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Home Publications Blogs Beat the Press Hot Air from David Brooks on Clean Energy and Global Warming

Hot Air from David Brooks on Clean Energy and Global Warming

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Friday, 19 October 2012 04:01

David Brooks is trying to do his best to help the Romney campaign, but apparently he hasn't been getting the memos. Brooks' column today is a diatribe against measures to promote clean energy. (That would be socialist items like tax credits for retrofitting buildings, solar panels, or fuel efficient cars. The same sorts of policies that were promoted under President Bush, albeit on a smaller scale.)

There are a number of things that are not quite right in Brooks' piece, but my favorite is Brooks' assertion:

"The biggest blow to green tech has come from the marketplace itself. Fossil fuel technology has advanced more quickly than renewables technology. People used to worry that the world would soon run out of oil, but few worry about that now. Shale gas, meanwhile, has become the current hot, revolutionary fuel of the future.

... the oil and gas sector is investing a whopping $490 billion a year in exploration."

Oh no, Governor Romney has been running around the country trying to tell people how President Obama's horrible energy policy has blocked drilling for fossil fuels and sent gas prices soaring and now David Brooks is telling us that the great breakthroughs in fossil fuels and massive amounts of drilling has caused energy prices to plummet. Brooks' story is that the progress in drilling for fossil fuels in the Obama years has made clean energy uncompetitive.

This is horrible, Brooks is 180 degrees at odds with the Romney message. Someone better get Brooks with the program, even ardent Republicans might find it difficult to accept that energy prices are both too high and too low.

Okay, but there's much more fun in this Brooks column. His big gotcha indictment of Obama's clean energy program as a failure is:

 

"The U.S. government wasn’t the only one investing in renewables. Governments around the world were also doing it, and the result has been gigantic oversupply, a green tech bubble. Keith Bradsher of The Times reported earlier this month that China’s biggest solar panel makers are suffering losses of up to $1 for every $3 in sales. Panel prices have fallen by three-fourths since 2008. ... The U.S. share of the global market, meanwhile, has fallen from 7 percent to 3 percent since 2008."

Wow, what a disaster! Prices of solar panels have fallen by three quarters in 4 years. Those people in the Obama administration must feel really stupid. They thought their clean energy program would make alternative energy competitive, but look now, prices of solar panels fell by 75 percent in four years.

Okay, I'm tempted to spend the rest of the day dumping ridicule here, but I trust folks get it. The point, Mr. Brooks, was to have the price of solar panels fall. A 75 percent drop in prices in just four years is amazing. To put this in terms that Republicans can understand, if gas prices had fallen by 75 percent from their 2008 peaks, we would be paying about $1 a gallon for gas today.

Part of Brooks' point is that China seems to have even larger subsidies than the United States, thereby undercutting our industry. This raises some important trade issues that aren't really different in solar energy than in other sectors.

China wants to pay lots of money to subsidize its exports of solar panels. Does it make sense for us to take advantage of cheap panels from China or are we better off blocking them and allowing our own industry to grow? I have not examined the issue closely enough to have a good answer, but the idea that China's policy somehow undermines the merits of Obama's clean energy program makes no more sense than claiming it was a mistake for the United States to have a steel industry if China began to massively subsidize its steel exports. This just doesn't make any sense.

It should already be clear that this column is swinging for the fences and missing bigtime, but wait, there's more:

"Then, in 2008, Barack Obama seized upon green technology and decided to make it the centerpiece of his jobs program. During his presidential campaign he promised to create five million green tech jobs. Renewable energy has many virtues, but it is not a jobs program. Obama’s stimulus package set aside $90 billion for renewable energy loans and grants, but the number of actual jobs created has been small. Articles began to appear in the press of green technology grants that were costing $2 million per job created."

Why wouldn't renewable energy create jobs? When people put solar panels on rooftops, aren't those jobs? I think there's some problem with how conservatives use the word "jobs." They also constantly tell us that government doesn't create jobs, so apparently teachers, firefighters and construction workers employed by the government don't have "jobs." Now we learn that people employed in renewable energy don't have "jobs." There seems to be some definitional issue here that is not easily resolved.

The logic that the rest of used is that there were millions of workers left unemployed as a result of the collapse of the housing bubble. In the absence of government stimulus, these workers would be doing nothing. (Okay, I'm assuming that the confidence fairy would not magically reemploy them.) This means that the government could use spending to reemploy them doing almost anything. One of the things that these workers could do is putting solar panels on roofs and retrofitting buildings. What's the problem with this logic?

Also, let's give Brooks and his friends in the Romney campaign a little kick in the face for telling us about "$90 billion for renewable energy loans and grants." Umm, there is a big difference between loans and grants. If we want to just mix and match, we have had over $4 trillion in government loans and grants for housing in the Obama years. (Virtually all of that is lending guaranteed by Fannie and Freddie and the FHA.)

In fact, if we want to mix loans and grants we can talk about $16 trillion in loans and grants provided by the Fed, Treasury, and FDIC to the Wall Street crew to keep them from going belly up during the financial crisis. Using the Brooks-Romney methodology, President Obama committed an amount that was less than 0.6 percent of the Wall Street bailout to promoting clean energy and stopping global warming.

As far as Brooks' line that:

"articles began to appear in the press of green technology grants that were costing $2 million per job created,"

Well, as we know, you can print pretty much anything you want these days. If Brooks has a specific study, I'll take a look at it.

Okay, there's more here, but it doesn't get better. I should probably mention a cheap effort to sleaze Al Gore. Gore has invested in green technologies. The government has subsidized green technologies. Brooks produces zero evidence that Gore used his connections to benefit from these subsidies in a way that any other rich person could not have done. This doesn't mean that Gore didn't use connections. I have no idea whether he did or didn't. I'm not generally inclined to defend Al Gore, but Brooks has nothing on the former VP. It's just straight sleaze.

The long and short is that Obama's investments in green energy have in fact been modest. They have produced some real dividends as Brooks inadvertently highlights with his complaint about the plunging price of solar panels. They have not revolutionized energy production, but what would we expect from an amount of loans and grants that is equal to 0.15 percent of GDP over the last four years and less than one fifth of what we spend each year on oil and gas exploration?

 

Comments (22)Add Comment
Poor David Brooks.
written by David, October 19, 2012 7:38
Full body slam, plus KO. Thanks, Dean, this made my morning!
Bubble, bubble.
written by jhm, October 19, 2012 7:48
At the risk of incurring the wrath of the FT, I continue to think that this story [May 6, 2012] is underreported, especially in the face of such happy talk about domestic energy independence:

"Think about it. Even before the most recent gas price crash, the shale gas producers were spending two, three, four, and even five times their operating cash flow to fund their land, drilling, and completion programmes.

"The widely accepted claims of huge volumes of cheaply produced energy did not square with this deficit financing.

"There is nothing wrong with exploration and production people being compulsive optimists and, it follows, compulsive drillers of prospects for which they do not have quite enough money. In fact, it is absolutely necessary to get the production we need. What is wrong is how this has been paid for. Too much money was borrowed, on complex and demanding terms. Wall Street should have provided reality checks to the shale gas people; instead, they just provided cashier’s cheques with lots of zeroes at the end."


http://www.ft.com/intl/cms/s/0/75942e5c-944e-11e1-bb0d-00144feab49a.html#axzz29k6exfQk
...
written by kharris, October 19, 2012 8:24
A favorite trick, not just for Brooks, but for anybody with an axe to grind and a willingness to deceive, is to substitute one goal for another. This can be, and is, done in all sorts of ways.

A very common use of this trick is to create a jobs ratio. Even if each job gained through subsidies to the alternative energy sector is matched with $2 mln in support, why should we care? The primary goal of supporting clean energy is to have clean energy. As a secondary matter, support may result in having a sizable share of the clean energy industry in the US, which would lead to job growth, among other things. To the extent that subsidies for the sector aim to boost hiring, it is future hiring that is the right metric for success. It is wildly wrong to treat subsidies to alternative energy development as a current-period jobs policy. To be that wrong, one would have to be either ignorant of how things work or dishonest. There is no reason someone treating alternative energy subsidies as a current-period jobs program could not be both ignorant and dishonest, of course.

There is a similar problem with the notion that "the market has spoken". A $400 bln investment in conventional energy development looks big, but that is partly an artifact of the size of the conventional energy sector. Does Brooks think there is a risk that firms in the sector won't be going concerns much longer? Because that's the circumstance in which you'd expect a very large sector like conventional energy to have very small capital spending plans. Capital spending plans for copper-linked communication were once vastly larger than for satellite-linked communication. Would Brooks have us conclude that satellite-linked communication should have been ignored by policy makers for the simple reason that capital outlays on copper-linked communication were very large? I suspect his answer would be some sort of "oh, tut-tut" but the analogy is pretty tight.

Oh, and I didn't see any mention of externalities and public policy. We don't have a carbon tax. Would Brooks like to argue - now, before the election, if you don't mind - for a carbon tax as better than subsidies to green energy as way of dealing with the externalities of carbon emission?
...
written by skeptonomist, October 19, 2012 9:22
In the past, the oil industry was subsidized even more than now, especially through the depletion allowance, a huge tax break. This probably helped establish our dependence on oil. I don't know if the US would have been better without this, but government intervention in markets is nothing new.
Future of Energy is Fusion Not Fracking
written by Robert Salzberg, October 19, 2012 9:33
Shale gas is gotten through fracking which is marred with environmental hazards. Would you like a few manmade earthquakes to celebrate your low birth weight babies? What part of 'fossil' fuels makes Brooks think they're sustainable, ie fuels of the future?

Mr. Brooks writes:

"But he who lives by the subsidy dies by the subsidy."

Brooks must know that the fracking industry gets both subsidies through the tax code and got a giant additional subsidy through Cheney's infamous Halliburton Loophole that exempted fracking fluids from the Clean Water Act.


Solar and wind energy are good potential renewables but the real game changer for energy is fusion, the same way our Sun is powered.

Earlier this month in San Diego, scientists from around the globe united for the 24th International Atomic Energy Agency Fusion Energy Conference.

Here's a link to what a real article by a real writer says about the future of energy:

http://www.utsandiego.com/news/2012/oct/10/a-global-quest-to-test-the-feasibility-of-fusion/
...
written by Kat, October 19, 2012 9:42
What part of 'fossil' fuels makes Brooks think they're sustainable, ie fuels of the future?

I think it is the part where he does not live near areas that are being opened up for drilling.
What about the math on this part of the equation?
written by victor mcsurely, October 19, 2012 10:08
Firstly I'd like to thank you for this article and the work of the site in general. It is really helpful work.

I have a serious question I'd like put to the site regarding the thinking on this issue, and I'm really hoping you or someone from the team could give this some thought:

Here is a University of Maryland paper from 2007 on the cost of ignoring global warming. Since 2007 data for climate change has become more detailed. Current data paints a more morbid outcome.

I cannot figure out why economists are ignoring this thread. Perhaps because it is being COMPLETELY IGNORED in the debate. If there were a nation gearing up to do us this damage in we'd be all over it.

The only thing I am left to wonder is who makes the money in disaster relief. Hmmmmm.

http://www.cier.umd.edu/documents/US Economic Impacts of Climate Change and the Costs of Inaction.pdf
...
written by Aaron, October 19, 2012 10:27
"China wants to pay lots of money to subsidize its exports of solar panels. Does it make sense for us to take advantage of cheap panels from China or are we better off blocking them and allowing our own industry to grow? I have not examined the issue closely enough to have a good answer...."

I'm not going to pretend to be an expert on this one, either, but I'll pass along what I know....

China's investment is not just about manufacturing capacity. They also want to hold the patents for crucial next-generation energy production. Brooks, it seems, would just as soon let them. I am told that China also sees a genuine need for greener energy, their rapid industrialization having created some very serious problems with pollution.
...
written by AndrewDover, October 19, 2012 10:31
I'm having a hard time believing $90 billion from David Brooks:

"Obama’s stimulus package set aside $90 billion for renewable energy loans and grants, but the number of actual jobs created has been small."

American Recovery and Reinvestment Act of 2009
http://www.recovery.gov/Transparency/fundingoverview/Pages/fundingbreakdown.aspx
Ah, David
written by Mike, October 19, 2012 10:46
I too was dumbfounded by David's reasoning. Decided to leave a comment at the NYT, but comments on David's column were closed early, as often seems to happen. So I'll comment here. I always come here immediately after every Brooks column anyway.

You beat me to the obvious. But then, "beat"ing is what you do, right? The stupendous drop in solar panel prices is a bad thing -- how?

And Solyndra: Joseph Stiglitz says that if government (or any venture operation, for that matter) doesn't have some investment failures, it isn't taking enough risks. If success was certain, the private sector would have already done it. And besides, Solyndra failed because of the aforementioned drop in panel prices. We can live with failures of that sort.

Finally, if green energy is to be judged relative to technological advances in the fossil fuel industry, then we are screwed. Either we take global warming seriously or we don't. If we take it seriously, green energy will be profitable.
24 Countries, Including U.S. and China, Invest 20 Billion to Build Fusion Reactor in France
written by Robert Salzberg, October 19, 2012 11:06
At the bottom of the linked page there's a link to a great 3 minute interview that explains what fusion energy is.

Highlights include the fact that all we need for raw material is a bit of seawater, it's extremely clean and we already are building the first plant in France.

A global Manhattan Project for clean energy is already under way and sorely in need of press coverage and funds to accelerate the process and Brooks is metaphorically saying that lighting the Earth's farts is fabulously futuristic.

http://www.iter.org/newsline/241/1347
(gas) pipe dreams...
written by pete, October 19, 2012 11:15
Robert Frank had a nice piece a few months ago in the times talking about a minimum $3 a gallon tax on gas. There was a nice discussion on the BBC this morning talking about China and Brazil. Seems clear that if there is a consensus that carbon is the enemy, that a fat tax on carbon is the only way to go. If raised enough to bring about sufficient energy substitution, this could be used to offset probably most income taxes, and probably even payroll taxes, offsetting the distributional economic impact of the tax alone. Of course, the extant system of picking winners and losers is subject to typical capture....why are we always surprised? Rachel Maddow lobbies power lines through everyone's backyard to benefit T Boone Picken's windmills...whowouldathought....
Yeah but the solutions around here...
written by James, October 19, 2012 11:49
Hello Professor,

Probably its best to end all subsidies to our solar industry and the renewables. End the tax breaks as well, lower any tariffs.

Basically the technology blows. You are still looking at energy costs that are an order of magnitude off from gas or nuclear for energy use.

Right now, the focus should be more on research and development for batteries and panel efficiency at a small scale in universities.

Further, the left misrepresented oil supply data and played on false fears, causing years of problems and malinvestment. I don't know how you walk away with out cleansing your side of the isle of that deception.

My current plan, probably can pass in a republican congress. I would like to see a major long term tax credit and tax break for purchase of higher efficiency vehicles. Something on the order of 8K per year. That's right, a huge break. I would even allow the wealthy to purchase a car and give it away every year.

If combined with increased domestic production, we can get additional vehicles in use that cut gas consumption, energy prices will come down significantly and capital outflow for energy will slow.

Make the credit for 10+years, so there isn't so much of a pulling demand forward effect.

Changing the fleet turn over rate and doing with a tax break is a win win, unless you are so revenue hungry for socialist BS that you can't stomach possibly losing revenue.

But, you could look at dropping gas use by 35% per capita and slowing the bleed of capital out of the country. It could be done very quickly.
Innovation v. Commercial Exploitation
written by Ron Alley, October 19, 2012 12:58
Today's Brooks column shows just how silly hyper-partisan Republican analysis of government action really is.

Nobody expects that the role of government in innovation and the development of technology to produce instantaneously viable commercial ventures. Three examples of government subsidies come to mind.

During World War I, the federal government's demand for lightweight engines to power aircraft resulted in the development and limited production of aluminum block gasoline engines. When WWI ended, demand for those engines dried up and aluminum block engines were not produce in large numbers nor used in American automobiles for about 40 years. The underlying technology just wasn't cost effective. Yet today, you probably drive a car with an aluminum block engine.

Similarly, during WWII, government subsidies enabled American companies to design and develop jet engines for aircraft. To be sure, the original jet engines were expensive and not cost effective for civilian applications. However, government purchases enabled jet engine manufacturers to refine their products and, in about 15 years, produce jet engines that were cost effective enough to give rise to the production of the Boeing 707 and the DC-8.

The third example is corn-based ethanol production. As far as I know, the government did not invest directly in the development of corn-based ethanol production, but subsidized the construction of corn-based ethanol production through tax subsidy and clean air requirements. The result has been a the development of a product that is, at best, only marginally cost effective. Without government created demand, we probably would not have corn-based ethanol production at the present rate.

These three examples demonstrate, the role of government in supporting technological innovation should not be confused with commercial exploitation of those same technological innovations. Commercial exploitation of any technology is created by demand. Only in limited and exceptional circumstances can government provide demand sufficient to nurture commercial exploitation. Unfortunately, government support for solar panel manufacture could not succeed without government efforts to create demand through direct purchases of solar panels for government buildings and government programs to require landlords of government leased buildings to retrofit their buildings with solar panels as well as tax credits sufficient to create private sector demand. Even that would not be sufficient to create the level of demand that the government created in the case of ethanol production, or the auto industry provided in the case of aluminum block engines.
It brought tears to my eyes
written by Nassim Sabba, October 19, 2012 1:09
This is so funny, it is worth of theOnion.com

I think he doesn't write for theOnion.com because he would lose the union benefits he has at the NYTimes.

In fact, the above piece is a comedy (an ironic tragedy in the Greek sense of the word) to see a grown man lose his marbles he had inherited from, all we know, marble rich ancestors.

Hopefully ObamaCare will kick in soon enough to help this poor fellow with his rapidly approaching rise in his dementia and Alzheimer's decease.

God bless America for its real monopoly on exceptional journalists.
energy
written by mel in oregon, October 19, 2012 3:43
the problem is we are going to run out of oil eventually, & in spite of all the happy talk about green energy sources, there isn't any real substitute for oil. so that's what the military buildup with carriers in the china sea & encirclement of russia with missiles is all about, there will be a huge fight for this dwindling resource. only problem is nobody can win, we are either going to cook the planet or get into a nuclear war. so that's what romney is all about, drilling everywhere in sight & the heck with global warming & the destruction of the environment. obama if he's lucky enough to win by the skin of his teeth will open the keystone pipeline right after the election. heck he's already approved the southern half. the one thing you can count on is the price of gas will be up another $2 or so a gallon by 2016 no matter which dummy wins.
...
written by Kat, October 19, 2012 6:27
Victor,
I am not an economist, (obviously) nor even one of the more knowledgeable commenters here, but I will attempt to answer your question.
First, the only time we are allowed to be future oriented is when discussing those unsustainable "entitlements".
Next, as for economists ignoring the economic consequences of global warming, I believe it is more a case of ignoring the economists that warn of the consequences of global warming.
And that's the way it is.
...
written by david j michel jr, October 19, 2012 7:48
go obama go,am I on brad delongs page!
...
written by victor mcsurely, October 19, 2012 11:34
Thanks Kat, I suppose you are right. I would think somehow though, in all these talk of budgets that reach into 40 years from now, there would be an insistence on factoring in this expense, which is growingly summable. Truly it is like an enemy of the country arming itself for destruction. Although, ironically, it is our denial which is arming it. Now that 95% of published climatologists validate the human cause of climate change and are much more decisively on the same page regarding its consequences, I would think people who love dealing with probability and cost could really sink their teeth into this and shed light into what is either willful ignorance with huge economic consequences or really one of the more cynical profit schemes humanity has seen. Anyhow, Thanks for the thought!
...
written by Kat, October 20, 2012 9:56
Victor,
I agree this crisis eclipses all others. I feel that Clinton squandered an opportunity for the institution of a carbon tax (I remain suspicious of cap and trade), but used to be inclined to think raising the issue would be politically disastrous for any politician. I realize this is nonsense now. A carbon tax may be offset with reductions in other taxes.
And now I see that our leaders from both parties are quite willing to go to bat to sell us on the idea of dismantling social security-- an immensely popular program with broad support.
heres what jobs mean ...
written by Matic Primc, October 21, 2012 5:07
The confusion you get from these columnists constantly misunderstanding "jobs" comes from the fact that they do not care one whit about jobs. What they mean to say is "profits" for their rich backers, but of course they can not write that or their charlatanism is immediately exposed. As soon as you start substituting the word profits for jobs in the commentary it immediately starts to make sense.
Foolish ideologues
written by Ormond Otvos, October 22, 2012 8:09
Are gonna sink us again.

Brooks just ignores/denies the results of continued fossil fuel usage.

Of course our g;e of world solar production is lower, because others are ramping up. An honest appraisal would give the actual production figures, but Brooks is obviously reaping some mortgage payments shilling for the Rmoney backers.

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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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