What Jonathan Chait Gets Wrong about the Innovation Approach to Climate Change

by Samuel Thernstrom

Editor’s note: Sam Thernstrom of the Energy Innovation Reform Project kindly agreed to write for us on how a better, more innovation-friendly energy policy would also represent a better approach to climate policy. 

Usually the best response to the name-calling that so often passes for public discourse over climate policy is to ignore it, but Jonathan Chait’s June 17 piece in New York deserves discussion because it unintentionally illustrates the most underappreciated source of climate gridlock today: the partisan groupthink that often prevents liberals from engaging in any kind of conversation about creative ways to finesse the barriers to progress.

Given the daily chorus of complaints from liberals that the only obstacle to climate solutions is conservative obstructionism, it’s ironic that conservatives who do offer constructive ideas about how to move forward are so often dismissed by defenders of the conventional climate wisdom. Nothing that conservatives offer is good enough; no alternative to traditional targets-and-timetables for emissions limits can be given any credence.

Chait is outraged by proponents of a so-called “technology-first” approach to climate — that is, one that emphasizes the need for further research, development, and demonstration of clean energy technologies before attempting to deploy them on a large scale. This approach, Chait acknowledges, may be a “genuine differentiation from the mindless scientific denialism and reflexive sneering at green energy that is the mainstream Republican position,” but he is quick to assure his readers that this is hardly a step in the right direction. The technology-firsters, Chait tells us, “don’t want to watch the world burn, but don’t want to do much to stop it from burning.”

Chait focuses his ire on Jim Manzi, who recently wrote an excellent essay on this concept for National Affairs. But it takes nothing away from Manzi’s accomplishment to note that he is hardly the only conservative who has taken this position — and it’s not only conservatives who have taken this position either. But Chait presents this idea as though it were the work of a lone lunatic, albeit one who has attracted a few foolish followers.

Chait argues the technology-first approach “remains well short of grappling with reality” because it assumes that the research offers “something close to a miracle cure” in thinking that it can avoid paying the full cost of emissions reductions. This is an absurd straw man. No innovation proponent thinks it’s a miracle cure — but there is every reason to believe that a technology push is indispensible to any pragmatic decarbonization effort.

The question of what sort of climate policy would be most effective in the long run is not nearly as simple as Chait and conventional environmentalists would have us believe. The value of an innovation-first approach depends in part on the question of what it is compared with: Without innovation, are we on track to solve the climate problem? No.

President Obama’s much-celebrated recent “leadership” in pursuing EPA regulations of carbon dioxide emissions from power plants is far short of grappling with reality as well. By some measures, the president’s proposal is barely better than business as usual. Even some liberals admit it is far short of what would be needed to constitute a serious response to the climate challenge.

What will EPA’s proposed regulations do for the climate in the long run? It’s hard to know for sure but even the best-case answer is probably not much, and there are good reasons to believe the best case will not come to pass. EPA’s proposed carbon regulations rest upon a very novel interpretation of the agency’s powers under the Clean Air Act, and the courts may well send it back to the drawing board. Congress may step in as well, and at least some states will fight them tooth and nail. But even if EPA wins every battle, the end result will be at best incremental emissions reductions from a single sector of the American economy — and serious environmentalists understand that incremental reductions aren’t enough.

Because of CO2’s extraordinary persistence in the atmosphere, the only way to stabilize atmospheric concentrations is to achieve very deep global emissions reductions, not just bending the curve of a single nation’s emissions a little. Doing so will require very significant advancements in the technologies the world uses to generate and consume energy. Today’s technologies simply can’t do the job, despite what we hear from environmental ideologues — particularly when we consider the severe limits on what developing nations will pay to decarbonize their economies at a time when millions still lack basic access to energy.

Many scholars have written at length about the need for innovation to meet climate goals. One compelling example is a 2011 study produced by two dozen of California’s leading energy system experts under the umbrella of the California Council on Science and Technology — not exactly a conservative cabal — which set out to explore how California might meet its goal of cutting its greenhouse gas emission by 80 percent by 2050. And it should be noted that they stacked the odds hugely in favor of the proposition by setting aside all considerations of cost or political feasibility, assuming in effect that the governor of California had dictatorial powers and an unlimited checkbook. Their conclusion? Existing technologies could theoretically take us fairly far — if we don’t care about cost and other practical concerns — but they still can’t do the job.

There’s no way around the need for innovation. Germany’s experience with its lavish subsidies for renewables is another example of the lesson many environmental advocates are reluctant to learn: Even in wealthy nations that are strongly committed to an “energy transition,” today’s technologies aren’t up to the task in fundamental ways; until we get the price and performance of clean energy sources right, commitments to using them are unlikely to be sustained. The day these technologies become competitive with carbon-intensive energy, we’ll have essentially solved the problem — and until then, we’re nearly nowhere. As long as green technologies remains stuck in Tesla-land they will be a status symbol for the rich rather than a practical path to climate conservation.

Decarbonizing the global economy depends upon mankind’s ability to develop low-carbon energy sources that can compete on price and performance in global markets — and scale massively, providing affordable, reliable, clean energy to billions of people. The question is whether that can be done quickly enough — and how.

Conventional wisdom holds that emissions limits will spur the invention of new low-carbon technologies — but the main effect of EPA’s proposed regulations, at least in the near term, will be to force utilities to burn more natural gas and less coal. Such fuel-shifting creates a satisfying appearance of incremental progress, allowing politicians to proclaim victory but it’s not clear that it will do much to develop true decarbonization technologies such as advanced nuclear and carbon capture and sequestration.

There is also important scholarship that suggests that cap-and-trade and other regulatory limits may not be an effective way to drive innovation — rather than producing the long-term breakthrough innovations needed for effective decarbonization, they incentivize companies to do the bare minimum necessary to comply with standards — such as fuel-shifting to gas.

So if we going to be serious about the climate, let’s be clear: The carbon regulators do not have a clear and credible path to decarbonization. What they have is a dream: They’re pinning all their hopes on the chance that this round of EPA regulations will survive legal and political scrutiny and ultimately grow into something much tougher, years down the road. That’s not utterly inconceivable — but it’s also very far from certain. Even if we assume EPA will be able to tighten standards in the future, it’s almost certain they will add up to too little, much too late.

Which brings us back to the question: Is there any alternative worth consideration? Technology-first proponents such as Manzi correctly note that their approach, not the regulatory path, produced the shale-gas revolution that has allowed American emissions to fall faster than Europe’s, despite the continent’s carbon limits and taxes. But Chait’s not having any of it.

While he does admit that “it’s impossible to judge how effective subsidies for basic research will be in reducing emissions over time” — a remarkable concession in the middle of a piece spent scorning the approach — he dismisses this as irrelevant because he assumes we can simply have it all. Why choose between regulations and innovation when you can have both?

But there are always tradeoffs in life. With the president proudly pursuing a go-it-alone regulatory approach, conservatives are united in their focus on stopping him, and the partisan divide has only deepened. The technology-first path is potentially politically unifying while the regulations-first approach is unlikely to succeed on its merits and is certain to produce a legal and political battle that will consume the next decade or more. Environmentalists are going to the mat to defend a dicey EPA proposal that relies on a heroic legal reach to achieve painfully modest goals. The go-it-alone regulatory approach guarantees failure just when we should be shooting for success.

Chait proclaims, as if it is known fact, that “technology-first is not an adequate substitute for putting a price on carbon emissions.” Needless to say, there is no proof for that claim, and much evidence for the opposite proposition: Carbon-pricing and regulations are no substitute for focused technological innovation.

Europe, for instance, has in effect been pricing carbon in automotive fuels since the end of World War II (due to their high gas taxes) and the effect on low-carbon innovation has been negligible: Europeans pay more for fuel but they drive basically the same cars as Americans and are no closer to decarbonization than we are. Had the Europeans spent that money on researching alternative low-carbon fuels, they might well have made real technological breakthroughs by now. And, as already noted, the innovation-driven shale gas revolution in America has outpaced Europe’s regulatory approach, an inconvenient fact that Chait ignores.

Chait’s other complaint is that proponents of the technology-first approach “seem to have no specific idea about how their proposal would work.” Wrong again. There is actually a large body of work outlining possible approaches to an innovation-focused approach to climate, some from conservatives, some from liberals, and some from bipartisan teams. Reviewing that literature is beyond the scope of this column but it doesn’t help Chait’s credibility that he complains so bitterly about the lack of a proposal when there are a number of them that are worthy of consideration.

Chait’s other argument against a technology-first approach is that it has no conservative support, and he makes much out of the fact that some House Republicans have opposed funding for ARPA-E, an arm of the Department of Energy that supports energy innovation.

It is true that one of the unfortunate costs of the Obama administration’s ill-advised investments in Solyndra and other bad bets in their effort to pick winners in the market of energy technologies was an erosion of conservatives’ longstanding support for basic R&D. (ARPA-E is actually an outgrowth of a George W. Bush administration initiative to create “innovation hubs” at DOE.) But despite the backlash, the picture is not nearly what Chait paints: My organization works with conservatives on these issues and our experience is that there is an enormous appetite for these ideas—but the most frequent objection I hear is the widespread disbelief that liberals would ever accept them. Reading Chait, you can see why they feel that way.

If liberals want conservatives to join them in causes like climate change, they would be wise to spend some time thinking about whether there is anything that they can do to make the proposition more appealing My organization favors funding for ARPA-E — but before we ask Americans to give the Department of Energy more money, let’s restructure it to make it an agency that’s capable of spending money effectively. Secretary Moniz has actually taken some steps in the right direction recently, which I applaud. Imagine what could be done if that work was actually the focus of the administration’s efforts rather than its quixotic charge at carbon regulations. The Department of Energy should be at the forefront of our climate response, not the Environmental Protection Agency — and Chait is wrong to think that we don’t need to recognize that.

What is lost in the caricature of a technology-first approach that we hear from Chait is that the concept does not mean all research and development, no demonstration or deployment. The idea of an innovation-first approach is rather to scale up research, development, and demonstration efforts, focusing first on institutional and regulatory reforms that would enhance our capabilities and building from there. This is not an excuse to do next-to-nothing on climate; it is a real path — perhaps the only one — to deep emissions reductions over time. There is plenty of room for common ground here, if people of good faith could only work together to explore it.