Tuesday, July 28, 2009

Joe Romm Ignores Facts in Attacking Breakthrough Institute Op-Ed

By Devon Swezey. Originally posted at The Breakthrough Institute

On Monday, Joe Romm of Climate Progress publicly attacked the Breakthrough Institute for publishing an op-ed in the San Francisco Chronicle -- called "Will America lose the clean energy race?" -- which urged Congress to fully fund President Obama's energy education initiative and scale up direct pubic investments in clean energy to boost U.S. economic competitiveness and accelerate the nation's transition to a clean energy economy

Romm never mentioned the central focus of the op-ed -- President Obama's energy education program (RE-ENERGYSE) and the Breakthrough Institute's efforts to rally support behind this program -- and instead attacked it for what he calls "willfully misleading nonsense" about Asian countries' planned investments in clean energy while apparently defending the smaller investments in the proposed Waxman-Markey American Clean Energy and Security Act.

Romm asserts that the op-ed "attacks" President Obama and Democratic leaders, when in fact the op-ed is aimed at supporting the President's RE-ENERGYSE program and calling for larger public investment in clean energy to compete with Asian challengers. The RE-ENERGYSE initiative is currently in danger of being cut by Congress at a time when the U.S. is severely lagging in energy science and technology education, and last week the Breakthrough Institute organized over 100 universities, student groups and other organizations to submit a letter urging Congress to fully fund the initiative.

Romm makes several factually incorrect statements about Asia's plans for clean energy investment that contradict research in publicly accessible reports and analyses, including those by the Center for American Progress (which employs Romm). Here is a fact check to correct Romm's misstatements and clarify the details of investment plans in Asia:

1. The op-ed states, "China alone is reportedly investing $440 billion to $660 billion in its clean-energy industries over 10 years."

Romm's response:

"the China figure -- while it is certainly impressive and definitely should motivate U.S. action (as I have argued) -- is "reported" and cumulative over 10 years. It is part of their stimulus and NOT just R&D, but an investment in clean-energy industries broadly defined"

Facts: China's planned investment of $440-$660 billion over 10 years is indeed part of an economic stimulus package, but not the original $586 billion stimulus that is passed late last year, as Romm implies. The new investment, according to a recent paper by Andrew Light and Julian Wong of the Center for American Progress (CAP), is part of a planned second stimulus package that is "dedicated solely to new energy development over the next decade, including generous investments in wind, solar and hydropower." China is planning to make a sustained commitment to clean energy investment by building on the clean energy investments in their first stimulus package rather than being content with a one-time investment.

China's massive clean energy investment plan is indeed "reported," or planned. A top source for Breakthrough Institute's figures are analysts at CAP, who have repeatedly published the same figures, including recently in Congressional testimony. These numbers were reported early by the AFP and have since been republished several times, including recently by the Washington Post in an article similar to Norris' and Jenkins' op-ed, titled "Asian Nations Could Outpace U.S. in Developing Clean Energy."

The Breakthrough Institute has never suggested that China's investment is centered solely around R&D, nor have we suggested that U.S. clean energy investments should be solely focused on R&D, despite Romm's ongoing effort to misrepresent our position, which strongly supports direct public deployment of clean energy technology (see here for a summary of Breakthrough's clean energy investment policy recommendations).

2. The op-ed states: "South Korea is investing a full 2 percent of its gross domestic product in a Green New Deal."

Romm's statement:

"Note that South Korea's Green New Deal -- $38 billion cumulative over the next four years-- is a stimulus bill covering all environmental projects (not just clean energy) and includes, for instance, 'More than 2,500 miles of bicycle expressways.' As the Guardian reported in April, the SK government promises to spend only about $1.8 billion 'on research into low-carbon technologies' and 'the renewable energy spending share of South Korea's green new deal is a disappointingly low £80m [$120 million] mostly on solar-powered homes, photovoltaic heating and geothermal power sources for apartment blocks.'"

Fact: As Mr. Romm writes, the South Korean government announced a "Green New Deal" stimulus bill in January that totaled $38 billion, $30.8 billion of which was set aside for "green" investments, according to the investment house HSBC. However, a smaller portion of that spending, $1.8 billion, will go towards "renewable energy."

What Mr. Romm seems to have completely missed, however, is that South Korea has since announced an even larger investment of $85 billion over 5 years, or close to 2 percent of its 2008 GDP each year, dedicated to a "green growth" strategy primarily centered around clean technologies and industries. As Reuters reported on July 6, the new investment is "mainly for encouraging green growth industries and technologies such as renewable energy, LEDs (light-emitting diodes), smart power grids and hybrid cars, is expected to create up to 1.81 million jobs."

While it is unclear if the $85 billion includes, or is in addition to, the original $30.8 billion in "green" investment, the plan still represents at least a doubling of South Korea's commitment to creating a clean energy economy, with a primary focus on clean energy investment. It should also be noted that South Korea's economy is about 1/14th the size of the U.S. economy, and a "green investment" representing a comparable share of the U.S. economy would be in the range of $285 billion per year.

3. The op-ed states: "Japan is redoubling incentives for solar, aiming for a 20-fold expansion in installed solar energy by 2020."

Romm's statement:

"Note that Japan's investment is also from an expected "new stimulus plan," as Reuters explained in April article with the less than ominous headline, 'Japan solar subsidies lure fewer users than planned.' Note also the use of the key word 'aiming' for a 20-fold expansion. In fact, as Reuters explains 'A top economic and fiscal policy advisory committee said last month that Japan should increase its solar power capacity 20-fold by 2020 from 2005 levels.'"


Fact: While the green portion of Japan's economic stimulus spending to date has indeed been marginal -- $12.2 billion according to HSBC -- Japan has recently announced an ambitious goal to be "the number one solar power in the world." In order to accomplish this goal, Japan has launched a "Low Carbon Technology Plan" that includes $30b in new investments in low-carbon technology R&D over five years, and another plan, "The Action Plan for Achieving a Low-Carbon Society" which aims to significantly improve solar cell efficiencies and reduce generating costs to that of conventional energy. In order to spur demand for solar PV, Japan has re-instated aggressive residential PV installation subsidies and has proposed a new long-term deployment incentive for solar, equal to 50 cents/kWh. The vision to make solar energy cheap was articulated not just by "a top economy and fiscal policy advisory committee," as Romm asserts, but by Japanese Prime Minister Taro Aso, who announced in April a national goal to "increase the electrical output from solar power to 20 times the current level by 2020."



In reality, none of the statements in the op-ed concerning Asia's investments are misleading, and are in fact supported by news reports and studies far more current than the ones Mr. Romm cites, drawn from sources including the Center for American Progress.

Romm also relies on outdated analysis of the ACES bill, which will only invest around $10 billion per year in clean energy, broadly defined (~$9b from allowance allocations and ~$1b from the CCS Demonstration and Early Deployment fund). Romm writes that the ACES legislation would allocate 13% of allowances to clean energy and energy efficiency measures, equivalent "to nearly $14 billion a year -- not the $10 billion a year TBI says."

To arrive at this faulty figure, Romm relies on a House Energy and Commerce Committee summary of ACES (rather than his own independent analysis). That E&C summary relies in turn on an April EPA analysis of the early discussion draft version of ACES that estimates the price of carbon allowances to be $17-$22 from 2015-2020. However, as both Mr. Romm and the Energy and Commerce Committee surely know, EPA published a more recent update of their ACES analysis in June, reflecting numerous changes since the formal introduction of the ACES bill. That most recent EPA analysis projects a lower allowance price of $13-$16 between 2015-2020, as a result of "the looser 2020 cap and the expanded amount of international offsets allowed," EPA explains. At these more recent and updated figures, clean energy investments in ACES would amount to $8-$10 billion per year between 2015-2020, consistent with the Breakthrough Institute's analysis of ACES and statements in the op-ed.

However, regardless of whether the number is $10 or $14 billion annually, this clearly pales in comparison to China's planned investments of $44 to $66 billion per year. Breakthrough Institute strongly advocates a minimum investment of $30 to $50 billion per year in low-carbon energy research, development, demonstration, and deployment, of which approximately $15 billion should be for clean energy R&D, as recommended by President Obama and the nation's top energy scientists.

While the investments in the U.S. stimulus bill represented a large and unprecedented increase of public investment in the U.S. clean energy economy, it is clear that winning the clean energy race will require sustained investments of at least this amount or more, something that the ACES legislation recently passed by the House fails to deliver. While our Asian competitors are all planning to build on their existing stimulus investments with major sustained investments in their own clean energy economies, the U.S. is poised to move backwards, from ~$35b annually in clean energy investments in the stimulus to just $10b annually in the ACES climate bill. That may be acceptable to Mr. Romm. But it is no way to win the clean energy race.

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