Joined: 29 Sep 2004
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|Posted: Fri Jul 23, 2010 4:27 am Post subject: The big Green Buy
|THE HUFFINGTON POST
The Big Green Buy: How Government's Purchasing Power Can Drive the Clean-Energy Revolution
Gates's acknowledgment of the need for government intervention is welcome, but he and many others are stuck on "innovation." The fixation on new "game-changing" technology is omnipresent. Think of the metaphors we use: a green Manhattan Project or a clean-tech Apollo Program.
Yet according to clean-tech experts, innovation is now less important than rapid large-scale implementation. In other words, developing a clean-energy economy is not about new gadgets but rather about new policies.
An overemphasis on breakthrough inventions can obscure the fact that most of the energy technologies we need already exist. You know what they are: wind farms, concentrated solar power plants, geothermal and tidal power, all feeding an efficient smart grid that, in turn, powers electric vehicles and radically more energy-efficient buildings.
But the so-called "price gap" is holding back clean tech: It is too expensive, while fossil fuels are far too cheap. The simple fact is that capitalist economies will switch to clean energy on a large scale only when it is cheaper than fossil fuels. The fastest way to close the price gap is to build large clean-tech markets that allow for economies of scale. So, what is the fastest way to build those markets? More research grants? More tax credits? More clumsy pilot programs?
No. The fastest, simplest way to do it is to reorient government procurement away from fossil fuel energy, toward clean energy and technology -- to use the government's vast spending power to create a market for green energy. After all, the government didn't just fund the invention of the microprocessor; it was also the first major consumer of the device.
Call it the Big Green Buy. The advantage of this strategy is that it is something Obama can do right now, without waiting for congressional approval to act. As such, it amounts to a real test of his will to make progress in the fight against climate change.
Perhaps the most important move in this direction came in October 2009, when President Obama quietly signed Executive Order 13514, which directs all federal agencies to "increase energy efficiency; measure, report, and reduce their greenhouse gas emissions from direct and indirect activities; conserve and protect water resources through efficiency, reuse, and stormwater management; eliminate waste, recycle, and prevent pollution; leverage agency acquisitions to foster markets for sustainable technologies and environmentally preferable materials, products, and services; design, construct, maintain, and operate high performance sustainable buildings in sustainable locations."
The executive order also stipulates that federal agencies immediately start purchasing 95 percent through green certified programs and achieve a 28 percent greenhouse gas reduction by 2020. The stimulus package passed in 2009 included $32.7 billion for the Energy Department to tackle climate change, and some of that money is now being dispersed to business and federal agencies.
Government has tremendous latitude to leverage green procurement because it requires no new taxes, programs or spending, nor is it hostage to the holy grail of sixty votes in the Senate. It is simply a matter of changing how the government buys its energy, vehicles and services. Yes, in many cases clean tech costs more up front, but in most cases savings arrive soon afterward. And government -- because of its size -- is a market mover that has already shown it can leverage money-saving deals.
Viewed broadly, there are four simple things the government can do to help close the clean-technology price gap and aid clean-tech business across the valley of death.
First, it can boost R&D as Gates has requested, but that alone won't bring mass-scale green power on line.
Second, it can set up a Green Bank tasked with financing clean-tech businesses as they cross the valley of death. Along with loans, the government can offer more loan guarantees, which encourage otherwise frightened private capital to invest in clean-energy start-ups. The Waxman-Markey climate bill of last year included language to do that, but nothing like it is yet law.
Third, the government can impose mandates on the private sector requiring companies to adopt electric vehicles, purchase clean energy and conserve energy. Industry already lives with numerous rules that put limits on the anarchy of production. Yet in the crazy world of American politics circa 2010, forcing green procurement mandates on business would be very difficult.
So let's get real. The fourth path is the best: a robust program of green procurement is the most immediate and politically feasible thing government can do to boost the clean-tech sector. And the only number that approaches the scale of the energy economy is government spending on energy. We need to be talking not about millions or billions but trillions of dollars going in a new direction. If the government is serious about electric vehicles -- then just buy them already!
At one level, the mad Tea Partiers are correct: government is leviathan -- a monster. But it is our monster, and with proper leadership, even this government in the current climate could jump-start a clean-energy revolution.
Those who cannot remember the past are condemned to repeat it. - George Santayana