President's Energy Speech

Joseph A. Stanislaw has spent his career concerned about the future of energy production and consumption. The J.A. Stanislaw Group specializes in strategic thinking and investment in energy and technology, advising industry and governments as they set energy policy.

Deeply influenced by the writings of E. F. Schumacher, Mr. Stanislaw has authored several papers on alternative energy technologies and their promise.

He writes of his latest innovative essay: "With the historic election of Barack Obama to President, our nation enjoys new opportunities to confront monumental challenges--especially the convergence of energy, climate change, and security. This is the speech I would like to see President Obama deliver when he takes office in January 2009."

We have excerpted sections of it below. The full essay is at www.smallisbeautiful.org/publications/stanislaw_08.html

Best wishes,
Staff of the E. F. Schumacher Society

* * * * * * * * * *
TOGETHER WE WILL EMPOWER AMERICA IN THE 21st CENTURY

My fellow Americans, this is my first address to you as your President. It is also one of the most important speeches I will ever make.

Our nation confronts many challenges. . . . one challenge transcends them all.

It is--at once--our most critical economic, national security, foreign policy, and environmental challenge. It lies at the heart of how we educate our children and operate our government. It is the key to unlocking millions of jobs, and to preserving and developing our local communities. And it is our way out of this economic crisis, the most severe crisis our nation has faced since the Great Depression.

This issue is energy--how we produce it and how we consume it.

The threats we face today that are linked to energy have multiplied. Not only are our economic security and well-being at risk, but so too is our fundamental security. Our reliance on foreign oil threatens our independence. Our exposure to climate change poses an unacceptable risk to our communities, our environment, and our culture.

It is this convergence of economics, climate change, and security that
makes energy the most important issue of our time.

In leading our country into a new energy era, I have on my side one all- powerful weapon--a weapon none of my predecessors ever fully enlisted in their efforts: you, the American people. Each and every American, beginning today, has the power to drive our country to greater energy independence. Each and every American can contribute in a meaningful way to creating the green economy of the 21st century and to combat climate change.

I will be accountable to you. And I expect you to be accountable to me and to each other. This is what democracy means.

We will appeal to American common sense by expediting the era of cutting-edge clean vehicles, energy efficient homes, and smart appliances--all of which will save you money and improve your lives.

We will build on the American ethic of fairness by allowing competing technologies to prove themselves on their true merits -- making our markets reflect and capture the true cost of energy . . .

We will inspire and support America's spirit of innovation and entrepreneurship by investing in research and providing powerful incentives to bring new technologies into the marketplace.

We will lead the way by making energy a force for international unity, not division, and by seriously addressing climate change.

And we will honor America's forward-looking spirit by investing in education, from cradle to grave, so that we change how Americans of all ages view our energy challenges and the related environmental issues.

Nor will we suddenly turn our backs on oil and gas. No matter how fast the progress on alternatives, the world will be primarily reliant on fossil fuels for at least two generations--the bridge to tomorrow's new energy future depends on this. . . . There is no quick fix. But a rising tide of alternative sources of energy--combined with new demand patterns and new demand efficiencies--will mitigate the eventual, gradual drop-off in hydrocarbon production that should begin in the next quarter-century. This will create a bridge to the new, cleaner energy era ahead and will create a wave of new jobs--a new industrial revolution.

Allow me to outline five areas of action, including specific targets, on
which my administration will begin working immediately.

The first, and most vital goal, is education. There is only so much that presidential leadership alone can accomplish. For this great American project to succeed, we must make knowledge of energy part of our national DNA. This can only be done through education.

So tomorrow, I will convene a blue-ribbon commission of high school and college educators, business and labor leaders, economists, and technology experts to look at every aspect of our education, training, and public awareness systems. . . .Their first goal will be to identify the skills our schools must teach so that we develop a world-class workforce that can usher in a new era of energy and environmental progress – these include basic skills needed from electricians, to welders, to plumbers, to more advanced engineering skills.

But education requires not only learning in the classroom, but learning in the real world. So today I am announcing the massive expansion of AmeriCorps. Every graduating high school senior will be encouraged to undertake one year of national service. The top priority will go to projects that will rebuild our communities so that they become energy efficient and environmentally aware.

Our second goal is one that also enlists every single American--energy efficiency.

The greatest proven reserves of fossil fuels that we have are not in Saudi Arabia or the Gulf of Mexico--they are in your cars' gas tanks, in your homes' oil heaters, in the electricity plant down the road. A barrel of oil saved is a barrel found. Everything we do today, we could be doing more efficiently as soon as tomorrow--consuming less energy by using technologies that are already available to us.

By the end of my first term in office, our goal is to put in place energy efficiency programs and initiatives to promote alternative transportation technologies that will eliminate the need for oil imports by 2025.

Our progress towards energy efficiency, however, will only be possible if we continue to develop smart technologies and alternative forms of energy. For this to happen, we need markets that are honest and fair--markets that reflect the true price of energy. This will be my administration's third goal.

Simply put, when you buy a gallon of gas today, or fill your boiler, the price of these fossil fuels does not reflect their true costs to our society. Over the course of my first term, therefore, I will confer with the energy industry about adopting a carbon tax or a carbon trading system that creates a cost for carbon to make the economics of our energy systems reflect the honest cost of fossil fuels. The revenues we raise from such a tax or trading system would be invested in helping to finance the upfront costs of energy efficiency technologies for Americans, as well as in the research we need to develop clean and alternative technologies.

This is my fourth goal: to make America the world leader in every promising clean and alternative energy technology. There is no silver bullet to achieve our energy targets--we need every bullet.

As importantly, my government will renew our country's aging infrastructure, laying the foundations for the green economy of the 21st century. A smart energy grid will be one of our signature projects. Specifically, within two months from today, we will begin work on demonstration projects for a smart grid system in two to three locations in America, so we can prove the worth of these technologies. We will then reward states that allow for the rapid implementation of smart grids and we will develop programs to speed the construction of such grids across the country.

If we are willing to spend $1 trillion to bail out banks, surely we can invest an equal amount to build the basis of our future prosperity. In doing so, government will lead by example. We will use America's might in the market to set the highest standards for energy technology. Those companies that lead the way will be rewarded in the marketplace through the government's purchasing power.

Your government will construct buildings that meet green LEED standards. Your government will retrofit its buildings to the highest "green" standards. Your government will purchase automobiles and electronics that rate in the top 10 percent of energy efficiency. By doing so, we will create economies of scale for these technologies that will bring down prices for all Americans. And your government will hire employees who have received certification in energy efficiency.

I expect that city and state governments, many of which have been visionaries in this field, will follow the federal government's lead. In fact, we will help them do so by offering federal guarantees for municipal bonds raised for this purpose. We also will require any entity drawing on federal funds to meet federal energy standards.

In everything we do, in fact, we will be guided by a profound commitment to our local communities--it is the prism through which we will develop all of our energy policies.

. . . in cooperation with today's top technology companies, we will launch a major web portal to allow local communities nationwide and worldwide to share their best ideas and practices for transforming themselves into green economic leaders.

Government also will use the current crisis in our economy to transform local communities. As we rebuild our financial system, we will ensure that it functions to promote housing and urban transport improvements that are responsive to our energy goals. This includes, among other measures, providing mortgages with lower rates for more energy efficient homes.

And when the smoke clears--and the smoke will literally clear--we will have created millions of new jobs--jobs that pay well and stay put for all those students educated by the "green economy" schools we will have created. Jobs that revitalize local communities. Jobs that make America a global industrial leader once again. Jobs that cannot and will not be exported.

But if there is one thing we have learned during the economic and foreign policy crises of the past decade, it is that we cannot go it alone. America is not an island.

On the energy issues that matter most, we need to reach out and develop deep cooperation with our allies and trading partners. This is my fifth goal.

Our ultimate destination is energy independence. But, the path to that ultimate destination is mutual interdependence. We will achieve this by creating transparency in energy markets, by investing jointly with our allies in new and renewable technologies, by leading negotiations for a successor treaty to the Kyoto protocol, and by creating a G20 for energy security.

To oversee all aspects of this greatest challenge of our generation, I am creating today a National Energy Council, which will be located in the White House.

Their core mission will be to create the vision, the direction, and the conditions to drive us to this new energy future.

We should not expect short-term miracles from this plan. Over the next four years, we must do the hard work of defining and putting in place a 50-year vision for the wholesale transformation of our society to one that has a sensible long-term energy policy – and is also clean and green. If we do this, our energy costs and our foreign dependency will drop dramatically each and every decade. This is the promise I make to you and your children and your grandchildren.

* * * * * * * * * *
Used with permission of Joseph A Stanislaw and
Deloitte Touche Tohmatsu (www.deloitte.com).

Scale Limitations/Shaping a Future Economy

John Fullerton described the current financial collapse in his May 2008 essay "The Relevance of E. F. Schumacher in the 21st Century." It now seems prophetic.

In the same article he warned us not to look to the tweaking of current economic systems to solve our problems, but rather to reach to the teachings of our common wisdom traditions to find new ways of assessing the truth of our situation and to collectively build new economic systems that are just, ecologically responsible, and permanent. In fact he names this rebuilding as the central task of concerned citizens in the first decades of this century.

We have posted his full article at the E. F. Schumacher Society's website (http://www.smallisbeautiful.org/publications/fullerton_08.html) and excerpted sections below for your reading.

Best wishes,
Staff of the E. F. Schumacher Society
140 Jug End Road
Great Barrington, MA 01230
www.smallisbeautiful.org

********************************
Excerpts from:
"The Relevance of E. F. Schumacher in the 21st Century"
By John Fullerton
May, 2008

Our global economic system is broken not because of the credit crisis; it is broken because it is predicated on perpetual, resource driven growth with no recognition of scale limitations.

What we are not hearing, at least in the mainstream media, is a critical reframing of the questions that address root causes. . . . . We are not hearing a debate about the sustainability of a perpetually growing global economic system nested within our finite biosphere. We are not hearing a debate about the wisdom of allowing financial power (and systemic risk) to be increasingly concentrated in the hands of a few financial institutions of increasing complexity and scale. We are not publicly questioning the wisdom of the system we have allowed to evolve in response to capital's quest for ever increasing financial returns. Nor are we debating where to look for creative responses.

However, nothing could be more important at this critical time. What we must grasp is that the financial crisis we are reacting to is but a cyclical side show to the bigger issues we face regarding the sustainability of our economic system. We should see the present financial crisis as a wake up call to this far greater challenge. We should search with an open mind for the wisdom we need to transition our economic system onto a sustainable path, grounded in ecological reality, with a respect for human justice and a deep appreciation for all life.

What is needed is nothing less than a new economic myth, which incorporates the central issue of scale in order to supplant and transcend the "invisible hand" of the free market. We need a "post-modern (post-materialist) economic theory".

At the beginning of the 20th century, scale did not matter. At start of the 21st century, scale redefines our economic challenge.

In my personal quest for this new economic myth, I was stopped dead in my tracks after discovering E.F. Schumacher several years ago. Most who know of Schumacher know him from his seminal work, Small is Beautiful - Economics as if People Mattered (1973). The fortunate ones have also read his final published work, A Guide for the Perplexed, a title that grabbed me and did not disappoint. Most disciples of Schumacher probably encountered his clear thinking during the 70s. Many went on to become leaders in the environmental movement. I was in junior high school when Small is Beautiful was published, and then was busy building a career in global finance during the 80s and 90s on the belief that finance rather than politics would dominate international relations during my lifetime. I got that right, but not in the way I expected. Seeing global finance, what I do, as a root cause in fueling our unsustainable economic system, has shaken many of my prior beliefs on economics.

. . . it is now time that we transcend to an economics built upon wisdom. Schumacher's instruction is clear and compelling. "From an economic view point, the central concept of wisdom is permanence. We must study the economics of permanence." This intention takes us in a profoundly different direction than conventional, Cartesian thinking. "Permanence" suggests valuing durability over efficiency, stability over speed. These are different values from those typically celebrated in the marketplace.

We need to think about what adjustments are necessary to "insure" the permanence of our collective home, which must include a stable civil society. Such thinking must address the very nature of our economic system. Without a sustainable and just economic system, there is no permanence. We need to inject these ideas into the public debate by reframing the cyclical economic concerns that preoccupy the mainstream media. We see little true recognition of this profound challenge among our business, financial and governmental leadership, which remains absorbed with short-term tactical issues.

Following Schumacher's lead, we should look to the great wisdom traditions for direction in this truth. Where better to look than to the ideas and teachings from all cultures that have stood the test of time, rather than restrict ourselves to contemporary economic theories that we know are limited and incomplete.

Schumacher is relevant to our critical 21st century challenges precisely for this reason. His philosophy, his concern about the limits of materialistic scientism, his distinctions between divergent and convergent problems, and his ideas of decentralism, appropriate technology, and human scale to name but a few, are all rooted in the great spiritual and philosophical teachings. Not surprisingly, his ideas, in addition to being humane and just, are aligned with nature and nature's sustainable way, the only truly sustainable system we know. They are, I believe, rooted in truth as best as Schumacher could discern it, and therefore they represent wisdom, the wisdom of permanence.

If you examine Schumacher's personal library, which is carefully stewarded at the
E. F. Schumacher Society in the Berkshires, you will find that most of the texts are not about economics. Instead, they include the great philosophical and spiritual texts from all traditions. Schumacher's gift and genius was to derive economic principles and ideas from these teachings, to have the courage to speak the truth, despite knowing it often flew in the face of conventional economic thinking, and to make the truth accessible with his clear and witty prose. What emerges is certainly not the final word on the economics of permanence. Some of his thinking is outdated, or simply missed the mark. But as a foundation to build upon, it is invaluable. The reason his ideas about economics ring true is because they are built upon these wisdom traditions. The contradictions of modern economics are gone.

Our challenge now is to refine and update this thinking and to chart a practical path of convergence between the reality that exists in our economic system today and the principles we strive to uphold and upon which our long run prosperity undoubtedly depends. . . . The opening decades of 21st century may be our best chance to launch the critical transformation of our economic system to an economics of permanence. We need to get it right, as only our collective consciousness will allow.

Transitioning to a sustainable and just economic system is the ultimate challenge of the 21st century. History no doubt will judge our generation by how well we acknowledge, embrace and take up this challenge.

******************************
John Fullerton is a former Managing Director of JPMorgan where he worked for 18 years in New York, London, and Tokyo, and subsequently was CEO of an energy focused hedge fund. He is now seeking to launch an investment fund focused on investing in high impact sustainability initiatives, and is working on The Purpose of Capital, a book about the role of investment capital in sustainable economics. He is a friend and supporter of the E. F. Schumacher Society in Great Barrington, Massachusetts. John can be reached at john@level3cap.com.

Co-producers of Our Own Economies

If our common interest is to build more independent regions and their unique regional cultures, then part of that effort will be to build more independent regional economies --ones in which the goods consumed locally are produced locally.

In her Cities and the Wealth of Nations, the late Jane Jacobs brilliantly argues that the best strategy for economic development is to generate import-replacement industries. She would have us examine what is now imported into a region and develop the conditions to instead produce those products from local resources with local labor. Unlike the branch of a multi-national corporation that might open and then suddenly close, driven by moody fluctuations in the global economy, a locally owned and managed business is more likely to establish a complex of economic and social interactions that build strong entwining regional roots, keeping the business in place and accountable to people, land, and community.

What then is the responsibility of concerned citizens to help build sustainable regional economies?

An independent regional economy calls for new regional economic institutions for land, labor, and capital to embody the scale, our endeavors. These new institutions cannot be government-driven, and rightly so. They will be shaped by free associations of consumers and producers, working cooperatively, sharing the risk in creating an economy that reflects shared culture and shared values. Small in scale, transparent in structure, designed to profit the community rather than profit from the community, they can address our common concern for safe and fair working conditions; for production practices that keep our air and soil and waters clean, renewing our natural resources rather than depleting them; for innovation in the making and distribution of the basic necessities of food, clothing, shelter, and energy rather than luxury items; and for more equitable distribution of wealth.

Building of new economic institutions is hard work. Most of us rest complacently in our role as passive consumers, not co-producers and co-shapers of our own economies. But it is work that can be done, and fine beginnings are being made in the development of local currencies, community supported farms, regionally based equity and loan funds, worker-owned businesses, community land trusts, and business alliances for local living economies.

These initiatives are motivated by the affection that the citizens of a region have for their neighbors and neighborhoods; for the fields, forests, mountains, and rivers of their landscapes; for the local history and culture that binds these all together; and for their common future.

We encourage you to join regional economic projects in your own communities or create them anew. Inventory the
multitude of human, natural, and financial resources available for local production. Support existing businesses. Share information. Apply the genius of local knowledge to shape new enterprises. Celebrate successes.

On Saturday, September 20th BerkShares local currency will celebrate the two millionth BerkShare exchanged at one of our five participating banks with the Second Annual BerkShares Bash. Featuring some of the Berkshire businesses that define the program and our local economy, the event is scheduled for 1-5 PM on the front lawn of the John Dewey Academy at the historic Searles Castle, Main Street, Great Barrington, Massachusetts.

Admission is 5 BerkShares. Kids 12 and under are free. Delight in local musicians, yummy food, fine crafts, Roger the Jester, face-painting, stilt walking, neighbors and friends. Bring the family, a picnic basket, a blanket for sitting, extra BerkShares for treats, and the expectation of a great time.

Susan Witt for the
E. F. Schumacher Society