How to fix: America's energy woes

Oil addiction is squeezing the middle class, with the costs now including ominous climate shifts. Can a race toward green technology solve both problems -- and restore US competitiveness at the same time?

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By Richard Conniff, MSN Money

Everybody says this country needs a Sputnik-style challenge to get us motivated again. But Americans already face such a challenge in climate change and an energy crunch - and they threaten us far more dramatically than the Soviet space program ever did.

You don't have to look to melting glaciers to see the symptoms of America's energy and climate woes. Just think about the $3 per gallon you're paying for gasoline, or about the massive wildfires that raged across the American West recently, or our military entanglement in the Middle East, brought on in part by our boundless thirst for oil.

Even President Bush now acknowledges that global warming is a serious threat and that energy independence is a major goal for national policy.

The job for the next president is to rally the country to deal with these problems.

"Sustainable energy is the equivalent of the U.S. moon shot," says Steven Chu, the Nobel Prize-winning physicist who directs the Lawrence Berkeley National Laboratory, near San Francisco. A commitment on the scale of the Apollo space program would, says Chu, lead to "breakthroughs in energy technologies, efficiency technologies and new forms of energy."

What follows are a few ways a jolt of moon-shot psychology could help America solve its energy problems:

Bolster American science and technology education. In 1957, alarm over the Soviet space program produced a new commitment to science in the nation's classrooms, with vastly improved teacher training and science-education resources. We won the space race -- and produced the generation of scientists and engineers behind the technological revolution of the late 20th century. But science education has again lost its way. In a 2006 comparison of 15-year-olds from 30 developed countries, American students ranked below average in science literacy and near the bottom of the list, just ahead of Portugal, in mathematics.

It's time to get alarmed again, with energy and climate as the immediate focus -- and an array of technological and competitive benefits down the road.

A program called FIRST (For Inspiration and Recognition of Science and Technology) offers one good way to make science exciting. Its robotics competitions -- like March Madness for science geeks -- give middle- and high-school kids hands-on experience with physics and computer programming. Video: Robots in action

The American Association for the Advancement of Science also has developed a blueprint, dubbed Project 2061, for improving science education nationwide. "Our future is going to be shaped by science and mathematics and technology," says Project 2061

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director Jo Ellen Roseman. "These are the jobs that pay well, and persist and contribute to the economy." Video: Hollywood, sports . . . and science?

Get our priorities straight. Right now, Congress is geared toward high-carbon pork-barrel projects like the notorious 2005 "bridge to nowhere," which would have spent $400 million to link two sparsely populated islands in Southeast Alaska. Meanwhile, the nation faces a huge backlog of necessary maintenance on neglected roads, rails, bridges, levees and dams.

Former Iowa Gov. Tom Vilsack says it's time for a new approach.

He suggests that the nation copy a system of prioritization used in Iowa when he was governor. First, a complete report card on federal infrastructure would identify risks. Then every proposed improvement would rise or fall in priority based on how well it meets certain agreed-upon national objectives -- with climate and energy high on the list.

That could mean bolstering flood levees in cities threatened by rising seas, hurricane retrofitting in places like Florida, and water storage and transport improvements in the West. In Iowa, Vilsack boasts, an infrastructure effort that included renewable energy and appropriate transportation among its goals resulted in more jobs at better pay, turning the state from a laggard to a leader in income growth.

Clean up coal. Coal may still be king among energy sources in the United States, China and many other countries, but it carries a steep environmental cost. Because of massive carbon dioxide emissions, the main cause of global warming, Kansas recently blocked construction of two 700-megawatt coal-fired power plants. Utilities themselves have canceled another14,000 megawatts and delayed 32,000 megawatts of planned coal-fired generation, according to the National Energy Technology Laboratory. To keep the power flowing to middle-class homes and workplaces, industry and government alike need to invest heavily in technologies to make coal burn much cleaner. They also need to devise economical ways to capture carbon emissions and sequester them safely underground.

Reconsider nuclear power. While support from environmentalists is still scarce, former opponents such as Environmental Defense are now increasingly open to nuclear power, because it produces no carbon emissions. After a 30-year dry spell, the Nuclear Regulatory Commission now expects to receive applications for 32 new reactors across the United States. With nuclear waste already piling up at existing plants, we need a concerted research effort to find a safe disposal method and to ensure cleaner, cheaper, safer technology for new power plants.

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Tax carbon, or develop a cap-and-trade system. It may sound crazy, but executives of such energy companies as Dynegy and Duke Energy have recently come out in support of a tax on carbon. They describe such a tax as the least cumbersome way to encourage conservation and reduce carbon-dioxide emissions.

But how is a tax that could push the price of gas to $5 a gallon going to sit with the middle class? To make the change affordable, oil investor T. Boone Pickens and others suggest using carbon-tax revenue to ease the payroll-tax burden on middle-class workers.

The alternative to a carbon tax, backed by General Motors, among others, is a cap-and-trade system, with the overall limit on carbon emissions to become stricter each year. Companies would be free to choose the cheapest way to make their reductions, either by investing in efficiency or by buying carbon credits from companies that find a way to come in under their targets.

A federal cap-and-trade system, launched in 1995, already has proved effective at dealing with acid-rain emissions. But ExxonMobil CEO Rex Tillerson has argued that a carbon tax would be simpler to administer and more stable in its economic effects.

Promote alternative energy and conservation. But do it carefully. Right now, the federal government pays a 51-cent subsidy on the production of every gallon of corn ethanol. Agribusiness giants like Tyson Foods and Cargill say misplaced emphasis on ethanol is destabilizing the farm economy and driving up the price of food. Moreover, in some cases, corn ethanol produces more pollution than ordinary gasoline. Daniel Kammen of the University of California at Berkeley argues for incentives aimed more accurately at the results we really need.

For instance, cellulosic biofuel -- made from inedible parts of plants or from nonfood plants such as switchgrass -- could meet an eighth of the nation's transport energy needs with little effect on food prices, and deliver an 80% improvement in greenhouse gas emissions compared with conventional gasoline.

Incentives also should promote energy efficiency and conservation; that's the cheapest, fastest way to bring down energy costs.

Exploit our competitive edge. We're losing old-economy manufacturing jobs, but the United States leads the world in pollution monitoring, control and abatement. The environmental-technologies business is worth an estimated 1.4 million jobs in this country -- and could be worth much more if U.S. trade negotiators can beat down steep tariffs on environmental products imported to China, Brazil and other countries.

To get a sense of the potential market, consider this: China alone is spending $12 billion on environmental

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projects to prepare for the 2008 Olympics.

Invest in public transportation. Americans like suburbs. As a result, the average family spends far too much on cars. Jammed roads mean commuters waste increasing amounts of time idling in traffic, spewing exhaust. And rising gas prices just add to the financial and emotional toll.

Mass-transit use has risen 30% since 1995, faster than highway miles driven. But advocates now urge increased federal funding to get ahead of the trend, making public transit more comfortable and convenient.

The American Public Transportation Association calculates that the average two-income family saves $6,235 a year by making the switch from cars to public transit. That's more than most families spend on food. And there's another payoff: At current ridership levels, says APTA president William Millar, public-transit users eliminate the need for one supertanker from the Middle East every 11 days.

Say goodbye to sprawl. Denser developments in cities and around existing transport hubs use energy far more efficiently and produce fewer carbon dioxide emissions. One way to rethink how we live: New-urbanism designer Andres Duany says shopping malls failing across the country can take on another life as mini-cities if we add housing and office space.

Old city centers also are getting more attention. For instance, the federal New Markets Tax Credit program rewards investment in struggling communities. One result: In April, the first commercial building will open in a planned 88-acre residential, retail and medical-research development next to Johns Hopkins Medical Center in East Baltimore. It promises to bring 4,000 new jobs to the neighborhood.

To most middle-class Americans, climate change and the energy crisis naturally look like a terrible threat. But just as with Sputnik, which circled ominously overhead 50 years ago, a looming environmental and energy crisis could be America's next big opportunity.

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Published Dec. 28, 2007