Posted on July 24, 2019 by Rich Powell
Below is my testimony before the House Committee On The Budget on the cost of climate change on July 24, 2019.
Good morning Chairman Yarmuth, Ranking Member Womack and members of the committee. My name is Rich Powell. I lead ClearPath, a non-profit advancing conservative policies that accelerate clean energy globally. We advocate markets over mandates, and innovation over regulation. An important note: we receive zero funding from industry.
Given this committee’s vital role in America’s climate policy, I will today discuss a few topics:
Before diving into budget policy, I find it’s always important to address the elephant in the room. Climate change is real, global industrial activity is the dominant contributor, and the challenge it poses to our health, our security, our agriculture, our infrastructure, and our communities merit significant action at every level of government and the private sector. The National Oceanic and Atmospheric Administration estimates that the five-year running average damages of weather events has risen five fold over the past 20 years from $20 billion to $100 billion annually.
As you also well know, managing our national debt is another defining challenge of this century. This committee must balance both demands.
First, we must remember the global nature of this challenge. America should do its part, but even if the U.S. eliminated greenhouse emissions tomorrow, the growth in CO2 through 2050 by developing Asian countries alone would exceed total U.S. emissions today. For too long, this sobering reality was used to justify inaction. Instead, it should serve as a call to action towards an immense opportunity -- high-paying jobs, a manufacturing renaissance, thriving U.S. exports.
Second, we need to reorient our climate policy mindset from spending to investing.
As a consultant at McKinsey & Company, the most important business philosophy I used came from the great Stephen Covey: Begin with the end in mind.
On climate change, our end ought to be developing countries buying clean energy instead of traditional technologies.
We cannot spend our way to that end -- the global energy system is too large, our budget too small. Rather, we must invest scarce taxpayer dollars into clean innovations that the global economy will choose on their economic merits. This is a market-based climate solution.
Unfortunately, our energy debate is often caught between extremes. On one side, some advocate virtually no Federal investment. Others seek permanent subsidies to favored technologies.
To the first point -- why shouldn’t clean tech emerge like Silicon Valley innovation? Unfortunately two people in a garage rarely innovate advanced energy - it requires massive scale, and regulations scare power producers away from new tech. The oft described “valley of death” between a lab and a profitable business is deep.
Taxpayers supported all new energy sources in recent decades. Going forward, government should neither command-and-control a solution, nor do-nothing-and-hope. Government should support a wide portfolio of clean innovations, and ramp down support as technologies mature. The potential clean returns of such investing are literally world-changing.
Third, let me address the importance of strong objectives in clean energy investments.
When DOE has clear goals -- based on market relevant cost and performance targets -- along with strong leadership and accountability, and steady investments, it produces breakthroughs. The SunShot initiative to radically decrease the cost of solar is a strong example.
Another prime example: since 2013, DOE has invested in next generation small modular nuclear reactors (SMRs) in partnership with NuScale. Earlier this week, NuScale announced that the U.S. Nuclear Regulatory Commission completed the second and third phases of design review. They are a big step closer to marketing the world’s first commercial SMR, potentially by 2026.
Fourth, Congress must grow past the outdated mindset of basic-only research.
Nothing has illustrated this more than the shale gas boom. This breakthrough produced an economic windfall estimated at $100 billion annually, and has driven power sector emissions down since 2005. It emerged from combined basic and applied research, and targeted tax incentives, and private sector contributions.
We should remember that our global competitors have no philosophy against applied research. The Chinese have scooped up innovators struggling to commercialize in the U.S. A basic-only research agenda is essentially a subsidy to the Chinese economy -- not a wise investment.
Finally, how do we build on your strong bipartisan record of clean innovation?
The FY18 & 19 appropriations bills were great successes -- ClearPath applauded the critical investments in advanced nuclear, carbon capture, grid-scale storage and other clean energy technologies.
Lawmakers maintained U.S. leadership in clean innovation -- a principle essential to prioritize again in your FY20 bills. Steady DOE funding is required, but even more important are direction and goals to ensure dollars are invested wisely.
Thank you again for the opportunity to testify. ClearPath is eager to assist the Committee in this important work.
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