Waxman-Markey Insights From Paul Krugman and an Engineers Perspective

Paul Krugman, Professor of Economics at Princeton, summarizes what the passing of the Waxman-Markey bill would mean to Americans in a short NPR interview. He explains how it will help us take into account the cost of global warming into the economy, providing incentives to change how we produce and consume energy (see my article on externalities for more on this). He says that the overall number of jobs will remain about the same, but the mix of jobs will be different. Krugman says he would bet his Nobel prize that the climate bill would not cost Americans much financially (he says serious studies conclude it would cost most families less than the value of a postage stamp per day), but was not willing to bet his Nobel prize that the bill would save the world, explaining that it may not be enough. In fact, some members of Congress opposed the bill because they felt it was not aggressive enough. Several environmental groups, including Greenpeace, also oppose the bill for the same reason.

How does all of this relate to design? While many exciting technologies are emerging that help us use less energy and produce it more sustainably, these technologies only make it to market if they make economic sense. To invest in a new renewable energy project, for example, a business case must be made. If we include the true, long-term costs of fossil fuel derived energy, some renewable energy sources are clearly the right choice. While many engineers and others are concerned about sustainability and interested in energy efficiency and renewable energy, this concern is not enough to produce the large-scale shift to sustainability we need. We need to create an economic environment that supports substantial, continued investment that will accelerate the development and deployment of clean energy technology.

I hear many folks talking about what individual choices they can make to reduce their carbon footprint or live more responsibly. I hear support for wind and solar energy. Consumers are starting to consider ‘greenness’ in purchasing decisions. But oft times there seems to be a disconnect when it comes to making collective choices that will bring about substantial change, much more than what individual choices will procure. We need to shift our collective support from status quo energy systems to new energy strategies that will carry us (and the natural world) through successfully for generations to come. The innovative spirit and talent is there, waiting to rise to the challenge. It will lie relatively dormant until citizens make the clarion call for strong incentives and bold policy that will empower engineers and others to accelerate the metamorphosis of our energy, transportation, and agricultural systems.

Waxman-Markey is not ideal. It may not be enough. But perhaps it will give Americans a taste of the exciting progress that can be made when we focus and guide our efforts in the right direction. Perhaps after this first taste we will be willing to move beyond this first step.