Electric Cars, 'Cap and Trade,' and More

R. James Woolsey Jr., a former director of the Central Intelligence Agency, has a favorite personal strategy for ensuring U.S. domestic security: his Toyota Prius hybrid, upgraded with an A123 conversion kit that allows it to run largely on a battery rechargeable by house current.

Unlike the billions it would cost for, say, hydrogen vehicle infrastructure, "I stopped at Wal-Mart," said Woolsey, "and bought my infrastructure" — an extension cord — for $4.95.

Driving plug-in cars tamps down the American appetite for oil from sources vulnerable to terrorist attack, especially the Middle East, where two-thirds of America's oil comes from, Woolsey said during a recent Harvard panel. Meanwhile, 75 percent of American drivers could drive electric cars without adding a single U.S. power plant.

Woolsey was among 28 panelists and speakers at last week's "Acting in Time on Energy Policy" (Sept. 18–19), sponsored by the Harvard Kennedy School (HKS), the Belfer Center for Science and International Affairs at HKS, and Harvard's Consortium for Energy Policy Research.

"Acting in Time" is an HKS initiative that holds periodic conferences on why looming large-scale problems — including global warming, long-term health care, and pandemics — are not being expeditiously addressed.

For the energy conference, one policy paper was written for each of the six panels. The papers will appear in book form by January, said conference co-organizer William Hogan, the Raymond Plank Professor of Global Energy Policy at HKS.

Over two days at the Charles Hotel and at HKS's Taubman Center, questions and comments came from an audience of about 130 academics, policymakers, and business leaders.

Panels looked at climate change, carbon capture and storage, oil and transportation, energy innovation, electricity market structure — and at the obstacles to acting in time to address the overall problem.

As for global warming policy — the subject of the first panel — "It's a particularly good time to act in time," said moderator Jeffrey Frankel, the James W. Harpel Professor of Capital Formation and Growth at HKS.

According to the policy paper by conference co-organizer Kelly Sims Gallagher, director of the Energy Technology Innovation Policy research group at HKS, sea ice is melting at record rates, average temperatures in the U.S. Midwest are getting hotter, and between 2000 and 2005 alone global emissions of CO2 grew by 16 percent — with the United States and China accounting for 46 percent of the Earth-warming gas.

There's no definitive answer for how much time the world has before irreversible climate change, said Gallagher, a proponent of worldwide emissions "budgets." But delaying changes in energy infrastructure, she said, would cost governments more in the long run.

"We don't have a lot of time," agreed respondent John Holdren, HKS professor of environmental policy and director of the Science, Technology and Public Policy Program.

Needed, said Holdren, are immediate government incentives for sequestering excess CO2 and for "cap-and-trade" (a strategy for limiting CO2 emissions and giving them market value).

Making carbon capture and storage work was grist for the second panel, based on a paper by Daniel P. Schrag, Harvard professor of Earth and planetary sciences and director of the Harvard University Center for the Environment.

Carbon sequestration is an essential ingredient in stemming destructive energy policies, his paper said, in addition to energy-efficient practices, nuclear power, and sources of renewable energy. Shut down low-efficiency U.S. coal power plants, said Schrag, and finance 20 large-scale demonstration projects for injecting excess CO2 into U.S. aquifers, or off-shore seabeds.

Demonstrations of carbon sequestration are "inadequate with respect to scale, time, and funding," said panelist John M. Deutch, a one-time CIA director who specializes in energy and environment issues at the Massachusetts Institute of Technology. Federal effort will be needed, he said — regulations to minimize squabbling from U.S. states and capital at a scale that states or private industry cannot manage.

Innovation in energy technology can help, according to another panel paper, but the United States is not the leader it should be.

"We are vastly underfunded" for energy technology innovation, and hampered by short-cycle government funding in an arena that needs multiyear funding, said panelist Jane A. "Xan" Alexander, a 20-year veteran of the federal energy bureaucracy and now a consultant to the nonprofit Clean Air–Cool Planet.

Part of the problem is the level of federal funding. U.S. dollars for energy innovation research and development peaked at $6 billion during the Carter Administration, "and are less than half that now," said Dan W. Reicher, director of climate change and energy initiatives at google.org.

Is change on the horizon after the next presidential election? The conference dinner on Thursday evening (Sept. 18) at Loeb House featured a battle of words between Obama campaign energy adviser Jason Grumet and his counterpart with the McCain campaign, Floyd DesChamps. (Woolsey, who was not part of the debate, is also a prominent McCain energy adviser.)

For his smooth delivery alone, Grumet won the debate, said scientist Marilyn A. Brown, a conference observer who teaches public policy at the Georgia Institute of Technology. (Her comparative analysis of the McCain-Obama policy differences on energy, written before the Acting in Time event, is available at http://www.gatech.edu/energybuzz/.)

The final panel on Sept. 19 was on "Barriers to Acting in Time on Energy and Solutions for Overcoming Them" — the title of the lead-off paper by negotiations scholar Max H. Bazerman, the Jesse Isidor Straus Professor of Business Administration at Harvard Business School.

In addition to electric cars, Woolsey suggested another solution: "good old energy efficiency in buildings."

The U.S. president "has an agenda-setting function," but some of the needed leadership in the energy policy debate has to come from the private sector, said panelist and senior fellow at both HKS and Harvard Law School Ben W. Heineman Jr.

Panelist Susan F. Tierney, managing principal at the consulting firm Analysis Group, concentrated on White House leadership — with much hinging on the victor in the coming presidential election, she said.

"The president has to shape a vision for why this is not a sacrifice but a responsibility," Tierney said of hard choices necessary in an effective energy policy. "Without that ... we're totally toast."

Visit www.ActingInTimeOnEnergy.com to access the conference website.

To view photos from the conference, click here.