In his press conference yesterday, the President’s opening statement covered Iran, climate change, and health care. Here he is on climate change:
This energy bill will create a set of incentives that will spur the development of new sources of energy, including wind, solar, and geothermal power. It will also spur new energy savings, like efficient windows and other materials that reduce heating costs in the winter and cooling costs in the summer.
These incentives will finally make clean energy the profitable kind of energy. And that will lead to the development of new technologies that lead to new industries that could create millions of new jobs in America — jobs that can’t be shipped overseas.
He is still not referring to it as a “climate change bill,” nor does he ever say “cap-and-trade.” He refers once to “the carbon pollution that threatens our planet,” but continues to rhetorically frame this cap-and-trade legislation as a clean energy technology bill. He has been doing this consistently since his first press conference, and it reaffirms for me that his political and communications advisors think that addressing climate change is less popular than promoting clean energy technology.
Also, his last sentence is misleading. Raising the price of energy would lower U.S. GDP. We would produce less carbon and would have lower incomes. While the President did not say that this bill would help the economy by creating a net increase in jobs, he creates that impression by saying “that lead to new industries that could create millions of new jobs in America.” It is misleading to suggest that cap-and-trade legislation, such as that being considered this week by the House of Representatives, will not harm the economy. You can argue that the environmental benefits are worth the economic cost, but not that this will increase U.S. economic growth.
I don’t understand why he thinks that jobs that could be created in clean energy technologies would necessarily be created in America, or why they could not be shipped overseas. I can see why the windmill maintenance guy and the solar cell installation firm would have to be based in America (like the classic economics course example of not being able to outsource haircuts).But solar cells and windmill parts, as well as batteries, new building materials, and nuclear power plant components can all be designed, developed, and manufactured anywhere in the world. The U.S. clearly has an R&D head start on the rest of the world, but I don’t see why the President thinks these jobs “can’t be shipped overseas.”
This Presidential statement is a rhetorical flourish, but I’d be interested to see CEA Chair Dr. Christina Romer try to defend it in front of an audience of her academic colleagues. I think it’s indefensible:
The nation that leads in the creation of a clean energy economy will be the nation that leads the 21st century’s global economy.
This statement is true but incomplete:
At a time of great fiscal challenges, this legislation is paid for by the polluters who currently emit the dangerous carbon emissions that contaminate the water we drink and pollute the air that we breathe.
Thanks to a grad school professor, I have forever imprinted the question-and-answered, “Who pays taxes? PEOPLE pay taxes.” The President is correct that the costs of a cap-and-trade system would be directly imposed on those who produce power and fuel from carbon-based energy sources. But power companies, like all firms, are aggregations of economic interests. They would pass these costs through to their owners, employees, and customers. So one could even more accurately say that “This legislation is paid for by anyone who uses electricity from a coal-fired or nautral gas-fired power plant, who drives, or who buys anything that has power or fuel as an input.” It is also paid for by the hard-working employees of those companies, and by those who own stock in those companies.
Finally, I wish he would mention nuclear power when he talks about new sources of low-carbon energy. Not doing so suggests a political calculation, because nuclear power is the one non-carbon power source that many on the far left oppose.
(photo credit: whitehouse.gov)