Kudos Team Warren
Elizabeth Warren’s new plan for fighting climate change isn’t a little bit better than the “Green New Deals,” it’s a lot better.
Psychologically, Americans love a good fight, especially one where the underdog can come from behind and win. America could be Sylvester Stallone’s character before he takes on Drago in Rocky IV. Rocky is old and out of shape — just like America on climate policy. But he sees the urgency in the fight. He gets in shape quickly, to defend his nation and avenge his friend. He fights back to win a fight he easily could have lost.
Team Warren’s new plan for tackling climate change gets both the urgency of the problem and America’s fighting spirit. For Team Warren, the point isn’t to mitigate, or to slow, or to lessen the impact of climate change. It’s to fight it. In a policy conversation crowded with Green New Deals, Team Warren looks to far more compelling historical analogues than the New Deal. From the American Industrial Base fighting Nazi aggression, to the space race against Russia under President Kennedy, Team Warren is invoking historical parallels that red blooded Americans can whoop and pump fists and rally behind.
What the many Green New Deals miss is that the original New Deal wasn’t all that popular — nor was it all that effective in reducing unemployment. What really put America back to work and kept it there was “Freedom’s Forge” — the American industrial policy to make “war materials” not just for America, but for all of the allied nations. Building on the production genius of Henry Ford, Freedom’s Forge took American-style mass manufacturing to the next level and helped win the war. But it did more than that. After all the smoke had cleared, WW2 investments in manufacturing continued to sustain American prosperity for decades after. It’s easily visualized in the unemployment statistics from 1920–1960:
And that’s what’s exciting about Team Warren’s newest plan. It’s a lot less Green New Deal and a lot more Freedom’s Forge for Electrification. A lot more Space Race for green tech. A lot more Marshall Plan, even. And despite what some might think, this is a remarkably centrist and positive shift away from the leftist narrative of the Green New Deals. And while it’s an important departure, it’s worth critiquing in the spirit of improvement.
What Warren gets is that, if we are going to adequately address climate change — if we’re going to get serious about electrification and decarbonizing — we need to manufacture a very large number of things. We need to manufacture electric heat pumps for 120 million American homes and 6 million commercial buildings. We need to manufacture 200+ million electric vehicles. We need 90 million solar rooftops, tens of millions of wind turbines, and billions of batteries, not to mention new biofuel industries, new farming methods and technologies, and new approaches to forestry. It’s jobs for days. Actually, it’s jobs for decades.
And manufacturing is just the tip of the jobs iceberg. The real jobs are in the deployment, installation, connection, and maintenance of all of these items. Beyond purely factory-based manufacturing jobs, many of these other jobs are permanently local and un-exportable, because they have to be completed here, in our built environment. Sure, you can import a car from Asia and run it tomorrow without ever having to employ any American labor. But when you put solar panels on an American roof and a heat pump and double-glazed windows in an American basement, you are creating jobs that simply cannot be exported, and are very difficult to automate. You are creating jobs that play to America’s strengths — contractors, mom and pop operations, and other small businesses doing local installation and maintenance work, all over the country, forever and ever, amen.
We are years, not decades, away from an American economy where clean energy is cheaper than fossil fuels have ever been — where clean energy underpins a healthier, happier, and economically stronger America.
Between installing the new HVAC systems, the solar panels, the batteries, the new electrical circuits, the new plumbing, and on and on, domestic job creation will be truly enormous, stretching into every corner of the country — far more than the 1 million jobs that Team Warren hopes for. In fact, all of these systems will create so many jobs that we’ll need to enormously automate manufacturing with advanced robotics, just to avoid the labor shortage. And this will be America’s advantage globally. Up to now, manufacturing jobs have gone to the lowest cost labor markets in the world, hurting American manufacturing, but also leaving an enormous opportunity for American investment in advanced manufacturing automation — the next stage of industrial efficiency. Advanced automation will make American goods outcompete those from even the lowest labor cost nations.
The second effort Team Warren nods to, the space race, was all about technological leadership. The day after Sputnik’s orbit was announced, the US created the Defense Advanced Research Projects Agency (DARPA, though originally just “ARPA”) to “prevent technological surprise.” Since then, DARPA has been perhaps more important to American technological advantage than any other agency or effort. It gave us GPS, the internet, robots, autonomous cars, AI, and practically everything that Silicon Valley has ever taken credit for. More specifically, in her plans, Warren mentions ARPA-e, which was the Department of Energy’s effort to create its own, dedicated DARPA. And where DARPA has a $3bN budget, ARPA-e’s has nervously oscillated around $300M.
While we absolutely need to radically increase ARPA-e’s budget (I testified on Capitol Hill to this effect), I get nervous when team Warren leans on NIH as a model, or talks about National research centers as analogs. These aren’t our highest performing centers. DARPA, by contrast, can choose from all over the nation for the best teams to innovate. It doesn’t care whether they are in universities, big companies, small companies, garages, or national labs. NIH isn’t as agnostic, and consequently doesn’t always get the best of America’s innovators.
I have always strongly believed the US needs a new kind of National Lab. It would be completely distributed and would put individuals, startups, odd private/public partnerships, even students (as opposed to their professors) on a level playing field. It would fast track contracting and make the overhead for being on government contract so low that everyone could afford to do this research work. This is how we could get all of America involved in innovating the technologies we need. It wouldn’t be siloed in ossified cold-war research models.
And truly, more modern research is warranted. There are still very hard problems left to solve in decarbonizing, and Warren mentions a few. Decarbonizing long-distance air travel is very difficult but could be done with biofuels. Plastics in the ocean, as well as Nitrous oxide emissions in the creation of the Olefin intermediaries, are challenging, and our most likely pathways to a net carbon zero materials economy is through Synthetic Biology — through imagining materials that can biodegrade and return to natural cycles in real time. Cement and concrete production are also particularly difficult, but also probably our best opportunity at large scale carbon sequestration because concrete is the only human-created material flow on the same scale as carbon dioxide production.
That all said, Team Warren does make it seem like the climate fight is a bit more of a science project than it really is. There is already an obvious, attainable, no-miracles-required pathway to at least the first half of decarbonizing — right through electrification. Far be it from me, the founder of an independent R&D lab, to minimize the role of research in the climate fight, but I’m concerned that the funding in Warren’s plan appears to be tipped heavily towards research. Research is good, yes, but holding it above all else makes the climate fight seem more like a war for the nerds — a far less inclusive and less exciting part of a plan that otherwise looks like industrial mobilization. Instead, I’d prefer to see more of the money going to scale-up and deployment efforts (to be fair, some of this is done under her federal procurement plan, but not enough, nor in enough detail to judge).
If the US can get green financing right domestically, the country will be well positioned to export not only clean technologies, but also the financial products and services that enable them.
Another important thing Team Warren misses is the importance of finance innovations to make this all work. All of the technologies we talk about in the electrification and decarbonization of the nation (and the world) are high in upfront capital cost and low in ongoing fuel costs — the opposite of fossil fuels. That means purchasing the right thing looks more like financing a home than anything else. And while team Warren does mention the challenges for low income and regional communities, if we are going to make sure that everyone can afford to join the fight against climate change, the government needs to support the new financing institutions that will underpin this transformation. It’s not like it hasn’t been done before. The US pioneered both auto-financing as well as home-financing and backed it with institutions like Fannie Mae and Freddie Mac. If the US can get green financing right domestically, the country will be well positioned to export not only clean technologies but also the financial products and services that enable them.
The third pillar of Warren’s plan, the Green Marshall plan, is both insightful and commendable — and still a much better analogue than the New Deal. At the end of the day, it will be up to a few large industrialized nations to produce the technologies that will enable the global energy transition. A Marshall plan would enable the US to have the seat at the head of that table. Just this week, I happened to sit with the assistant secretary to the current state department (He was meeting with Silicon Valley energy “thought leaders”). Traditionally, the state department has played an important role in protecting American fossil fuel interests. A Green Marshall plan could underpin a clean tech diplomacy that’s better for all nations.
So far, I have been tempted to critique all of the Green New Deals and climate change platforms 2020 candidates have proposed. But I don’t think that would be very flattering, or a very good use of anyone’s time, so I’ll probably limit myself to boosting good plans. Before this Team Warren announcement, Inslee was a clear leader, though his plan misses big opportunities — and, like so much environmentalism before it, leads with gloom and doom. So far, Warren’s plan is less detailed, but what she has done here is lead with patriotism and the positive economic benefits of fighting climate change. Not only that, but she has rooted them in the kind of historical analogs that still give people chills at the movies. Team Warren is on the scent of the positivist and centrist global climate fight story that can both win elections and motivate Americans — and for that matter, the rest of the world — to get the job done.
Right now, on climate change — the only issue that will motivate me to get my American citizenship and vote in 2020 — Senator Warren has a clear lead. Her story will become even more powerful when it becomes clear just how much of an economic boon the fight against climate change will be for the country. We are years, not decades, away from an American economy where clean energy is cheaper than fossil fuels have ever been — where clean energy underpins a healthier, happier, and economically stronger America.