Opportunities in a Downturned Economy
Four Experts Talk About Positive Environmental Action That Can be Taken Now
Dukenvironment recently posed these questions to a panel of four Nicholas School experts. They responded with insightful commentaries on opportunities that exist in four critical areas: energy and climate policy; economic stimulus package investments; habitat conservation and ecosystem services; and environmental education.
1. Climate and Energy Policy: Time to Put a Price on Carbon
by William L. Chameides
Dean of the Nicholas School of the Environment
One of the few positive aspects of the global recession is that it presents us with an incentive to re-examine our economic system and correct a fundamental dysfunction at its core.
There’s a distortion in the marketplace in terms of energy costs. The true cost of fossil fuels is not reflected in what we pay at the pumps or in our monthly energy bills. These payments don’t include what economists call external costs—the environmental and health impacts associated with the extraction of and pollution from fossil fuels. But make no mistake. While we don’t pay these costs up front, we pay them eventually in higher health care costs and higher costs for ecosystem services such as clean water. In the case of greenhouse gas pollution and global warming, many of us may actually escape the onus of making these deferred payments, but our children won’t.
As our leaders think about ways to jumpstart the economy, it’s a great opportunity for them to address this problem by passing legislation that puts a price on carbon.
My preference, one shared by many scientists and economists, is a cap-and-trade system. But a carbon tax, if it’s properly structured, could also work. And there’s also the option of putting a price floor on gasoline.
The bottom line is that any of these options would help eliminate the apparent competitive advantage fossil fuels now enjoy over “higher priced” renewable energy—an advantage that is a reflection of a distortion in the marketplace rather than a true price differential. Removing this distortion can be achieved only if the environmental and health care costs of using fossil fuels are internalized into the price we pay for the energy they generate.
Taking such a step at first might seem like a drag on the economy, but the actual effect would be just the opposite. It would send a clear signal to producers, investors and consumers that, despite any temporary declines in fossil fuel prices, renewable low-carbon energy is the fuel that will power future economic growth and create new jobs for generations to come.
Clean, renewable energy technologies like wind, geothermal power and solid biomass will be cost-competitive with conventional fossil fuels by 2030, whether or not our leaders today have the courage and foresight to put a price on carbon. If the true cost of fossil fuels was factored into their price, however, sustainable low-carbon technologies already would be the cheaper option. So why are we waiting?
2. Economic Stimulus Package: A Silver Lining for Clean Energy
by Richard G. Newell
Gendell Associate Professor of Energy and Environmental Economics
On Feb. 17, President Obama signed the American Recovery and Reinvestment Act of 2009—or economic stimulus package—valued at $787 billion by the Congressional Budget Office. While motivated by the economic downturn we are now experiencing, the stimulus package contains substantial energy-related investments that advance longer-term environmental, security, and innovation goals at the same time they boost near-term economic activity.
The estimated value of the energy-related stimulus provisions is about $64 billion. They include: $15.8 billion to make homes and government buildings more energy efficient; $11 billion for “Smart Grid” research and development, pilot projects and other funds to modernize the electricity grid, making it more efficient, reliable and capable of transmitting renewable and other energy sources; and $2.5 billion for research, development, and deployment of energy efficiency and renewable energy technologies at universities, companies and national laboratories.
Also included are: $3.4 billion to support demonstration projects for carbon capture and sequestration of CO2 emissions at industrial facilities and fossil fuel power plants; $6 billion in federal “loan guarantees” for renewable energy power generation and transmission projects; and $2 billion for basic energy science research, including $400 million to fund a new Advanced Research Projects Agency focused on high-risk, high-payoff research on energy sources and energy efficiency.
And there’s more.
The stimulus also contains $2 billion in grants for U.S. manufacturers of advanced vehicle batteries and battery systems, to help enable electrification of the transportation system; $1 billion for other energy efficiency programs, including alternative fuel trucks and buses, transportation charging infrastructure and energy-efficient appliances; and a whopping $20 billion in the form of extended tax credits for renewable energy production from sources such as wind, biomass, geothermal and hydropower.
These are large investments by any standard, and they have the potential to substantially advance the achievement of energy and environmental policy goals.
For those goals to be attained over the longer run, however, longer-term public support for clean energy research will be required, as well as the establishment of an economy-wide policy for reducing greenhouse gas emissions to encourage cost-effective technology deployment and innovation in the private sector.
3. Conservation and Restoration: Making Smarter Use of Natural Features
by Curtis J. Richardson
Professor of Resource Ecology and Director of the Duke University Wetland Center
Necessity is the mother of invention, and one positive aspect of a downturned economy is that it forces us to take stock of missed opportunities and make smarter use of the natural features of our landscape.
We have millions of acres of land in this country that are so-called “marginal lands.” They are too wet or too degraded, or have soil too poor to be used for growing traditional agricultural row crops. Rather than sit idle, they could be converted into farms for growing high-yield trees, switchgrass and other plants used for making cellulosic biofuels. Putting these marginal lands to use growing biofuel crops well suited to their natural conditions is a sustainable solution that would create jobs, add to our nation’s energy security, and take pressure off productive farmland, much of which is now being used to grow corn and other crops for ethanol rather than food.
The weakened economy also presents us with practical incentives for restoring more wetlands. Restoring these complex landscapes, rather than draining and developing them, can be a relatively low-cost, long-term fix to the nation’s natural water-supply and water-quality infrastructure. Our SWAMP research site in Duke Forest is an example of this. By investing about $2 million to restore a severely degraded and eroded 14-acre wetland-stream-lake ecosystem at the edge of campus, we’re able to treat stormwater runoff from 1,200 acres in Durham. We’ve reduced nitrate levels going into our drinking water reservoir downstream by 64 percent, and phosphorus levels by 28 percent. Compared to the costs of other water-treatment options, that’s a solid return on investment.
Porous pavement is another low-cost option worth considering. It uses a permeable pavement surface over an underlying stone reservoir to temporarily store surface runoff before allowing it to seep back naturally into the subsoil. Porous pavement is already being used in many European cities, and holds potential for reducing surface water runoff from hundreds of thousands of acres of parking lots in the United States, too, thus helping to improve water quality and aid our overtaxed and aging urban stormwater systems.
You don’t need to be a city or major university to make effective use of the natural features of your landscape, of course. Individual property owners can take advantage of them, too. Planting trees near your home or building can reduce solar heating problems in the summer and reduce energy bills. Open-air ventilation systems can reduce cooling costs. Rain barrels and rainwater cisterns—which our forefathers used out of necessity 100 years ago—can cut your water bill. A backyard rain garden can curb stormwater runoff while attracting birds and other desirable wildlife to your yard.
4. Environmental Education: Be Ready for the Opportunities that are Coming
By Sherri C. Nevius
Program Director, Duke Environmental Leadership Program
With all of President Obama’s green economy initiatives and a surge of organizations implementing green initiatives of their own, environmental and business professionals are looking to advance their management and leadership skills to stay on top of their game and be ready for the opportunities and changes that are coming.
I’m talking to prospective students every day who are looking to update their education and skills but can’t take time off from their careers and families. With the tough economy, it’s not feasible. They need to continue earning a paycheck and maintain their seniority.
The Duke Environmental Leadership (DEL) program gives working professionals a chance to do just that. We’re unique, in that we offer a Master of Environmental Management (MEM) degree in Environmental Leadership that is mostly online, complemented by five brief place-based sessions over two years. This allows our students to advance their careers while maintaining their commitments to employers and families, in an economy where leaving your job for two years to update your education might be too risky.
Applications for the online MEM program are up 10 to 20 percent this year, and more of the applicants are coming from the private sector. We’re getting inquiries from Wall Street and the banking industry, and from large companies like Harley-Davidson. This trend has been building for several years, but it has accelerated during the past year. In 2004, the first year we offered the degree, nearly half of our students came from local, state and federal governments and only 13 percent came from business. Today, we have more of a balance: 42 percent of the students come from government and nonprofits, and 42 percent come from private industries or consulting firms. We expect to maintain a similar balance in the future. Our students include scientists, biologists, engineers, directors, managers, vice presidents, sustainability coordinators and teachers. This diversity reflects growing interest from the corporate sphere, along with continued strong interest from nonprofits, government and academia. It’s one of the things that makes the program so appealing to students.
In addition to getting more applicants, we’re also getting more qualified ones. On average, we get students with between five and 15 years of environmental-related experience, but our current applicant pool has even more. Many are in a position to move into senior leadership positions within their organizations while in the program or soon after receiving their degree.
What does all this say about environmental opportunities in today’s economy? I think it clearly says that senior-level management in all sectors of the economy, especially the private sector, anticipates long-term future growth in fields related to the environment. They are looking to invest in new management and leadership skills so their organizations are in position to benefit from Obama’s green initiatives and from increased consumer demand for environmentally responsible organizations, products and services. Going green isn’t going away. It’s the new way of doing business.
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