Japan Poll: Vote for Climate Leadership

Back in July, I made a post almost immediately after Japan’s prime minister decided to dissolve parliament, realizing this could be a big opening for a new climate leadership from Japan when we need it most.  As I observed then, the main Japanese opposition party that may take power favors considerably more aggressive emissions targets of 25% below 1990 levels by 2020.  This is in comparison to only 8% below 1990 levels for Japan’s current leadership.  Please see my previous post on this subject on why Japanese leadership on this issue going into Copenhagen could be a big deal.  Below is a press release I just got on how polls say Japanese voters support these strong emissions targets.  Of course it would make sense that if a party is so unpopular it has to dissolve parliament, the current status quo is not going to poll well, which was why my previous post on this topic was optimistic for change.

As Elections Loom, Japan Votes Climate

National poll says strong emission targets, green jobs and clean energy could swing the vote

Climate change could make all the difference as Japan prepares for parliamentary elections this month, according to a new country-wide survey in which 76% of Japanese voters say they are more likely to vote for a party with a strong climate policy.

“Climate change and green jobs are the sleeper issues in this election,” said Ricken Patel, director of global campaign network Avaaz.org which commissioned the poll. “The Japanese public demands more from its politicians in these critical policy areas — and parties who don’t respond could lose out on millions of swing votes.”

Critically, climate could play a key role in the winning the support of undecided voters, of whom more than two-thirds (69%) say they would be more likely to vote for a climate-friendly party.

“The parties have not yet highlighted climate change in their election campaigns,” said Kimiko Hirata, Director, Kiko Network. “But as many voters are still undecided, parties that strengthen their climate policies will have a good chance to get these climate voters on their side.”

While many voters say they don’t know enough about the climate positions of the two main parties DPJ and LDP, more support the DPJ’s position (40% support) than the LDP’s (20%). Asked specifically about emission reduction targets, 50% of voters support the DPJ plan to aim at 25% emission cuts by 2020 from 1990 levels, while only 29% favour the LDP target of 8% cuts by 2020.

“The statistics show that climate voters are currently spread across every party. That means every party can potentially win votes from the others if they ramp up their climate rhetoric and match this with policies to deliver green jobs and clean energy,” said Naoyuki Yamagishi, Head of the Climate Change Programme at WWF Japan.

The findings, released today by a coalition of national and international groups including Kiko Network, WWF and Avaaz.org, also show that a climate-friendly “Green New Deal” for the economy is “very important” to secure the vote of 19% of the electorate.

“We’ve found that a critical chunk of the population fits the profile of a ‘green economy voter’. A bloc of voters this size could swing the election,” said Patel of Avaaz.org. “As in Australia and the USA, leaders with strong climate policies could oust long-time incumbent parties who were blocking strong action on climate change.”

For more information or to arrange interviews please contact:

· Ricken Patel, Director, Avaaz.org:   +1 646 229 5416 (EST), +1 888 922 8229 (EST), +32 470 860 660 (CET). media@avaaz.org

· Kimiko Hirata, Director, Kiko Network, Tokyo:  +81 3 3263 9210. khirata@kikonet.org

· Masako Konishi, WWF Japan, Tokyo: +81 3 3769 3509. konishi@wwf.or.jp

· Masahiko Aida, Greenberg Quinlan Rosner (polling firm), Washington DC:  Washington DC: +202-478-8300. maida@gqrr.com

Key findings (full pollster memo attached):

· 76% of voting-age citizens say that they would be more likely to vote for a party with strong climate policies. Only 12% say they would be less likely. Among LDP supporters, 79%, and among DPJ, 81 % say they would be more likely to support a party with strong climate policies. Among undecided voters, 69% say they would be more likely to vote for a climate-friendly party.

· 19% of respondents say that a the development of a clean energy economy – a green new deal – is very important to their vote. These voters are currently spread out across every party, representing 24% of LDP/CGP voters, 20% of DPJ voters, 21% of other parties’ supporters, and 16% of undecided voters.

· From what they already know about the two major parties’ climate policies, voters prefer the DPJ’s by an impressive 2:1 margin, with 40% saying the DPJ’s position is closer to their own and only 20% saying the LDP’s is.

Methodology: International polling firm Greenberg Quinlan Rosner (Washington DC, USA) conducted a telephone survey research of nationally representative Japanese citizens of 20 years and above with a random digit dialing sampling frame. The fielding period was 12-27 July. A total of 970 respondents responded.  Adams Communication (Tokyo, Japan) conducted actual telephone interviews using CATI (Computer-assisted telephone interviewing). The survey is demographically and regionally representative of the Japanese voting-age population. Random digit dial CATI phone interviewing is standard practice for polling in the developed world.

More information on the poll methodology can be obtained by contacting the pollster (contact above).

The Clean Energy Bank

This is an awesome provision in the Waxman-Markey bill which has received very little attention.  I’m re-posting a piece by Jake Caldwell on the Center for American Progress website, which does a great job at explaining how funding for clean energy investment is more than just government spending, it’s knowing how to use limited government money to LEVERAGE spending by the private sector whose spending and venture capital investment makes up a much larger chunk of our economy than the government.  One of those ways is a clean energy bank.

By Jake Caldwell | August 7, 2009

Download this memo (pdf)

Introduction

The United States must build and deliver clean energy today to create jobs, lower energy costs, and strengthen our economy. The establishment of a federally owned, independent, not for profit Green Bank—formally called the Clean Energy Deployment Administration, or CEDA, in legislation now before the Senate—will spur private-sector investment in innovation and American ingenuity to help end our dependence on oil, and help diversify our nation’s sources of energy to lower prices over the long term while also confronting global warming. The Green Bank will improve our global economic competitiveness, too, by making the United States a worldwide leader in the manufacture and deployment of clean-energy technology.

The creation of a Green Bank will encourage a long overdue integrated and strategic approach to clean-energy innovation, efficiency, and deployment in the United States. In combination with Senate action on clean energy—legislation that provides incentives for the research, development, and deployment of clean-energy technologies, and a market-based pollution-reduction program that reduces greenhouse gas emissions and reinforces a predictable price signal on carbon—the Green Bank will open credit markets, motivate private business to invest again, and create good, clean-energy jobs here at home.

In partnership with the private sector, the Green Bank will enable innovative, commercially viable clean-energy technologies in such areas as wind, solar, geothermal, advanced biomass, increased efficiency, and transmission infrastructure—all to be deployed on a large scale. The construction and actual deployment of these clean-energy technology projects is vital to a clean-energy future.

What’s more, clean energy delivers long-term job growth and holds tremendous new job-creation potential, particularly in the manufacturing sector. A recent report from the Center for American Progress and the University of Massachusetts Political Economy Research Institute notes that $150 billion per year in clean-energy investment can generate a net increase of 1.7 million jobs.

In short, the Green Bank can encourage the rapid deployment of clean energy and ensure that lower energy costs are passed on to consumers. In addition, the Green Bank can act as a bulwark against higher energy costs associated with volatile fossil fuel prices.

Costs and benefits of the Green Bank

A Green Bank funded at $7.5 billion could fund generation of 60 to 80 gigawatts of clean energy over a period of 20 years, or 3 to 4 GW annually. The result: Our national security will be enhanced by reducing our dependence on foreign oil. A fully capitalized Green Bank at $50 billion could:

• Provide enough electricity to power approximately 22.9 million cars per year
• Decrease gasoline consumption by an incremental 12.6 billion gallons per year
• Decrease oil consumption by an incremental 642 million barrels per year, or 1.8 million barrels per day

In the past, Congress has encouraged private-sector equity investments in wind, solar, and other clean technologies through tax credits. Equity investments are important, but the deployment of major clean-energy projects will also require significant loans and low-cost debt financing. The Green Bank will marshal a variety of well-established financial tools and incentives to enable the federal government to enlist the private sector to increase the amount of debt capital available at lower rates to clean-energy projects. A Green Bank can vastly expand the tools available to lenders by providing direct support, such as direct loans, letters of credit, and loan guarantees, and indirect support, like authority to issue bonds, purchase debt securities, and other financial products.

In a clean-energy project, the Green Bank can potentially reduce the cost of debt by half—to about 4.5 percent in today’s credit markets from around 8.5 percent without federal support. As the cost of debt is reduced, projects can still provide a 15 percent return on equity and meet debt coverage ratios without an increase in electricity rates. The upshot: By lowering the cost of debt, the Green Bank allows utilities to provide the same levels of electricity from clean-energy sources without passing on any additional costs to the consumer.

The result will jumpstart business investment, increase capital at reduced loan rates, lower energy prices to consumers, and spur the construction and operation of more clean-energy technology and energy-efficiency projects throughout the country.

Jumpstarting private-sector investments in clean energy

A Green Bank is essential because many clean-energy technologies face several unique obstacles along the path to large-scale deployment and then to the delivery of clean energy in our homes. Traditional banks and commercial lenders are reluctant to loan to many of these clean-energy projects with limited track records in the marketplace.

And many existing off-the-shelf clean energy and efficiency technologies are abandoned due to a lack of funding as they attempt to be deployed at larger scale.

Indeed, renewable energy investment dropped precipitously in the first quarter of 2009, the period for which complete data are available, to $500 million compared to $2 billion in the fourth quarter of 2008 and $5 billion in the first quarter of 2008.

In order to maximize the leverage of private capital, the Green Bank should have at its disposal a wide range of direct and indirect support tools and incentives to encourage loans to facilitate deployment of clean-energy technology. These direct and indirect incentives tend to reduce the risk to lenders so they are encouraged, in turn, to offer better loan rates to potential clean energy and energy efficiency projects.

Under current Senate clean-energy legislation, the Green Bank will be capitalized with $10 billion. This capital can be leveraged at the standard 10-1 ratio to provide loan guarantees in support of $100 billion in private-sector investment in clean energy. The private sector can also provide an additional $100 billion in equity. As a result, a $10 billion capitalization of the Green Bank translates into $200 billion available for in clean-energy investments.

The surge in capital will allow clean-energy projects to be deployed at the operational and commercial level in a shorter timeframe than is standard today. As clean-energy and efficiency technology is deployed at a larger scale, valuable experience and cost savings will be gained, and more and more clean energy will be delivered to American homes at lower prices in every region of the country. The United States will reclaim its rightful place as a global leader in clean-energy technology.

The Green Bank creates clean-energy jobs

As a nation, we can and must do better at nurturing and growing our clean-energy sector and clean-energy jobs, because competitors in other countries are already filling the void. A Green Bank will ensure the United States is a job leader in the clean-energy technology growth industry of the future.

Clean energy has the potential to create significant jobs in the manufacturing sector. A Green Bank will provide low-cost capital to help build clean-energy manufacturing facilities, create long-term jobs in the United States, and deliver clean energy at lower cost to consumers. As noted above, a recent Center for American Progress-University of Massachusetts Political Economy Research Institute report demonstrates that $150 billion per year in clean-energy investment can generate a net increase of 1.7 million jobs.

A significant portion of these jobs will occur in the struggling construction and manufacturing sectors. Moreover, the CAP-PERI report also notes that clean-energy investments generate roughly three times more jobs than an equivalent amount of money spent on jobs related to carbon-based fuels.

A Green Bank can ensure the clean-energy manufacturing sector is able to overcome several challenges, including securing access to capital when prospective lenders are reluctant to provide financing to manufacturers producing clean-energy technology. Frequently, clean-energy businesses are small, innovative, and highly specialized. They often have limited collateral and revenue and face cost uncertainties, as supply and demand for finished product fluctuates. The Green Bank can provide stability and incentives to leverage private capital, raise the comfort level of prospective lenders, and allow manufacturers to meet their goals and set us firmly on the path to long term job growth and a clean-energy economy.

The Green Bank can lower carbon emissions to reduce global warming

The establishment of a Green Bank will provide a coordinated, strategic approach to clean-energy innovation and energy efficiency in the United States, enhance federal government and private-sector complementary efforts to reduce carbon emissions, and deliver clean energy to American homes in as short a timeframe as possible.

The establishment of an independent Green Bank, governed by a board of directors and comprising additional members with clean-energy and energy-efficiency financial expertise, will make a significant contribution to the nation’s overall energy innovation strategy and project funding decisions. Importantly, the Green Bank will not place the federal government in the role of picking winners and losers in specific clean technologies. Rather, the Green Bank would establish broad, overarching performance-based goals such as the deployment of clean energy that diversifies our energy supply, and reduces or sequesters greenhouse gases.

The Green Bank will work in an integrated manner with clean-energy and climate-change legislation that promotes clean energy, energy efficiency, limits on global warming, clean-energy jobs, and transition investment to ensure U.S. competitiveness. The Green Bank has the potential to reduce carbon emissions by an estimated 22 to 59 million metric tons a year, which would be the equivalent of:

• Taking between 5 million and 13 million cars off the road every year
• Neutralizing the carbon emissions of between 15 and 39 power plants every year

The Green Bank also can help meet the demand created by a national renewable electricity standard, and it will encourage the deployment of a smart grid and modernized transmission to ensure supply comes from optimal locations throughout the country. In addition, energy-efficiency projects financed by the Green Bank would include any project that results in a net reduction in energy use required to achieve the same level of service prior to their application. Such projects would include smart-grid technologies and energy-efficiency gains in existing buildings and new construction.

Smaller projects could be aggregated so as to attract more financing in an area where it has been difficult to secure financing in the past. As noted above, credit support from the Green Bank includes a wide-ranging toolbox (including direct loans, letters of credit, and loan guarantees) that will assist states, localities, and the private sector in rolling out innovative mechanisms to finance building energy efficiency retrofits at scale. This includes municipal bonds, utility loans with on-bill repayment, and increasing commercial loans for retrofits, as the Green Bank effectively lowers the uncertainty and technological risk associated with a lack of historic performance data.

All of these goals would be interwoven into expedited funding decisions as projects were evaluated for viability and creditworthiness by a professional and experienced staff. In sum, the Green Bank will provide the means to allow us to meet our most ambitious carbon reduction targets while promoting clean-energy jobs to ensure U.S. industry and workers will be leaders in the clean energy technology future.

Rethinking GDP

I was forwarded a very good column in the NY Times written by Eric Zencey, so I’m re-posting it below.  I’ve often made the case that too many of the decisions we make today don’t account for the costs and externalities of losing our natural environment(natural capital).  This flawed cost-benefit analysis leads to market failures.

G.D.P. R.I.P.

By ERIC ZENCEY

IF there’s a silver lining to our current economic downturn, it’s this: With it comes what the economist Joseph Schumpeter called “creative destruction,” the failure of outmoded economic structures and their replacement by new, more suitable structures. Downturns have often given a last, fatality-inducing nudge to dying industries and technologies. Very few buggy manufacturers made it through the Great Depression.

Creative destruction can apply to economic concepts as well. And this downturn offers an excellent opportunity to get rid of one that has long outlived its usefulness: gross domestic product. G.D.P. is one measure of national income, of how much wealth Americans make, and it’s a deeply foolish indicator of how the economy is doing. It ought to join buggy whips and VCRs on the dust-heap of history.

The first official attempt to determine our national income was made in 1934; the goal was to measure all economic production involving Americans whether they were at home or abroad. In 1991, the Bureau of Economic Analysis switched from gross national product to gross domestic product to reflect a changed economic reality — as trade increased, and as foreign companies built factories here, it became apparent that we ought to measure what gets made in the United States, no matter who makes it or where it goes after it’s made.

Since then it has become probably our most commonly cited economic indicator, the basic number that we take as a measure of how well we’re doing economically from year to year and quarter to quarter. But it is a miserable failure at representing our economic reality.

To begin with, gross domestic product excludes a great deal of production that has economic value. Neither volunteer work nor unpaid domestic services (housework, child rearing, do-it-yourself home improvement) make it into the accounts, and our standard of living, our general level of economic well-being, benefits mightily from both. Nor does it include the huge economic benefit that we get directly, outside of any market, from nature. A mundane example: If you let the sun dry your clothes, the service is free and doesn’t show up in our domestic product; if you throw your laundry in the dryer, you burn fossil fuel, increase your carbon footprint, make the economy more unsustainable — and give G.D.P. a bit of a bump.

In general, the replacement of natural-capital services (like sun-drying clothes, or the propagation of fish, or flood control and water purification) with built-capital services (like those from a clothes dryer, or an industrial fish farm, or from levees, dams and treatment plants) is a bad trade — built capital is costly, doesn’t maintain itself, and in many cases provides an inferior, less-certain service. But in gross domestic product, every instance of replacement of a natural-capital service with a built-capital service shows up as a good thing, an increase in national economic activity. Is it any wonder that we now face a global crisis in the form of a pressing scarcity of natural-capital services of all kinds?

This points to the larger, deeper flaw in using a measurement of national income as an indicator of economic well-being. In summing all economic activity in the economy, gross domestic product makes no distinction between items that are costs and items that are benefits. If you get into a fender-bender and have your car fixed, G.D.P. goes up.

A similarly counterintuitive result comes from other kinds of defensive and remedial spending, like health care, pollution abatement, flood control and costs associated with population growth and increasing urbanization — including crime prevention, highway construction, water treatment and school expansion. Expenditures on all of these increase gross domestic product, although mostly what we aim to buy isn’t an improved standard of living but the restoration or protection of the quality of life we already had.

The amounts involved are not nickel-and-dime stuff. Hurricane Katrina produced something like $82 billion in damages in New Orleans, and as the destruction there is remedied, G.D.P. goes up. Some of the remedial spending on the Gulf Coast does represent a positive change to economic well-being, as old appliances and carpets and cars are replaced by new, presumably improved, ones. But much of the expense leaves the community no better off (indeed, sometimes worse off) than before.

Consider the 50 miles of sponge-like wetlands between New Orleans and the Gulf Coast that once protected the city from storm surges. When those bayous were lost to development — sliced to death by channels to move oil rigs, mostly — gross domestic product went up, even as these “improvements” destroyed the city’s natural defenses and wiped out crucial spawning ground for the Gulf Coast shrimp fishery. The bayous were a form of natural capital, and their loss was a cost that never entered into any account — not G.D.P. or anything else.

Wise decisions depend on accurate assessments of the costs and benefits of different courses of action. If we don’t count ecosystem services as a benefit in our basic measure of well-being, their loss can’t be counted as a cost — and then economic decision-making can’t help but lead us to undesirable and perversely un-economic outcomes.

The basic problem is that gross domestic product measures activity, not benefit. If you kept your checkbook the way G.D.P. measures the national accounts, you’d record all the money deposited into your account, make entries for every check you write, and then add all the numbers together. The resulting bottom line might tell you something useful about the total cash flow of your household, but it’s not going to tell you whether you’re better off this month than last or, indeed, whether you’re solvent or going broke.

BECAUSE we use such a flawed measure of economic well-being, it’s foolish to pursue policies whose primary purpose is to raise it. Doing so is an instance of the fallacy of misplaced concreteness — mistaking the map for the terrain, or treating an instrument reading as though it were the reality rather than a representation. When you’re feeling a little chilly in your living room, you don’t hold a match to a thermometer and then claim that the room has gotten warmer. But that’s what we do when we seek to improve economic well-being by prodding G.D.P.

Several alternatives to gross domestic product have been proposed, and each tackles the central problem of placing a value on goods and services that never had a dollar price. The alternatives are controversial, because that kind of valuation creates room for subjectivity — for the expression of personal values, of ideology and political belief.

How, after all, do we judge what exactly was the value of the services provided by those bayous in Louisiana? Was it $82 billion? But what about the value of the shrimp fishery that was already lost before the hurricane? What about the insurance value of the protection the bayous offered against another $82 billion loss? What about the security and sense of continuity of life enjoyed by the thousands of people who lived and made their livelihoods in relation to those bayous before they disappeared? It’s admittedly difficult to set a dollar price on such things — but this is no reason to set that price at zero, as gross domestic product currently does.

Common sense tells us that if we want an accurate accounting of change in our level of economic well-being we need to subtract costs from benefits and count all costs, including those of ecosystem services when they are lost to development. These include storm and flood protection, water purification and delivery, maintenance of soil fertility, pollination of plants and regulation of our climate on a global and local scale. (One recent estimate puts the minimum market value of all such natural-capital services at $33 trillion per year.)

Nature has aesthetic and moral value as well; some of us experience awe, wonder and humility in our encounters with it. But we don’t have to go so far as to include such subjective intangibles in order to fix the national income accounts. As stressed ecosystems worldwide disappear, it will get easier and easier to assign a nonsubjective valuation to them; and value them we must if we are to keep them at all. No civilization can survive their loss.

Given the fundamental problems with G.D.P. as a leading economic indicator, and our habit of taking it as a measurement of economic welfare, we should drop it altogether. We could keep the actual number, but rename it to make clearer what it represents; let’s call it gross domestic transactions. Few people would mistake a measurement of gross transactions for a measurement of general welfare. And the renaming would create room for acceptance of a new measurement, one that more accurately signals changes in the level of economic well-being we enjoy.

Our use of total productivity as our main economic indicator isn’t mandated by law, which is why it would be fairly easy for President Obama to convene a panel of economists and other experts to join the Bureau of Economic Analysis in creating a new, more accurate measure. Call it net economic welfare. On the benefit side would go such nonmarket goods as unpaid domestic work and ecosystem services; on the debit side would go defensive and remedial expenditures that don’t improve our standard of living, along with the loss of ecosystem services, and the money we spend to try to replace them.

In 1934, the economist Simon Kuznets, in his very first report of national income to Congress, warned that “the welfare of a nation can … scarcely be inferred from a measure of national income.” Just as this crisis gives us the opportunity to end the nature-be-damned, more-is-always-better economy that flourished when oil was cheap and plentiful, we can finally act on Kuznets’s wise warning. We’re in an economic hole, and as we climb out, what we need is not simply a measurement of how much money passes through our hands each quarter, but an indicator that will tell us if we are really and truly gaining ground in the perennial struggle to improve the material conditions of our lives.

Eric Zencey, a professor of historical and political studies at Empire State College, is the author of “Virgin Forest: Meditations on History, Ecology and Culture” and a novel, “Panama.”