The Island of Doubt

The stimulus bill is designed primarily to make the current recession as brief as possible. But Barack Obama has convinced those drafting the legislation to focus a significant portion, some $52 billion, depending on who's counting, of the expenditures involved on green jobs, conservation and energy efficiency. Some environmental campaigners say that's not enough. And that argument will continue even after Obama signs whatever Congress passes.

It would be nice if it were politically possible for most, if not all, of the $900 billion (and counting) would be spent on projects that are at least mindful of climate concerns. That's not going to happen, as there are many constituencies more weddd to the status quo that need mollifying. But it seems fair to question whether it makes any sense at all to spend just as much on expensive technologies that won't create any jobs for a decade.

I refer to the fact that last week

the Senate Appropriations Committee voted to increase nuclear loan guarantees by $50 billion in the economic recovery package (S. 336). This staggering sum "would more than double the current loan guarantee cap of $38 billion" for "clean energy" technology.

This we learn from Climate Progress, which picked it up from the Wonk Room, which in turn picked up the story from Friends of the Earth.

Wonk Room explains it best:

In contrast, the committee allocated only $9.5 billion exclusively for "standard renewable energy projects." Although the loan guarantee program covers nuclear technology, carbon capture and sequestration for coal plants, as well as renewable energy, the vast bulk of requested loans -- $122 billion -- are for new nuclear power plants. This $50 billion nuclear throwaway nearly matches the total allocation for genuinely clean energy in the House version of the stimulus package: only $52 billion in total for smart grid, renewable energy, and energy efficiency investments.

Now, there's nothing inherently wrong with funding projects that aim to develop sources of electricity that produce next to no greenhouses gases. But the prevailing consensus of the business community is that nuclear power is too expensive without significant government support. The same is true of most renewables, of course. But nuclear power is a 60-year-old technology that still can't cover it's own insurance costs.

There are some interesting alternative approaches to harnessing radioactivity, the "Generation IV" technologies. My favorite is the liquid flouride thorium reactor. But none of those will be available before 2030, so can't play a serious role in stabilizing greenhouse gases in the near-term. And it's the near-term that we're most interested in, because if we don't start bringing down emissions before 2012 or 2015, it's looking increasingly like we will have missed our last opportunity to avoid catastrophic climate change. So say more and more climatologists.

That leaves us with the question of which technologies can produce the fastest results in terms of emissions reductions. As even existing nuclear plants take upwards of 15 years to come on line, it would seem that $50 billion in loan guarantees for the industry isn't the most effective way to spend that money. If genuninely renewable technologies such as wind, solar and geothermal, do offer much faster schedules for contributing to a clean energy grid, as many have aruged, then we can expect Obama to face considerable pressure to reject any bill that includes such generous support for nukes.

That's my attempt at turning an economics question into something more related to the real world.