Investment And / Or Tax ?  

Posted by Big Gav

Jeff Jarvis at BuzzMachine has a post on a World Economic Forum session at Davos, featuring Larry Page, Sergey Brin, and the Google Foundation’s Larry Brilliant, in which he contrasts Al Gore's description of some of our problems and recommendation to implement carbon taxes with the Google boys' vision of some of the solutions that can be generated by investing in clean technology.

I think he makes a mistake in making this an either / or proposition - the quickest way to switch to a clean energy economy is to implement carbon taxes and invest in solutions - and the former will make the latter occur much more rapidly than would otherwise occur.

The key difference between this [session] and the Gore-Bono panel prior to this is that Gore concentrated on the things we must stop doing — as the movement does — while the Google team concentrates on what we can start doing, thanks to technology.

Brilliant says after the Bono and Gore session earlier: “It’s true that climate change takes the oxygen out of the room.” In other words, it takes attention and effort away from poverty and development. He says we have to get over our cultural ADD and handle more than one crisis at a time.

He outlines the Google Foundation’s priorities. They believe that people don’t know what services their governments offer and so they help inform them and help governments get that message out. Another priority is job creation. Less than 15 percent of jobs in the developing world are from small and medium enterprises and they are targeting growth there. In health, they are concentrating on diseases that jump from animal to human, such as AIDS, and become pandemics. They are funding early-warning systems. They concentrate on climate change: making ecological power cheaper than coal-fired power. And they believe electric cars plugged into a green grid will take care of much of our problems.

Larry Page talks about the renewable-power-cheaper-than-coal initiative. Buying a lot of electricity, Google knows that the cheapest came from coal. The cost of electricity as a percentage is going up, he says, and is approaching the cost of the computers themselves. So they want to get it cheaply and get it green. Startups can work selling green energy at 10 cents per kilowatt hour because there is a demand for renewable energy, he says, but that does not bring real change. “Our primary goal is not to fix the world,” he says, but they do have the power to drive things forward, to get to three cents.

Sergey Brin says the are concentrating on three energy sources: solar-thermal, deep geothermal, and high-altitude wind; if he had to add one, it would be photovoltaic. He says that windmills are on a par with coal but are intermittent and they think it can be even cheaper by using high-altitude wind, through kites, which are cheaper to make that metal windmills. They’ve invested in this and solar-thermal. Deep geothermal is a bit farther off because it requires more fundamental research to get to scale.

What’s the reaction of the energy companies? “They’re pretty good at pushing things into the future and you guys want to claim the future now,” Friedman says. Brin says some of these companies such as BP are invested but Google has an advantage because it does not have a legacy business to cannibalize. Indeed, Google can benefit its core business. “There’s a big bet at some point that you need to make that’s going to take capital.” And Google, he says, in a good position to take that risk.

Asked about the reaction of shareholders, Page says the investment is moderate and there is potential for payoff.

Friedman asks whether they can succeed in this space without taking more of a political position. Brilliant says very few of the people fighting against the climate change movement are bad people: “the have children, they have grandchildren.” He says that the movement has not done a good enough job to communicate. “You can’t separate the quest for dignity and fight poverty from climate change…. We have failed to get that degree of awareness in Congress.” ...

Asked what the next president should do to help their cause, Page responds as an engineer and complains that there has been no research on transmission — which adds to costs — and so he wants a priority on that work from government — an interstate highway system for power, Friedman says. Brin’s answer: Renewable energy is not on a level playing field because of the costs of old energy: health and coal, politics and oil, tariffs on commodities for ethanol, regulation on electric-care development. Brin says they are generating 1.6 megawatts of solar power on their campus. “It’s been great. It produced shade. It reduced cost.” But he says that regulation, federal to local, adds cost. “There’s just all these barriers to clean energy that don’t exist for dirty energy.” ...

Gore, from the audience, takes issue with Brilliant, saying that getting information out is no longer sufficient. “That’s the way the world used to work. The world doesn’t work that way anymore. The reason that the tobacco industry was able to continue killing people for 40 years ater the surger General’s report…. they understood the power of strategic persuasion. They went about it in a very careful, organized, and well-funded way.” He says we are “vulnerable to strategic persuasion campaigns if the other side assumes that we should just get the information out there.” He says Exxon Mobil has funded 40 front groups to “in their own words position global warming as theory rather than fact.” He concludes: “We need to take them on, Goddamnit.”

Brilliant responds, saying he agrees with Gore but adds: “Each of us needs to play the role we are uniquely positioned to play.”

The other unspoken divide is about economics: Gore and Friedman favor raising the cost of carbon. Page and Brin see a victory in reducing the price of the clean energy. Tax versus investment.


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