Category: Economic Policy

Four Years Have Passed, and It’s Been Even Worse than I Anticipated

About four years ago, on October 9, 2016, one month prior to the U.S. Presidential election, I published a heart-felt and in some ways painful essay at this blog in which after 30 years of political privacy in my professional life — including, importantly, my teaching — I found it necessary to come out of the closet of political neutrality to condemn in no uncertain terms the threat which I believed one of the candidates, Donald Trump, posed to the United States and the world if he were elected President.

Sadly, four years later, all of my concerns have been validated, plus one threat that I had not thought about, namely that the Trump administration would damage American democracy in ways big and small, and that as the November 2020 election approached, President Trump himself would pose the greatest threat imaginable to the sanctity of the electoral process and thereby to the credibility and even the existence of our democratic form of government.

Of course, within the realm of environmental policy, the damages done to U.S. policy over the past four years are legendary, but not really a surprise. Indeed, see my essay at this blog from one week after the 2016 election (“What Does the Trump Victory Mean for Climate Change Policy?”, November 10, 2016), as well as dozens of essays I’ve posted since then.

So, rather than review the dismal record of the Trump administration over the past four years, I thought it might be more interesting for you — as it has been for me — to offer my essay of warning from four years ago.

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This is Not a Time for Political Neutrality

October 9, 2016

I have been writing essays at this blog for over seven years, and throughout that time, through perhaps 100 more-or-less-monthly essays, I have tried very hard to keep politics at bay, and to view each and every issue I discussed from a politically neutral, yet analytical economic perspective.  But I find it difficult to remain neutral in the current U.S. Presidential election cycle.

Since before the summer, I had resolved to write today’s essay, but I decided to wait until one month before the November U.S. election to post it, simply because I thought this was the point in time when people would be paying most attention to the upcoming election but would not yet have completely made up their minds.  In particular, I want to address this message to people who – like me – are political independents.

Background

I have been teaching at Harvard for close to 30 years, and every year I take pride in the fact that at the conclusion of my 13-week course in environmental economics and policy, my students cannot say – on the basis of what I have said in lectures or what they have read in the assigned readings – whether I am a tree-hugging environmental advocate from the political left, or an industry apologist from the political right (actually, I am neither, although hostile voices in the blogosphere have sometimes wanted to peg me as being on the opposite of whatever extreme they occupy).

Likewise, I have remained bipartisan in politics, ever since I directed Project 88 more than 25 years ago for the bipartisan coalition of former Democratic Senator Timothy Wirth and the late Republican Senator John Heinz.  Starting with the White House of President George H. W. Bush, and continuing with every administration – of both political parties – since then, I have worked on substantive matters of environmental and energy policy, in some cases closely and intensively, and in some cases indirectly and on the periphery.

Such professional bipartisanship and political neutrality have been important to me, and have been consistent with my voter registration, as I am officially registered as an independent (in Massachusetts, this goes by the designation of “unenrolled”).

So, over the years, I have voted for Democrats and I have voted for Republicans, for various offices ranging from the Mayor of my town to the President of my country.  And in each and every one of those elections, although I preferred one of the two principal candidates (sometimes very strongly), in no case did I fear for the future of my community, my state, or my country if my candidate lost and the other candidate won.

This time is different.  In all honesty, I fear for the United States and I fear for the world if Donald Trump is elected President.  The time for my professional bipartisanship and political neutrality has ended – at least temporarily.  And so I apologize to my readers for using this platform – An Economic View of the Environment – to express my broader, personal views on the upcoming election.  This is a departure that I hope never again will be necessary.

I am not part of a campaign, and I am not recommending a candidate.  Rather, I am recommending that everyone vote!  Of course, today’s essay, like all my posts at this blog, expresses only my personal views, and is not written on behalf of my employer, nor in my capacity as a faculty member of the Harvard Kennedy School.

What Drives My Fear of a Trump Presidency?  His Views on the Environment?

My fear of the consequences of a Trump victory in the Presidential election is not simply because of Mr. Trump’s misleading, (consistently) inconsistent, and fundamentally incorrect statements in the realm of environmental and energy policy.

Let me be clear.  I do find Mrs. Clinton’s policy positions in my area of expertise – environmental and energy economics and policy – to be superior to Mr. Trump’s positions.  I will not repeat here my views of Trump’s environmental and energy positions, because I have frequently been quoted in the press as critical of his pronouncements and positions in this realm (Climate Central, E&E News, Scientific American, New York Times, Washington Post, The Verge, New York Times, The Week, Law Street, Climate Central, New York Times, The Hill, Newsmax, Climate Central, Grist, and National Public Radio).  And a few times I have been quoted as criticizing Hillary Clinton’s policy prescriptions in the environmental and energy realm (New York Times, Denver Post, and High Country News).  (For that matter, I have been quoted perhaps hundreds of times over the past seven and a half years as sometimes supportive and sometimes critical of Obama administration environmental and energy policies.)

So, yes, I believe that the world would be worse off with what I anticipate would be a Trump administration’s environmental and energy policies.  But that is not what really frightens me.

What Really Does Scare me about a Trump Presidency?

What frightens me is much broader and more profound.  I worry about what a Trump presidency would mean for my country and for the world in realms ranging from economic progress to national security to personal liberty.  This comes not from any analysis of policy proposals, but from Trump’s own words in a campaign in which he has substituted impulse and pandering for thoughtful politics.  From the first day – his June 16, 2015 announcement of his Presidential bid (in which he described Mexican immigrants as drug smugglers, criminals, and rapists, and promised to “build a great wall”) – until today, Mr. Trump has built his populist campaign on false allegations about others, personal insults of anyone who disagrees with him, and displays of breathtaking xenophobia, veiled racism, and unapologetic sexism.

As disturbing as Trump’s stated positions are in economic policy, national security, and personal liberties, possibly even worse is the reality that Donald Trump, if elected President, would – intentionally or unintentionally – provide cover and support for the ignorant, racist, and xenophobic tendencies that sadly inhabit a substantial fraction of the U.S. population.  In many ways, Trump represents not the best that my country has to offer, but rather the worst excesses of American culture.

Trump is clearly a politician who seeks support by appealing to popular desires and prejudices rather than by using rational argument.  That is the definition – word for word – of a demagogue.

The Bottom Line

If you are an independent, like me, please do not sit on the sidelines of the upcoming election, condemning both candidates for their failings.

It has been said many times by many people that Hillary Clinton is not an ideal candidate for President.  I do not disagree with that sentiment.  Nor can I dispute the fact that her primary campaign against Senator Bernie Sanders pushed her to adopt positions of the left, including her unfortunate reversal regarding the Trans-Pacific Partnership Agreement.

But Mrs. Clinton would bring significant, positive experience to the presidency from four decades of public life, including as a member of the U.S. Senate and as Secretary of State.  In contrast with Mr. Trump, she has surrounded herself with legions of smart and experienced advisers in dozens of key policy realms.  Her campaign has produced detailed proposals on the most important challenges facing the country (although I do question some of her environmental positions).  But she is, if anything, a realist – not an ideologue, and certainly not a demagogue, which is precisely how I would characterize Mr. Trump.

I recognize that many people harbor very negative feelings about Mrs. Clinton.  The low approval ratings (of both candidates) validate that.  I respect those voters who have serious concerns about a Clinton presidency.

My core argument is that there are great differences between the two major candidates.  I disagree strongly with those of my fellow political independents (and others) who say that because both candidates are flawed, they will not vote.

In my view, that would be a mistake.  The fate of the United States and the fate of the world are really in our hands.  If you are an independent, please do not sit out this election.  It is much too important.

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Carbon Pricing, the COVID-19 Pandemic, and Green Economic Recovery

In our most recent (September 8th) webinar in our series, Conversations on Climate Change and Energy Policy, sponsored by the Harvard Project on Climate Agreements (HPCA), I had the pleasure of chatting with Joseph Stiglitz, University Professor at Columbia University.  This webinar series features leading authorities on climate change policy, whether from academia, the private sector, NGOs, or government.  A video recording and transcript of the webinar are available here.

In this case, my guest has had his feet planted firmly in more than one of those realms.  In addition to being a long-time faculty member at Columbia, Joe Stiglitz is Co-Chair of the High-Level Expert Group on the Measurement of Economic Performance and Social Progress at the OECD, and Chief Economist of the Roosevelt Institute.  Among the many positions he has held, he was a Member and then Chairman of the Council of Economic Advisers in the Clinton administration, and subsequently Senior Vice President and Chief Economist of the World Bank.

He received the John Bates Clark Medal from the American Economic Association in 1979, and the Nobel Prize in Economics in 2001.  In addition, he is Fellow of the National Academy of Sciences, the American Academy of Arts and Sciences, the American Philosophical Society, and the Econometric Society.

I first met Joe in 1993 when he was a Member of President Clinton’s CEA, and then again on a long flight to Seoul, Korea, when we were both attending the initial meeting of the Second Assessment Report of the Intergovernmental Panel on Climate Change.

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In our wide-ranging conversation, Joe Stiglitz shares his thoughts on carbon pricing, post-pandemic economic recovery, green economy transition, and much more.

Stiglitz explains that he favors a multi-faceted strategy to address climate change and to spur the transition to a green economy – including public investments, research and development, regulations, and carbon pricing. Such a “carbon package,” he says, can serve as a long-term economic stimulus because it will encourage companies to retrofit their operations, thereby spurring private investment and innovation. “And that’s the sense in which it will be a growth story. It will actually make for a more dynamic economy.” 

The economic impacts of COVID-19 may have temporarily diverted resources away from climate change efforts, Stiglitz remarks, but the post-pandemic period will bring tremendous opportunities to integrate green policies into economic recovery plans in the United States and elsewhere. “The pandemic has brought to light some of the real weaknesses in our economy. It has certainly made us more aware that we need to be better prepared for the risks that we face. One of those risks was the pandemic that we hadn’t thought about, and the other one is something we know about, which is climate risk,” he says.

Discussing public investments moving forward, Stiglitz remarks, “From my perspective, we as citizens have the right to make sure that that money serves a dual purpose – not only the purpose of bringing the economy back, [but] back in a way that is more consistent with the vision that we want of the post-pandemic economy and society. And that means a more equal society, I hope, a more knowledge-based society, and a much greener economy.”

He highlights two examples of national recovery plans that include green elements – in France, where the Air France rescue package includes provisions that the airline reduce its carbon footprint; and in New Zealand, where unemployed and underemployed citizens were hired to improve public parks, which serve as popular tourist destinations. And he cites the European Union’s “Green Deal” as an example of a multilateral effort to hasten the transition to a green economy, and he likens it to a wartime effort to address a visceral threat.

“What we are talking about here is heavy mobilization of resources,” he says. “Sometimes I use the metaphor of a Green New Deal wartime mobilization. The difference is that you see your enemy right in front of you in war. The effects of climate change we are seeing right in front of us – in the fires, the hurricanes, the floods, but some people are not seeing it as clearly as we would see a military attack.”

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When we are half of the way through the one-hour conversation, I pose some questions submitted by members of the virtual audience, on issues ranging from the challenges facing developing countries to the economic capacity necessary to move the needle on climate change. 

When asked what approach he would advocate to achieve widespread policy support for achieving net CO2 emissions reductions by the year 2040, Stiglitz remarks that, “I think that as a recognition that we all share the planet and carbon molecules don’t carry passports, that we’re in this together. There is a shared concern. Hopefully that will be enough to enable people to come to agreement on what a fair sharing of the burden is.”

Beyond this, Stiglitz explains that there is plenty that individuals can do to help in the fight against climate change.  “We all have multiple roles in our society. We are consumers. We are workers. We are citizens. As citizens, we have an important role in advocacy, in helping change the political process to help deal with carbon and the green transition. The only way these problems will be solved is when we have proper public policy.”

“As consumers, I think we also have roles, moving more towards greener housing, greener eating, greener transportation. We make lots of decisions, as individuals, we do savings, and we could put our money into portfolios that are greener. We can express our values through how we allocate our portfolios.”

“As workers, I think it’s important to articulate to the extent that we can, and in some firms there’s a greater openness than others, that we ought to be thinking of moving towards greener. I would argue it’s better for the companies…if they’re ready for the green transition,” he states. “I think there are lots of individual actions, and if we’re going to move our society, it will take lots of these adding up together to succeed.”

All of this and more can be heard and seen at this website.  I hope you will check it out.

Previous webinar in this series – Conversations on Climate Change and Energy Policy – have featured Meghan O’Sullivan’s thoughts on Geopolitics and Upheaval in Oil Markets, Jake Werksman’s assessment of the European Union’s Green New Deal, Rachel Kyte’s examination of “Using the Pandemic Recovery to Spur the Clean Transition.”

The next HPCA Conversation on Climate Change and Energy Policy is scheduled for October 19th with guest Joseph Aldy, Professor of the Practice of Public Policy, Harvard Kennedy School.  Please register in advance for this event on the HPCA website.

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A Broad Ranging Conversation from Energy Policy to Social Injustice

As readers of this blog know, in our monthly podcast – “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program – produced by the Harvard Environmental Economics Program, I chat about policy and practice with interesting people who are working at the interface of economics, energy, and the environment, whether from academia, NGOs, business, or government.  My guest in our most recent podcast fits that description to a tee.  Vicky Bailey has had over 30 years of experience in high-level, national and international, corporate executive, and government positions in the energy sector.  You can listen to my conversation with Vicky Bailey here.

I’ve had the privilege and pleasure of knowing and working with Vicky for more than 20 years, originally as part of a multi-year Harvard energy project directed by my colleague Professor Bill Hogan. 

Vicky has served as Commissioner of the Indiana Utility Regulatory Commission, a member of the Federal Energy Regulatory Commission, appointed by President Bill Clinton, and as President and CEO of PSI Energy, Inc., Indiana’s largest electric utility, now Duke Indiana.  Reflecting her bipartisanship, she was appointed by President George W. Bush to be the first Assistant Secretary of Energy for both International Affairs and Domestic Policy.  In the Obama administration, she was appointed by Secretary of Energy Steven Chu to the Blue Ribbon Commission on America’s Nuclear Future, and in 2014, to the National Petroleum Council by Secretary of Energy Ernest Moniz.

Vicky is the founder of Anderson Stratton International LLC, management advisory services.  She has served on numerous corporate and non-profit boards, including the Board of Directors of Resources for the Future, the Washington-based think tank, which has brought Vicky and me together again!

At the outset of our conversation, Vicky notes that the COVID-19 pandemic is changing the way people work and live, and thereby having profound effects on energy demand.  “Working from home will change energy demand. We can plan for some things, but this is something probably we hadn’t planned for, but we’re seeing energy demand come back.  Things are coming back, but it’s very slow and coming back in a different way.”

Reflecting upon what she thought might be the most significant change in the energy sector that she has witnessed, Vicky responds that discussions about energy, the environment, and climate change are much more politicized today than they were 20 years ago.  

“The words ‘climate change’ seem to now conjure up positions or sides. That wasn’t the way it was for me coming along.” She cited the important work of late Indiana Senator Richard Lugar, a moderate Republican who saw the threat of global warming through the lens of a farmer.  He was a strong supporter of climate because he recognized that the environment can cause stress on crops, which then has an issue as it relates to feeding, getting that produce, and getting that out to feed people.”  Validating how times have changed, we discuss the fact that the Clean Air Act Amendments of 1990 passed in the House of Representatives with the support of approximately 97 percent of Democrats and 85 percent of Republicans.

Near the end of our conversation, I note that the brutal killing of George Floyd in May of this year – and brutality toward many other black men and women over the years – has greatly increased national consciousness about personal and systemic racism – both in the United States and globally.  In this regard, I ask Vicky if she can share her perceptions, given her truly diverse set of experiences in business and government. Her response is heart-felt and full, and so I want to share with you an extended, albeit edited, part of what Vicky Bailey has to say:

“Yes. It has been a hard time. The murder of George Floyd that we all witnessed, or those of us who did see this video and see it on TV and other areas, you can’t unsee that.  And you have to say, why? Why is that happening? Why did it turn into that? And even if you thought, Well, okay, he did something bad, he did something criminal, doesn’t he at least get to make it to the jailhouse?   Can we make it to the jailhouse? Others seem to be able to do that, even though they commit horrendous crimes. They seem to be able to make it to the jailhouse, and our men and women don’t.  And so we’re weary of that.”

“And people are angry about that. They see other segments of society treated differently and given latitudes and benefits of the doubt, that other segments are not.  So, I don’t agree with violence and those of you who know me, I’m not a sharp elbow. I’m not a loud and boisterous kind of individual.  But there are those who feel that you don’t hear them. You don’t hear their cries.  You don’t feel their pain. Unless we come out and speak loudly, this behavior is just going to continue.  It just seems to continue. And for me, it’s a time for reflection. It’s a time for conversation. It’s a time to lend your voice. Don’t be afraid to do so.”

“But I am optimistic. I believe in America. I have said that through my own public service. And I believe we always aspire to do better, but we need our leaders. We need our leadership:  leadership and character, what we teach our children from kindergarten on.  We are a great country, but we continue to strive to do better.  And that’s what I want to appeal to. I want to appeal to that. That better side of us.”

All of this and more is found in the latest episode of “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program.” Listen to this latest discussion here.  You can find a complete transcript of our conversation at the website of the Harvard Environmental Economics Program.

My conversation with Vicky Bailey is the fourteenth episode in the Environmental Insights series.  Previous episodes have featured conversations with:

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunes, Pocket Casts, Spotify, and Stitcher.

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