Candidatos Buscan La Presidencia Sin Ofrecer Soluciones

Con los candidatos presidenciales ya elegidos para los principales partidos políticos de la República Dominicana, la campaña para las elecciones del 2012 ha arrancado. Basado en los problemas nacionales que la administración de Leonel Fernández no ha podido solucionar — como la desigualdad, la falta de empleo y competitividad, y la debilidad que se percibe en las instituciones publicas — los candidatos han lanzado plataformas basadas en confrontar problemas complejos y de gran importancia. Danilo Medina ha propuesto un compromiso con la inversión social y el fortalecimiento de instituciones publicas; Hipolito Mejia promete eliminar la “corrupción general” que se percibe en la administración de Leonel Fernandez; Carlos Morales Troncoso tiene como prioridad fortalecer el PRSC; y Guillermo Moreno promete un cambio a las políticas de los partidos tradicionales para que existe honestidad e inclusión popular.

Para cada uno de estos candidatos, existe un gran respaldo dentro de los círculos que los respaldan. Fuera de las encuestas, existen los(as) que ven a Danilo Medina como un líder honesto que puede seguir las políticas consideradas exitosas de la administración de Leonel Fernandez; los(as) que ven a Hipolito Mejia como una alternativa a la corrupción percibida en la administración de Leonel Fernandez; los(as) que ven a Carlos Morales Troncoso como alguien que puede fortalecer el PRSC y convertirlo en un partido significativo nuevamente; y los(as) que ven a Guillermo Moreno como alguien con una visión de un país que puede solucionar todos los problemas que los partidos tradicionales no han podido solucionar. Cada candidato ofrece un mensaje que gusta a diversas partes de la población, desde los jóvenes que quieren una alternativa significativa como la que promete ofrecer Guillermo Moreno a las comunidades más vulnerables que ven a Hipólito Mejía como alguien que tendrá mas atención a los problemas básicos de la población.

Mientras las diversas partes de la población se sienten conforme con su candidato preferido, la realidad es que ningún candidato ha ofrecido un plan sensible para solucionar los problemas críticos que enfrenta la República Dominicana. Por ejemplo, recientemente los candidatos se comprometieron a asegurar que el 4% del PIB sea destinado a la educación, pero ninguno ofreció detalles explicando cuales gastos gubernamentales serán recortados o cuales impuestos serán creados para lograr tal compromiso. Ningún candidato ha ofrecido detalles sobre como el país puede combatir la inflación — la cual en gran parte depende de los mercados internacionales — así como la corrupción, la delincuencia, y la desigualdad. Ningún candidato a ofrecido un plan de como se generaran empleos, especialmente para la juventud, ni como trabajaran con las generadoras eléctricas y la CDEEE para continuar el progreso hacia un sistema eléctrico que ofrezca energía asequible y constante a toda la población.

Si en realidad queremos un cambio en República Dominicana, no basta apoyar un candidato que tenga un mensaje que guste a un punto de vista popular. Hay que demandar de los candidatos que ofrescan detalles de como solucionaran los problemas que enfrenta el país, y luego ser críticos de tales detalles para asegurar que en realidad son validos y conformen a un plan realista que pueda sacar al país de los problemas que mas preocupan a la población, como el desempleo, la delincuencia, y la corrupción.

Por mas que veamos a los candidatos como opciones para un cambio, resultaran en lo mismo que han resultado administraciones anteriores, las cuales han logrado crecimiento en la economía pero no han logrado eliminar problemas críticos como el desempleo, la desigualdad, la baja calidad de la educación, y la competitividad. Es hora de que la población reflexione si es aceptable que los candidatos ofrezcan un mensaje en blanco, sin ningún tipo de análisis ni planificación de como aseguraran que sus promesas se hagan realidad.

Why Leaders Ought to Communicate Frequently

One of the most difficult tasks for any leader — whether of a large organization or a small group — is to communicate frequently and effectively. Communication is not just important because it helps shape debates that lead to important decisions being made, but also because organizations need a sense of direction to keep the engine going. Leaders who don’t communicate frequently and effectively probably outnumber those who do. This is very noticeable when you take entire societies as an organized group, where the people are typically in constant distrust of their leaders because such leaders fail to communicate frequently and effectively.

Over the past two years, the importance of constant and effective communication has become so noticeable to me as I’ve witnessed different leaders employ very different strategies to communicate to the public. I want to focus exclusively on two very good government leaders to whom I can relate and whom I believe have very different strategies of engaging with those whom they represent. While I strongly believe frequent and effective communication is important for any leader, whether at the corporate, civic, or governmental level, I chose to compare two government leaders because of the impact their strategies have in shaping a nation.

The first leader, if you already guessed correctly, is President Barack Obama of the United States. Aside from having a highly successful electoral campaign in which records were set in terms of engagement, President Obama has made it a priority for his administration to communicate frequently and effectively to the public. Not only is he in constant communication with the public — from constant appearances on TV to town halls to news conferences to videotaped weekly addresses to Twitter updates — but his entire cabinet is fully engaged with the public through social media, conferences, and public appearances. It is arguable that this has been the most engaging administration in U.S. history, in spite of the anger some may feel regarding agenda items that have yet to be accomplished.

The Obama administration’s frequent and effective communication has not just helped achieve the most productive legislative Congress in many years, but has also helped rally a nation into debating issues previous administrations largely ignored. Although I feel some anger at the fact that the President has consistently taken a centrist approach towards many issues when they fully deserve and warrant a more aggressive approach, I admire how President Obama has used messaging — messaging that a majority of people can appreciate and understand — as a tool to achieve key goals. While words don’t necessarily translate into deeds, I think many people can agree that President Obama’s frequent and effective communication has helped his administration achieve quite a lot over the past two years.

Now, on the other end of the spectrum, we have President Leonel Fernandez of the Dominican Republic, my country of origin. Here we have a leader who not only understands how to keep an economy growing and is very capable of designing effective policies, but who has been elected three times in the last 15 years (1996, 2004, and 2008). While a majority of Dominicans agree that President Fernandez is one of the best leaders the country has witnessed, a majority of them will also say that they disagree with the way President Fernandez is handling the government. A sweeping 2010 election where the majority party (Partido de la Liberacion Dominicana) took almost full control of government can be used as evidence of the President’s popularity, but it doesn’t deny the fact that most Dominicans disapprove of President Fernandez, precisely a result of how infrequently and ineffectively he communicates to the people about issues that matter to them.

Unlike President Obama, President Fernandez only speaks to the public on rare occasions, such as for his annual address to Congress or updates on emergency actions. As a result, the people don’t feel like they need to follow their leader to get a sense of direction of where the country is going and what they should strive to accomplish. When President Fernandez does speak directly to the public, he does so in such language that people do not understand or feel interested in what he’s talking about, often focusing on statistics rather than telling a story to which people can relate. Not only is this a bad way to negatively impact what is in fact good leadership, but it’s also a waste of power, as President Fernandez squanders all the opportunities he has to get people to think and behave in ways that could help his nation race for a better future.

Good leadership is not just based on how well you can manage a team, but also on how well you can communicate to that team so it knows what it must do to accomplish its goals. All too often leaders fail to understand how valuable a position they’re in, where they can easily grab an audience’s attention and shape a debate, a decision, a common cultural problem, or even behavior. Clearly, some leaders tend to achieve goals from the top down regardless of who is alienated at the bottom or in the middle. Yet oftentimes it is better to achieve goals by having all people on board the ship rowing forward. Leaders who want to become better at what they do should understand the importance of frequent and effective communication if they want to add further momentum to their organization’s engine.

“Unworkable” Climate Treaty Not An Option

With all the news about President Obama’s deal to reduce this year’s federal budget by $38 billion and his proposal to reduce total deficits by $4 trillion over the next 12 years, it is easy to bypass the Administration’s promise to finally act boldly on climate change and help the U.S. unleash a wave of innovation in clean energy, smarter transportation, and energy efficiency. The budget deal alone signals that the U.S. will reduce its investments in clean energy, high-speed rail, and energy efficiency at a time when countries like China and Germany are moving ahead at full speed to capture a market that will be worth trillions of dollars in the next several years.

Today, the Obama Administration’s commitment became even clearer when Todd Stern, the Administration’s climate envoy to the United Nations climate negotiations, declared that a climate treaty was “unworkable.” In Stern’s own words, ”it’s [not] necessary that there be [an] internationally binding emission caps as long as you’ve got national laws and regulations. What I am saying is it’s not doable.” In effect, Stern is stating the Obama Administration’s position is that to move forward on climate change, countries will have to simply do whatever they can on their own. This clearly shows the level of urgency the Obama administration has placed on climate change, basically declaring that solving climate change is a luxury rather than a real global emergency similar to nuclear proliferation.

If it were true that we could solve climate change and avoid the trillions in costs it will bring by the end of the century by simply allowing countries to draw up their own plans (by the way, this is not very different from what the Bush administration proposed in their “voluntary scheme”), then it would also be true that we did not need the New START or any other non-proliferation treaties because countries could draw up their own plans voluntarily and address the issue the best way they could (regardless of how long it would take them or how much they could do).

This approach is well-known to be a recipe for failure, and if as a society we believe that risking failure to act boldly on climate change is an acceptable result, then we are accepting endangering future generations’ livelihoods and creating conditions that will be catastrophically damaging to the global environment and economy. I agree that circumstance is causing the Obama administration to put a lot of important issues aside, but how can anybody who understands climate change agree that a President who has so frequently called for bold action now sends his climate envoy to negotiations saying that a treaty is not and will not be possible?

If Obama was really committed, he would come out and set the record straight to let the world know that a treaty is not only still possible, but that it is in fact a requirement to ensuring that we will not give future generations a planet that is so damaged that it can no longer support productive economies. What we saw today from Todd Stern is just another sign that Obama is now less willing to stand strongly for anything, much less employ his political capital to get things done. I hope the President knows what he’s doing and won’t end up being ashamed of not acting when he could years down the road.

Are We Already Practically Cooked?

These days, it feels as if the climate debate has entirely fallen off the agenda (even Obama is not allowed to say “climate” anymore). So much has the debate shifted that it feels like we’re already practically cooked, waiting for the climate to warm up to levels that will simply reorganize Earth in a way that won’t be very comforting for anybody. We have gone from the days of Texas mega wind farm Ads on TV and the constant mention of climate and energy in the presidential campaign to a time where climate change is no longer in the agenda of U.S. politics. Obviously, this has thrown people off even as a global movement to address climate change has grown to record levels.

At the same time, we have experienced early warnings of the catastrophic effects severe climate change will bring to society. From floods of biblical proportions in Pakistan, Brazil, and Australia to massive snowstorms in the U.S. and Europe to record low winter sea ice extent in January, we are coming to grips with the reality of climate change. It is becoming all too clear that climate change is already affecting us directly in many ways, from rising food prices causing social instability to massive property losses due to increasingly frequent extreme weather events.

Given these realities, can we say that we are practically cooked? An optimist will rightly say we have to keep hoping, while a pessimist would say there’s nothing we can do. Yet the reality is very different from both of these views. While it may look hopeless, the fact is that a revolution is cooking. The world is realizing that clean energy technologies are not just good because they help fight climate change, but also because they provide real market stability, jobs, and hard currency. In spite of real economic problems, both advanced and emerging nations are joining a race that is set to intensify this decade. And if you’ve heard the trade debate lately, it has a lot to do with just that.

Nations are betting that whoever is the best at developing high-end clean energy products will win precious advantage this decade. That is why emerging nations like China are throwing a lot of money at clean energy and why the Obama administration opened an investigation into the matter, why Secretary Steven Chu wants the cost of solar energy to drop 75% by the end of the decade and Vice President Biden announced over $50 billion for new and improved high-speed rail lines, and why investments by major corporate players are now focusing a lot more on innovations that will change how we move around and use energy. From surging wind and solar manufacturing in China to the big bets automakers are making on EVs and plug-in hybrids, the race is clearly on.

My personal bet is that this race is set to intensify in dramatic ways, with investments surging over the next few years and game-changing innovations driving a shift away from fossil fuels and energy waste. While the question of whether this will be enough to slow and reverse climate change remains, it is clear that we aren’t practically cooked yet. In addition to this race, we will need to find ways to actually remove carbon from the atmosphere or adapt to a significantly warmer world, and my hope is that the fruits of this global race will create enough capacity for us to figure out how to do that in a way that is beneficial and does not change global ecological stability. In five years, we will know whether in fact we won’t be cooked by a fast warming planet in the future. Stay tuned for those news.

Revista Refugios: El Green Team

Comparto una pieza en la revista Refugios en Republica Dominicana sobre la situacion critica en la cual se encuentra el medio ambiente (y por ende la sociedad) y los esfuerzos que se llevan a cabo por la sociedad civil en busqueda de un mejor futuro.

China: The New Big Hope on Climate Change

This past week, it became very clear that the United States will never get around to doing what it takes to lead on climate change. Last December, President Barack Obama went to Copenhagen promising the world the U.S. would cut its emissions 17% by 2020. That target by itself, while an important milestone, didn’t even come close to what the science says we need to do to avert catastrophic climate change. After tough health care and financial reform battles, Obama chose not to embrace a battle for climate change legislation, instead sending his own lobbyists  to work on “getting the votes” in the U.S. Senate. The bill in consideration, initially focusing on capping greenhouse gas emissions, got so watered down that it basically became an energy bill like the one passed in 2005 under the Bush administration, with no goals on cutting greenhouse gas emissions nor any renewable energy targets. All of this in a Democrat-controlled Congress that promised swift action to end our addiction to fossil fuels and spur a clean energy economy that creates hundreds of thousands of new jobs.

So, after more than 10 years of fighting and high public support for action on climate change since the days of Kyoto, the U.S. Senate has confirmed what we refused to admit. The United States will NOT lead on climate change, so we must not put our hopes on this nation. It seems that no matter what we do locally or globally, the ideology-based members of Congress will simply not agree to ensuring the U.S. economy doesn’t miss the great jobs and growth opportunity that clean-tech would bring. They will only agree to enriching the pockets of their fossil fuel friends, and ONLY with fossil fuels, as to them it seems that fossil fuel money is very different than clean energy money. As a result, it’s time to think not about nation-building through problem-solving, but about human survival through problem-solving. In other words, we have to think about how we can avert climate catastrophe at whatever cost instead of how we can do so at benefits to us (“us” being U.S. citizens). In the end, we’ll be better off averting climate catastrophe even if it’s not us who take the biggest piece of the clean-tech pie.

As it stands, the best hope we have right now to avert climate catastrophe is China. With all the press that people read about coal burning and ever-increasing consumption in China, it is the only country showing the incredible capacity we’ll need to muster to make the transition to clean energy. In only four years, China has become the world’s leader in wind and solar, beginning exactly from nothing. It took the developed world decades to get to where China has gotten in just a few years. On top of that, it takes China very little to make a decision that will strengthen their capacity to lead on clean energy, such as creating feed-in tariffs, investing twice as much on clean energy than the United States, and even creating a cap-and-trade system to price carbon directly. It can do this even while having one of the biggest supplies of coal. If what China has done in a few years is any indication of what’s to come, we MUST begin to put our hope on China as a major innovator in clean energy and, as such, the only leader that can and should be responsible for leading the world away from climate catastrophe.

To make this clear, let’s put out some numbers about how impressive China’s clean energy sector has been over the last few years. Five years ago, China wasn’t even up on the charts in the wind energy sector. In 2005, it approved major policy to drive growth of wind turbine manufacturing and wind energy installations. In 2009, it led the world in total installations of wind energy, installing a stellar 13.8GW of wind energy (compared to 9.9GW in the U.S.; China is expected to pass the U.S. in installed capacity in 2010). At the same time, it became the world’s top manufacturer of wind turbines, with 3 firms already in the global top 10. In photovoltaic (solar power or PV), it supplied nearly 40% of the world’s panels last year, making it the leader in PV manufacturing. In addition to these key technologies, it has broken it’s own goals in solar hot water, biomass, and hydro consistently. It is also building the world’s largest and most advanced high speed rail systems, and has one of the world’s most ambitious programs to manufacture electric vehicles, having its own target of becoming the world’s leader in just three years. A very long walk for such little talk.

We can’t fool ourselves. China is clearly today’s most capable nation of turning this crisis into an incredible opportunity. While the U.S. still has incredible capacity, its gridlocked politicians will never let it pick up momentum, especially now after everything indicates politics will just get worse after November 2010. In spite of the reality that there are key issues in relation to China’s jump into clean-tech (such as quality), these are gradually going away as China’s clean-tech sector matures. It is time for the world’s attention to shift away from the U.S. and onto China when it comes to climate change. Chinese authorities know they will lead, and it is why their game has been very simple: obstruct international negotiations that could lead to the U.S. being more aggressive on clean-tech. This buys China time to create its industries, fix any issues they might have, and drive them to incredible growth that can not only meet domestic clean energy targets, but also easily take the rest of the world on a transition to clean energy, EVs, high-speed rails, etc.

The sooner we admit this, the sooner the rest of the world can shift its attention to China, putting pressure on its authorities to drive the clean-tech bandwagon fast enough to cut greenhouse gas emissions on a scale that would prevent Greenland’s melting, the Amazon’s burning, and the Arctic’s disappearance. For us, it’s no longer about whether we will lead. It’s about whether we will survive.

La Empresa Sostenible

Debido a la crisis socio-ambiental en que el mundo vive – desde el cambio climático a la perdida de ecosistemas a la deterioración social en comunidades marginadas – ha surgido presión pública demandando responsabilidad de parte del sector privado. Tal presión ha surgido por las centenas de casos de parte de empresas multinacionales donde se ha abusado del medio ambiente, la fabrica social de los trabajadores, y comunidades marginadas simplemente por el lucro al corto plazo. Ejemplos típicamente apuntan a las malas condiciones en las cuales trabajan los pobres en muchos países para multinacionales, la destrucción de ecosistemas vitales para la existencia de servicios ecológicos, y la negligencia de las comunidades marginadas en las cuales muchas empresas operan.

Como resultado de tal presión, en los últimos años muchas empresas han enfrentado la realidad de pérdidas económicas por falta de responsabilidad socio-ambiental, ya sea porque los consumidores se concientizan y dejan de comprar productos de tales empresas o porque tales empresas han chocado con la perdida extrema de los recursos naturales de los cuales dependían. Al chocar con tales realidades, han entendido que la única vía hacia un futuro prospero es mediante la sostenibilidad empresarial, también denominada como responsabilidad social corporativa.

Simplemente, la empresa sostenible es aquella que valora los tres aspectos pilares de la sociedad – ambiental, económico, y social – de forma balanceada. Tal empresa tiene como estrategia minimizar su impacto al medio ambiente, contribuir lo más posible en las comunidades en las que opera, y asegurar el buen trato y la felicidad de sus trabajadores. Además de tal estrategia, tiene un enfoque en la innovación, el servicio comunitario, el mejoramiento continuo, y la prosperidad de la empresa en el largo plazo. No es suficiente simplemente hacer uno o dos proyectos para crear una imagen de responsabilidad. Es necesario tener una cultura interna que en realidad construya el sentido de que la empresa debe cambiar continuamente como parte de su estrategia de minimizar impactos mientras se mantienen beneficios económicos satisfactorios.

La empresa sostenible normalmente tiene un plan estratégico que categoriza su labor en cada una de las áreas fundamentales – ambiental, económica, y social. En el área ambiental, no tan solo trata de minimizar su impacto mediante la reducción de desperdicios y contaminación, el uso de tecnologías y productos sostenibles, y la concientización de los trabajadores, sino que también busca la sostenibilidad en las comunidades donde opera. En el área económica, trata de incrementar la producción vía la innovación, creando productos y servicios con impactos mínimos y con mayor enfoque en la calidad de vida de los consumidores. Y en el área social, invierte en sus propios trabajadores y en el desarrollo humano de las comunidades en las que opera.

La tendencia a nivel global para las empresas es clara. Las empresas que se están reformando están cada vez más segura de su futuro porque tienen una base de consumidores y clientes fieles, además de ser cada vez más competitivas. El comportamiento en el área socio-ambiental de cada empresa ya es un gran factor determinante para el público. En el futuro, habrá más oportunidades para la empresa sostenible que para la empresa que siga operando irresponsablemente. Aunque también falte mucho que hacer a nivel de políticas públicas, el sector privado tiene un gran papel que desempeñar para asegurar un futuro prospero y sostenible para la sociedad.

Can Obama Succeed On Clean Energy?

Today, Senators John Kerry and Joe Lieberman, joined by a strong coalition of business groups and NGOs, unveiled “comprehensive” climate change and clean energy legislation and emphasized their confidence in getting it passed during the current Congress. Immediately afterwards, President Obama applauded the Senators for introducing legislation that would spur clean energy innovation and ensure the U.S. meets its climate change pledge to the international community under the Copenhagen Accord. Regardless of how anybody may feel about this (i.e. too late, too weak), it is a major milestone. We’ve marked off the checklist for everything that needs to be done to pass a climate bill, except getting the Senate to pass one. Now, it is up to President Obama to fight hard to get climate change and clean energy legislation passed. Can he do it?

Ever since he signed health care legislation over a month ago, President Obama has been wavering among a host of issues ranging from climate change legislation to wall street reform to nuclear proliferation. Unfortunately, he hasn’t decided to choose or two of these priorities and go with them as aggressively as he did with health care reform. What’s worse, he’s failing to live up to one of his core principles he repeatedly mentioned throughout his campaign for health care reform, and that is that his choice to act wouldn’t be influenced by “politics or the polls,” but instead by what “is the right thing to do.” With the upcoming Congressional elections, it seems that President Obama is being influenced more by the polls than “the right thing to do” as he has chosen not to fight aggressively for anything. A great example is his rather short period of campaigning for wall street reform, which lasted a couple of weeks to be left to Congress again.

If President Obama wants to succeed on climate change and clean energy legislation, he will have to push it as hard as he pushed health care reform. So far, President Obama hasn’t dedicated any town hall meetings or domestic visits to climate change and clean energy legislation. He’s only spoken about it during a few times during his weekly addresses and when he announced lifting the ban on offshore drilling in many areas. A quick search through the White House website for health care yields 616 entries as of today, while for energy and the environment there are 64 (that’s roughly 10%). Clearly, if President Obama wants to succeed on climate change and clean energy legislation, he’ll have to campaign more aggressively for it to tip the political balance towards getting the necessary votes in the Senate to pass the strongest bill possible.

Furthermore, he will have to come up with the kind of language that will resonate with people across the country. When he campaigned for health care reform, he spoke of insurance industry abuses, unreasonable premium hikes, and a ballooning federal deficit, all of which were key messages that resonated with people across the country. However, when President Obama speaks of climate change and clean energy, he talks about innovation, leadership, and job creation, failing to emphasize the loss of jobs to other countries, the impacts of floods, droughts, and rising temperatures that are not uncommon across the country, and the damage that fossil fuels incur on the environment, health, and the pockets of U.S. citizens. It is  important to emphasize how climate change and clean energy legislation will spur new industries and create new jobs, but it is also important to emphasize how action will benefit citizens directly, just as he did with health care.

This is perhaps the best time to get it right. The BP oil spill and the coal mine disasters have exemplified our need to eliminate our dependence on fossil fuels altogether, while our continued loss of clean energy manufacturing jobs to other countries will continue to make it harder to fight the high unemployment rate. We all witnessed how President Obama mustered public support to pressure Congress to act on health care. There is no doubt it can happen again for climate change and clean energy legislation, but it will require President Obama to “do the right thing,” step up to the plate, and campaign aggressively for legislation before campaigning for the Congressional elections erases all chances to get anything done this year. This one is just as up to the Senate as it is to President Obama.

Our Bet On Clean Energy Innovation

The time to decide on a strategy to remain as #1 is slowly coming to an end. The U.S. has seen a jolt in economic activity as a result of the Recovery Act, but it’s all too clear that this alone won’t bring the U.S. economy back to sustainable growth over the long-term. We have entered a period where huge deficits are in order and the private sector won’t make a comeback where it used to prosper. Instead, something new must arise to fill the gap in economic activity after the U.S. government can no longer sustain the economy by issuing debt. The Obama administration has repeatedly said that it is “confident” that clean energy is the only sector that can fill that economic gap and pave the way to lower deficits, a higher trade surplus, and a better overall fiscal status.

Until very recently, the climate movement in the US, largely led by youth, was the main reason why clean energy had a future. The idea was that we had to develop clean energy to reduce our greenhouse gas emissions and slash our oil bill, which was financing “terrorists” and making the trade deficit worse. The youth climate movement was successful in making it clear that we better develop a clean energy economy to also create the jobs of the future and become the leader in this all-too-important sector. So today, the Obama administration understands that developing clean energy is all about creating jobs in the US and cleaning up the Federal books (though more importantly it’s about preventing runaway climate change). Whether “clean energy” means wind, solar, and geothermal or nuclear, clean coal, and biofuels is another debate. We know that nuclear, clean coal, and biofuels would not produce enough jobs compared to wind, solar, and geothermal, so I assume the outcome will be a mix, as Obama actually intends in his strategic political plan.  However, Obama may be overoptimistic in thinking that the US can win the clean energy race under his plans.

First of all, unlike other industries of the past that generated big economic growth (think cars, Internet, IT, etc.), clean energy is something the entire world knows about and is working hard to get its hands on. While it takes Washington years to make any decision on clean energy, Asia and Europe have already been racing to develop the best clean energy technologies in the world. Out of the top 10 clean energy companies in the world, only one or two are from the U.S., while increasingly more and more Chinese clean energy companies are going public. That’s because China made the decision to take this market a few years ago, and it’s already succeeding.

According to the Apollo Alliance, a US labor organization that promotes a clean energy economy, the US already imports over 70% of all components for renewable energy projects. Most of this manufacturing is happening in China, which has already become the world’s largest manufacturer of wind turbines and solar components. With an economy that’s less than half the US economy, China is already spending more than twice as much than the US on clean energy, and plans to ramp it up further. And while experts have believed that China would focus on manufacturing while the US focuses on innovation, China is spending big on creating breakthrough technologies as well. Already, it is funneling $1 billion into the world’s first clean coal power plant that will capture carbon dioxide, and only because there’s less red tape in China to begin construction of such a plant.

The Breakthrough Institute has analyzed how much the U.S. would need to spend in order to remain competitive in this sector and truly create the technologies that will lead the market. According to its analysis, the U.S. will spend about $175 billion over the next five years on clean energy, including R&D and tax incentives. On the other hand, China alone plans to spend $397 billion, leaving the other “Asian Tigers” out. This leaves the U.S. at a significant disadvantage, making it highly unlikely to create the leading clean energy technologies that can fill it’s economic gap. Even passage of a climate bill in Congress, which would certainly put all serious action until at least 2014, would be insufficient to close this gap.

In the end, the numbers do show that the Obama administration’s bet on clean energy will probably not hold out. Asia will end up taking all the manufacturing jobs and exporting their technologies to the U.S., and the U.S. will have to look elsewhere for innovation in order to fill the economic gap. And while cloud computing has its promises, it will not create a market big enough to fill the gap. So, I wouldn’t bet on clean energy making it for the U.S. economy, even if there was a change in Washington. It is time for a drive in innovation in a variety of sectors, not just clean energy. It’s really the only way out.

Author’s note: I didn’t make any mention of EVs and high-speed trains because they’re in the transportation sector. While they are clean technologies, I wanted to focus on clean energy. Readers should know that the US is also behind in these other clean techs.

Eliminating the Income Tax

The global economic downturn has created the need to spur spending and investments. Despite central banks all around the world lowering interest rates to commercial banks to spur lending, we have not seen the kind of economic recovery that people expected, at least in the developed world. One of the reasons why the recovery has been particularly slow, especially on the jobs front, is because people are still generally cautious about spending and businesses are not investing nearly enough to create new jobs. I’m not a trained economist, but it doesn’t take an experienced one to know what is preventing more jobs from being created in the United States.

The Obama administration should be praised for taking the downturn to a stop. The Stimulus package clearly spurred an increase in productivity and brought job losses to a halt. With another year to go, it is expected that it will continue to at least keep the economy recovering at a reasonable pace. But as we see what’s happening with Obama’s agenda, from health care to climate change to financial reform, we know that people really would like to see a faster economic recovery. The question then would be if a faster economic recovery is possible. In the short-term, probably not. The government can choose to provide more stimulus, especially for local and state governments, but it can’t do anything innovative that can really create a big change in a short period of time.

Nevertheless, the government can secure faster economic growth over the long-term (say the next decade) if it did a few things. Surely, we need health care reform, financial reform, and a tax on carbon to spur innovation in clean energy. But we also need to reform a tax code that prevents jobs from being created and discourages saving and investing. After all, a lack of saving and too much overspending is what caused the economic crisis in the first place. It would therefore be prudent to encourage saving and investing, and discourage overspending to prevent future bubbles and secure steady, long-term economic growth.

So how do we do that? Robert Frank, a Cornell economics professor at the Johnson School, explains why eliminating the income tax would be a good thing. It would spur higher levels of consumer spending as incomes would be higher. This would have the effect of putting more dollars into the economy, which in turn would create more jobs. For those on the upper income brackets, it would lead to an increase in saving and investing as those with more money will have a higher amount left over after total consumption. This, too, would have the effect of creating more jobs.

Now, in a time like this we would like to have higher spending, but for the long-term, when economic growth is stable, it would not necessarily be too good to encourage overspending. This could lead to what we saw with the residential real estate market, where over-lending led to overbuying until the bubble burst. On top of that, eliminating the income tax without creating an additional source of government revenue would balloon the federal deficit, something that would be politically and fiscally unsustainable. So, in place of the income tax, professor Frank suggests implementing a “progressive consumption tax.” The idea here is pretty simple. You get a tax on how much you spend on goods and services annually, and the more you spend, the higher your tax bracket.

A progressive consumption tax would have the effect of increasing revenues for the government, especially from higher spenders. In effect, this would shift the tax burden away from the middle class and into the highest earners. While this may seem a bad thing for very wealthy people, in reality it may turn out to be good for them as well. Here’s why. A higher tax on big spenders would provide an incentive to spend less on luxury (reader: “what?” author: “wait, read on”) and invest more on things that provide actual returns, which would not only create more jobs, but also bring up wealthy people’s productive assets. When the financial markets crashed, a lot of people lost more than what they should’ve lost because they had not invested in productive assets. Instead, they had overspent on luxury, fueling others from lower income brackets to overspend as well and therefore fueling bubbles. So, in the end, it’s better to have an incentive to invest in productive assets than one to overspend on luxury. And this is what a progressive consumption tax would do.

In effect, these tax changes, coupled with new taxes on externalities to get rid of waste and harm, would create new and better jobs, increase federal revenues, lower unnecessary government spending, slash the federal debt and deficits, and create a more competitive environment in which society can prosper. Now, what are the chances of this being considered in the short term? Definitely closer to zero than to one hundred. The upcoming elections, the Obama agenda, and the public’s discontent with government will make something like this unlikely to come up soon, but talking about it consistently to give people an idea of what it would mean could increase its chances of becoming reality in the future.