The Wisdom of Half a Loaf

October 16, 2021

Washington Post:

The White House is scrambling to salvage a critical proposal to reduce carbon emissions and deliver on President Biden’s ambitious climate agenda, as pushback from Sen. Joe Manchin III (D-W.Va.) creates new headaches for the administration entering key international negotiations next month.

The fight revolves around the Clean Energy Performance Program, which Democrats have proposed as a way to reward utilities that increase their clean energy supply by 4 percent each year, while penalizing those that don’t. Lawmakers have included the initiative as part of a multitrillion-dollar tax-and-spending package that aims to advance Biden’s broader economic vision.

Claire Cohen-Norris on Twitter:

I have something to say about this Friday night news leak. 

There’s no news here. Manchin doesn’t like the Clean Electricity Payment Program. He never liked it. He still doesn’t like it. Negotiations continue. 

Frankly, I don’t like that the CEPP is narrowly tailored, addressing only the electricity sector. We need to cut emissions economy wide. But while it only addresses the electricity sector, with policies that address other sectors, it would be very powerful. 

But the CEPP isn’t THE answer. It is a possible answer.

And we are aiming really high to get anything so transformational as either the CEPP or a carbon tax with the slimmest possible majority in the Senate. Literally THE smallest possible margin. 

When FDR transformed our nation, he had supermajorities in Congress. And it was still hard. 

We have come way farther than we could have dreamed on November 9, 2016. 

Do. Not. Stop. Now. 

Rob Meyer in the Atlantic:

Here, at least, is the standard story: The past decade has been abysmal for climate-change policy in the United States. In 2009, a handsome new president took office pledging to pass a comprehensive climate bill in Congress. He did not. The Environmental Protection Agency sought to meaningfully reduce carbon pollution from power plants. It did not. The United States joined the Paris Agreement. Then we elected President Donald Trump, and we left.

Yes—and here, the narrator always inserts a gale-force sigh—America knowswhat it needs to do: Pass a carbon fee or tax, some kind of policy that nudges people to reduce their use of fossil fuels. Yet America refuses. And so the 2010s, once greeted as a “new era” for climate action, now seem unexceptional, the third decade in a row that the United States understood the dangers of climate change but failed to act. Meanwhile the seas rose, wildfires raged, and the Earth saw its hottest 10 years on record.

You have probably heard this tale before; it is a popular and undeniably accurate read of recent history. It has just one flaw: America is decarbonizing anyway.

That 2009 climate bill, the one that President Barack Obama couldn’t pass? It required the U.S. to cut greenhouse-gas emissions 17 percent by 2020 as compared with their all-time high. Yet last year, our emissions were down 21 percent. The same bill said that the U.S. had to generate 20 percent of its electricity from renewables by 2020. Last year, we met that target. We will surpass it in 2021.

These numbers are not a mere fluke. Last year was a singular, awful moment in economic history, but even accounting for the effects of the COVID-19 recession, America’s real-world emissions last decade outperformed the Obama bill’s targets. From 2012 to 2020, real-world U.S. emissions were more than 1 billion tons below what the bill would have required, according to my analysis of data from Rhodium Group, an energy-research firm. (Of course, had the bill passed, the U.S. might have done even better.) Meanwhile, across the economy, companies are learning how to decarbonize. Ford is already producing more electric Mustang Mach-Es than gas-powered Mustangs; General Motors, Honda, Volvo, and Jaguar have promised to stop selling gas cars altogether by 2040. Royal Dutch Shell was court-ordered last month to cut its emissions, and shareholders just forced Exxon to replace a quarter of its board with climate-concerned activist investors. Most important of all, the costs of solar and batteries have declined in the United States by a factor of 10 over the past decade, and the cost of wind has fallen 70 percent. Ten years ago, virtually no analyst thought they would fall so low. The International Energy Agency made headlines this year when it called solar “the cheapest electricity in history,” but the entire apparatus of renewable energy has seen cost declines.

What gives? America is supposed to be doing nothing right. Yet we’re making progress anyway. How? Why?

A group of scholars, engineers, and economists may have an answer. Over the past few years, this group has puzzled together a powerful thesis that explains why America and the world are decarbonizing—and how they can get better at it. Decarbonization isn’t best accomplished by fiat, they argue, but by feedback loop; it proceeds by a self-accelerating process that I have called “the green vortex.” The green vortex describes how policy, technology, business, and politics can all work together, lowering the cost of zero-carbon energy, building pro-climate coalitions, and speeding up humanity’s ability to decarbonize. It has also already gotten results. The green vortex is what drove down the cost of wind and solar, what overturned Exxon’s board, and what the Biden administration is banking on in its infrastructure plan.

In the group’s telling, the past decade might not be defined by “a failure to have any sort of comprehensive climate policy,” as Jesse Jenkins, an engineering professor at Princeton, told me, but by a “piecemeal, bottom-up investment and subsidy-led approach to driving emissions change.”

“Policy makers have been dithering about climate change since 1988, and in the background you have this steady progression of technologies,” Greg Nemet, a public-affairs professor at the University of Wisconsin at Madison, told me. Foreign industrial policy has driven that progression, he said, although American tax rebates—and California’s economic planning—have also played a part. Those policies have allowed the entire world to decarbonize and led companies to support ever more aggressive carbon cuts. That, in essence, is the green vortex.

In coining green vortex, I’ve borrowed from the work of Nina Kelsey, an international-affairs professor at George Washington University, who has argued that combining financial incentives and technological change into a “green spiral” can drive decarbonization.

“There’s so much energy spent on trying to convince people what we should do about climate change,” she told me. “I think it’s gone about as far as we can go.” What will fix climate change now, she says, is making it profitable for companies to fight climate change.

We should hope this thesis is correct. Under America’s new Paris Agreement pledge, announced by President Joe Biden in April, the country will need to double the pace of its emissions decline over the next decade. Whatever we’re doing right, we’re soon going to have to do it twice as fast. So … you know … we’d better figure out what it is.

The idea that drives the green vortex is: Practice makes improvement. The more that we do something, whether baking a cake or manufacturing electric vehicles, the better we get at it. (Economists call this “learning by doing.”) This idea might seem intuitive, but it is often ignored in policy conversations. Over the past half decade, learning by doing has driven down the cost of semiconductors, solar panels, and electric vehicles.

The green vortex leverages this idea to describe a positive feedback loop. Policy can speed up the pace of technology development. As technologies develop, they get cheaper. As they get cheaper, more companies adopt them. As more companies adopt them, their leaders grow more comfortable with climate policy generally—and more supportive of pro-technology policy in particular. As more corporate leaders support climate policy, coalitions change, governments can pass more aggressive measures, and the cycle expands and begins again.

The core mechanism here is that subsidies speed up learning by doing. Any industry would, eventually, figure out how to make a product more cheaply; subsidies move that learning forward in time, so that the unsubsidized price starts looking attractive more quickly. “You’re trying to grab the lever that accelerates the pace of cost declines,” Jenkins said. “That’s where the policy has teeth.”

The cycles of the vortex can start slow, but there is wide evidence for them. Nemet, the Wisconsin professor, pointed me to one case in particular. In the 1970s, amid a global surge in the price of oil, Denmark began to seed a homegrown wind industry. By the early ’80s, this small country best known for its maritime culture and cheese-filled pastry found one of its largest markets in the U.S., when California began subsidizing large wind farms. By 1990, three-quarters of the world’s installed wind capacity was in that one state. Cheap solar energy emerged from a similar global alignment, Nemet’s work has shown, this one between Chinese factories and German tariffs in the early 2010s.

The green vortex also makes Biden’s climate and infrastructure agenda, the American Jobs Plan, fit into place. Large swaths of Biden’s plan, which has been criticized for a lack of focus and unnecessary constraints, are devoted to beefing up industries. This choice makes more sense in light of the green vortex. It focuses much of its attention on industries that are crucial to decarbonization but that remain in their early stages. So it spends, for instance, $174 billion on “winning” the global EV market, chiefly by building “domestic supply chains” for electric vehicles and helping consumers buy specifically American-made vehicles.

The Biden plan spends even more time on industries that don’t yet have a plan to go zero-carbon. So it promises to invest in 15 industrial-scale demonstration projects to produce green hydrogen, and to create another 10 factories that will pioneer new ways to make zero-carbon steel, cement, and chemicals. And the plan promises that the federal government will buy such zero-carbon products to help fledgling firms.

This focus on domestic production, on American-made cars and steel, runs against 40 years of textbook economics, which has prized efficiency above all. Herbert Stein, President Richard Nixon’s chief economist, once declared that “if the most efficient way for the U.S. to get steel is to produce tapes of [the TV show] Dallas and sell them to the Japanese, then producing tapes ofDallas is our basic industry.” And it’s true that fostering a domestic carbon-capture industry might suck up dollars that could go toward decarbonization elsewhere. But if you’re trying to accelerate a vortex, it makes sense: Biden is betting that a strong domestic EV industry will build political demand for more decarbonization down the road.


24 Responses to “The Wisdom of Half a Loaf”

  1. Dana Nuccitelli Says:

    Keep calm and price carbon!

    • Dana Nuccitelli Says:

  2. jimbills Says:

    How about: receive a fifth of a loaf (the CEPP is the HEART of the Biden climate plan), when we really need five loaves to adequately feed the family. And what? Be happy we got the partial loaf?

    All the Manchin stalling BS (why couldn’t he have raised his objection to the CEPP months ago?) is meant to do is completely kill the real meat of the Biden climate plan, leaving a few crumbs afterwards, and then pointing his finger at the liberals for not wanting to pass the initial infrastructure bill. Again, climate policy in the U.S. is effed, completely effed, and the narrative is ‘be happy for what we can get’? Why shouldn’t be screaming mad about it?

    Or should we pretend we’re already doing well, as Rob Meyer of the Atlantic is suggesting (while not mentioning that NG is the reason for more than half the emission reductions in the last decade, or that we’re not on track to meet our Paris Agreement goals, which themselves aren’t nearly enough), or as Joe Manchin claims is the reason why he’s against the CEPP in the first place. Here’s his team’s quote: “Senator Manchin has clearly expressed his concerns about using taxpayer dollars to pay private companies to do things they’re already doing.”

    There won’t be a single Republican helping to pass a carbon tax. Why would Manchin support that when he’s actively killing the CEPP? The dude owns millions in fossil fuel stocks, he represents coal country, he’s the single largest recipient of FF campaign contributions this cycle, and he’s already said he won’t support a carbon tax:

    Oil & Gas: Top Recipients

    Manchin raises red flag on carbon tax

    The likeliest probability is that we’ll only be able to pass the initial infrastructure bill, which has a handful of very minor ‘green’ items in there like EV charging stations. But that ain’t nearly ‘half a loaf’, and there’s no way we should be content with that. Freaking pissed beyond belief is more appropriate.

  3. J4Zonian Says:

    It seems almost everybody has missed the point. Again. The US Energiewende is proceeding faster than the government was trying to push it. Not because capitalism is such an amazing force for good, (it’s really a force for horrific evil, obviously, decreeing everything must operate with rules a psychopath would happily follow and punishing anyone trying to follow any better rules.) it’s because, as jimbills sorta points out, that capitalism, aka psychopathy, rules both parties so completely that they’re both pretending to paddle downstream toward safety while actually trying to paddle upstream and actually being carried along by the far-too-slow current.

    Capitalism—that is, the mental illness that causes capitalism—is causing the transition to happen far too slowly to save much of anything. As Bill McKibben has said, and everyone in power ignores, Winning slowly is the same as losing.

    Gas reduces emissions only if you only count CO2 and ignore the much more powerful GHG, methane, which makes gas as bad as coal for climate. But ignoring that reality would be irrational, wouldn’t it? So why do so many do it?

    If we, as we are, switch from coal to gas, we reduce the cooling effect of coal’s aerosols, creating a sudden jump in warming as the masking effect of the aerosols declines but we keep emitting warming GHGs. Doesn’t this threaten dangerous tipping points even more than say, giving up gas and still burning coal?
    Of course there are those 5 or 6 million killed every year by coal’s air pollution (not to mention 3 or 4 million killed by gas and oil). What to do about them when both US parties refuse to anything real to stop the burning of any of it?

    For years a few people have been warning about that masking, which is hiding .5 to 1° of warming. But here we are anyway, above 1° over PIT already and people still blathering on about staying under 1.5. Tell me how all this doesn’t make staying under 1.5 impossible. And tell me how, since it obviously does make it impossible—actually mathematically impossible—how people can keep talking about staying under 1.5 and not be driven immediately from office? Both parties are complicit in the attempt to stop progress on climate, the Democrats are just tasked with the more subtle part of the psychological system’s illusion.

    So the right wing corporate Democrats (as opposed to the right wing extremist Democrats) have done everything they could to not be powerful enough to do anything about climate, terrified of the responsibility that comes with power and maybe of what the oligarchy would do to them if they actually changed anything.

    They’ve refused to take extremely popular progressive positions that would win them large majorities in both houses; have refused to pack the court Republicans have packed illegally; refused to bring any significant charges against Hair Twittler
    The Rusti Mussolini; have refused to take any meaningful position or help arouse the public against the Republican election-stealing program; have refused to get rid of the filibuster; have refused to do anything meaningful about, let alone get rid of Manchin and Sinema (no doubt afraid those 2 would finally go back to the side they’re on and throw all power in the US to the right wing forever. Well, the Democrats don’t care about forever, but they’d lose their majority now, which would take away their power to regulate the speed of the fascist takeover; like Manchin & Sinema, they retain power by withholding consent. In their minds it would also relieve them of some of the responsibility for the catastrophic direction the world is going in. So it must be a tough decision they have to make again many times a day. Apparently the few who care at all think the best they can do is slow down the takeover…)

    • neilrieck Says:

      Good points on capitalism. I recall some youtube videos where California Representative Waxman is interviewing Alan Greenspan. The whole exchange is quite civil (if the viewer has no political ideology) but the major takeaway is this: Greenspan admits that everything they thought they knew about the self-wisdom of market capitalism was wrong.

      Here is one:

      (what is better than capitalism? I have no clue)

    • ecoquant Says:

      Price Carbon but realize that due to the obstinacy of the United States and not a little arrogance and self-image of technical superiority, China is *way* ahead of us here, as is Europe.

      I was recently impressed that an activist in New Bedford, MA, working on empowerment of the Cape Verde community said the chief executive of Vineyard Wind, from Denmark, not only knew the detailed history of slavery in the United States, but conflicts with indigenous peoples. And he is committed to maximizing benefits to the local community from wind buildouts.

      However, he now has an incredibly ambitious schedule due to BOEM delays under President 45. So, he may need to rely more upon European techs and engineers than he would like to. But some day.

    • ecoquant Says:

      Gas reduces emissions only if you only count CO2 and ignore the much more powerful GHG, methane, which makes gas as bad as coal for climate

      Not quite true: Remember basically CH4 is around 20-30 years and then — wait for it — turns into CO2.

      If you want to worry about powerful short term greenhouse gases, check out N2O, which is emitted by decomposition of fertilizer, adding to the destructive contributions of that substance.

      • Brent Jensen-Schmidt Says:

        That is true. Also natural gas has a CO2 content which is vented in the benefaction process. This is a significant amount, can be huge, and is not counted because every field is different.

    • John Oneill Says:

      I think the global cooling effect from coal smoke is mostly from Chinese and Indian chimneys – hopefully the US had enough particulate filtration that it was less important. The same thing is probably happening from the world shipping industry’s edict to stop burning high sulfur bunker oil – good for people’s lungs, but less SOx reflecting sunlight.

    • rhymeswithgoalie Says:

      Capitalism is a force, period. Directing and constraining that force (and stop using that reification BS to make a conscious entity of “the invisible hand of the market”, as if it were some sort of beneficent deity) is our best hope.

      In the US we got rid of slavery then child labor and a lot of our water and air pollution by using the Rule of Law to prevent sociopaths from profiting by externalizing their costs. Then they learned how to buy politicians and use effective marketing techniques to convince people to vote against their self interests.

      Although undermining the good of society is the work of many, I do so look forward to the death of Mitch McConnell.

  4. jimbills Says:

  5. jimbills Says:

    Politically, rather than meekly accepting the loss of the CEPP and praying against reason he’ll support a carbon tax, the best play here is to put enormous pressure on Manchin (the media needs to help here, but is largely silent) while offering him something he wants (jobs for WVers?) to keep either CEPP in or some slightly modified version of it.

    Then – after the infrastructure and budget reconciliation bills pass in some form – try for the long ball with a carbon tax (go after Romney for support). But, discussing a carbon tax now while dismissing the CEPP entirely is just playing in FF interests’ hands. Manchin and the Republicans can just keep stalling and essentially ‘run the clock out’ – killing the bills entirely and then getting to blame the liberal wing for the loss of the infrastructure bill. (Romney will NOT support anything tied to the liberal social programs.)

    That’s the version of chess they are playing, and they’re kicking our butts here.

    Manchin can sell the CEPP to his constituents A LOT more easily than a carbon tax. His voters know what a carbon tax is and are already against it. They largely don’t understand the mechanics of the CEPP. Plus, if Manchin got something he wanted in the negotiations, he can tell them he got something for them.

    • ecoquant Says:

      The trouble with the reasoning is — and it’s something Manchin needs to weigh — that there are some Republicans who have quietly lobbied for a price on Carbon. If Manchin is going to oppose a Carbon Tax or, better, a Carbon fee-and-dividend scheme, he needs to bet that there will not be Republicans who will break ranks and support it.

      They might.

      • jimbills Says:

        They WON’T on the reconciliation bill, though, due to the social programs in it. We’re just one vote away from passing a modified reconciliation bill (with less social spending) with the CEPP in the bill. So? Give Manchin something for it. But changing the negotiations to replace a carbon tax for the CEPP now just adds confusion to the process, allows further delays on Manchin’s part, there’s no 100% guarantee the liberal wing will support it, and there won’t be a single Republican that supports it with the social programs.

        Fight to keep the CEPP in now – talk about a carbon tax later, when it ‘might’ be possible to get a handful of Republican voters for some very watered-down carbon tax. Right now, though, it’s just wasting time on a false hope, when time is critical to passing the reconciliation and infrastructure bills.

    • jimbills Says:

      I saw a tweet from David Roberts about how trying to bribe Manchin is a forlorn hope, and I have to agree, but I also think ‘trying’ to keep the CEPP in (in some form) is still the best play, and frankly, probably the only play. It doesn’t mean it will work. It probably won’t.

      As Manchin seems to be timing out his throwing of wrenches into the negotiations (he just came out with an employment requirement for the child tax credit), it’s pretty clear that he’s just trying to kill the reconciliation bill outright.

      Roberts also re-tweeted this recently, and I agree about 5000% on it:

    • rhymeswithgoalie Says:

      …while offering him something he wants (jobs for WVers?)…

      I think we’ve pretty much established by now that Joe Manchin doesn’t give a damn about the interests of his constituents. I think he realizes by now that he has poisoned the well and the Dems would primary him (if they even have a chance again in West Virginia).

      The only explanation I have for his behavior is sucking up to someone off-stage.

  6. John Oneill Says:

    As a New Zealander, I try to shut up about US politics, but man, it’s depressing…

    • Brent Jensen-Schmidt Says:

      Especially when the Trend is noticed elsewhere and ‘Here’.

    • rhymeswithgoalie Says:

      My small consolation is TFG is no longer president.
      Also, vaccine mandates seem to be working (in that few people who threatened to quit actually did).

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