissions.

They have achieved this through mandating a 'least energy cost' rather than 'least $ cost' approach, and while introducing renewable energy (and creating profitable businesses such as Vestas in so doing) have invested massively through community co-ops in capturing heat from energy generation, and also in heat storage.

In jurisdictions such as the UK, 'least £ cost' has given us the Dash for Gas and poor energy security from reliance upon the likes of Qatar and Gazprom. 

But with a bit of lateral financial thinking direct 'Peer to Asset' investment in energy savings through 'gas loans' (ie units retunable in payment for gas) could change the game.



Peter Grossman's picture
Peter Grossman on Feb 1, 2013 2:16 pm GMT

It's hard to think of an approach more wrongheaded than the one John Kerry recommended and that is endorsed in this post.  Consider the last energy bill that was touted as a big step toward a solution for energy and CO2 mitigation.  That one, passed in late 2007, backed by most Republicans and Democrats (including President Bush and Senator Obama), has saddled us with the Renewable Fuel Standard, which has done little to reduce CO2 emissions and has produced many unanticipated bad effects. That seems inevitable when energy policy is supposed to be a cure-all. I have a more radical idea: How about an energy policy that deals with energy and a climate policy that deals with climate?

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