Sunday, April 15, 2007

The Ethic of Stewardship: It won't be easy being Green

In the New York Times Magazine this weekend Thomas Friedman discusses the challenges of making environmentalism profitable, strategic, patriotic, and globally equitable. Political and technological innovation will play a crucial role in this process.

One major hurdle is the energy market and its often conflicting incentives: The world needs to simultaneously reduce demand for carbon-intensive energy sources and create demand for alternatives. Robert Socolow and Stephen Pacala of Princeton's Carbon Mitigation Initiative have innovated a series of "stabilization wedges"—aspects of the energy economy and changes in behavior that can be adjusted using current technologies. Their ideas could help bridge the transition to a Green economy over the next half century.

According to Friedman, McKinsey Global Institute has forecast that "developing countries will generate nearly 80 percent of the growth in world energy demand between now and 2020, with China representing 32 percent and the Middle East 10 percent."

Despite the advanced industrial world's historical responsibility for climate pollution, the developing world is catching up, and so Friedman concludes that the Green platform "will not go down Main Street America unless it also goes down Main Street China, India and Brazil. And for green to go Main Street in these big developing countries, the prices of clean power alternatives—wind, biofuels, nuclear, solar or coal sequestration—have to fall to the “China price.” The China price is basically the price China pays for coal-fired electricity today because China is not prepared to pay a premium now, and sacrifice growth and stability, just to get rid of the CO2 that comes from burning coal."

Friedman believes that the "only way we are going to get innovations that drive energy costs down to the China price... is by mobilizing free-market capitalism." But the market will only work if there is an accurate price for carbon, if countries "force their people to pay the full climate, economic and geopolitical costs of using gasoline and dirty coal."

But Friedman realizes that "the market alone won’t work. Government’s job is to set high standards, let the market reach them and then raise the standards more. That’s how you get scale innovation at the China price."

He goes on to suggest a number of areas where government can help:

  • Raise efficiency standards for buildings and appliances

  • Stipulate that utilities generate a certain amount of electricity from renewables

  • Raise mileage standards for cars

  • Tighten the cap-and-trade system for the amount of CO2 any factory or power plant can emit

  • Offer loan guarantees and fast-track licensing for anyone who wants to build a nuclear plant

  • Enact a carbon tax

Government, of course, means us. The market, of course, means us. People now must roll sleeves, cinch belts, and innovate. As the unpredictable havoc of doubling atmospheric carbon gets delivered to our doorstep, the Ethic of Stewardship becomes less about intergenerational sacrifice and more about shared humanity. It won't be easy being Green, but it will be worth it.

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