There are two motors behind the emerging climate policy. The first is the actual danger posed by global warming. The second is the rising cost and uncertain supply of fossil fuels. The transition to a renewable energy base is not a luxury item; it is essential to our economic well being. The side effect of a renewable energy base is a reduction of greenhouse gasses. Regulation of carbon dioxide will stimulate and hasten the transition to a green energy economy. It will also promote more efficient use of all forms of energy, even fossil fuels.

In his November 17th column in the New York Times, David Leonhardt discussed "cash for caulkers", a proposed stimulus program to promote weatherization in private homes.  Leonhardt concluded that while

"... cash for caulkers would be trickier than cash for clunkers ... [it] would have the potential to do far more good. McKinsey, the consulting firm, estimates that households could reduce their energy use by 28 percent over the next decade. In terms of greenhouse gases, that would be the equivalent of taking half of all vehicles in this country off the road...Done right, cash for caulkers would be precisely the kind of stimulus that makes the most sense: spending money now to save money later." 

It makes good economic sense to use less energy to get the same benefit. This is true in appliances, homes, autos and every place else we use energy. However, the argument is often made that fossil fuels are cheaper than renewables and so the move away from fossil fuels will increase costs and reduce economic well being.  However, as I and many others have frequently observed, the era of cheap, easily accessible and abundant fossil fuels will not last forever. The price spikes and political battles over drilling are warning signals of the uncertain future of fossil fuels.  Eventually, capital will move away from uncertainty and the risks of fossil fuels toward energy sources that are more susceptible to cost reduction through application of new technology. While today renewables are far riskier than fossil fuels, this is not a trend that will last forever.

In the globally interconnected economic competition we all work within, the future will belong to those nations that learn to deliver energy with the least economic and environmental cost.  This competition requires companies to look to cut costs on materials, labor, production processes, waste management, transportation and energy.  These trends will continue with or without a climate treaty.

But the climate treaty and a climate law in the U.S. will provide a strong signal to the public and to business leaders that governments will push the move to a green energy economy. In the case of the Obama Administration, the failure to produce such change endangers the fragile political coalition that brought it to office. The Copenhagen conference should be seen as a giant two-week long media event pushing climate policy. It will be the climate change Olympics. President Obama and his fellow world leaders will not be able to drive this issue off of the agenda no matter how hard they try to reduce expectations.

Moreover, it is in President Obama's political interest to ride this media wave and encourage it to build. The predictable aftermath of Copenhagen will be a rise in understanding of the climate problem and support for change policy at the national and international level.  As the mid-term elections approach and the Democrats continue to sink in the polls, they will need tangible results, or at a minimum a well fought loss, to energize the first time voters that made the difference in 2008.  During his presidential candidacy, Obama made hope a principle, and when questioned about the feasibility of fundamental political change, responded "yes we can." Many of us continue to hope that we can and we will.

I have argued that the Democrats need three successes to have any chance of maintaining control of Congress in 2010: 1. Economic revival; 2.Health care reform, and; 3. Climate change and energy policy. However, in addition to making progress in all of those areas, they need to link the three together in a convincing message that the change we were promised is well underway. If the main message out of Copenhagen is that the United States temporized and retreated, the Democrats will have deep problems motivating 2008's first time voters to the polls. In that election Obama was the choice of 69% of first time voters. At a minimum, the President needs to go to Copenhagen and clearly articulate his own policies on climate change. In my view, going to Copenhagen is less risky for him than staying away.

It’s true that, under cap and trade, companies receive permits to pollute. But it’s also true that the permits gradually reduce the amount of greenhouse gasses they are allowed to emit.  For the record, it’s not just rich companies that get to buy permits to pollute, but clean companies that get to sell them. The idea is to get as much pollution reduction as possible at the least possible cost. There are two basic alternatives to cap and trade: 1. a simple cap—what is often called command and control regulation; or 2. a tax on carbon. By setting a cap or tax on pollution, you are still allowing it to take place—and so it is still “permission to legally pollute.” An out and out prohibition on carbon dioxide emissions is infeasible, since it would end economic life as we know it. Jon Stewart’s Daily Show would be taken off the air, since there would be no electricity to run our televisions. That would be a shame, since it’s my favorite TV show.

The problem of global warming is a complicated one, and it is only the most visible of the impacts of our growing technological capacity. Our economic and political lives are becoming more complicated and more difficult to manage. We benefit from these technological marvels, but we are more vulnerable as a result of them.  The growing complexity of economic life and financial transactions has been further complicated by the increased technical and scientific content of the goods and services provided by our post-industrial society. For example, the free market marvel of Henry Ford’s Model T has been replaced by today’s highly regulated automobile—a vehicle that includes pollution control technology, required safety equipment, and a range of computer controls and other technologies. Similarly, American farming has come a long way from “40 acres and a mule” to become a highly mechanized, computer-controlled agribusiness. 

Public policy requires an understanding of science and technology to be effective. Farming practices influence food safety, public health, and water supplies, and even generate ethical issues that stem from cloning and genetic engineering. Our public officials cannot regulate those activities in the public interest if they do not understand the science and technology upon which they are based. How can one create policy on “how clean is clean” at a toxic waste site—how far clean-up must proceed before it is complete—without some understanding of the transport, toxicity, and latency of the individual and interacting chemicals?

The names Henry Ford, Alexander Graham Bell, and Thomas Edison are well known and are of a time when technology and the economy was simple enough for inventors to become “heroes” and even players in the national economy.  Today’s version of these innovators, like Bill Gates and Steve Jobs, may not be “inventors,” but are technically sophisticated managers who depend on huge R & D machines to develop new products. They continue the 20th century practice that tied economic growth to technological innovation.

New products, made with new and more efficient production techniques, are constantly introduced and upgraded: autos, electricity and illumination, refrigeration, air conditioning, radio, telephones, black and white TV, color TV, digital TV, main frame computers, laptop computes, satellite communication, air travel, cell phones, Blackberries, the Internet, and computer software. Modern economic life is dominated by the development and introduction of new technologies.

Just as economic life is dominated by science and technology, public policy issues are increasingly shaped by scientific and technological developments as well. Understanding public policy requires increased levels of scientific literacy. For example (not an exhaustive list):

• National security: Arms, aircraft, submarines, ships, missiles, atomic weapons, and spy satellites are all subject to constant technological change and advancement. Modern warfare is dominated by the importance of new technology and the ability or inability to develop counter-measures to these new technologies.
• Health care. From immunizations to MRIs, health care and the associated calculation of costs and benefits are constantly changing due to the development of new drugs and technologies. Moreover, the effect of the use of non-medical technologies on human health requires both an understanding of those technologies and of their impact on human biology and chemistry. People are living longer and healthier lives as a result of medical technologies. These technologies are reshaping our economies, societies, and politics in profound ways that we are only beginning to understand.
• Environmental Protection and Sustainability. The entire range of human activity influences a web of biological relationships in our ecosystems that eventually lead back to humans and their health. We are learning more every day about the science of our planet, how it is changing due to human impacts and what we need to do to minimize our negative impact or “footprint.” We need to learn more about how to provide food, water, energy, and other resources based on the principles of reuse and sustainability.

Scientific and technical literacy is essential for understanding and governing the modern world. To maximize the benefits and reduce the costs of using new technologies, decision-makers must develop a more sophisticated understanding of the science of the new technologies they are selling or trying to regulate. For example, in the 1950s and 1960s, engineers knew that the toxic waste they were dumping the ground could kill people and ruin the environment, but the business leaders they worked for were largely ignorant of those scientific facts.  Most of the elected leaders responsible for the communities “hosting” these dumpsites did not even know they existed or, if they did, that they were dangerous. At the infamous Love Canal in Niagara Falls, New York, the Hooker Chemical Company sold the land they dumped chemicals on to the local government for a dollar. The community then built a school on top of the site, with a playground directly over the dump. Eventually, the chemicals leached off the site, causing great harm to the local community. It is difficult to know how much it will cost us to clean up this nation’s toxic waste, but the job is far from over and the bill is probably over $100 billion. Ignorance was far from bliss. In the 21st century we need to do a better job of teaching our leaders to understand science and technology. 

In addition to understanding science, last year’s Wall Street meltdown should also convince us that we need our leaders to develop a deeper understanding of finance as well.  The media can play a role in increasing our scientific and economic literacy, or they can focus on death squads, the President’s birth certificate or cute word plays on “cap’n trade.” A cheap laugh is always better than a vicious lie, so I’ll keep tuning into The Daily Show—since even on the rare occasions that he is wrong, Jon Stewart always does his job and makes us laugh.

The letter writers are  Senators Sherrod Brown (D-Ohio), Debbie Stabenow (D-Mich), Russell D. Feingold (D-Wisc.), Carl Levin (D-Mich.), Evan Bayh (D-Ind.), Robert P. Casey (D-Pa.), Robert C. Byrd (D-W.V.), Arlen Specter (D-Pa.), John D. Rockefeller IV (D-W.V), and Al Franken (D-Minn). In the letter, these Senators express:
“… strong support for the inclusion of a package of initiatives, including a border adjustment mechanism, to ensure the viability and effectiveness of any climate change policy crafted by Congress… As Congress considers energy and climate legislation, it is important that such a bill include provisions to maintain a level playing field for American manufacturing…
Measures to ensure that U.S. manufacturers do not bear the brunt of our climate change policy could include: short-term transition assistance in the form of rebates provided to energy-intensive and trade-exposed industries; negotiating objectives requiring any international agreement to address manufacturing competiveness; effective means to measure, monitor, verify, and hold countries accountable for emissions reductions; and policies that promote investments in energy efficient and clean technology manufacturing and help the sector retool for the clean energy economy.”

This is a key issue, and if not addressed it has the potential to split the Democratic Party in two and to eliminate the possibility of climate regulation both here and throughout the world. The underlying cause of this issue is the uneven pattern of economic development worldwide. The developed nations built their economies on fossil fuels and never had to worry about greenhouse gases. Nations just now building their economies, such as India and China, want the same “right to develop” that the world’s wealthy nations had back in the 20th century. The perspective of American manufacturers is that if they have to comply with these new regulations, then everyone else should as well. They assume that compliance with greenhouse gas regulations will raise the price of their goods and services.  They propose tariffs as a method of equalizing prices and “leveling the playing field.” Tariffs, of course, interrupt the free trade of goods, restrain competition and ultimately reduce wealth. 

It seems to me that the solution is not to raise the cost of imported goods, but rather to use the tax code and innovative federally funded research to lower the cost of compliance with new global warming rules. We should not automatically assume that cleaner manufacturing is inherently more expensive. While this tends to be true when we retrofit old factories with pollution control equipment, we can encourage the construction of new facilities that have a smaller carbon footprint from the start. But where will the money come from for this?

One source might be the funds raised by the auction of emission allowances under Waxman-Markey.  A second source requires that we break the taboo on new taxes and levy a new tax on fossil fuels. This money could then fund a tax deduction or credit for investments in technology that reduce greenhouse gas emissions. In addition, we can reduce emissions from Midwestern manufacturers by targeting new renewable energy sources for manufacturing. We can also fund research on carbon capture and storage that will enable us to burn fossil fuels without impacting climate systems.

Rather than wasting time protecting old and dirty factories, we should fund the research needed to revitalize American manufacturing. We should use the tax code to encourage investment in manufacturing facilities that can compete with the foreign factories that rely on cheaper labor and less stringent environmental laws. We should work to build lower-cost, non-fossil fuel energy sources and more automated factories engineered to reduce waste and emissions.

It is disappointing, but not surprising, to see these Senators “rounding up the usual suspects.” It is really time to break this depressing cycle of rust belt protectionism and anti-environmentalism. One look at Detroit tells you how successful this strategy has been. If we are going to get the developing world to build their industries according to green principles, the United States must lead by example. We need to develop green technology, implement it at home and provide incentives for adopting it in the developing world.

This is not an argument for allowing our industrial base to disintegrate. We need to stimulate private investment in that base and directly fund the research and development required to build a competitive but sustainable economy. While this letter to the President is simply an opening gambit in the intense bargaining process that awaits us this fall, it is both pathetic and short-sighted. These folks know better, and rather than providing vision and forward-looking leadership, they have decided to protect their flanks. It is high time that we focus on the fundamentals--which even these senators acknowledged when they wrote: “Climate change is a reality and the world cannot afford inaction.”  At least they got that part right.

However, the fact remains that the green economy is creating jobs. Just as America has transformed itself from an industrial economy to a higher-end information- and service-oriented economy, we are now at the start of another transformation—to a green economy. In June the Pew Foundation released a study on this transformation, which concluded that:

The number of jobs in America’s emerging clean energy economy grew nearly two and a half times faster than overall jobs between 1998 and 2007…Pew developed a clear, data-driven definition of the clean energy economy and conducted the first-ever hard count across all 50 states of the actual jobs, companies and venture capital investments that supply the growing market demand for environmentally friendly products and services.

This does not mean that the debate will be settled by these new facts, but hopefully this information will have some influence on matters. Senator John Kerry’s response to Governor Palin’s op-ed referred to the job creating capacity of a green energy economy. While it is never a good idea to predict the future, I think that a new era of climate policy is about to begin. The public understands the reality of the issue and has begun to appreciate the vulnerability of our economy to the current energy supply system.

As I have argued before, if handled carefully, climate and energy policy can help modernize our economy’s technological base and ultimately increase our standard of living. Our goal should be to ensure that the percentage of our Gross Domestic Product (G.D.P.) devoted to energy expenditure is as low as possible. According to the United States Energy Information Agency of the Department of Energy, there has been a fair amount of volatility in this indicator over the past forty years.  The first year that the federal government reported our expenditures on energy as a percent of G.D.P. was in 1970. That year we spent eight percent of the G.D.P. on energy. This grew to 11.6 percent in 1979 and peaked at 13.7 percent in 1981. In 1999 it dropped to an all time low of six percent, due to a fast growing economy and low fuel prices. However, in the 21^st century, this percentage has tended to grow. It jumped to seven percent in 2000 and to 8.8 percent in 2006, the last year for which we have government data.

With our shrinking economy and increased fuel prices the amount of our nation’s wealth devoted to energy may be growing once again. The question we need to address in the long run, is how do we reduce the price and also the unpredictability of energy costs? Fossil fuels are subject to a wide variety of unpredictable cost factors—ranging from increased use of automobiles in China to Middle East politics. In the long run, however, the cost of fossil fuels is bound to grow. While the Earth retains huge quantities of fossil fuels, we are not making any more of the stuff. Each day that we burn fossil fuels less of them remain. Fossil fuels will continue to get more difficult and more expensive to extract, and the environmental impact of extraction will not let up. While fuel extraction can be made more cost-effective and environmentally friendly through the use of technology, the fundamentals remain: fossil fuels will become more expensive over the next century. In contrast, look at the cost of computing. According to Moore’s Law, a truism first popularized by Gordon Moore, one of the founders of Intel, the processing power of microchips doubles every 18 months and the cost of computing drops every year. Anyone who buys a laptop knows that they keep getting more powerful and less expensive. Solar technology has the potential for the same type of cost reductions over time. The basic fuel of solar power, the sun, will always cost the same to tap into—zero. Solar cells and batteries will only get less expensive as a mass market develops and as technology improves.

What is most impressive about the way Congress is approaching climate change policy is that they are linking it to the use of energy. The Waxman-Markey energy and climate bill recently passed by the House of Representatives not only sets a regulatory cap on carbon emissions, it also encourages energy efficiency and renewable energy to ensure that we can actually achieve these caps without shutting down the economy. While the start up of the green energy economy will require investment, the pay-off potential is enormous. In the case of the emerging climate policy, the anti-tax mantra of the Republican right is in reality an anti-investment policy. It is unfortunate that they are “rounding up the usual suspects,” but I continue to hope that the approach taken by Waxman-Markey emerges as the national consensus.

Watching the Obama Administration’s “green team” in action is inspiring. In a very short period of time, these folks have revitalized our environmental agenda. They are doing it with words and with deeds. While there is plenty of rhetoric and lots of symbolic action, there is also significant and important activity underway at the ground level.  Taken together, we are seeing a rapid repudiation of the Bush environmental legacy, along with the reversal of many of the Bush era’s environmental policies. 

On March 10, 2009 EPA took an important positive step under the Clean Air Act to begin the regulation of greenhouse gasses. At long last the U.S. government proposed a national system for reporting emissions of carbon dioxide and other greenhouse gasses.  According to EPA estimates, about 13,000 large facilities produce over 80% of the nation’s greenhouse gasses and those facilities are covered by the proposed regulation. Most of the information we have about the concentration of greenhouse gasses are estimates based on computer models.  This new rule starts the process of collecting detailed information on emissions, measured at the actual source of those emissions.  In order to implement policies to control and reduce greenhouse gas emissions, we need detailed information on who emits these gases and how much they generate.  We need to learn to collect, report, analyze and verify real data on actual emissions.

Lisa Jackson, EPA’s new Administrator, acknowledged the importance of this proposed  rule and observed that: “Our efforts to confront climate change must be guided by the best possible information. Through this new reporting, we will have comprehensive and accurate data about the production of greenhouse gases” 

The importance of this step cannot be minimized, and the absence of such a system made any discussion of reducing global warming little more than a symbolic exercise. The fact that EPA is getting serious about measuring the actual sources of greenhouse gas emissions tells you that they are finally serious about controlling them. A fundamental of management is that you can’t manage something unless you measure it. Measurement tells you if the actions taken by management are making things better or worse.  You can’t set a precise price on carbon unless you have real information on how much a source emits.

I know that some people find details like this boring and unexciting, but change in public policy always begins with ordinary, prosaic steps like this one. It’s important to understand that this is just a critical first step of a very long process. If EPA’s regulation survives the public comment period and is not delayed by the courts, the first reported data will not arrive until 2011. This means that regulations or carbon fees designed to reduce these emissions cannot be put into effect until these emission reports are submitted and verified.

While it will take a while to achieve reductions in greenhouse gasses, the first U.S. program to regulate carbon dioxide as a pollutant under the Clean Air Act is now underway. While we  need a law that will focus specifically on global warming, and we also need an international agreement, this is a good place to start.  EPA often begins new areas of regulation by reinterpreting existing laws. Before there was a Federal Water Pollution Control Act in 1972, EPA began regulating water pollution through the creative use of the 1899 Rivers and Harbors Act.  Even though that law was designed to keep the ports clear for shipping, its language could also be used to regulate discharges of pollutants in waterways near major cities. (We’ll leave out the fact that the Republican Nixon Administration focused its early enforcement efforts on cities with Democratic Mayors!)

Solving the climate crisis will require a series of concerted actions on a variety of fronts: 

- We need to develop cost effective renewable energy technologies.

- We need to learn how to sequester and store the carbon dioxide already in the atmosphere and the additional carbon to come. 

- Americans waste enormous amounts of energy-- so one of the easiest things we can do is become more efficient in our use of energy.

- The global warming now under way requires that here in New York City we adapt our infrastructure to minimize damage from flooding. 

- National and international law must be established to reduce emissions of greenhouse gasses.

- We need to learn how to set a price for carbon that reduces the use of fossil fuels and encourages renewable energy but does not stunt economic growth.

The idea that we should choose among these actions is absurd. We need to do all of it as soon as we can. However, in order to reduce global warming, we must develop an effective and accurate system for measuring this type of pollution. On March 10, 2009, the EPA took an important and long overdue first step in this process.  Elections really do have consequences. Fortunately.

Last week New York state began to back away from its important and historic participation in the agreement among the northeastern states to reduce greenhouse gasses. As New York Times' reporter Danny Hakim wrote March 5:

“At the urging of the energy industry, Gov. David A Paterson has agreed to reconsider a key rule New York adopted as part of a 10-state pact aimed at reducing the threat of global warming by cutting power plant emissions. Gov. David A. Paterson may alter regulations in which utilities buy or trade allowances to cover carbon dioxide emissions. Mr. Paterson appeared to overrule the State Department of Environmental Conservation in making the move, which would reopen state regulations to provide power plants leeway to release greater amounts of emissions at no additional cost. Administration officials said the governor was concerned the rule might unfairly burden the energy industry.”

While this is an absolutely inexplicable political move, it is also evidence of a poor understanding of the grave threat posed by global warming. It also means that unlike President Obama, Governor Paterson does not understand the connection of environmental protection to economic growth. Or perhaps he understands the connection, but like the most recent President Bush, has decided to pander to the energy industry for campaign contributions. Of course, the day after the Times' story, Erik Engquist reported in Craine’s New York Business that the Governor has made no decision on the issue. According to Engquist’s story: "On Friday his [Paterson’s] office sought to allay concerns. ‘We haven’t made any changes yet, and we haven’t even suggested any,’ said spokesman Morgan Hook. ‘The governor made a commitment to look at the regulations again if it’s determined that there’s a need to do so.’”

There is a disturbing pattern here in the clumsy way Governor Paterson approaches policy issues.  Perhaps his long years of service in the legislature has been poor preparation for the responsibilities of executive office. A state senator in the political minority can reconsider all the policy he wants to reconsider and it is no big deal. A governor has the power to rewrite the rules, and therefore when a governor says he is going to reconsider a rule, it is not a purely academic exercise—it means the policy might actually change.

Given the importance, visibility and symbolic nature of this issue, I truly cannot understand why the governor has re-opened it. Didn’t someone on his staff mention that he would expose himself to an onslaught of political attack from the environmental community? Didn’t anyone mention to him that the policy action on global warming has now shifted to Washington DC, where a national cap and trade system of carbon limits and fees (a form of carbon tax) has already been proposed by our new President? In all likelihood, New York’s rules will be supplanted by national policy.  This was not an issue Paterson needed to take on. Even if he was inclined to pander to the energy industry, he could have easily said he was waiting to see what the federal government would do.

As the most recent Marist poll reports, the broad public has lost confidence in the governor. Paterson’s approval rating of 26% is the lowest for any governor since the Marist poll began state-wide surveying almost 30 years ago.  

While elected officials often come back from poor poll results, the good will and political support that Governor Paterson brought with him into office has now evaporated. Given his approach to the global warming issue, and his handling of Caroline Kennedy’s halting Senate bid, it is easy to see why.  What I find so puzzling is that David Paterson is a bright, talented and dedicated public servant. The state and nation are in the midst of the deepest financial crisis of our lifetime. We need a governor capable of rising to the occasion. That is not what we are getting.

"With concerns over climate change intensifying, electricity generation from coal, once reliably cheap, looks increasingly expensive in the face of the all-but-certain prospect of regulations that would impose significant costs on companies that emit large amounts of carbon dioxide and other greenhouse gases.

As a result, utilities' plans for new coal plants are being turned down left and right. In the last two-and-a-half years, plans for 83 plants in the United States have either been voluntarily withdrawn or denied permits by state regulators. The roughly 600 coal-fired power plants in the United States are responsible for almost one-third of the country's total carbon emissions, but they are distinctly at odds with a growing outlook that embraces clean energy."

The Times piece goes on to discuss the expense of the technology to capture and store carbon and the expense and unreliability of renewable sources of energy. This is a worn out argument. The article also presents the usual environmental and industry advocates arguing on each side of the issue. The Edison Electric Institute can be relied on to argue that new technology will cost too much and threaten our electric supply. I wonder what old Thomas Edison would say if he knew that his name is now being used to oppose the development of new technology?

Why does this tired argument keep getting repeated? The cost figures on carbon capture and storage are based on assumptions that cannot be tested. We don't really know how much this will cost. The estimates that carbon capture and storage will more than double the cost of coal fired power plants is clearly too high. Since it hasn't been done, it's easy to see why investors would believe that the first ones will be quite expensive. I'm sure that's true, but it's not really relevant. The private sector should not and will not pay the cost of developing this technology. Government will need to subsidize this until it becomes cost effective.

The debate on carbon dioxide regulation seems caught in the same rhetoric we saw in the 1970's and 1980's over more conventional environmental regulation. There was similar discussion about how arbitrary and sudden government regulation was going to shut down American business. Anyone who actually observes regulation in this country knows that the "business of America is business". Regulations are implemented slowly, with negotiated schedules and great care. Businesses are given plenty of time to clean up their act. Moreover, regulations and rules allow the good guys to do the right thing and compete on a more level playing field. And without environmental regulation there is no pressure to develop new and cheaper technologies that produce without polluting.

As for the cost of renewable energy; solar power, wind power and battery storage prices will also come down as the technology develops. Think of computers. The computer I am writing this on sits on my lap and is more powerful than the million dollar plus mainframes of the 1960's. As mass markets are developed and technology is refined, prices come down and today's infeasible ideas become tomorrow's everyday experiences.

How do we get this done? How do we go from here to there? In the case of computers, a lot of the basic Research & Development came from the Defense Department and NASA. Our rockets, missiles and space capsules needed smaller, more powerful computers. And then there's the internet that was also developed by government: Our military computers needed to communicate with each other. One thing led to another and eventually we had an internet. Government paid the costs of development and then it was turned over to the private sector and a new industry was created.

Sometimes national security drives the development of technology- sometimes it is public health. Cities like London developed sewers and indoor plumbing to prevent disease. Cities like New York developed a hugely expensive water supply system because local sources were polluted. I'm sure someone was saying: Do you know how expensive this indoor plumbing will be? We will all go broke installing these pipes and pumps everywhere!

More recently we had some of the same arguments raised against paying the cost of installing air pollution devices on cars and power plants and against spending billions of dollars on sewage treatment plants. We did all of that and the economy continued to grow. In fact, the economic benefits of cleaner air and cleaner water far outweighed the costs.

Here is the fundamental truth that it is time to face: Just as we needed to develop new public health technologies to survive in cities when they went over a million in population, we must now invest in world-scale technologies to survive on a planet of seven billion people. The climate problem is the first planet-wide stress we know about. Others will surely come. We need to learn how to develop and implement the 21^st century equivalent of indoor plumbing.

We are capable of making this transformation but it requires that we escape from the environment- economic growth tradeoff paradigm we see on the front page of the Sunday New York Times Business Section. We need to work on the push and pull of carbon dioxide reduction. We need to regulate and set a cap on carbon dioxide.  This should be done with mandatory reduction targets, a tax on fossil fuels and a trading system to allow the most efficient reductions possible. In addition we need to spend money on the basic and applied technology of carbon sequestration, renewable energy, energy transmission and energy storage. We need cheaper and smaller solar receptors and cheaper and more efficient batteries.

Clean coal may be a fiction in 2009, but if we are to use coal for electricity, we must develop better ways to mine and burn coal. As my Columbia colleague Klaus Lackner eloquently argues, no matter how fast we develop renewable energy, we will continue to use fossil fuels for many years. He estimates the costs of sequestration will come down dramatically as technology and a mass market is developed. The problem is developing the technology and mass market. Government can and must stimulate the technology and market.

In the long run fossil fuels will be more expensive than other sources.  Fossil fuels are finite and must be mined from within the planet. They will get harder to mine and scarcer and for those reasons will eventually be more expensive. We need to accelerate the development of the new technology of energy. Let's end these 20^th century debates once and for all and get on with the job.