Except for the usual misconceptions contained in most mainstream energy policy analysis.

Cellulosic ethanol is just plain bad policy.  Forget it, it's an excuse to continue gas guzzling.  More efficient vehicles should read, plugin hybrid vehicles, instead of flex fuel ethanol guzzlers.  

Cellulosic ethanol (like nukes) ought to get a research program to quiet the lobbyist shills and robber barons, like Khosla enabled by political pals like Bill Clinton.  Throw them a bone, cut subsidies until (unless) they can prove the experimental results actually reduce GHG and result in cheaper, more efficient transoportation (it never will, and will die off in a few years).

Biogas from waste ought to hold this position, the biofuel position, in energy policy.  Only 5% of our energy coming from this source would cancel the rest of our CO2 carbon footprint.  Biogas can be compressed to run in diesel trucks, tractors, and trains, saving imported oil and saving beleaguered truckers and farmers from fuel price bankruptcy.

Another big mistake?  building retrofitting ought to specify that the retrofit should mainly focus on geo heat exchange heating/cooling (36% potential GHG savings) and solar PV/heat cogeneration on buildings.  As well as smart grid heat/cold energy storage in building mass and appliances, like freezers and water heaters.

All these improvements employ people already working in these fields, impelling huge new job growth.  solar installers in California can't find enough trained workers right now to meet soaring demand.  Imagine what would happen were subsidies diverted from old energy economy companies to this energy revolution.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

Feeding cars at the expense of humans is intolerable and should be a crime.

Make these fuels from organic waste and 'weeds', not food.

As for the first two comments from Grist readers, bring it on!  This is the debate we need.  What "counts" as green?  Which energy and efficiency investments and technologies make sense?  What standards will be used?  How will success be measured? Who decides?

Not so long ago, the idea of vetting job creation through a sustainability lens that considered economic security, ecological health and social justice as co-equal standards would have been unthinkable.  As more and more studies like this one emerge, we increase the probability that sustainability measures will become the default standard for discussing job creation efforts.

Next month's Remake a Living column here at Grist will look at some of the most popular job titles in one of these sectors:  wind power.

Kevin  

 

Kevin Doyle kevinldoyle@gmail.com

14 million green jobs is huge and it would be great if it were real!

The 14 million is the number of people working in the industries that could be green.  That is, jobs that would be green if ALL electricians, agriculture inspectors, etc... were working in green industries.  14 million is a lovely pipedream, but probably not a reality.  It is too easy a number for people to poke holes in.

This is the broken window fallacy. http://en.wikipedia.org/wiki/Parable_of_the_broken_window ...

Barack Obama and the Democrat Party have picked up the rock and are aiming at the window while they tell you that ruining the US economy will create better paying jobs.  Don't believe them.

Importing some of the country's renewable energy technology is not in and of itself a bad thing. California's first boom in wind power in the 1980s was built largely around imported wind turbines. Nowadays the country has a larger wind-turbine manufacturing capacity.

But exaggerating job benefits by assuming that all the manufacturing stimulated by growth in "green technologies" would take place within U.S. borders is not helpful to anybody.

These are only my personal opinions.

Of course, the question is, how would you require such a thing?  If governments at all levels provided the finance capital for much of the activity, it could be a requirement for a loan or grant.  This needn't be as bad as it sounds, as there is much activity in the US already from foreign renewable technology builders, so domestic requirement need not mean settling for worse technology.

The important point to make is that transforming the economy into a sustainable economy will create jobs, not kill them.  And we definitely need jobs, contrary to some of the comments above -- the unemployment figures are ridiculous, as shadowstats.com has shown for years, and Kevin Phillips in Harpers recently.  And we need good jobs, now more than ever.

Part II: Prohibited Subsidies

Article 3: Prohibition

3.1   Except as provided in the Agreement on Agriculture, the following subsidies, within the meaning of Article 1, shall be prohibited:

       (a) subsidies contingent, in law or in fact(4), whether solely or as one of several other conditions, upon export performance, including those illustrated in Annex I(5);

       (b) subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.

3.2    A Member shall neither grant nor maintain subsidies referred to in paragraph 1.

The United States is a founding Member of the WTO. That means it is prohibited from granting "subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods" -- i.e., local-content subsidies.

Another relevant WTO legal text is the Agreement on Trade-Related Investment Measures (TRIMs). I reproduce here the first paragraph of its Annex:

1. TRIMs that are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article III of GATT [General Agreement on Tariffs and Trade] 1994 include those which are mandatory or enforceable under domestic law or under administrative rulings, or compliance with which is necessary to obtain an advantage, and which require:

       (a) the purchase or use by an enterprise of products of domestic origin or from any domestic source, whether specified in terms of particular products, in terms of volume or value of products, or in terms of a proportion of volume or value of its local production;  or

       (b) that an enterprise's purchases or use of imported products be limited to an amount related to the volume or value of local products that it exports.

The ASCM refers to conditions for receiving subsidies, the TRIMS to rules on investment.

That is one problem I have always had with the approach used to "sell" renewable energy to policy makers: it relies on exaggerating employment benefits, rather than stressing its environmental merits. The resulting policy can be, to use a euphamism, "sub-optimal". Consider the way that governments have supported and protected their domestic biofuels industries, for example. A stress on domestic production trumps has given us fuels with life-cycle carbon emissions that are much higher than ethanol produced in Brazil.

Unfortunately, the tendency to yoke the promotion of renewable energy to protectionistic and mercantalistic instincts is not confined to the United States.

Currently, below the radar screens of most environmental groups, there are on-going negotiations at the WTO to "reduce or eliminate tariffs and non-tariff barriers on environmental goods and services." The United States negotiators, and many other industrialized countries, consider most goods related to renewable-energy (except for ethanol, which they consider to be an agricultural product, and therefore not covered by the EG&S negotiations) to be candidates for some eventual list of environmental goods -- goods that would benefit from an accellerated schedule of tariff reductions.

But a good number of developing countries are pushing back. "Not produced here" is their attitude to dropping import tariffs on solar cells, solar collectors, wind turbines, etc.

Pity. Had California taken that attitude in the 1980s, the boom in wind power that sparked the beginning of the modern industry in the United States (and all its associated jobs in related services) would have been merely a damp squib.

These are only my personal opinions.

1) I think you're saying that the WTO restricts domestic content laws in the case of industries that are subsidized.  I don't know if providing financial capital is subsidizing -- when a bank does it its not subsidy, but when Berkeley does it its a subsidy (I'm referring to their program of loaning money for rooftop PV, paid back by savings of the PV)?  Providing finance capital could be the best thing that governments can do right now, its ridiculous that you can get a 30-year mortgage for a McMansion in exurbia but you can't buy a geothermal heat system or PV because the financing isn't there.

But then, there's also the case of not subsidizing something, but simply giving out grants, or even governmental takeover.  So, say everybody in the US read Makansi's "Lights Out" (makes a great gift), and counter to his recommendations actually, there was a hue and cry to nationalize the grid.  And there was domestic content legislation for rebuilding the grid.  Would that be against WTO rules?  It would be sort of ironic if WTO rules pushed governments to take over industries, but that sort of leads to

2. I have a hard time believing that China, Japan, Europe, and oh, just about everybody does not have some sort of domestic content (could manifest itself as trade restrictions) for some of the goods in the country, particularly those bought by the government.  Come to think of it, the NYC subway cars have some domestic content legislation -- I'm mixing this up with 1), but that would indicate that an enterprise directly run by a government can have domestic content laws.

3. I assume we agree that it's absurd to exempt agricultural goods from these rules.  So why were agricultural sectors able to get out of them but not manufacturing ones?

Article 1: Definition of a Subsidy

1.1  For the purpose of this Agreement, a subsidy shall be deemed to exist if:

     (a)(1) there is a financial contribution by a government or any public body within the territory of a Member (referred to in this Agreement as "government"), i.e. where:

        (i) a government practice involves a direct transfer of funds (e.g. grants, loans,  and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees);

        (ii) government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits)(1);

        (iii) a government provides goods or services other than general infrastructure, or purchases goods;

        (iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments;

         or

     (a)(2) there is any form of income or price support in the sense of Article XVI of GATT 1994;

         and

     (b) a benefit is thereby conferred.

All the types of transfers you describe above sound like they would fit the definition of "subsidy" to me.

So, say everybody in the US read Makansi's "Lights Out" (makes a great gift), and counter to his recommendations actually, there was a hue and cry to nationalize the grid. And there was domestic content legislation for rebuilding the grid. Would that be against WTO rules?

First, nationalization of the electricty grid ain't going to happen: apart from the political opposition it would encounter, the government doesn't have the cash. Second, even assuming such a fantasy is possible, whether or not local-content obligations would be against WTO rules would depend on whether the associated expenditure was considered a subsidy or government procurement. The rules relating to the latter are covered under the plurilateral Agreement on Government Procurement, which is less stringent on local-content preferences than is the ASCM.

I have a hard time believing that China, Japan, Europe, and oh, just about everybody does not have some sort of domestic content (could manifest itself as trade restrictions) for some of the goods in the country, particularly those bought by the government.

In a paper I wrote a couple of years ago (sorry, I don't have time at the moment to find a link), I pointed out that China did indeed have domestic-content requirements for its wind industry. That revelation came as quite a surprise to many OECD countries, and I presume led to them asking some hard questions. China is a member of the WTO, so it may have been flouting the prohibition.

I know of no remaining subsidies contingent on domestic content obligations in Japan or Europe, though it is always possible that some have gone unnoticed. But you are right, when it comes to government procurement (e.g., police cars and fire engines), preference is often given for local suppliers, though within bounds set by the Agreement on Government Procurement (especially relating to transparency in bidding procedures).

I assume we agree that it's absurd to exempt agricultural goods from these rules. So why were agricultural sectors able to get out of them but not manufacturing ones?

There is a long and convoluted history for the treatment of agricultural products under the GATT, and the WTO Agreements. It would take too long for me to go into that now. But the decision to keep the negotiations on liberalizing trade in environmental goods in the negotiating group on non-agricultural market access (NAMA) was one of those "administrative decisions" taken early on in the negotiations, which started in 2002. Naturally, Brazil and some other Latin American countries have a different opinion on the interpretation of the negotiating mandate.

These are only my personal opinions.

Thank you Ron for pointing out that the WTO agreements limit this kind of silliness in any case.

But hapa touches on the larger point. Why should a country as large and resource-rich as the US need such rules in any case? The era of cheap transportation that led to the outsourcing of manufacturing is coming to a close, the countries whose historically far lower labor costs led to the outsourcing of manufacturing are catching us up, the industries involved need the R & D talent which the US excels in....

The true meaning of life is to plant trees, under whose shade you do not expect to sit.

And I suppose that all the billions that every country including the US spends on subsidies are legal according to the WTO because they don't specify that the recipients of the subsidies have to buy goods and services domestically?

Anyway, thanks again for the learnin'

And, yes, a large part of government expenditure -- almost assuredly the majority -- around the world is neither prohibited nor actionable (i.e., it is "WTO legal") because it is for general infrastructure and is not contingent on the use of domestic goods or services.

By the way, even actionable subsidies -- e.g., investment grants to domestic producers of a particular technology -- are, by default, "WTO legal". It's just that they may be challenged by another country if that country can make a convincing case that their economic interests are being adversely affected as a result of the subsidy. A successful challenge will typically lead to the imposition of a countervailing duty by the complainant, or (occasionally) the withdrawal of the offending subsidy.

These are only my personal opinions.

Also, I did a post on Community Choice Aggregation which is similar to a municipal utility, but again, that's general investment in infrastructure and I believe doesn't involve domestic content restrictions.

Practically speaking, there seems to be quite a bit of foreign construction of wind turbine factories in the US, so maybe the question is somewhat moot (although spaceshaper, the increased cost of shipping would lead corporations seeking low-wages to go back to Mexico).  And of course, there is a case to be made for infant industry protection, although I don't know that solar and wind would fall under that -- subway and high-speed rail would, since there isn't any production in the U.S.

I heard a few years back, while we're on the subject, that the Pentagon wanted to change their domestic content minimum from 50% to 33%, and that was getting Congress hysterical, but I don't know what happened.

I'm researching an article about renewable technologies outside the US, and it seems to me that many countries, such as Germany, Spain, and Japan, have successfully used governmental policies to help along their equipment makers -- I hope to have a post about that in the future.  But thinking about it, I don't know that domestic content laws were part of those policies, I think the general support of solar or wind provided domestic manufacturers with a jump on the market, and they are now the biggest players worldwide.