Time Magazine DC Bureau Chief Michael Scherer recently wrote about the impact of NDN’s work, citing a chart from developed by our team as the “most important chart in American Politics:”
"There is a single chart — three colored lines on a grid — that shapes the political reality of this country. During the 2012 campaign, one of President Obama’s senior strategists called it “the North Star” and started his internal PowerPoint presentations with it…The chart was originally created by NDN and the New Policy Institute, and it helped Democrats change the way they talked about the frustration of the American people.”
This article, and the impact it describes, is the best way to understand what we do – through powerful ideas, cutting edge analysis, and relentless advocacy. It is in this way, through these means, that the team at NDN/NPI has done much this past decade to lead the center-left to a much better day.
Our summer fundraising drive is off to a good start, having brought in close to $40,000 in our first few weeks. But our goal is to raise another $60,000 before August to bolster our programs for the rest of the year. We hope you will do your part and support us today.
“This diagnosis draws on many of the ideas bubbling away in Mr Miliband’s unabashedly academic salon of economists, politicos and philosophers. One chart in particular informs its arguments. Devised by Simon Rosenberg, the founder of the NDN, “the most important chart in American politics” shows that US household incomes have lagged behind GDP and productivity growth since the early 1990s. The same observation, reckon senior Labourites, lies at the heart of Britain’s woes, too.”
We are known for many things at NDN/NPI, including groundbreaking work on immigration, the Middle East, the role of technology in our lives and American demographics. However, I believe that it our economic work - guided by former chief economic advisor to Bill Clinton, Rob Shapiro - which has had the most impact on the politics on both sides of the pond these last few years. We can only do this work with your support, and I hope we can count on you, today to keep this essential work flowing.
Renowned thinker and writer Moises Naimjoined us at NDN to discuss the future of power and the international political landscape. He unpacked some of the themes of his latest book, The End of Power, and presented a vision that drew a through-line between the events of the Arab Spring and many other emerging global trends.
This wide-ranging conversation was moderated by NDN’s Simon Rosenberg and explored economic and institutional challenges that are coming to define our globalized world. You can watch the full video at our YouTube channel and pick up a copy of his new book here.
I have a new op-ed running on the Huff Po home page. Check it out and let me know what you think. A version can also be found below:
Immigration Reform Is Very Much Alive
Contrary to recent news accounts, we are closer to passing a meaningful immigration reform bill than at any point since John McCain and Ted Kennedy introduced their bill in 2005. Consider:
The Senate passed a bill with 68 votes, the most any immigrant reform bill has received since this process began. The last time an immigration bill passed the Senate it was in 2006, and it received just 62 votes.
The House, whose last major vote on immigration reform was in 2005 and called for the deportation of the 11 million unauthorized migrants in the U.S., has already passed five immigration and border related bills out of committee. Last week Speaker John Boehner said he believed the House needed to do something on immigration reform this Congress, and next week Republicans are having a public hearing on the DREAM Act.
While much has been written about the need Republicans have to support immigration reform to get back in the game with Latino voters, I think an equally compelling reason why the House is already taking significant strides towards passing an immigration reform bill is the pressure they feel to meet the very high bar set by the Senate "Gang of Eight" framework. Their framework will give the country a better legal immigration system, one more based on bringing growth producing skilled labor. It will close some of the holes in our interior enforcement system, build on the significant gains made in border security in recent years and make the border region even safer. It will make needed investments in 47 ports of entry with Mexico, facilitating more trade and tourism, creating more jobs on both sides of the border. It creates an arduous but achievable path to citizenship for the 11 million unauthorized immigrants already in the country. And remarkably, it will grow the economy, create jobs and lower the deficit by a $1 trillion over 20 years.
In a time where Americans have so little faith in their government to meet the emerging challenges of our time, the Gang of Eight framework is a bit of a political miracle: incredibly thoughtful public policy, broad bi-partisan support, a deep and diverse political coalition backing it. It just is very hard for the House Republicans to walk away from all that too.
And they haven't. In the last few months the House Republicans have passed bills relating to border security, interior enforcement and changes in the legal immigration system. They are talking about the DREAM Act and a "path to legalization." The Border Caucus is floating smart proposals to invest in our ports of entry, something that could help bring border state Republicans along. Some House Republicans have even said they expect a bill with citizenship to eventually pass and be signed into law.
The characterization of the House Republicans as standing in the way of immigration reform is only half right. They are, as the Founders intended, moving this issue through their chamber at their own pace. This is to be expected, frankly. Unlike the Senate the House hasn't really debated the issue since 2005, and there are many new members particularly in the Republican Conference. There just isn't a lot of institutional knowledge about the issue. Institutional bluster, perhaps, but not a lot of knowledge or understanding. So they need time.
Another reason the House Republicans need time to work through the issue is the House chamber's unique history with immigration reform. Just a few months after Senators McCain and Kennedy introduced their thoughtful bill in 2005, the House voted to arrest and deport the 11 million unauthorized immigrants in the U.S. In 2006 when the Senate passed McCain-Kennedy, the House refused to even consider it. The default position for many in the House GOP -- that the solution to the 11 million is for them to all leave the country -- was in the platform of the Republican Party in 2012, and carried by its nominee. While there have been immigration reformers like Bush and McCain in the GOP over the past decade, much of the Republican Party has strongly held views that what the unauthorized immigrant population did by jumping the immigrant line was wrong, and that as a matter of policy, the nation cannot reward bad behavior. Getting those who hold this position to change is not, and was never going to be, easy. If dozens of Republicans are to sign on to a bill that has provisions they have said they will never support and deeply oppose, that too will require time.
As someone who has worked on immigration reform since the summer of 2005, I don't think the immigration bill is dead -- it is very much alive. You can see the outlines of an eventual deal. The House will likely accept much of the Senate enforcement framework, dropping the expensive and reckless border surge but adding to the interior enforcement provisions. Dems might have to accept more W low skilled visas to get the House to go along with the Senate vision for the new skills-based legal immigration system. Adopting some of Senator Cornyn's savvy proposals on border infrastructure investment could help bring him back to the table, and entice more border and growth oriented GOPers to sign on.
This of course leaves us with the 11 million, and legalization and citizenship. My own read of the situation is the House Leadership knows it must do something here, that leaving the 11 million or even a large potion of the 11 million in limbo just won't fly. As we saw in the Senate process the GOP was willing to trade and deal on citizenship. With the House GOP talking about DREAMers, Ag workers and legalization the elements of an eventual deal are on the on table. The Washington Post's Greg Sargent reported yesterday that the bi-partisan "gang" in the House has worked out a path to citizenship, adopting a new trigger process, recasting the early stages of the path, and making it longer. So it is possible to for House Republicans to craft a citizenship path that the president and the Dems can support if all the parties can sit down and work it all out.
Reports of the death of immigration reform are premature. The Senate Bill may be dead in the House, but immigration reform isn't. What the House comes up with will be different than the Senate, but that's why we have conference committees. I don't think the differences between the two chambers are as great as many believe; the Senate bill provided an extraordinary framework to build from; and the House needs time to work through it in their own way. Of course it is possible that the House conservatives block any progress on immigration reform this year, but I think their arguments will weaken over time, not strengthen. Why? Simply, they just aren't very good, and the politics of recent years has made them jarringly obsolete. Being on the side of fixing the broken immigration system, creating jobs and reducing the deficit is just better politics than once again doing nothing about a very challenge facing the country -- even if it means citizenship for the 11 million.
Something will pass the House this year. Whether it is good, and can become something signed by the president will depend to a great degree on how well our leaders work together to bring this tough process to conclusion. But a deal is out there to be made. I hope the tribes of Washington can seize this moment and give America a far better immigration system than we have today.
October 18 Update - Rep. Bob Goodlatte's recent floating of the idea of "no special path" for undocumented immigrants is a promising development. By allowing qualified undocumented immigrants legalization and then the ability to apply for a green card and legal permanent residence as any other immigrant, it shows the House GOP might be able to get to a place that allows legal status and citizenship for most of the 11m undocumented immigrants.
Again, looking at this through a negotiator's eye, the House GOP has moved, is playing ball, and one can see a deal struck between the two parties this fall. Byron York's new article reports that the House GOP leadership is working on a bill despite the fallout of the shutdown fight. The House Democrats came closer to the House GOP's approach by smartly dropping the border surge in their new leadership bill. And with 87 House GOP Members choosing a different path than the House radicals, it is further evidence that with the right kind of patient leadership, a deal could be struck.
The economic recovery is now four years old -- the anniversary comes this month – yet job growth remains a big problem. Since the recession technically ended in June 2009, American businesses have expanded their workforces at an average annual rate of 1.4 percent, creating some 6.1 million new jobs. The good news is that we’re creating new jobs at twice the rate seen in the first four years of the last expansion. Nevertheless, the job gains are much smaller than those seen in the early years of the expansions of the 1980s and 1990s. So, is this ongoing problem simply a feature of the slower economic growth of this cycle, or have American businesses lost some of their storied capacity for generating new jobs? The answer is, some of both – and over the next decade, new technologies could further aggravate the problem.
To get at why this is happening, you have to first take account of the character and basic features of these economic cycles. For example, job creation bounces back more sharply after a deep recession than following a milder downturn. So, we start by comparing the job gains seen over the last four years, following the Great Recession of 2007-2009, with those following the deep downturn of 1981-1982. The gap is very large: The 1.4 percent annual growth in private employment over the last four years is 61 percent less than the 3.6 percent annual job gains seen during the first four years of the 1982-1989 expansion. We see a similar disparity between job creation in the first four of the two most recent expansions that followed more moderate recessions. The 0.7 percent annual rate of job growth over the first four years of the 2002-2007 expansion was 68 percent less than the 2.2 percent annual job gains seen in the first four years of the 1991-2000 expansion. Something has changed.
The most obvious change is that every successive expansion since the 1980s has seen progressively lower rates of economic growth, especially in the early years. U.S. GDP grew by an average of 5 percent per-year in the first four years of the 1980s expansion, followed by 3.4 percent annual gains in the first four years of the 1990s expansion, 3.0 percent growth per-year in the early years of the 2002-2007 expansion, and just 2.3 percent average annual growth over the last four years. As Keynesians have insisted, the slower economy should explain much of the recent slowdown in job gains – although not all of it.
We can calculate roughly how much of the slowdown in job gains can be traced to the slower economy by adjusting the rates of job creation for the rates of overall growth. Those calculations suggest that if the economy had grown as fast over the last four years as it did in the first four years of the 1980s expansion, we could have seen 3.0 percent annual job gains instead of just 1.4 percent average job growth. Since jobs actually grew in the early 1980s by an average of 3.6 percent per-year, as much as 80 percent of the current slowdown in job creation may simply reflect slower economic growth. So, while recent austerity measures – the sequester, increases in payroll and income tax rates, and so on – do not explain all of the slowdown in growth, their apparent impact on jobs is powerful testimony to how misguided those measures have been.
Thinking through job creation in this way, then, tells us that some 20 percent of our current employment problem, and perhaps more, is “structural.” Put another way, U.S. businesses now respond to economic growth by creating fewer jobs than they used to.
Technological advances, of course, are one of the driving forces at play here. The countless applications of information technologies (IT) across every industry and economic activity have created considerable wealth, but they also displace more jobs than they create. Consider our manufacturing workforce, which contracted nearly 28 percent over the last two decades, falling from 16,480,000 positions in 1992 to 11,951,000 in 2012. All of these job losses can be accounted for by workers with high school diplomas or less, whose number in manufacturing declined by more than 40 percent. The picture is different for workers with the skills to operate in an IT-dense workplace: Over the same 20 years, manufacturing jobs held by college graduates increased by 2.4 percent and the number with graduate degrees jumped 44 percent.
The latest threat to jobs, according to many technologists, is coming from robotics, the application of information technologies to new forms of kinetic hardware. Today, businesses worldwide employ some 1.4 million industrial robots, mainly in automobile and electronics assembly. Those numbers appear to be rising quickly. For example, FOXCONN, the Taiwan-based giant that assembles 40 percent of the world’s consumer electronics -- and employs 1.2 million workers around the world -- has announced plans to purchase 1 million new robots over the next three years.
A new report from the Atlantic Council catalogues the growing number of large-scale, public-private R&D programs underway. The U.S. effort is led by DARPA, NASA and firms such as Raytheon and iRobot, with grants from the NSF National Robotics Initiative playing a venture capital role. In Japan, the FANUC Corporation and the Ministry of Economy, Trade and Industry have taken the lead. In Korea, the Ministry of the Knowledge Economy is working with LG and Samsung. And in Europe, the European Network of Robotic Research is collaborating with companies such as Philips and the ABB Group.
No one can predict the direction or dimensions of robotics a decade from now. Nevertheless, the next generation of the technology will be able to draw on important recent developments, such as the first, open source Robot Operating System as well as advances that allow robots to retrieve and manipulate objects outside the structured environment of an assembly line. In the last year, for example, Willow Garage released a new personal robot that can fold laundry and pour beer, the French firm Robotsoft showcased robots that monitor elderly patients, Italian and Swedish firms offered robotic landscapers, a Japanese company unveiled its new robot teachers, and South Koreans developed robots to assist firefighters and provide basic child care. The first large-scale application of the technology may well involve transportation. Drone technology could force early retirement on thousands of pilots, and future variations of Google’s driverless car could displace tens of thousands of teamsters, cabbies and bus drivers. In any case, our structural problems with job growth are likely to worsen.
This post was originally published in Dr. Shapiro's blog
For the last few months, the Senate was at center stage of the immigration reform show passing its border and immigration bill, S. 744, through the Judiciary Committee and full Senate. The House Homeland Security and Judiciary Committees were also at work passing legislation, but somehow the spotlight seemed to ignore most of that activity. Now that all eyes are on the House, these bills are crucially important to the immigration reform process in the coming months.
In case you missed it, here are the five bills that have passed out of committee in the House.
Dramatic changes have been taking place in the Middle East over the last few weeks and NDN's MENA Initiative has gathered together some of their latest analysis to help our community better understand the challenges and opportunities of the unfolding events in Egypt, Iran, and Syria. You can stay up to date on all of these developments at the MENA Initiative website, www.menaprogram.org
A Critical Crossroads in Egypt
“When Deputy Secretary of State Bill Burns meets with Egyptian officials today, for the first time since President Morsi was deposed, he should strongly encourage the transitional government to avoid prosecuting or persecuting the ousted leader and his allies. While the Muslim Brotherhood’s government managed to alienate much of the population through managerial incompetence and autocratic tendencies, they were serving under the legitimate authority of popular elections.
The United States has important regional interests in the stability of Egypt, but American policy needs to avoid taking sides with specific political actors. Instead, the U.S. should make it clear that our allies and recipients of large aid packages are expected to be invested in the processes, values, and institutions of inclusive democracy. We have seen over the last several years that threats to withhold military assistance are seen in Cairo as empty threats and insufficient motivation to change policy or approach. This sticks American policymakers with the bill while denying them any of the leverage that is supposed to accompany it. Burns should inform the Egyptian government that, as mandated by U.S. law, aid will be temporarily suspended until a democratically elected government is returned to power. The United States should take this opportunity to continue working on the bilateral relationship – one that is marred by a history of suspicion and ambivalence – while expanding the scope of stakeholders that the U.S. government engages with. If we aspire to see this “revolution reboot” result in a more open, democratic, and inclusive Egypt, we need to learn the lessons of the last 18 months, speaking out vocally for U.S. values and backing it up with consistent actions.” Brad Bosserman, 7/18/2013
"In Egypt, a new transitional government is taking shape amidst clashes between the Egyptian Army and the Muslim Brotherhood. Response in Washington has been mixed, with Sen. McCain calling for suspending U.S. aid in light of the military-led ouster of President Morsi. The major questions that will determine the immediate and medium-term implications of these events involve the details, time table, and process for holding new parliamentary elections and the amending of the currently suspended constitution. Also crucial will be addressing the future of the Muslim Brotherhood. After being forced out of the formal political process and having their media networks shut down by the military, the U.S. should use its leverage to discourage the prosecution of the Brotherhood, push for building institutions and norms that are inclusive and give voice to all Egyptian constituencies, and encourage the government to craft a means of formal engagement with the Brotherhood that will be essential in dissuading them and their regional allies from pursuing a path of violent opposition." Brad Bosserman, July 8, 2013
"Millions of Egyptians took the streets over the weekend in much-anticipated protests against President Morsi. The largely peaceful demonstrations reveal a deep and broad "legitimacy deficit" for a government that was elected democratically, but has consistently pursued non-inclusive policies designed to consolidate power in the hands of Morsi and his allies. The everyday Egyptians taking part in these protests feel alienated by the ruling government and the heavily criticized constitutional process that followed. But while the opposition may appear unified from 30,000 feet, there remain deep ideological, political, and strategic cleavages among these anti-Morsi groups. The situation on the ground is still unfolding, but as of Monday afternoon, the Egyptian military had issued an ultimatum, threatening to intervene in 48 hours if the situation is not resolved. The U.S. has vital strategic interests in seeing a stable, secure, and democratic Egypt and American policymakers should speak out in favor of institutions and processes that respect the will and views of the Egyptian public. A military coup seems very unlikely to be a positive development, but neither does a continued consolidation of power by Morsi . If a third way is to emerge, the responsibility lies with key Egyptian opposition figures to coalesce around a shared goal and vision for the country, at least in the short term, which can provide a legitimate alternative." Brad Bosserman, July 1, 2013
A New President of the Syria Opposition
"The Syrian National Coalition met in Istanbul over the weekend and elected Ahmad Jarba as their new President. The move represents a victory for the Saudi-aligned factions within the rebel coalition and Jarba declared that the SNC would not attend the proposed peace conference in Geneva until major military support was secured. As the Assad regime continues to make headway on the ground, it is unclear how the level of aid that is currently being supplied by the U.S. and Gulf allies will be able to turn the tide in favor of the rebels or even provide enough leverage to extract any real concessions from Assad." Brad Bosserman, July 8, 2013
Shadi Hamid from the Brookings Institution and Research Director of the Brookings Doha Center.
Yisser Bittar from the Syrian American Council.
Christy Delafield from the Washington office of the Syrian Opposition Coalition.
A New President in Iran
"The election of Hassan Rouhani as the next president of Iran is a positive development and represents an opportunity for reform as well as renewed and rational engagement with the west. While it would be naïve to expect any sudden policy shifts from a regime still headed by Ayatollah Ali Khamenei, Rouhani ran on a platform of reform that emphasized not only domestic economic issues, but also his goal of working toward normalizing relations with the international community and creating an environment in which sanctions can be gradually rolled back.
U.S. relations with Iran should continue to be driven by our regional interests and by ensuring the security of our allies. It should be understood, however, that the current policy of sanctions and isolation are not policy goals in and of themselves. American interests will be best served by a more democratic, open, and responsible Iran that respects international norms and laws. If President-Elect Rouhani wishes to normalize Iran's relationship with the United States and our allies, they will need to bring their nuclear program under transparent monitoring and cease supporting regional terrorism and instability through the forces they control both directly and by proxy.
It is worth noting that Mr. Rouhani was instrumental in negotiating the 2003 Sa'dabad Agreement, in which Iran agreed to suspend nuclear enrichment. Though this deal eventually collapsed, the fact that he has demonstrated a willingness to constrain the Iranian nuclear program should be viewed as a possible opening for new talks. While it will take time for the President-Elect to bring new and hopefully reform-minded personnel into the bureaucracy, the Iranian people have clearly rejected the status quo and spoken out for change. The United States should seize this opportunity to develop a diplomatic relationship with the new President and deploy a strategy designed to encourage Iran to become a more open and responsible member of the global community. Brad Bosserman, June 17, 2013
As the debate over immigration reform moves from the Senate to the House, Simon will be presenting an updated version of a powerpoint we’ve been giving around town these last few months: “The Border Is Safer, The Immigration System Is Better, and Mexico Is Modernizing and Growing.” It is a fact-filled presentation showing how successful the Obama Administration has been in managing the complex US-Mexico border and improving our immigration system.
The presentation will take place here at NDN at twelve noon, and lunch will be served. You can RSVP here.
At its core this presentation is a refutation of the border hysteria far too common in our politics today, an hysteria that has been largely abandoned, for example, by the Republican Party of Arizona, the state perhaps most responsible for exporting this politics to the rest of the country. Among the statistics we will cover in the presentation tomorrow:
In recent years spending on border security has tripled, the number of border patrol agents has doubled.
The net flow of unauthorized immigrations to the United States is now ZERO, and the annual flow of unauthorized migrants is one fifth of what it was a decade ago.
Crime on the US side of the border has plummeted, and is violent crime rates in the 2 largest border cities, San Diego and El Paso are one third of what they were a decade ago.
Apprehension rates in 2 of the 5 high traffic corridors are already over the Senate goal of 90%, and 2 are over 80%.
Due to the drop in flow and huge increase in border patrol, the apprehension rate per border patrol agent has dropped from 327 in 1993 to 19 last year, or one every two to three weeks.
Meanwhile, trade with Mexico across this very same fortified border has exploded, growing from $300b in 2009 to $536b in 2012. Mexico is now the US’s third largest trading partner, and second largest export market.
If you cannot make it tomorrow, feel free to send this invitation on to others. And for more of our analysis about the border and immigration reform, visit this page on our site, which includes a link to an earlier version of this presentation and related materials. Also see Simon’s op-ed in The Hill, "On the Border, DHS Has Earned Congress' Trust," arguing that the Republican party must acknowledge the positive work done by the Department of Homeland Security at the border in order set realistic and achievable goals for immigration legislation.
We hope you can join us for this timely and informative discussion. And please don’t be shy about forwarding this information, which is so important to the current debate, to others you think might be interested.
On July 24th, NDN and NPI will host an introductory conversation about the potential for a burgeoning energy community between Canada, Mexico, and the United States. You can register for this exciting event here.
As soon as August of 2013, new leadership in the Mexican government is expected to pass comprehensive energy reform to modernize its energy resources. The reforms could pave the way for Mexico to open its hydrocarbons sector to private investment, as well as to create significant growth opportunities in renewable energy.
Because Mexico is the U.S.’ third largest trading partner, America is in the unique position to avail itself of these opportunities and to broaden and deepen its relationship with Mexico for the benefit of the entire region. By establishing a North American Energy Community, we can create a cleaner energy economy for both nations, spur desperately needed economic stimulus in the border region, and build a viable platform for regional energy security.
A distinguished panel will offer insights into the opportunities and pitfalls of this important emerging economic development:
Governor Bill Richardson
Former Secretary of Energy, U.S. Ambassador to the UN, and Governor of New Mexico.
Richardson has enjoyed a very successful career in public service, academia, and the private sector. Few can match his wide-ranging experience and dedication to both energy issues and issues related to the U.S.-Mexico relationship.
Director of the Mexico Institute at the Woodrow Wilson Center for International Scholars
Wood brings two decades of academic and professional experience in Mexico to the conversation. At the pre-eminent Institute, he provides invaluable analysis on a broad range of issues pertinent to the United States and Mexico.
Rick Van Schoik
Energy Portfolio Director at the North American Research Partnership
Van Schoik is a leading expert in multidisciplinary, tri-national research and policy programs. He frequently travels to give talks and publishes articles in the scientific, lay, and professional press that inform several perspectives on transboundary security, transportation, water, energy, environmental, and related issues.
Wednesday, July 24th, 2013
12:00 Noon – 1:30PM
NDN Event Space
729 15th St NW
Washington, DC 20005
Please RSVP here today for this luncheon, as space will be very limited.
It is that time of year again for friends of NDN/NPI – the time we come to you and ask for your financial support of our path-breaking work.
Over the next few weeks on this site and through other means we will explaining what we’ve done these past few years with the money our supporters have generously given to us, and what we intend to do going forward. We are proud of what we have contributed to the national debate here in the US, and we are confident that, with your support, we can keep making a difference during a time of significant global transition and change.
We write now because this is the time of year we most need your support. Our generous supporters keep us well-nourished and in the black throughout the year. But to avoid that summer cash-flow lull – as many head out on vacation – it is important that we raise $100,000 before August 2nd.
I hope you will help us by contributing what amount you feel comfortable - $15, $25, $50, $100 or more.
You can make a secure, online donation here, or learn how to use other means of payment. We know that you have spent time with us recently, and we hope that experience will move you to contribute today. It will certainly set off some celebratory and seasonal fireworks here if you do!
Thanks again for your interest, and support, of our important work here.
The Supreme Court's blockbuster decisions on voting rights and same-sex marriage attracted most of the attention, but President Obama also moved decisively last week, on climate change. The facts that drove the President are scientifically undisputed. Increasing concentrations of greenhouse gas emissions in the earth's atmosphere continue to raise global temperatures; and without serious action, the long-term effects on sea levels and climate could be catastrophic. Yet, climate-change deniers on the far right have a tight hold on a majority of congressional Republicans, who now won't even acknowledge the threat. With no hope of reaching a reasonable accommodation, the President put forward new regulations that don't need their approval -- and ultimately will be less effective and more costly for average Americans than the alternatives which Congress won't consider.
For a while now, most climate experts and economists have broadly agreed that the most efficient and effective way to reduce these carbon and other greenhouse gas (GHG) emissions is the direct approach: Raise the price of fuels based on the GHG emissions they produce, and so raise the price of all goods and services based on the emissions created to produce them. In principle, this approach could attract bipartisan support. It rests on one of the bedrock tenets of conservatism, the power of prices in free markets, as well as the liberal disposition to create national programs to improve the general welfare. Yes, the most straight-forward way to achieve such climate friendly fuel prices is apply a dreaded tax to all forms of energy based on their carbon dioxide (CO2) and other GHG emissions. But even that, in more placid political times, could be a basis for attracting broad support, since the revenues from a climate tax could be dedicated to cutting payroll, corporate and other, more economically-distorting taxes.
The truth is that every other serious approach to climate - from a cap-and-trade system to the President's new regulations - also would raise prices: Directly or indirectly, they make it more expensive to use fuels that emit more than their share of greenhouse gases, relative to other fuels that damage the climate less. Over time, those price differences should gradually move millions of businesses and tens of millions of households to favor the cheaper, more climate-friendly fuels and technologies, and the goods and services produced using them.
The sobering news is, we don't have much time. Scientists warn that however broadly we might adopt the current generation of cleaner fuels and technologies, the atmospheric concentrations of CO2 and other GHG will soon reach levels that will produce serious climate changes. However, the economics of setting a clear and hefty price on carbon and other GHG would also create new incentives that could extend the frontiers of climate technology. If energy companies, scientists and entrepreneurs can be certain about the price of carbon and other greenhouse gases, looking forward - if they know how much more it will cost people to use climate-damaging fuels, compared to climate-friendly ones - that would create strong incentives to develop and adopt the next generation of climate-friendly fuels and technologies.
The question is, how efficient and effective are each of these approaches, and which is most likely to spur new advances? The question highlights the costs of the extreme right's current hold on congressional Republicans, which drives the political stalemate on climate policy and has left President Obama with few options apart from executive regulation. His new regulatory agenda has three parts. It includes, first, higher energy-efficiency standards for appliances and buildings, aimed at reducing energy use whether clean or otherwise. There also are new loan guarantees for projects to reduce or isolate the greenhouse gases emitted by fossil fuels, and additional grants to develop more efficient biofuels. These guarantees and grants are designed to promote greater use of more climate-friendly technologies and fuels by reducing the cost of capital to develop them. While these measures provide a sense of the administration moving on many fronts, their combined impact on the climate crisis will be modest.
There is one measure that could matter a great deal more: The President has directed the EPA to develop new CO2 and other GHG emission standards for existing power plants. This follows EPA regulations proposed last year that set similar standards for new power plants. The logic is straight-forward: Set standards that will force utilities to rapidly shift from coal to natural gas and renewable fuels. This makes sense, since the use of cheap coal to generate electricity accounts for about half of worldwide carbon and other GHG. Shifting to natural gas worldwide would cut life-cycle GHG emissions by 20 percent, and shifting to renewable fuels would reduce those emissions by as much as 40 percent.
There is no doubt that sufficient regulation could move the United States to a path under which our GHG emissions would decline in a sustained way. But using regulation in this way will cost Americans a great deal more than a carbon tax with the same result. Under the new regulation, existing power plants will have to develop and adopt new investments that meet a new, uniform standard by reducing their emissions from fossil fuels or converting their plants to use cleaner fuels. To begin, monitoring and enforcing such regulation will cost a lot more than collecting a tax. More important, the program suffers from the inefficiencies of most regulation, because some utilities will be able to meet the regulation much more cheaply than others, based on the state of their current plants. For example, plant A could reduce its emissions by a required unit by investing $1,000,000, while plant B could reduce its emissions by the same unit for $250,000, and by two units for $500,000. So, reducing emissions by two units under the regulation will cost $1,250,000, while plant B could achieve the same result for the climate under a tax or a cap-and-trade system for $500,000. Under all of these alternatives, most of the costs are passed along to the ratepayers and consumers. But a tax with offsetting tax reductions could return much of those costs to everyone. Based on a simulation from several years ago, those costs could average some $1,500 per-household, year after year.
Finally, while the new regulations should spur technological innovations to enable utilities to meet the standard more efficiently, the incentive to innovate will dissipate once the standard is met. By contrast, the economic incentives to develop and adopt cleaner fuels and technologies never go away under an emissions tax, since every incremental advance would reduce the tax and, with it, the price of energy.
This past weekend, President Obama also devoted his weekly address to his new climate program. He deserves credit for refusing to be cowed by his opponents' intransigence. He could truly elevate his presidency, however, by taking the case for a carbon/GHG tax with offsetting tax cuts to the country, and beating his opponents on one of the most fateful challenges we face today.
This post was originally published in Dr. Shapiro's blog