Wrapped inside the economic stimulus package is about $80 billion in spending, loan guarantees and tax incentives aimed at promoting energy efficiency, renewable energy sources, higher-mileage cars and coal that is truly clean. As a stand-alone measure, these investments would amount to the biggest energy bill in history.

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As ambitious as this measure is, it should not be confused with a global warming bill. Dealing with climate change will require a much broader strategy, even larger federal investments in clean-energy technologies and an effort to put a price on greenhouse gas emissions to unlock private investment on an enormous scale. But this is a useful down payment, which could also help reduce the nation’s reliance on foreign oil.

Eighty-billion dollars is still a lot of money. And the federal agencies overseeing its disbursement must provide strong regulation and firm guidance to ensure that it is spent wisely. Money invested in a modern electricity grid, for instance, will have been badly spent if it is used merely to build transmission towers to move energy from old coal-fired power plants. It will be well spent if it helps move clean energy, such as wind and solar power, from, say, Texas, to distant cities that need it.

That is just one of many provisions that will bear close watching as the money flows to states, cities and businesses. Here are some of the most important ones.

ENERGY EFFICIENCY Homes and buildings soak up 40 percent of the energy generated in this country — more than vehicles. Of the $25 billion provided for energy efficiency, more than half is aimed at helping low-income families weatherize one million homes and helping governments at all levels retrofit public buildings.

RENEWABLE ENERGY In addition to new money for research into alternative fuels, the measure provides roughly $20 billion in tax incentives for wind, solar, hydroelectric and other renewable power sources. These incentives, which are crucial for future development, were the subject of endless Congressional bickering last year, and it is heartening to see them enshrined in law.

SMART GRID The measure invests $11 billion in grants and $6 billion in loans to modernize the electric grid and increase its capacity to deliver power generated by renewable sources. These programs will need especially careful oversight.

The package includes other potentially useful energy-related provisions: $2 billion in grants and loans for research into advanced car batteries, a tenfold increase over the existing program; and $3.4 billion to develop coal-fired power plants that can capture and store greenhouse gases, also a tenfold increase.

Much more will be required to fully address climate change and oil dependency. And President Obama promised much more in his campaign. But the stimulus package is a good beginning.

Dr. Chu said a “revolution” in science and technology would be required if the world is to reduce its dependence on fossil fuels and curb the emissions of carbon dioxide and other heat-trapping gases linked to global warming.

He said that while President Obama and Congressional Democratic leaders had endorsed a so-called cap-and-trade system to control global warming pollutants, there were alternatives that could emerge, including a tax on carbon emissions or a modified version of cap-and-trade.

http://www.nytimes.com/2009/02/12/us/politics/12chu.html?_r=2&pagewanted=print

Steven Chu, the new secretary of energy, said Wednesday that solving the world’s energy and environment problems would require Nobel-level breakthroughs in three areas: electric batteries, solar power and the development of new crops that can be turned into fuel.

Dr. Chu, a physicist, spoke during a wide-ranging interview in his office, where his own framed Nobel Prize lay flat on a bookcase, a Post-it note indicating where it should be hung on the wall.

He addressed topics that included global warming, renewable energy sources like solar and wind power, the use of coal and a proposed repository for nuclear waste at Yucca Mountain in Nevada.

Dr. Chu said a “revolution” in science and technology would be required if the world is to reduce its dependence on fossil fuels and curb the emissions of carbon dioxide and other heat-trapping gases linked to global warming.

Solar technology, he said, will have to get five times better than it is today, and scientists will need to find new types of plants that require little energy to grow and that can be converted to clean and cheap alternatives to fossil fuels.

Dr. Chu, who once called coal “a nightmare” in the way it is currently used, said the United States must also lead the world in finding a way to burn the fuel cleanly, because other countries with big coal reserves, like India and China, will not turn away from coal.

But Dr. Chu said such developments were not impossible. At the turn of the last century, he noted, scientists like Fritz Haber and Carl Bosch made Nobel-winning discoveries that allowed the development of cheap nitrogen fertilizers, saving Europe from starvation.

“I think science and technology can generate much better choices,” Dr. Chu said. “It has, consistently, over hundreds and hundreds of years.”

Dr. Chu said members of Congress who are drafting legislation to limit emissions of global warming gases had not yet sought his advice, although he added, “I would expect that they might.”

He said that while President Obama and Congressional Democratic leaders had endorsed a so-called cap-and-trade system to control global warming pollutants, there were alternatives that could emerge, including a tax on carbon emissions or a modified version of cap-and-trade.

Dr. Chu said reaching agreement on legislation to combat climate change would be difficult in the current recession because any scheme to regulate greenhouse gas emissions would probably cause energy prices to rise and drive manufacturing jobs to countries where energy is cheaper.

“The concern about cap-and-trade in today’s economic climate,” Dr. Chu said, “is that a lot of money might flow to developing countries in a way that might not be completely politically sellable.”

But, he said, he supports putting a price on carbon emissions to begin to address climate change.

“Clean-coal technology is something that can make America energy-independent,” Obama says in the ad, which has run on cable channels such as CNN, Fox News and MSNBC.

“We thought it was a key moment to let people know that we are faced with a climate crisis, and we shouldn’t have any illusion that clean coal exists today,” Hardwick said in an interview.

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Portraying clean coal as a mirage, the Alliance for Climate Protection’s first commercial, shown on broadcast and cable networks starting last December, features an announcer showing off “today’s clean-coal technology” as he gestures toward empty terrain. In a new ad now running, an actor playing a coal company executive says, “Don’t worry about climate change, leave that to us.”

The commercials are the start of an ad campaign for clean energy that the group, based in Menlo Park, California, has said will cost $300 million over 3 years. Spokesman Brian Hardwick declined to say how much advertising has been purchased so far. Gore is the organization’s founder and chairman.

“We thought it was a key moment to let people know that we are faced with a climate crisis, and we shouldn’t have any illusion that clean coal exists today,” Hardwick said in an interview.

Gore has called for the U.S. to produce all of its electricity from renewable energy by 2018, instead of “dirty fossil fuels” such as coal and oil.

The coal industry’s commercials tap into Obama’s credentials as a clean-energy advocate, showing excerpts from a speech he gave in Lebanon, Virginia, in September.

False Start

“We thought it was important to do what we could to get another side of the story out there,” said Michael Morris, AEP’s chief executive, in an interview. The industry is trying “to reach out to some of the policy makers” with its message that adding restrictions on coal would damage the already struggling economy.

Prospects for the new technology were clouded last year, when Samuel Bodman, Bush’s Energy secretary, canceled plans to build a clean-coal plant in Illinois. The cost of the facility, initially estimated at $1 billion, had soared to at least $1.8 billion. Bodman said funding the technology at multiple plants would be an “all-around better deal.”

The House-passed version of Obama’s economic stimulus plan would provide $2.4 billion for development of carbon capture and storage, according to a summary issued by Speaker Nancy Pelosi, a California Democrat. The version now before the Senate has at least $4.6 billion for that purpose, according to Bill Wicker, a spokesman for Senate Energy Committee Chairman Jeff Bingaman, a New Mexico Democrat.

“The president has his hands full…..”

Steven Chu, point man for his new green team, should begin moving the energy department into the 21st century. He will innovate in a host of areas given short shrift by the previous administration, including solar, wind and biofuel development, which is essential because the freefall in energy prices will not erase the prospect of eventual fossil fuel shortages.

Environmentalists, after finally electing one of their own, worry that the green agenda will be delayed by global warming sceptics eager to use the slow economy as an excuse to do nothing. Growth-focused economists fear that Obama’s green team believes that high-cost environmental change is more important than stabilising jobs and reviving markets.

http://www.ethicalcorp.com/content.asp?ContentID=6313

President Obama’s sustainability remake of the US economy must confront harsh commercial and scientific realities, argues Jon Entine

Barack Obama’s initiatives face a host of complicating factors, from plummeting oil prices to the changing dynamics of climate change science.

The encouraging news is that Steven Chu, point man for his new green team, should begin moving the energy department into the 21st century. He will innovate in a host of areas given short shrift by the previous administration, including solar, wind and biofuel development, which is essential because the freefall in energy prices will not erase the prospect of eventual fossil fuel shortages.

One of Chu’s most notable achievements as director of the Lawrence Berkeley National Laboratory was the Helios Project, aimed at using synthetic biology and nonomaterials to make efficient, low-cost solar panels. He also has a nuanced view of biofuels, advocating cellulosic ethanol – fuel made from corn cobs and grasses – rather than focusing only on corn and soybeans.

Chu also has a healthy respect for nuclear energy. When asked if nuclear power should be made a bigger part of the energy portfolio, he responded: “Absolutely.” As the technology quickly advances to address the waste problem, “the risk-benefit equation looks pretty good for nuclear”, Chu has said.

It remains to be seen whether the rest of Obama’s energy advisers shares Chu’s pragmatism. The wild card is global warming. Chu favours putting a price on greenhouse emissions through a cap-and-trade scheme, but he also recognises the potentially devastating costs to the economy of sharply raising energy costs to reduce carbon output. It is not clear whether he might be amenable to a revenue-neutral carbon tax, which some experts believe might be more effective than trading carbon credits, because many of the world’s biggest polluters, including China, have not agreed to cut emissions.

It is also not clear whether Obama’s other two key energy gurus – former Harvard physicist John Holdren, his science adviser, and Carol Browner, a former Environmental Protection Agency (EPA) administrator as energy adviser – carry similar priorities.

Big guns

Browner is an apparatchik of the climate change school. She’s expected to push the EPA to regulate greenhouse gases under the Clean Air Act, which the Supreme Court ruled is within its province. If the EPA succeeds, it could open the door to a slew of new energy taxes and mandates at exactly the wrong time. It would stunt the stimulus benefit of falling gas prices, which economists believe pumped roughly $200bn into the US economy last quarter alone.

Holdren introduces a different set of concerns. He was one of the experts whom Paul Ehrlich enlisted in his famous bet against the economist Julian Simon in 1980, when environmentalists were predicting an “age of scarcity”. Simon disagreed, and offered to pay $1,000 if any selected natural resource became more expensive. Ehrlich and Holdren bet that chrome, copper, nickel, tin and tungsten would become scarcer. They were wrong on all five metals, and paid up when the bet came due in 1990.

Hopefully, Holdren’s judgment has improved. He is a strong proponent of the view that global warming can be blamed mostly on human-created carbon emissions. Yet the data remains controversial. Arctic sea ice unexpectedly expanded dramatically at the end of last year to levels last seen in 1979, according to the University of Illinois’s Arctic Climate Research Center. And NASA says solar variations confirm that the Pacific Decadal Oscillation had shifted to its cool phase as predicted by past climate changes, which typically leads to several decades of global cooling.

It remains to be seen whether these are natural variations temporarily offsetting a long-term warming trend or a more fundamental shift toward global cooling. It is a reminder of the inexactness of atmospheric science, which is something to consider when politicians urge dramatic policy shifts costing trillions of dollars that at best affect temperature change by a few degrees over many decades.

The correlation between economic growth and energy costs is high and negative; when energy costs go up, productivity takes a nosedive. In these extraordinary times, arguably the top priority must be to ensure that a secular financial downturn doesn’t turn into a worldwide structural depression. If that happens, both the economy and the environment will be losers.

Considering the strong economic headwinds, the political infighting within the new administration over Obama’s stated support for a cap-and-trade scheme could be intense. Environmentalists, after finally electing one of their own, worry that the green agenda will be delayed by global warming sceptics eager to use the slow economy as an excuse to do nothing. Growth-focused economists fear that Obama’s green team believes that high-cost environmental change is more important than stabilising jobs and reviving markets. The president has his hands full.

Obama’s goal to double U.S. renewable- energy by 2012 may take years longer because even fully funded projects take at least three years to develop, he said.

In Bush’s last three years, solar and wind production doubled, helped by easier financing and tax breaks

http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=awAasQBsmz0oPresident Barack Obama may find it harder to increase renewable energy than his predecessor during a financial crisis that halted lending by Lehman Brothers Holdings Inc. and other alternative-power financiers, investors said.

New loans to harness the wind, sun and biodegradable waste will need extra government backing in a deepening recession, said Clayt Tabor, finance director at Midwest Wind Finance, a wind-farm developer in Minneapolis. Obama’s goal to double U.S. renewable- energy by 2012 may take years longer because even fully funded projects take at least three years to develop, he said.

Obama, more supportive of clean energy than George W. Bush, may struggle to shift quickly from coal-burning plants that spew global-warming gases. In Bush’s last three years, solar and wind production doubled, helped by easier financing and tax breaks that attracted loans from Lehman, now bankrupt, and insurer American International Group Inc., later taken over by the government.

“The project-development cycle is three to five years so you can’t just stop and start on a dime” in a tough environment, Brian Redmond, managing director of CP Energy Group LLC, a Boston-based renewable-energy advisory firm, said in an interview.

The new president repeated his call to double renewable power capacity in three years during his first weekly radio and video address as president on Jan. 24. He’s pressing Congress to pass an $825 billion economic-recovery package with provisions to aid green energy. House Democrats have begun work on the legislation.

If approved, they will come on top of $7.7 billion in tax breaks already available. These incentives, part of the October bank rescue, are only offered to investors earning profits.

Under the stimulus bill, eligibility for the $7.7 billion will be broadened to include investors with losses, a growing group in the recession. Lehman, which had agreed to make loans to developers such as Newton, Massachusetts-based First Wind, is in bankruptcy court. AIG has stopped lending on renewable-energy projects.

“Adjusting tax incentives so they are more broadly usable is the most important policy adjustment needed,” Bank of America Securities-Merrill Lynch said in a research note to clients. “Funding is sparse and demand is being affected by the depression as well as low fossil-fuel prices.”

The U.S. had renewable-energy generators capable of producing 28,721 megawatts of power in 2007, not counting hydroelectric dams, according to Energy Department data. A megawatt can supply about 800 average U.S. homes.

“It’s one that will invest in our most important priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century,” he said.

http://www.whitehouse.gov/president-obama-delivers-your-weekly-address/

According to the report released along with Obama’s address, the administration has set a goal of doubling renewable energy generating capacity in three years and accelerating an overhaul of the nation’s power transmission system.

To accelerate the creation of a clean energy economy, we will double our capacity to generate alternative sources of energy like wind, solar, and biofuels over the next three years.

We’ll begin to build a new electricity grid that lay down more than 3,000 miles of transmission lines to convey this new energy from coast to coast.

We’ll save taxpayers $2 billion a year by making 75% of federal buildings more energy efficient, and save the average working family $350 on their energy bills by weatherizing 2.5 million homes.

The incoming US president says meeting the challenge of climate change and ensuring America a secure energy supply are top priorities that can both be achieved by weaning the country off its dependence on imports of foreign fossil fuels.

California, where they are already test-driving some of Obama’s plans under the unlikely gaze of Governor Arnold Schwarzenegger. The state legislature has passed a key law to enact emissions reductions programs through regulation and carbon trading. The laws are intended as a model for federal action.

“It has a state plan for renewables; it has the technologists to deliver; and it has the venture capital,”

http://www.onlineopinion.com.au/view.asp?article=8420

Europe’s leadership on fighting climate change seemed unassailable until just a few months ago. It had grabbed that position more than a decade ago, when Germany’s then environment minister, a former East German chemist named Angela Merkel, negotiated the groundwork for the Kyoto Protocol in Berlin in 1995. Two years later, Europe basically pushed Bill Clinton to send Al Gore to Kyoto to sign up to the first emissions targets – which were never ratified by the US Senate and subsequently repudiated by George W Bush.

Early last month, Merkel – now German Chancellor – signalled Europe’s retreat. She successfully lobbied on behalf of her coal-burning and car-making industries to water down European Union plans for carbon emissions trading in a new EU energy package. It is now unclear whether EU promises to cut emissions by 20 per cent by 2020 – and 30 per cent if other developed nations will go along – can be met.
The inauguration of Barack Obama now looks like the world’s best chance to break free of the climate trap. The incoming US president says meeting the challenge of climate change and ensuring America a secure energy supply are top priorities that can both be achieved by weaning the country off its dependence on imports of foreign fossil fuels.

Among the climate cognoscenti, the sense that a really important shift may be about to happen was accentuated when Obama announced in December that he had chosen Steven Chu as his energy secretary.

The Nobel prize-winning head of the Lawrence Berkeley National Laboratory has helped pioneer research on energy efficiency, solar energy, and cellulosic “second generation” biofuels. Last year he announced a US$500 million deal with BP to fund a new Energy Biosciences Institute at Berkeley. “We are seeking industry partnerships,” he said then. “We seek solutions. We don’t seek, dare I say, science papers anymore.”

Chu is also an advocate of a national high-voltage electricity super-grid to distribute renewable energy across the United States. In 2005, he went to Washington to pitch the idea – none too successfully, it seems – to Bush’s energy secretary Samuel Bodman. And now it fits right in with Obama’s campaign promise to establish “a new digital grid … to make effective use of renewable energy.”

It also fits in as part of the new, green, job-creating, economy-reviving, American infrastructure that Obama promises – his 21st century version of the New Deal’s Grand Coulee and Hoover dams.

In September I visited California, where they are already test-driving some of Obama’s plans under the unlikely gaze of Governor Arnold Schwarzenegger. The state legislature has passed a key law to enact emissions reductions programs through regulation and carbon trading. The laws are intended as a model for federal action.

Even more striking are the green energy entrepreneurs tooling up in California. “If Barack Obama wins,” David Mills, the bicycling-mad boss of solar energy pioneers Ausra in Palo Alto, told me, “then it’s going to be boom time here”. He was cheering even louder with the news of Chu’s appointment.

Mills and Ausra are in the vanguard of what many believe will become the critical renewable technology for America – solar thermal energy. Unlike photovoltaics, which convert solar heat directly into electricity, solar thermal concentrates solar energy using mirrors to heat water, which is then used to drive conventional steam turbines. One of the advantages of solar thermal is that it allows the energy to be stored for when it is needed, in the form of hot water.

Mills, a Canadian, developed his system in Australia. But a couple of years ago, frustrated by government indifference there, he shipped out Solargenix to California. “It has a state plan for renewables; it has the technologists to deliver; and it has the venture capital,” he told me. Backers in Silicon Valley have pumped hundreds of millions of dollars already into start-up green tech companies like Ausra. In the fall, Mills opened a robot-run factory outside Las Vegas ready to cover the deserts of the American West with glass mirrors that catch the sun’s energy.

So even as President-elect Barack Obama talks about promoting green jobs as America’s route out of recession, gulf states, including the emirates, Qatar and Saudi Arabia, are making a concerted push to become the Silicon Valley of alternative energy.

“Truth is that locally money is tight as everywhere, and the property market is certainly taking a correction downwards,” said Richard Hease, whose Dubai-based company, Turret Middle East, organized the conference. “But on the renewable energy front, it is business as usual.”

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They are aggressively pouring billions of dollars made in the oil fields into new green technologies. They are establishing billion-dollar clean-technology investment funds. And they are putting millions of dollars behind research projects at universities from California to Boston to London, and setting up green research parks at home.

“Abu Dhabi is an oil-exporting country, and we want to become an energy-exporting country, and to do that we need to excel at the newer forms of energy,” said Khaled Awad, a director of Masdar, a futuristic zero-carbon city and a research park that has an affiliation with the Massachusetts Institute of Technology, that is rising from the desert on the outskirts of Abu Dhabi.

These are long-term investments in an alternative energy future that neither falling oil prices nor the global downturn seems likely to reverse. Even as the local real estate market is foundering, leaders in politics, business and research from across the globe will flock to this distant kingdom for three days starting Monday for the second World Future Energy Summit, which just one year after its inception here has become something of a Davos gathering on renewable energy.