Commentary: Obama should make the 'Big Green Buy'

Los Angeles TimesDecember 28, 2010 

Now that anti-science Republicans have taken control of the House, and the Cancun climate summit made only modest progress, pessimism about fighting climate change is fast congealing into conventional wisdom. Those on both sides of the issue say there is no chance of strong action emerging from Washington over the next two years to reduce greenhouse gas emissions.

Luckily, that's not true. President Barack Obama has the power to unleash dramatic emissions reductions without congressional approval. And in the course of doing so, the president can bring jobs and profits to communities across the nation, even in places represented by climate change deniers such as Sen.-elect Roy Blunt of Missouri.

How? By mobilizing the government's vast purchasing power to kick-start a green energy revolution. Federal spending is responsible for roughly 25 percent of the gross national product, giving Washington enormous power to influence marketplace behavior even if annual spending levels are trimmed.

The federal government is the world's largest consumer of energy and vehicles. If the Pentagon, the Postal Service and other agencies shifted their buying wherever possible from dirty technologies to clean ones, it would give manufacturers such as Smith Electric Vehicles, headquartered in Blunt's state, a huge influx of orders. These orders would yield economies of scale that would enable green manufacturers to substantially reduce prices.

As the prices of green technologies fall to near that of dirty technologies, consumers and private companies will begin buying green of their own accord. Their purchases will yield additional economies of scale, enabling green manufacturers to lower prices further and entice more buyers, thus hastening the displacement of dirty technologies.

Bryan Hansel, chief executive of Smith Electric Vehicles, explains how it might work. Hansel's company makes delivery trucks that require components bought from the same suppliers used by fossil fuel vehicle makers. But, he says, "If we could buy equipment in batches of 100 rather than 10 at a time and make long-term commitments to our suppliers, that would immediately cut the costs, in some cases by 30 percent to 40 percent."

Smith Electric Vehicles received a $32 million Energy Department grant this year to help offset the cost of its trucks. But what would really help the company, says Hansel, is a move that would have the additional virtue of saving taxpayers money. If, say, the General Services Administration ordered 1,000 trucks a year for the next 10 years, Hansel says, Smith Electric could close the price gap that makes its electric vehicles 20 percent costlier than diesel equivalents. Then Smith could move forward with plans to open 20 more manufacturing facilities across the country.

Think of it as the Big Green Buy: The government's spending power would be used to close the price gap between dirty and green technologies and stimulate new markets for green technologies.

We know this approach works because it fostered the greatest economic success story in recent American history. Most Americans own computers today because the government not only funded the research and development of microprocessors (as part of the space race) but also became the first large-scale purchaser of the devices. Sustained orders from the Pentagon and NASA helped manufacturers attain economies of scale and reduce prices so consumers eventually could afford their own computers.

A similar green-tech revolution is ours for the taking - if Obama shows the requisite leadership, including the courage to affirm that some forms of government spending are actually good for the economy.

Would buying green cost more? Sometimes yes, sometimes no. Price differentials vary from product to product, GSA officials said in interviews. Recycled paper costs about the same as virgin paper; electric vehicles can cost 20 percent more than standard models; green buildings cost more upfront but less over time because operating costs are lower.

In cases in which the lifetime costs of green technologies are the same as or less than those of dirty technologies, buying green should be a no-brainer. But even when buying green costs somewhat more, it still makes economic sense.

For one thing, the government routinely pays more than retail if doing so serves broader national interests. Medicare, for example, is forbidden to buy drugs in bulk, presumably to strengthen the drug industry. The federal government also has strict "buy American" rules that cost more but benefit our national economy. So why not buy green? What's more, the government should heed the advice of Hansel. Instead of giving green companies grants to develop their products, why not redirect such monies to cover the extra costs of actually purchasing them?

Another advantage of the Big Green Buy is that Obama can do it now, without waiting for Congress. In fact, he has already made a quiet move in this direction. In October 2009, he signed Executive Order 13514, which directs federal agencies to "leverage agency acquisitions to foster markets for sustainable technologies." Now Obama must make sure that agencies are vigorously implementing his order. (A lack of follow-through neutered similar executive orders by President Bill Clinton.)

Climate change is accelerating and, if not halted soon, may become irreversible. Waiting for congressional Republicans is pointless; their opposition is as unyielding as was the 17th century Vatican's in rejecting Galileo's theory that the Earth revolves around the sun (and as ill-founded - virtually every scientific organization in the world affirms that climate change poses the gravest of threats). Climate action cannot wait two years for another election that may or may not improve Washington's sclerotic politics. For our children's sake, the Big Green Buy must start now.

ABOUT THE WRITERS

Mark Hertsgaard's books include the forthcoming "Hot: Living Through the Next Fifty Years on Earth." Christian Parenti is writing "Tropic of Chaos: Climate Wars and the New Geography of Violence." They both cover the environment for the Nation. They wrote this for the Los Angeles Times.

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