GlobalWarming:ARealSolution

byRobertF.KennedyJr.,RollingStone,June18,2007
InearlyMay[2007],100ofthenationstopbusinessleadersgatheredforasummitataprivate
resortnestledon250acresinCaliforniasNapaValley.Theattendees,gatheredattheinvitation
ofSiliconValleyventurecapitalists,includedCEOsandothertopexecutivesfromsuchFortune
500corporationsasWalMart,Proctor&GambleandBP.Theyhadbeeninvitedtodiscussways
toendAmericasfossilfueladdictionandsavetheworldfromglobalwarming.Butinreality
theyhadcometomakemoneyfortheircompaniesandthatmayturnouttobethethingthat
savesus.
Forthreedays,theexecutiveslistenedastheircolleaguesandbusinessrivalsdescribedhowthey
areusingnewtechnologiestoweanthemselvesfromoilandboosttheirprofitsintheprocess.
DuPonthascutitsclimatewarmingpollutionbyseventytwopercentsince1990,slashing$3
billionfromitsenergybillswhileincreasingitsglobalproductionbynearlyathird.
WalMarthasinstallednew,energyefficientlightbulbsinrefrigerationunitsthatsavethe
company$12millionayear,andskylightsthatcututilitybillsbyupto$70,000perstore.The
company,whichoperatesthenationssecondlargestcorporatetruckfleet,alsosaved$22
millionlastyearjustbyinstallingauxiliarypowerunitsthatallowdriverstooperateelectric
systemswithoutidlingtheirvehicles.Inamovewithevenmorefarreachingpotential,WalMart
hasordereditstrucksupplierstodoublethegasmileageofthecompanysentirefleetby2015.
Whenthosetrucksbecomeavailabletootherbusinesses,Americawillcutitsdemandforoilby
sixpercent.
Theexecutivesgatheredattheretreatwerentwaitingaroundforfederalsubsidiesornew
regulationstotiltthemarketintheirdirection.Businesslogic,notgovernmentintervention,was
drivingthemtocutenergycostsandinvestinnewfuelsources...
Asthediscussionsatthesummitdemonstrated...Americadoesntneedtowaitforfuturistic,
pieintheskytechnologiestocutitsrecklessconsumptionofoilandcoal.Ourlast,besthopeto
stopclimatechangeisthefreemarketitself.Thereisgoldingoinggreen,andthesamedriveto
makeabuckthatcreatedglobalwarminginthefirstplacecannowbeharnessedtoslowthe
carbonbasedpollutionthatisoverheatingtheplanet...
Sowhy,ifwecanprofitablyslashplanetwarmingpollution,doestheworldfaceaclimate
crisis?Theanswerissimple:marketfailure.
Theglobalclimatecrisisistheresultnotofanorderlyfreemarket,butofadistortedmarketrun
amok.Atrulyfreemarketistheplanetsbestfriend.Freemarketspromoteefficiency.
Efficiency,afterall,meanstheeliminationofwasteandpollutioniswaste...
Herearesixmodest,triedandtruemechanismswecanimplementtoquicklyfosterfreemarket
solutionstoglobalwarming:
FeebatesCaliforniaisconsideringimposinga$2,500feeonHummersandotherlowefficiency
automobilesandthenrebatingthatmoneytodriverswhochoosetopurchasemoreefficient
carslikehybrids.Thiscrossbetweenafeeandarebatemotivatesmanufacturerstodevelop
lesspollutingvehiclesandisaperfectexampleofhowtogiveconsumersanincentiveto

conformtheirselfinteresttothepublicinterest,turningeverydriverintoaguerrillawarriorin
thebattleagainstglobalwarming.
CapandTradeOneofthemosteffectivetoolsforharnessingmarketstosavecivilizationisa
mandatorycaponplanetwarmingpollutiononethatbeginsbycuttingemissionsnowandthen
reducesthemeightypercentby2050.Establishingmandatorylimitsinallindustrialsectors
wouldcreateahugemarketforproductsandtechnologiesthatuselessenergyandemitfarless
carbon.Inaddition,companiesthatfigureouthowtocuttheiremissionstobelowtheirlimitwill
earncreditsthatcanbesoldtothosecompaniesthatcantmeettheirquota,creatingapowerful
incentivetoactuallybeatthepollutionlimits...
CleanIncentivesRevenuesfromthesaleofcarboncreditsunderthecapandtradesystem
shouldbeusedtocreatemarketbasedfinancialincentivestospeedthedevelopmentand
adoptionofpromisingnewtechnologies...AllacrossEurope,citizensarescramblingtocover
theirroofsandhomeswithsolarcollectorsandtransformtheirresidencesintominipowerplants
...Connecticutalreadyoffersarebateofupto$46,500forhomeownerswhogosolar,and
Congresscouldboosttherapidexpansionofexistingtechnologiesbyprovidingsimilar
incentivesforsolarwaterheaters,residentialwindturbines,geothermalsystems,modern
electroniclightingandimprovedinsulation...
DecouplingUtilitiescurrentlymakemoneyonlybyproducingandsellingusmore
electricitygivingpowercompanieslittleincentivetopromoteenergyefficiency.California,
however,hasdecoupledprofitsfromenergysales,creatinganewkindofmarketthatrewards
efficiency.Utilitiesmakemoneynotbysellingpowerbutbyhelpingconsumersuseitmore
productivelyintheirhomes.Theresult:Californiansusealmosthalfasmanykilowattsasother
Americans.Wevebeenabletokeepenergydemandflatforthirtyyearswitharapidlygrowing
population,whiletheaveragepercapitaenergyconsumptionfortherestofthenationhassoared
byfiftypercent,saysTomKing,CEOofPacificGasandElectric.Andwehaventevenmade
adentinthepotentialthatsouttherewecangobeyondanythinganybodyseverprojected.
NetMeteringCaliforniaalsotookanearlyleadinthisarea,allowinghomeownerswhoinstall
solarpanelsorwindturbinestoselltheirexcesselectricitybacktotheutility.Theelectricmeter
actuallyspinsbackwardwhenthehomeisgeneratingmoreelectricitythanitconsumes,and
customersarebilledonlyforthenetamountofenergytheyconsumefromtheutilitysgrid.Our
objectiveistogiveeveryhomeownertheincentivetoturntheirhouseintoacleanenergypower
station,saysKing.Wecannotonlyreplacegasolineanddramaticallyreducecarbonemissions,
butwellalsohaveagridthatismoredecentralizedandhencemoreresilient.
PerformanceStandardsThequickestwaytoimprovetheenergyefficiencyofappliances,cars,
trucksandbuildingsistoestablishminimumstandardsbasedonthecurrentstateoftechnology.
Ratherthanprescribingspecificsolutions,performancestandardsharnessthemarketby
establishingtargetsandrewardingcompaniesthatcreatethebestemissionscuttingtechnology.
Thegovernmenthassuccessfullydonethisforenergyintensiveapplianceslikerefrigerators,
whichnowconsumeseventyfivepercentlessenergythantheydidtwentyfiveyearsago...
Thechallengefacingustodayis...tocreatearationalmarketplaceonethatservesthebroader
interestsofournationbyunleashingtheinnovativepowerofAmericanentrepreneursto

transformourenergyeconomy.Doneright,thistransformationwillnotonlycurbglobal
warming,itwillcreateanengineofsustainableeconomicgrowthforgenerations.
ByRobertKennedyJr.FromRollingStone,June26,2007RollingStoneLLC2007.AllRights
Reserved.ReprintedbyPermission.
RobertF.KennedyJr.isanenvironmentallawyerandaprofessoratPaceUniversitySchoolof
Law.

Cap and Trade

Feebates

Clean Incentives

Global Warming: __________________________

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Decoupling
Performance Standards
Net Metering