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Remarks at North American Competitiveness Conference, San Diego, California

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Wednesday, April 14, 2010

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Secretary of Commerce Gary Locke
Remarks at North American Competitiveness Conference
San Diego, California

Hello everyone. It's great to be here in San Diego to talk about an issue that is vital to the economic future of this continent.

The international competitiveness of North America in the 21st century will be shaped by how well we innovate in the clean energy space.

There are plenty of people in government, in business and in the media who think that statement is overblown.

They say that for all the excitement about clean energy, it accounts for only a fraction of energy production around the world.

And they point to forecasts that say even 20 years from now, the world will still depend on fossil fuels for as much as 80 percent of our energy; which is about the same percentage as we use today.

They will tell you, in short, that clean energy may be nice. It might make us feel good. And it might even be worth investing in.

  • But to imagine that it can produce a substantial share of the world’s energy that powers our factories, our planes, trains and automobiles….
  • To suggest that clean energy can be a significant driver of economic growth and job creation…

Well, the critics say that’s just not realistic. That’s not serious.

If the next few decades of energy policy look like the last few decades—where our will to act on clean energy has risen and fallen with the price of a barrel of oil—than the naysayers may be right.

Our challenge is to write a different story.

To explain to our constituents, to our investors, and to anyone else who will listen that the development of clean energy and energy efficient technologies could spur one of the greatest economic opportunities of the 21st century.

And it could put millions of people to work in high-skill high-wage jobs.

If the countries on this continent are not willing to grasp this opportunity, other countries around the world certainly are.

The Pew Charitable Trust just released a study showing that China attracted $35 billion in capital to its clean energy industry last year—twice as much as the United States.

Look at China's rapid growth over the last three decades. It’s has a pretty impressive record of identifying promising economic opportunities. We should pay attention.

If we don't get our act together, we're going to be watching the capital, the businesses and the good paying jobs ending up in Shanghai instead of Silicon Valley or Toronto or Mexico City or other cities across this continent.

Today, I want to talk about how we stop that from happening.

Whenever people discuss the economic potential of clean energy, we inevitably hear the phrase “green jobs.”

Unfortunately, critics have taken to deriding green jobs as little more than a marketing tool contrived by environmentalists.

As President Obama said this past summer, there is a lot of “misinformation that there's somehow a contradiction between clean energy and economic growth.”

That’s a false choice.

Meeting the twin imperatives of rising energy demand and reducing our greenhouse gas output, will require nothing less than completely rethinking the way we produce and consume energy.

In the next few decades, we need to rebuild and reinvent many of our industrial activities; from power generation and transportation to manufacturing and construction.

So when we talk about potential job creation arising from clean energy investments, we’re not just talking about someone working for a solar or wind company.

We’re talking about millions of new blue and white collar jobs:

  • Engineers developing and designing energy-efficient lighting, meters, power generating technologies and factory processes;
  • Mechanics rebuilding outdated electric grids with sensors and controls that monitor and distribute clean energy more effectively;
  • Construction workers producing and installing green building materials;

The potential for new job creation is astounding.

The question is of course, how do we get from here to this promising energy future?

I am proud to say that since taking office, President Obama has already done more to mitigate climate change and invest in clean energy than any president in U.S. history.

Our Recovery Act included $80 billion in clean energy investments that will help double America’s renewable energy-generating capacity in three years, while creating thousands of good jobs.

And the Commerce Department has been playing a lead role in developing this emerging market. One of our technical agencies is helping to design the standards for a national smart electric grid. Another agency is developing new tools to measure carbon emissions. And throughout our department, we are looking to open up international markets for American clean energy companies.

These measures—along with others President Obama has made to invest in a new generation of nuclear power and drive tough new efficiency standards in automobiles, appliances and consumer electronics—are historic. But they are only the beginning of what must be done.

Because even these ambitious measures don't address the most fundamental barrier to scaling up a clean energy economy.

Dirty fossil fuels are still the cheapest kind of energy.

And until that changes, we can't expect businesses that are accountable to shareholders to transition to more expensive clean energy.

And we can’t expect entrepreneurs to make investments in clean energy solutions that aren’t self-sustaining in the marketplace.

For some critics, this is all they need to claim that clean energy is an expensive boondoggle. They say just let the market decide and when clean energy can compete with fossil fuels on cost, then the market will grow on its own.

But our current energy market isn’t anything like a real free market that accurately reflects the true costs and benefits of fossil fuels in our societies.

Just last year, the National Academy of Sciences released a report showing that America's fossil fuel use costs us about $120 billion a year in health costs, mostly because of thousands of premature deaths from air pollution.

Our oil addiction continues to enrich petro-dictators and other countries that actively work against North American interests and fund terrorist networks that threaten us.

And if seas keep rising, floods start increasing and droughts start spreading and lasting longer, you'd better believe:

  • that's going to be bad for business;
  • bad for job creation;
  • and according to a recently released review by the Pentagon, climate change is going to be bad for global security.

If we continue on our present course, imagine how many billions of dollars it will cost to protect low lying areas in the U.S. and around the world threatened by rising oceans.

So let's be clear. The real cost of our fossil fuel use is much higher than what we are paying to heat our homes or fuel up our cars.

Even worse, we actually subsidize the same fossil fuel addiction we are supposedly trying to break.

Between 2002-2008, the U.S. handed out $72 billion worth of subsidies to fossil fuel industries; almost three times as much as we did for renewables.

Meanwhile, clean energy investors in America are faced with constant uncertainty:

  • Clean energy tax credits and subsidies are frequently rewarded or revoked depending on who is controlling Congress.
  • And clean energy investments can easily be wiped out by something as simple as OPEC deciding to increase its oil production.

Is it any wonder that the last 30 years of clean energy has largely been a story of lots of talk and little action?

The Obama administration seeks to end this destructive cycle once and for all by creating a set of incentives to finally unleashed the potential of clean energy.

A centerpiece of President Obama’s energy strategy is passing a comprehensive energy bill that features a price on carbon.

This step, more than any other, will send a market signal to every entrepreneur and business in America that it’s safe and profitable to make long-term investments in clean energy.

It will make the United States and this entire continent healthier, wealthier and more secure. And although fossil fuels will still need to be a key part of the world's energy mix in the near- and medium-term, pricing carbon will, for the first time, create needed certainty in the clean energy marketplace.

As expected, critics have lined up to claim, with little solid evidence, that this type of approach will usher in economic Armageddon.

But these claims are unconvincing.

Time and again over the previous few decades, we have seen vested interests predict disaster upon the passage of sensible environmental and energy regulations, be it:

  • the Clean Air Act;
  • efficiency standards for appliances and automobiles;
  • or the fight we had over a market-based system to curb acid rain back in the early 90s.

In every case, those measures cost far less than predicted and ultimately provided tremendous benefits for society.

Our Energy Secretary Steven Chu, likes to tell the story of how, when California implemented the first refrigerator efficiency standards in the 1970s, industry went nuts. They warned that the standards couldn’t be met at anything like a price consumers could afford.

But once the standards were set in stone, manufacturers had to give up the fight and assign the job to the engineers, instead of the lobbyists.

Today, the average American refrigerator is 10 percent bigger, half as expensive and uses two-thirds less energy.

The message here is simple: When you get the incentives right, the private sector can respond with solutions that are both more effective and more affordable than anyone would have imagined.

The same thing is possible when it comes to the development of clean energy.

But I suffer no illusions that this will be easy.

In ways we don’t even realize, our decisions are shaped by our past experience that makes us believe that what once was…always will be.

That’s why back in 1977, the Chairman of Digital Equipment Company—which was then one of the most respected technology companies in the world—made a statement that today seems ridiculous.

He said:

“There is no reason anyone would want a computer in their home.”

Just 30 years later, more than two-thirds of homes in the U.S. have a PC.

Well, after a century of fossil fuel use, it's hard for many people to imagine anything different. There are plenty of smart and experienced people saying that our energy future has to look a whole lot like our energy past.

It doesn't have to be that way.

With the right vision and the right commitment, we can build a clean energy economy that provides good jobs and sets this continent up for decades of sustainable economic growth.

Everyone here today is playing a part in helping that future become a reality—and I want to urge you to keep pressing for change.

In November, I will be co-hosting the Americas Competitiveness Forum, where we will have private and public representatives across the 34 countries of the Americas to discuss many of the same critical issues that we have discussed during this conference; including clean energy, as well as other topics relevant to the future sustainability and competitiveness of the Hemisphere. I hope to see you there.

Thank you.