Climate Change Legislation Must Stimulate Demand, Be Tough On Pollution

Consider these three worrying things: First, there's some risk that putting the wrong type of price signal solely on domestic pollution may transfer both jobs and pollution overseas [1], while increasing pollution. Second, that prices put on imports, like a recent tariff on imported solar panels [2], may not withstand the various political pressures brought to bear against it. Third, the Intergovernmental Panel on Climate Change (IPCC) proved to have been too optimistic, because climate change is happening much faster [3] than they first thought it would.

Can these problems be solved together? They must [4].

Preserving Manufacturing

When looking at the state-by-state data for yesterday's post on popular support for the public option, I started off using 2005 census data, but soon found the 2008 data instead. While going through and changing the numbers, which mostly shifted up by some small amount, Michigan's figures were startling just in those three years. But it gets worse.

Between 2001 and 2009, Michigan lost 465,000 residents [5]. It gets worse. The outmigration consists mostly of younger, more educated workers, leaving collapsed home values and eroding the local tax base for essential services and infrastructure maintenance.

Not coincidentally, from 2000 to 2006, Michigan lost 336,000 jobs [6], mostly in manufacturing. Between 2006 and 2008, the state lost another 74,000 manufacturing jobs [7]. Early this year, Gov. Granholm reported that one in ten residents was unemployed [8], while talking about retraining efforts the state had implemented to reduce reliance on the auto industry.

If the US continues losing manufacturing jobs, Michigan will have a lot more company in misery.

Nonetheless, international trade agreements and the status of upcoming climate negotiations make it very thorny to implement tariffs. Stiff opposition to trade barriers used to be the bane of developing nations who wanted to protect nascent, homegrown industries from competition with mature manufacturing economies. The same opposition to trade protections the United States and others embedded into the fabric of groups like the World Trade Organization can easily come back to bite us.

Reaping Renewable Jobs

As workers and investors look for new opportunities in the shifting global marketplace, renewable energy seems like an increasingly better choice. Though as Deutsche Bank analysts warn, if the US doesn't have a strong energy policy, investment capital will go elsewhere [9].

A decent case scenario for solar manufacturing in the US is probably for enough of a tariff to stand to encourage Chinese companies to bring final stage manufacture to the US [2]. A better case would be winning a dumping dispute against China. Yet in a recent reaction to US charges that China was dumping tires in the US, China brought dumping charges against US chicken and auto parts industries [10]. If it works, they'll probably go that route again, and our trade interdependence can make them hard to argue with.

The risk is that any US domestic industry that wants the government to hold back Chinese competition could trigger retaliation against another industry, possibly pitting US industries against each other.

For example, China also has a lock on many of the rare earth minerals, over 90 percent of the available supply of some, used to make wind turbines and many other devices essential to a high-tech green reformation. They've lately been tightening exports [11]. Long-term, the wind industry and the jobs it creates [12] isn't just vulnerable to pressure from China, it's dependent upon them.

For those seeking less conflict, the Deutsche Bank analysis did point to another type of support long provided to the domestic renewable energy sector in Germany, several other European countries, India and a few states here in the US: the feed-in tariff.

Feed-in tariffs establish a base price for renewable energy generation that's paid for across the system, guaranteeing that homeowners and commercial power utilities using less-polluting technologies can sell into the grid.

The local demand support and reliable cash flow makes all sorts of renewable energy attractive, like solar photovoltaic in Germany, a country not known for its abundance of sunny weather. As the Deutsche Bank report pointed out, Germany's seven years of feed-in tariffs created 300,000 jobs, without running afoul of the international community.

Demand support works on another problem, too, the limited availability of clean energy technologies. Last year. demand for PV panels so outstripped supply that customers missed a tax credit window [13]. (If a business misses a tax credit window, I think it can safely be assumed that the situation is serious.) If the global supply chain can't meet the current needs for renewable energy technologies, a steady uptick in demand provided by strong federal energy policy is likely to create a larger window of opportunity for American manufacturers to step through.

And there are a great many other renewable energy technologies, from geothermal [14] to solar thermal [15], to solar water heating [16]. Congress already showed a willingness to support demand for many of them in the stimulus bill, where business and individual tax credits for renewables were expanded for 2009 [17]. Hopefully they can be nudged a few more steps in that direction.

From manufacture to installation and servicing, each of these technologies holds out a chance for a variety of dignified jobs [18] in industries that the recently released Senate climate legislation will already require to pay prevailing wages.

Climate Deadline

The 2007 IPCC report wasn't able to include papers like this 2007 report, showing that the American southwest was on the edge of entering a permanent drought [19], because the studies came in after their deadline. In the subsequent two years, some environmental indicators, like ice that's melting 30 years ahead of IPCC projections [20], has shown the IPCC to have been much too optimistic.

Scientists think we may have already locked in a dangerous degree of warming [21] but there are still some hopes remaining if we act quickly.

One thing the US almost certainly can't for is every other nation on earth agreeing to help us solve this problem in a way satisfactory to us. The ensuing standoff could last, has lasted, far too long. Not only will it prevent our using this period of calm before the storm to grow and attract new industries, it may mean we can't even act in time to mitigate the damage that will be caused by worsening droughts and increasingly unpredictable, violent weather events.

Now is the time to address the climate crisis.

So while I admire Sen. Sherrod Brown's commitment to preserving manufacturing jobs [22], I hope he'll bring all his creativity to bear on helping Senate colleagues open up new avenues of demand for our nation's talented workers, ones that still allow us to move forward in meeting the challenge of preserving our species' global habitat. We'll only meet that challenge if a large portion of the US' labor pool is working hard at fixing it.