The president-elect intends to proceed with an economic stimulus program involving infrastructure spending. It seems likely that the Congress will consent and thus the issue is making the program as effective as possible, or at least as minimally destructive as possible.
Positive words are coming from Mr. Obama. He speaks of ending pork and of getting “the most bang for the buck,” and making the nation more competitive through the program. Further, he is tying the program to improving energy efficiency and reducing greenhouse gases (GHGs). We can be certain that the new president will propose an aggressive greenhouse-gas-reduction program. The economic stimulus program represents an opportunity to direct GHG removal strategies in rational directions.
The risk for the president-elect is that his concern about cost effectiveness and competitiveness is not shared powerful interests that support him and would prefer to use GHG emission policy to advance their ideological agendas. It is time to put a price tag on all such strategies. The United Nations International Panel on Climate Change says that sufficient GHG emission reductions can be obtained for under $50 per ton. Some of the most vocal elected officials on GHG reduction, such as Speaker Pelosi and Governor Schwarzennegger pay about $12 per ton to compensate for their GHG emissions when flying.
Cost effectiveness is required or GHG emissions reduction will take a heavy toll on an already weak economy. Ideological approaches, such as light rail or other expensive transit projects, cannot reduce GHGs anywhere near the $50 maximum. On the other hand, everyone is committed to far more fuel efficient cars and it is clear that traffic congestion will continue to get worse once the economy starts growing again. Expanding road capacity so those more fuel efficient cars can operate optimally (and with fewer GHG emissions) and any number of other strategies could make a lot of sense.
But the bottom line is that it is time to throw out the ideology and start serious cost analysis. The president-elect can address two of his principal goals by such a rational approach.