Finances F**k Future Fuels

| Wed Mar. 4, 2009 10:23 PM EST
The recession has walloped investment in clean energy. That means we're no longer on track to avert the worst impacts of climate change, according to a new analysis.  (Were we ever on track?)

Anyway… New Energy Finance says that although a depressed global economy will reduce CO2 emissions, funding for energy solutions is decreasing faster and that's likely to have a worse impact on emissions in the long run.

Here are the stats: Investment in clean energy—make that, renewables, energy efficiency and carbon capture and storage—grew from $34 billion to $150 billion between 2004 and 2008. But investment needs to reach $500 billion a year by 2020. That is if we want CO2 emissions to peak before 2020.

There is currently a generalish consensus that continued growth of emissions beyond 2015 or 2020 at the latest will lead to severe and irreversible climate change (though this will only meet the IPCC's relatively generous standard not the 350ppm number that Bill McKibben wrote about recently). The new analysis predicts that a peak before 2020 now looks highly unlikely .

So what do we do? Well, for those who have enough money that they actually do things like make investment decisions, why not move your money to where it's going to count in more ways than mere money? Invest in clean energy. For those of us who do not have anything resembling spare change, invest in a cleaner energy lifestyle. You know: eat more vegetarian; buy more locally; drive less; kill your clothes dryer; air your clothes more & wash them less (another grandmother solution); buy used; think about the long run more. We've talked about these solutions before.

As for why we continue to not do these things, at least on a societal level, Chris Goodall at CarbonCommentary makes some interesting, well, commentary.

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How to Build the Smart Grid Smartly

| Wed Mar. 4, 2009 6:58 PM EST
The Smart Grid transmits information between utility companies and household appliances, allowing you to automatically dial back energy use during peak hours. "In theory, the Smart Grid offers a user-friendly way to curb our electric appetites," Jenn Kahn wrote our in energy issue last May. "The most compelling thing about the Smart Grid is that it could change the way we use energy without requiring us to do anything."

Having read our magazine, I suppose, President Barack Obama recently set aside $4.5 billion in the stimulus bill to build a national Smart Grid. (At the time Kahn wrote her piece, Smart Grid boosters were pining for a meager $400 million in R&D funding). But it turns that the Smart Grid requires us to do at least one thing before it will pay off: figure out how to build it. It's going to be harder than we thought:

Smart grid operation standards have not been designated yet despite a provision in the 2007 energy bill calling for the Commerce Department's National Institute of Standards and Technology to come up with standards with the help of the Federal Energy Regulatory Commission and other organizations so that the technology can easily communicate on the same platform -- a concept known as interoperability. That lapse combined with the general lack of public knowledge about the smart grid and how to manage energy in real-time could be a recipe for failure, [Alaska Senator Lisa] Murkowski said.
"We are playing more than a game of catchup here," Murkowski said. "This is too important to get it wrong."

So the Smart Grid isn't exactly shovel-ready. The electric industry needs nine months to a year to agree on standards for the grid, the Times reports. But Kahn's piece illustrates why rushing the grid would be a mistake:

In one scenario, the utility—and eventually, our appliances themselves—would do the thinking, raising and lowering the power pulled into our houses so subtly that we'd hardly notice it. In the current "dumb" grid, information runs in one direction: from the user to the utility. As a result, there's usually no way for consumers to know about real-time rate changes until weeks later, when the added cost shows up on their electricity bill. In a smart system, usage and rate information would flow both ways and also arrive in real time.
But is the Don't Tread on Me nation ready to hand control of the thermostat over to for-profit utilities that don't always have our financial best interest at heart? (See the 2001 Enron-triggered California energy crisis.) It's not impossible. Many of us have come around to paying our bills automatically. With the appropriate protections in place, there's no reason to think that consumers would balk at a chance to save money and energy—so long as that six-pack stays cool.
Congress will need to write those protections into law if it wants the Smart Grid to be credible with consumers. It will also need to ensure the grid doesn't become a mishmash of competing technologies:
In the absence of federal standards for the Smart Grid and smart appliances, any utility that dared to update its grid would have to gamble that its new features would remain compatible with next-generation technology. As Steve Hickok, deputy administrator of the Bonneville Power Administration, puts it, "No one wants to get stuck with a Betamax."
In both cases, only the government has the authority to pull this off. That's why, despite the time and work, the $4.5 billion is ultimately money well-spent.

Pop Culture Watch

| Wed Mar. 4, 2009 5:34 PM EST
I've been meaning to write posts about both 24 and Watchmen for a while, but haven't quite gotten around to it because I don't have anything really meaty to say.  So I'm just going to toss out a couple of offhand observations instead, mostly as an excuse to host an open thread on either or both of these fine Hollywood products.

First, 24.  It's turned into exactly the train wreck that I was afraid of when the season started.  Back when Jack Bauer merely tortured people as part of the script, that was one thing.  Your mileage might vary on whether you felt like watching it, but in the end it was just modern-day Dirty Harryism.  Nothing to get all that worked up about.  But this season Jack isn't just spontaneously beating up on bad guys who know where the ticking time bombs are buried.  No.  This season Jack is beating up on the bad guys as part of a premeditated strategy and then talking about it endlessly.  And so is everyone else.  The writers are no longer content to merely suggest that (in their fictional universe) a bit of extralegal torture might sometimes be justified because it gets results.  They're bound and determined to explicate it on screen every single time it happens and demand that we, the audience, actively approve of it. This is not only depraved, it's lousy storytelling too.  All the usual 24 preposterousness aside, it's made the show cringe-inducing this season.

Next, Watchmen.  Like many fans of the comic, I suppose, I've been waiting for it with a mixture of both anticipation and trepidation.  Anticipation, of course, because it's a seminal comic and I'm eager to see how it gets translated onto the screen.  Trepidation because I don't think it will translate well.  This isn't because I think it's "unfilmable," or because I think Zack Snyder will necessarily ruin it.  (I'm agnostic about that.  I thought 300 was fairly entertaining, so I don't hold that against him.)  No.  Oddly enough, it's because I think the story is simply too absurd to survive the transition to film.  I realize that proposition is a little hard to defend, but there's a sense in which a story that tries to treat costumed superheroes as real people is much harder to accept than one in which the essential burlesque of the superhero genre is simply taken for granted.  Once you start to interrogate the whole concept, it's much harder to successfully suspend disbelief.

Now, obviously that didn't hurt the comic.  (Not much, anyway.)  But I think it's harder to pull this off on the screen, which works by default in a realist mode, than it is in a comic book, which doesn't.  Or so it seems to me, anyway — though I cheerfully admit that the whole argument sounds kind of half-baked.  Feel free to mock me in comments.

This won't stop me from seeing Watchmen, of course.  Maybe I'll even see it on Friday if I can find anyone to go with me.  The question is: how many people who haven't read the comic a dozen times will do the same?

Peter Bergen: "This Is Not Your Father's Taliban"

| Wed Mar. 4, 2009 5:11 PM EST
Testifying today before a House subcommittee, terrorism expert and Mother Jones contributor Peter Bergen (read him here, here, and here) offered his assessment of where things stand in Afghanistan. His comments make for interesting reading. He's particularly insightful about how the Taliban has evolved since 9/11. From his written statement:
But this is not your father’s Taliban. Where once the Taliban had banned television, now they boast an active video propaganda operation named Ummat, which posts regular updates to the Web. They court the press and Taliban spokesmen are now available at any time of the day or night to discuss the latest developments. The Taliban had banned poppy growing in 2000; now they kill government forces eradicating poppy fields, and they profit handsomely from the opium trade. The Taliban also offer something that you might find strange, which is rough and ready justice. The Afghan judicial system remains a joke, and so farmers and their families--the vast majority of the population-- looking to settle disputes about land, water and grazing rights can find a swift resolution of these problems in a Taliban court. As their influence extends, the Taliban has even set up their own parallel government, and appointed judges and officials in some areas.
The Taliban’s rhetoric is now filled with references to Iraq and Palestine in a manner that mirrors bin Laden's public statements. They have also adopted the playbook of the Iraqi insurgency wholesale, embracing suicide bombers and IED attacks on US and NATO convoys. The Taliban only began deploying suicide attackers in large numbers after the success of such operations in Iraq had become obvious to all. For the first years after the fall of the Taliban suicide attacks were virtually unknown in Afghanistan, jumping to 17 in 2005 and 123 a year later. Just as suicide bombings in Iraq had had an enormous strategic impact—from pushing the United Nations out of the country to helping spark a civil war—such attacks also have made much of southern Afghanistan a no-go area for both foreigners and for any reconstruction efforts.

Geithner Vows Tax Haven Crackdown

| Wed Mar. 4, 2009 4:55 PM EST

We've known for a while now that 83 of the 100 biggest companies in the U.S. have subsidiaries in tax havens, a practice that lets those corporations skirt an estimated $100 billion in yearly tax liabilities.

On the list of 83 tax-dodgers, you'll find the quasi-nationalized Citigroup (which takes the top prize, with 427 subsidiaries in tax shelters), AIG, Morgan Stanley, Bank of America...

You get the idea: We've thrown hundreds of billions of dollars at these institutions that actively search for ways to avoid paying their full tax bill. Treasury Secretary Tim Geithner addressed the problem Wednesday during his testimony before the Senate Finance Committee:

Feeding the Beast

| Wed Mar. 4, 2009 3:10 PM EST
Ross Douthat takes a guess at what Barack Obama is up to:

What you see in his budgeting proposals, I think, is the liberal equivalent of the conservative attempt to "starve the beast." In both the Reagan and Bush eras, Republicans passed tax cuts and ran up large deficits while hoping that by starving the federal government of revenue they would curb its long-run growth. Obama's spending proposals would effectively reverse that dynamic — they would create new spending commitments and run up large deficits, in the hopes that the dollars poured into health care and education will create a new baseline for government's obligations, which in turn will create the political space for tax increases on the middle class. Like the starve-the-beast approach, the Obama strategy puts off the hard part till tomorrow: Give them tax cuts today, conservatives said, and they'll swallow spending cuts tomorrow; give them universal health care, universal pre-K, subsidies for green industry and all the rest of it today, liberals seem to be thinking, and they'll be willing to pay for it tomorrow.

I think this is pretty much right, and it's exactly what conservatives are afraid of.  As Bill Kristol knows all too well, social spending programs, once they get started, tend to be pretty popular.  The odds of deep sixing, for example, national healthcare after it's up and running is essentially zero.  And once it's up and running, taxes will follow because most Americans would rather see their taxes go up than their healthcare services go down.

Of course, this mostly applies to broad-based programs.  Smaller ones are still hard to get rid of, but not impossible.  It's the bigger ones that become third rails.  Both Obama and the GOP are smart enough to know this, which is why Obama wants to swing for the fences and congressional Republicans want to become the Party of Nyet.  If they don't stop him now, they never will.

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US To Shed Contractors in Iraq, But It Won't Be Easy

| Wed Mar. 4, 2009 2:41 PM EST
General Ray Odierno, the US commander in Iraq, will seek to reduce the number of private contractors in the country by five percent each quarter, according to a directive obtained by the Christian Science Monitor. He is targeting 50 bases and smaller installations for reductions, where, so goes the thinking, Iraqis will begin to take over many of the responsibilities currently handled by private firms, such as laundry, driving, cooking, etc. There are currently about 150,000 contractors in Iraq, down from an all-time high of about 200,000. Some 39,000 of these are Americans, 70,000 are "third country nationals," and 37,000 are Iraqis--though according to the Pentagon these numbers are better thought of as guestimates; precise numbers are unavailable.

With US troops getting ready to leave Iraq by summer 2010 (itself a target date that is almost sure to be revised), a reduction in contractors only makes sense. But it will not be as easy as one might think. From the Monitor:
But reducing the number of contractors may not be easy. The support these contractors provide are sometimes critical, and difficult to eliminate quickly. Further complicating the matter is the fact that many of them use American equipment, which may or may not be left behind.
As for hiring Iraqis, apart from the security concerns posed by employing them for certain jobs, many Iraqi workers need to be trained before they can take over jobs such as base maintenance overnight. A training effort is now being planned to ensure Iraqis have the skills to take over these jobs, says a senior official in Baghdad.
In the interim, US forces may be forced to fill the void left by some of these contractors on everything from training Iraqi security forces to driving trucks, which could take them away from their military duties, says a former senior commander.

The Market

| Wed Mar. 4, 2009 2:34 PM EST
One of the memes making the rounds in the leftosphere these days is that the media pays way too much attention to the stock market.  There's a lot of justice in this.  Day-to-day fluctuations are pretty meaningless, and the media's longstanding insistence on inventing reasons to explain each day's results has always been ridiculous.

But this critique can also be taken too far.  Just because Jim Cramer has the emotional maturity of a five-year-old doesn't mean that the S&P 500 has nothing to tell us.  It can tell us, for example, that investors have little faith in the near-term earning power of American industry.  It can tell us that lots of 50-somethings have suddenly seen their retirement savings cut in half and are scared as hell about it.  And if Robert Barro is right, it can tell us how likely it is that a recession will turn into something much worse:

The U.S. macroeconomy has been so tame for so long that it's impossible to get an accurate reading about depression odds just from the U.S. data. My approach uses long-term data for many countries and takes into account the historical linkages between depressions and stock-market crashes.

....In the end, we learned two things. Periods without stock-market crashes are very safe, in the sense that depressions are extremely unlikely. However, periods experiencing stock-market crashes, such as 2008-09 in the U.S., represent a serious threat. The odds are roughly one-in-five that the current recession will snowball into the macroeconomic decline of 10% or more that is the hallmark of a depression.

Now, it's worth pointing out that almost all of Barro's data comes from developing countries.  There have been only a tiny handful of post-WWII depression-level events in rich countries.  Still, events being what they are, you might say that we are all banana republics now, and if Barro is right the Dow is telling us that we might have as much as a 20% chance of spiraling into depression.  That's worth listening to.

Vilsack Outs a Bad Contractor: Where Do We Find Stan Johnson?

| Wed Mar. 4, 2009 1:36 PM EST
Who is Stan Johnson? That was the mystery in the White House press room on Wednesday morning.

Secretary of Agriculture Tom Vilsack and Director of Homeland Security Janet Napolitano spoke on behalf of the Obama Administration's new initiative to eliminate waste and abuse from federal contracting. As part of his speech, Vilsack mentioned that he had learned of a USDA contract worth $400,000 that career officials in the department had flagged as "unnecessary." Vilsack was vague, saying only that the contract had come late in the Bush Administration and was likely awarded due to contacts. He added that the contract included questionable international travel.

Pressed by reporters for additional information, Vilsack looked to Press Secretary Robert Gibbs, as if asking for permission. When Gibbs did not object, Vilsack revealed that the contract had gone to a man named Stan Johnson, a major operator in Iowa who Vilsack, former governor of Iowa, said he knew personally. (One assumes Vilsack will not be invited to the next Johnson family dinner party.) So the question is, who is Stan Johnson and what did he do (or not do) as part of his "unnecessary" federal contract?

A little bit of online sleuthing reveals that Johnson is primarily a poobah at Iowa State University, having once headed ISU's Center for Agricultural and Rural Development and the university's extension school. Other credits on a lengthy resume: Board of Directors of the North Central Regional Center for Rural Development, executive director of the Food and Agricultural Policy Research Institute, and chair of the Board of the DC-based Institute for Policy Reform.

Not bad for a guy who got his start studying agricultural economics at Western Illinois University. One can see how Johnson had the contacts he needed to get a sweetheart deal from the US government. So what was the contract?, a website that stores info on federal contracts and grants, says that a man named Stan Johnson has a $20,000 contract with the Forest Service in Alaska. That's not likely to be the right man. Clearly more information is needed. Mother Jones spoke to the USDA main office, which said it is gathering information for reporters, and left a message for the press staff at the Forest Service. We'll let you know if we hear more.

Gordon and Barack

| Wed Mar. 4, 2009 1:10 PM EST
It now seems to be nearly universally agreed that Barack Obama snubbed British PM Gordon Brown pretty hard yesterday, holding no formal press conference and taking only a few questions.  But why?  Alex Massie speculates that Obama just didn't want to deal with foreign reporters:

Obama has been briefed about the British press corps and sees no reason to humour them. This would not be wholly unsurprising: Fleet Street's finest are viewed as scatalogically-obsessed, bottle-throwing, teenage yobs far too fond of relieving themselves behind the bushes in the Rose Garden, or worse, in the East Room's pot plants.

Joshua Keating figures Obama's reasons are more prosaic:

I think his motives are actually a bit colder. Obama's most powerful diplomatic weapon right now is his own international popularity, and he seems to be making it clear that he won't share it with just anybody. 

Obama giving the cold shoulder to Brown probably doesn't mean he has any less respect for the special relationship with Britain than any of his predecessors. More likely, and bluntly, he probably just thinks of Gordon Brown as a bit of a loser. Why roll out the red carpet for guys like Brown and Taro Aso who will likely be out of office soon anyway? Something tells me that when Dmitry Medvedev or Hu Jintao visit the White House, the Obamas will break out the good china.

Poor Gordon.  He's the Herbert Hoover of British prime ministers: a guy who took over at precisely the wrong moment and hasn't been able to figure out since how to deal with the hand he's been dealt.  He probably never had a chance.