Greening the Economy of the Future

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Transcript Greening the Economy of the Future

An Egalitarian Program for Building
a Clean Energy U.S. Economy
Bob Pollin and Jim Boyce
Labor Network for Sustainability Conference
Washington, DC
March 11, 2014
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Building a Clean Energy Economy is
Good For Jobs and Economic Growth
• Nothing original in this
– Comparable to case for military-based industrial
policies
• Ruttan: Is War Necessary for Economic Growth?
• Trade-offs are real but limited and
manageable
• Specific to regions/communities/industries
– Can compensate regions/communities
– Mazzocchi: Environmental “Superfund”for displaced fossil
fuel workers
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Focus on US: Meeting 2030 Emissions
Reduction Target
• U.S. Emissions as of 2010
– 6,800 mmt from all greenhouse gas emissions
– 5,600 mmt CO2 emissions from burning oil, coal and
natural gas
• IPCC and Obama Administration Targets
– 40 percent absolute decline in emissions
• 4,200 million metric tons (mmt) of all Greenhouse Gas Emissions
by 2030
• 3,200 CO2 mmt from energy-based sources
– 80 percent absolute decline by 2050
• 1,200 mmt of emissions by 2050
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How to Achieve 2030 Emissions
Targets
• Energy Efficiency
– Cutting absolute U.S. energy consumption by ~30 percent
• From ~ 100 to ~ 70 Q-BTUs
• Clean Renewable Energy
– Roughly quadrupling supply from clean renewables
• Low-emissions bioenergy, wind, solar, geothermal, small-scale hydro
• From ~3.5 to ~15 Q-BTUs
• Non-Renewable Energy
– Reduce consumption overall of oil, natural gas, coal, and nuclear
power by ~ 40 percent
• Investment Levels Necessary
– ~ $190 billion/year for 20 years; 1.2% of GDP
– Most investment costs recouped in 3-5 years
• Based on mainstream sources: National Academy of Sciences, U.S. Energy
Department, McKinsey
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Alternative Consumption Scenarios
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Figure 1. Job Creation through $1 Million in Spending:
Clean Energy Investments vs. Fossil Fuels
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Clean Energy:
16.7 Jobs
Number of Jobs Created
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12
8
Oil/Natural Gas/Coal
5.3 Jobs
4
0
Sources: See Pollin, Heintz, Garrett-Peltier (2009).
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Job Creation through $190 Billion/year
Clean Energy Program
• 4.2 million jobs in total job creation
– New Capital Expenditures in Efficiency and Clean
Renewables
– Operations and Maintenance for Clean Renewables
• Mostly low-emissions bioenergy
• 2.7 net job creation
– after subtracting job losses through retrenchments in
coal, oil and natural gas.
• Roughly equal to 1.5 percent employment in
2030 labor market
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Clean Energy Policy Agenda
• Market-shaping Rules
– Carbon Cap or Tax
– Enforcement of Clean Air Act
• Direct Public Spending
– Energy Efficiency/Renewable Public Investments and
Procurement
• Private Investment Incentives
– Feed-in Tariffs
• Regional Equity and Worker/Community
Transition Assistance
– “Superfund” for Workers
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Who pays?
Carbon pricing – via a cap or a tax converts an open-access resource
(the biosphere’s carbon absorptive
capacity) into property. It therefore
poses the fundamental question:
Who owns the sink functions of
the environment?
Higher fossil fuel prices = payment of rent
for use of the carbon sink.
CAP-AND-GIVEAWAY (aka Cap-and-Trade)
GOVERNMENT
Free
permits
FOSSIL FUEL
FIRMS
CONSUMERS
$100 billion
CAP-AND-SPEND (& Carbon tax)
GOVERNMENT
Auctioned
Permits
$100 billion
FOSSIL
FUEL
FIRMS
CONSUMERS
$100 billion
CAP-AND-DIVIDEND (& Fee-and-Dividend)
GOVERNMENT
$100 billion
Auctioned
Permits
$100 billion
FOSSIL FUEL
FIRMS
CONSUMERS
$100 billion
Environmental Legislation and GDP
Growth
• Alternative estimates of GDP growth under
Waxman-Markey cap-and-trade legislation
• CGE models
– Wide range of assumptions
– American Council on Capital Formation/National
Association of Manufacturers Model with “high
cost” estimates
• Worst-case scenario
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Conclusion for Reaching 2030 -35
Greenhouse Gas Emissions Goal
• Energy Efficiency: Overall U.S. energy consumption
needs to fall from ~ 100 – 70 Q-BTUs
• Renewables: Clean renewable energy needs to supply
15 Q-BTUs
• Oil: 21 Q-BTUs for automobiles
• Remaining 34 Q-BTUs: Mix of natural gas, nuclear,
coal
• Job Creation: Investing in clean energy transformation
will be substantial source of net job creation
• GDP Growth: Clean energy transformation will not
significantly affect overall GDP growth
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