DEBATING POLITICS, ECONOMICS AND OTHER TIMELY TOPICS WITH PAUL KRUGMAN OF THE NEW YORK TIMES

FRIDAY, FEBRUARY 5, 2016

PAUL KRUGMAN

BACKSTORY

An Energy Revolution Within Reach

Renewables
Get a Boost

So you say you want a revolution? Politically, Im afraid youll

be disappointed unless the revolution you have in mind involves
putting Donald Trumps finger on
the button. But an environmental
or energy revolution? Thats looking remarkably within reach.
Joe Romm at Climate Progress has the story (here: thkpr.
gs/3743517). The backdrop is the
remarkable improvements of recent years in renewable-energy
technologies, which have put
solar and wind power in striking
distance of matching the costs of
electricity generation using fossil
fuels.
But besides the costs, theres one
remaining hurdle: Renewables
have a hard time matching fluctuations in demand.
Enter three policy changes. First,
the last congressional budget deal
retained tax incentives for renewable energy, which will have a huge
impact maybe even a yuge
impact, as Donald Trump would
say on its deployment over the
next decade. Second, in January
the Supreme Court rejected a
challenge by power companies to
Environmental Protection Agency
rules leading to demand response
pricing which is, basically, paying people not to consume electricity during peak periods, a program
that really helps renewables.
Finally, if Democrats hold the
White House next year, well see
the Obama administrations plan
to limit carbon go into effect, which
will create a big incentive to switch
to renewables.
Nothing in this should lead to
complacency. Were still facing a
huge climate challenge, and President Trump (or for that matter any
of the other seven dwarfs) could

SANDY HUFFAKER/THE NEW YORK TIMES

Wind turbines near Ocotillo, Calif. In December, Congress approved the extension of tax credits for wind and solar power firms.
and would destroy the whole thing.
But were now achingly close to
making rapid progress on emissions much more rapid than I
think anyone imagined was possible just a few years ago.

Obama essentially supports the

Hillary Clinton theory of change
over the Bernie Sanders theory.
Heres the president talking to
Politico: I think that what Hillary
presents is a recognition that translating values into governance and
delivering the goods is ultimately
the job of politics making a reallife difference to people in their
day-to-day lives. I dont want to exaggerate those differences, though,

Bernie, Hillary and Change

Quoting President Obamas
interview with Politico last month,
Greg Sargent at The Washington Post recently noted that Mr.

READER COMMENTS FROM NYTIMES.COM

Leaving Fossil Fuels Behind

I am concerned that any positive developments that might
result from an energy revolution
will arrive too late. If we want the
United States to transition away
from fossil fuels, we need to push a
lot harder now.
CHRIS G., MASSACHUSETTS

People who support Bernie

Sanders are not looking for an
instant revolution they simply
want to stop preserving the plutocratic status quo. They want to
put the country on a path toward
real change.
They also know that an instant
revolution in energy production is
impossible. Renewable energy is
still not fully competitive, but there

According to analysts, a series of recent developments in the United States

could help expedite the nations transition to renewable energy.
The Rhodium Group, a consulting firm
that specializes in energy policy, predicted in a report released last month that
extensions of federal tax credits for wind
and solar power companies, combined
with forthcoming emissions regulations,
could effectively end the countrys natural gas boom.
While natural gas extraction emits a
significant amount of carbon, it produces
less than other fossil fuels like coal, and
analysts have long expected natural gas
to act as a bridge in the transition from
coal-generated power to renewables.
But while the cost of generating renewable energy from wind and solar is
expected to continue to decline, natural gas is still predicted to remain cheaper for several more years. Thus, renewables have been able to compete because
of the federal tax credits.
Additionally, President Obama unveiled a Clean Power Plan last August, which mandates steep cuts in emissions from power plants. Without the tax
credits for renewables, the cheapest way
for utilities to comply would have been
through the expansion of natural gas
generation.
Many analysts had expected the tax
credits to expire, but they received a surprise reprieve in a spending bill that was
passed in December and will remain in
place for five more years. According to
the Rhodium Group, The tax extenders fundamentally change[d] the game.
We expect wind and solar to cut off the
surge of [natural gas] generation.
In another blow to fossil fuel extraction, the Supreme Court ruled late last
month that the government could force
utilities to implement demand response energy pricing. Normally, when
a utility experiences high usage, it activates unused power plants to meet the
extra demand. But under a demand response pricing system, the utility must
pay consumers to conserve electricity the same amount that it would pay to
generate new electricity. If the case before the court had gone the other way, it
would have incentivized the construction
of more carbon-intensive power plants,
rather than foster conservation.
Justice Elena Kagan wrote in the
courts majority decision that the demand response practice started because wholesale market operators can
sometimes say, on a muggy August
day offer electricity both more cheaply and more reliably by paying users to
dial down their consumption than by
paying power plants to ramp up their
production.

is hope that it will be soon. But for

now, too many political barriers to
renewables remain in place.

improvements with regard to

renewables.
For example, silicon-based solar
panel technology has been around
for decades. And solar panels have
gotten a little cheaper every year.
Now prices are low enough that solar energy can be a viable competitor to fossil fuel extraction in sunny
regions around the world.
So when one opts for incremental
change, it does not mean giving up
on accomplishing big things. Sustained incremental improvements
over time can result in revolutionary changes.
In fact, steady improvements
are often the only way to make big
ideas a reality.

NAME WITHHELD, TENNESSEE

Incrementalism is just the

ticket if you are comfortable and
have a stable, middle-class job.
However, if you are falling out of
the middle class, then more of the
same wont cut it.
More than 30 years ago, President Reagan led a revolution that
gave us supply-side economics.
But it is no longer sustainable.
TIM KANE, ARIZONA

It occurs to me that some

people might not understand the
power of sustained incremental

because Hillary is really idealistic

and progressive. Youd have to
be to be in, you know, the position
shes in now, having fought all the
battles shes fought and, you know,
taken so many, you know, slings
and arrows from the other side.
Mr. Sargent could be wrong, of
course. But if youre a progressive
who not only supports Mr. Sanders, but is furious with anyone who
is skeptical about his insurgency

someone who considers the economist Mike Konczal to be a minion

and me to be a corrupt crook, for
example you might want to
ask why Mr. Obama is saying essentially the same things that progressive Bernie skeptics are.
And you might want to think
hard about why youre not just sure
that youre right, but sure that anyone who disagrees with you must
be evil.

Its worth noting that the cost

of replacing any significant portion of the power grid with wind
or solar energy will be staggering.

as long as were not talking

about ethanol, which is marketed as a renewable, even though it
uses more energy than it creates
and wrecks the livelihoods of impoverished farmers.

NAME WITHHELD, PUERTO RICO

NAME WITHHELD, FLORIDA

Power generated through solar and wind is starting to take

over at a time when energy demand is projected to be relatively flat for the foreseeable future.
This means that for the first time
since the Industrial Revolution,
economic growth and energy consumption have been decoupled.
Also, solar and wind arent the
power generators of choice just
because they are clean and relatively cheap. Renewables can be
integrated into the power grid in
manageable increments.
CHRIS GRANDA, VERMONT

Renewables? Absolutely, just

NAME WITHHELD, CALIFORNIA

The other revolution on the

horizon involves energy-storage
technology. Besides Teslas
home-energy battery, the German
company Varta is also selling rechargable batteries.
A balanced storage system can
take a lot of pressure off the grid
and help tremendously in fostering
the use of renewable energy.
NAME WITHHELD, VERMONT

ONLINE: COMMENTS
Comments have been edited for clarity and
length. For Paul Krugmans latest thoughts
and to join the debate online, visit his blog
at krugman.blogs.nytimes.com.

PAUL KRUGMAN

Top Secret Tends to Be the Default

We now have yet another Hillary Clinton email story this
time involving emails that covered material that wasnt classified when the messages were
sent, but which is now deemed to
be top secret by the State Department. The Clinton campaign is
demanding that the emails be released, presumably to show how
innocuous they really were.
Max Fisher at Vox suggested recently that this is basically a story
about the craziness and excesses
of the classification system, and
my own experience although
deeply out of date suggests that
hes probably right. (Read his article here: bit.ly/1UvVFPQ.)
As Ive mentioned before, I
worked for the American govern-

Paul Krugman
joined The New
York Times in 1999
as a columnist on
the Op-Ed page
and continues
as a professor of
economics and
international
affairs at Princeton
University. He was awarded the
Nobel in economic science in 2008.
Mr. Krugman is the author or editor
of 21 books and more than 200
papers in professional journals and
edited volumes. His latest book is
End This Depression Now!

ment, as a staff member at the

Council of Economic Advisers,
from 1982 to 1983. No, I wasnt a
Reaganite my job was a subpolitical, technocratic position,
which I filled because Martin
Feldstein, the councils chairman,
wanted the smartest young technocrats he knew to be on staff.
I was the senior international
economist; the senior domestic
economist was a guy named
Larry Summers.
Given the area I covered, I received a lot of classified reports
from the C.I.A., the State Department and other government agencies. The covers of these reports
had all sorts of warnings in capital
letters: SECRET NOFORN NOCONTRACT PROPIN ORCON,

I think, was the standard litany.

And there was a security person
who came through our offices at
night, scooped up any classified
documents we left out, put them
in a safe and issued citations to us
for leaving them out. Between the
number of classified documents I
received and my continuing true
identity as an absent-minded
professor, I got a lot of citations
second only to Mr. Feldstein.
But the reason I kept forgetting
to lock up the documents was the
fact that none of them literally
not one, during a whole year
contained any information that
was actually sensitive. There was
nothing in any of these classified
reports that you couldnt have
read in newspapers or figured out

for yourself by accessing public

information.
I suppose I was privy to a few
bits of sensitive information. For
example, I knew that Brazil was
out of money during the Latin
American debt crisis a few days
before that information was public though it wasnt mentioned
in classified documents. The
larger secret I learned from my
year in government that the
quality of discussion in Cabinetlevel meetings is lower than you
can imagine isnt the kind of
thing people put in classified
documents.
So my guess is that the
only scandal here is how much
anodyne stuff gets top secret
slapped on it.

READER COMMENTS FROM NYTIMES.COM

Hypocrisy Is the Issue

Id be more sympathetic toward
Hillary Clinton if she hadnt vigorously supported the prosecution
of Chelsea Manning and other
government whistle-blowers in
the past. Such hypocrisy is just too
much to forgive.
And when it comes to her emails,
she simply should have known better. Even if the information only became classified later (which hasnt
actually been confirmed), she was
the top official in the State Department. She should have known where
the bar was set.
If Mrs. Clinton was a low-level

employee rather than a rich, powerful, well-connected politician, shed

already be locked up.
SEB WILLIAMS, FLORIDA

Mr. Krugman, you were a nonpolitical technocrat when you were

on staff at the Council of Economic
Advisers. But Mrs. Clinton held the
very political title of secretary of
state.
She should have known that any
information that was shared with
her was classified from the moment
she received it.
C.G., NEW MEXICO

Considering all the information

that the former government contractor Edward Snowden was able
to obtain (and which the Russians
likely now possess), Mrs. Clintons
email server may have been the
only one with government information that was not hacked.
This email scandal sounds more
like the Whitewater scandal with
each passing day.

KAL/CARTOON ARTS INTERNATIONAL/THE NEW YORK TIMES SYNDICATE

last time the noise was this loud, we

went to war based on Republican
lies.
Lets not forget that we are still
paying for that war with American
lives and treasure.
JOHN S., ARIZONA

Secrecy is not about security.

Its all about power.

TERRY, NEVADA

NAME WITHHELD, NEW YORK

JUNE BUTLER, LOUISIANA

This email controversy stinks

to high heaven, but not because of
anything Mrs. Clinton did.
No, the origin of the rotten smell is
the Republican noise machine its
the same machine that years ago
repeated claims about Iraq having
weapons of mass destruction. The

was never anything in those briefings that I didnt already know from
reading the newspapers. Still, the
intelligence officers clearly enjoyed
their roles as guardians of all this
secret information.
There is an old joke about military
intelligence being an oxymoron. Its
as true as it is funny.

I had similar experiences during

the Vietnam War. I flew transports
to and from Southeast Asia, most
often into Vietnam itself.
Every one of those trips would be
preceded by an intelligence briefing
during which pilots were given current and secret information about
what we might encounter. But there

We need to know when, exactly,

the information in question was
classified. If it was classified in the
last couple of months, then Mrs. Clinton did nothing wrong.
Ill bet Mr. Snowdens glowing performance evaluations are now top
secret, but they werent at the time
that they were written.
ACHARN, THAILAND