TIME

Andrew Cuomo Meddled With His First ‘Independent’ Commission, Too

Andrew Cuomo
New York Gov. Andrew Cuomo speaks during an economic development news conference at GE Global Research in Niskayuna, N.Y. on July 15, 2014. Mike Groll—AP

The New York Governor pressured members of a utility commission to vote for privatization of the Long Island Power Authority, sources say

Before New York Governor Andrew Cuomo set up a supposedly independent commission to investigate political corruption in Albany—a commission he later shut down after it began poking around his own operations, a commission that is now causing him serious political headaches that could become legal headaches—he set up a supposedly independent commission to investigate the state’s electric utilities.

Mark Green, Cuomo’s fellow Democrat and onetime political opponent, says he was surprised when Cuomo tapped him to serve on the utility commission in November 2012. He says he was less surprised when Cuomo’s aides quickly began pushing the commission to propose privatizing the dysfunctional Long Island Power Authority, which was still struggling to get the lights back on after Superstorm Sandy. Several sources confirm the governor’s office pressured the commission to issue a report recommending privatization less than two months after its creation, and that Green threatened to resign when a Cuomo press release incorrectly suggested the recommendation had been unanimous.

“Independent?” Green said. “They tried to ram privatization down our throats. I told them I wasn’t going to be a fig leaf for Andrew.”

A spokesperson for Cuomo declined to comment.

Green, who lost to Cuomo in a Democratic primary for attorney general in 2006, was the commission’s most strident opponent of gubernatorial interference. But sources say members with no axe to grind—notably Peter Bradford, who had led the state Public Service Commission under Cuomo’s father Mario, and former attorney general Robert Abrams, a co-chair of the commission—objected as well.

“Several of us felt we needed to get further into our investigation before settling on one particular recommendation,” Bradford said. “There was definitely back-and-forth with the governor’s office about that. They had a viewpoint, and they wanted us to endorse it so quickly, we risked being perceived as a rubber stamp.”

Still, Bradford believes that Cuomo’s first Moreland Commission—the name comes from the state’s century-old Moreland Act—did good work without too much meddling. “It’s fair to say the governor didn’t have a truly independent process in mind,” Bradford said. “But nobody stopped us from issuing subpoenas. Nobody shut us down. The interference wasn’t as heavy-handed as it seems to have been later.”

Bradford was referring to Cuomo’s second Moreland Commission, the one that was supposed to root out corruption in state politics, the one that Cuomo disbanded in April. The New York Times reported this week that Cuomo’s aides forced it to withdraw a subpoena issued to the governor’s media-buying firm, and “objected whenever the commission focused on groups with ties to Mr. Cuomo.” Federal prosecutors are now investigating what happened with the commission.

The response from Cuomo’s office, laid out in this 13-page letter to the Times, has been rather novel: The commission was never intended to be truly independent, because it was a creature of the executive branch. “You know that’s f-cking ridiculous, right?” Jon Stewart asked on The Daily Show.

In fact, Cuomo, who’s running for reelection, aired a campaign ad bragging about the “Independent Commission” he established to fight corruption, but apparently, independence is a matter of degree. The letter to the Times argued that a commission created by the governor that reported to the governor and had the power to investigate the governor “would not pass the laugh test.” In fact, Cuomo said last August that the commission would investigate “anything they want to look at—me, the lieutenant governor, the attorney general,” and so on.

It’s an awkward position for Cuomo, but he’s still an overwhelming favorite to beat his Republican challenger, Rob Astorino, who recently lashed out at Republican Governors Association chairman Chris Christie for suggesting the race was a lost cause, as well as a liberal Democratic challenger, Zephyr Teachout. Cuomo has governed from the center on economic issues, working with Republicans to cut spending and cap property taxes, while tacking left on social issues, passing gay marriage and gun control laws. He lacks his father’s flair for rhetoric, but he’s seen as a more effective political operator, transactional rather than inspirational, pursuing the possible rather than the ideal. Albany has seemed a bit less dysfunctional during his tenure; politicians are still getting hauled off to jail but they’re at least finally passing budgets on time. Cuomo is often talked about as a potential presidential candidate—presumably not unless Hillary Clinton passes on the race in 2016, but quite possibly in 2020 or beyond.

The corruption commission could put a serious dent in that talk. It plays into the dark side of Cuomo’s reputation, persistent since he served as his father’s top aide, as a control freak and a bully. Several sources who declined to talk on the record cited fear of retribution. “I don’t want to poke that bear,” one official said.

On the other hand, Cuomo’s defenders say his aggressive approach has helped him break through the usual chaos of Albany to get things done—including, incidentally, the privatization of LIPA. Bradford said he was uncomfortable with the idea at first, and with Cuomo’s efforts to claim phantom unanimity. But by the time the commission finished its work, Bradford no longer felt uncomfortable.

“In the end, privatization seemed like the best way to shake things up,” he said. “Things worked out.”

TIME republicans

Governor Rick Scott Shows What a Real Scandal Looks Like

Rick Scott, Will Weayherford
Gov. Rick Scott, left, and house speaker Will Weatherford speak at a news conference after session on Thursday, May 1, 2014, in Tallahassee, Fla. Steve Cannon—AP

The Florida governor has been questioned about his investment in a natural gas company and his aide's involvement in a rail project.

A few months ago, I wrote about an epidemic of fake Republican scandals that Democrats were hyping for 2014, starting with a nothingburger of a whatever-gate involving Florida Governor Rick Scott. My point was that political scandals rarely get traction, and shouldn’t get traction, without a semi-plausible link to significant public policies. Let me put it a different way: Damaging scandals look more like the two latest messes involving Governor Scott.

The first involves Scott’s support for a controversial Miami-to-Orlando rail project known as All Aboard Florida, when the company pushing it had financial ties to his chief of staff. The second involves Scott’s support for a controversial natural gas pipeline to North Florida, when he owned a stake in the company building it. You probably haven’t heard about these messes, because they’re pretty obscure. They’re also mini-messes, especially for Scott, who was once CEO of a hospital chain that paid a record $1.7 billion fine for fraud committed on his watch.

What could turn these messes into scandals is their potential link to public policies—in particular, to lame and unpopular policies that could look even worse if Scott’s probable opponent, Republican-turned-Independent-turned-Democrat Charlie Crist, can frame them as corrupt policies. There’s nothing inherently wrong with government support for a train linking Miami and Orlando—though my pal Carl Hiaasen is not an All Aboard Florida fan—but it looks pretty sketchy after Governor Scott (at the urging of his conflicted chief of staff) rejected $2.4 billion in federal money for a high-speed rail project that would have eventually linked Miami, Orlando and Tampa. Similarly, there’s a case to be made for a natural gas pipeline to Florida, but it’s hard to square with Scott’s support for utilities waging an outrageous war to prevent homeowners from going solar in the Sunshine State.

Asking questions about an opponent’s record can be good politics, but answering them can be even better politics. It’s one thing to ask why Scott rejected federal money for a shovel-ready high-speed train that promised 27,000 jobs and enjoyed strong support from Florida’s business community; it’s another thing to suggest that Scott was clearing the way for his crony’s speculative slow-speed train. It’s one thing to ask why the Sunshine State is intentionally skipping a nationwide solar revolution that is reducing carbon emissions while saving ratepayers money; it’s another thing to suggest that Scott has a personal interest in pushing gas instead.

Scott will have a dramatic financial advantage in the fall, and it’s not clear whether voters will accept Crist’s latest political change of clothes, especially in what’s shaping up as a Republican year. But Scott is unpopular—he’s still best known as the Medicare fraud guy—and so are his policies. The challenge for Democrats is to link the personal to the political. Real scandals can do that.

 

TIME Budget

Lower Health Care Costs Brighten America’s Debt Outlook

Senate Deal on U.S. Debt Limit Emerging as Time Runs Short
A police officer rides a motorcycle past the United States Capitol building at sunrise in Washington, D.C., U.S., on Tuesday, Oct. 15, 2013. Pete Marovich—Bloomberg/Getty Images

Fiscal doom will be delayed thanks to lower health care inflation in recent years. But will Congress take notice?

For years, America’s health care costs grew at an unsustainable rate. That was the main reason America’s long-term fiscal position looked unsustainable as well; Medicare, Medicaid, and other health programs were spiraling out of control. But our health care cost inflation is no longer unsustainable. That’s huge news, because it means our long-term deficits should be manageable, too.

Louise Sheiner and Brendan Mochoruck of the Brookings Institution compared the Congressional Budget Office’s latest fiscal outlook with its projections from five years ago, and the shift is striking. In 2009, the CBO expected Medicare spending to skyrocket from 3% to 6% of GDP by 2030; it now expects much more modest growth to less than 4% of GDP. Overall, former CBO director Peter Orszag, President Obama’s first budget director, calculated the projected savings in federal health spending since the 2009 report at $7.9 trillion.

Those numbers, like all long-term budget estimates, could change radically. And while Obamacare’s cost controls contributed to the cost slowdown, it’s not clear how much they contributed. Policy wonks and political hacks will have plenty of time to argue about why the cost curve is bending. But the trend itself, as Orszag argues, is the most important trend in fiscal policy in decades. It’s the difference between a deficit crisis and a phantom deficit crisis. In 2009, graphs of projected federal health spending looked like ski slopes; graphs of all other spending looked like sidewalks. The long-term deficit problem was basically a medical problem.

Now it’s not such a problem. The question is whether Washington will notice.

Republicans have spent the last five-and-a-half years griping about the budget deficit, and most of their gripes have been absurd. They were wrong to accuse President Obama of creating a record trillion-dollar deficit, which he actually inherited from President Bush. They were wrong to criticize Obama for increasing the deficit with his 2009 stimulus bill, which was an amazingly effective Keynesian response to an economic crisis; the budget-balancing austerity approach the GOP was advocating led to much slower recoveries and double-dip recessions in Europe. And they were wrong to accuse Obama of turning the U.S. into Greece; the deficit has shrunk by more than half during his presidency, dropping from 10 percent of GDP to less than 4 percent as the recovery has progressed.

We still have a big national debt, and the CBO expects it to grow from 74% of GDP today to 106% in 25 years. We’ll spend trillions of dollars servicing that debt, and we should remember how Bush squandered President Clinton’s surpluses with unpaid-for tax cuts and unpaid-for wars every time we cut the check. But we are not Greece. Our finances are looking better in every way.

TIME climate change

Global Warming Is Coming, but Climate Hysteria Doesn’t Help Anyone

The Guardian's dire report of a climate-change catastrophe unfolding in Miami is a case of premature evacuation

Help us! We’re drowning! It’s a catastrophe! DO SOMETHING!

Well, we’re not actually drowning. We do get damp every now and then, but it’s hard to see how some modest sunny-day flooding in my neighborhood at high tide justifies the Guardian headline that’s been generating so much buzz: “Miami, the great world city, is drowning while the powers that be look away.” I’ve described South Beach as the canary in America’s coal mine for climate change, and the canary has started coughing a bit, but it isn’t dead or even very sick. I’m sorry to spoil the climate porn, but while the periodic puddles in my Whole Foods parking lot are harbingers of a potentially catastrophic future, they are not currently catastrophic. They are annoying. And so is this kind of yellow climate journalism.

The Guardian article — by Robin McKie, the science editor (!) — begins a block from my home, on Alton Road, which is “hemmed in by bollards, road-closed signs, diggers, trucks, workmen, stacks of giant concrete cylinders and mounds of grey, foul-smelling earth.” That’s a pretty ominous description of a basic construction project. The state is rebuilding the street, in part (not entirely) because Biscayne Bay is backing up through storm drains at high tide, in part (not entirely) because global warming has helped increase the sea level around South Florida by about 10 in. over a century. McKie describes this gentle backwater flooding with absurdly apocalyptic prose: “Tidal surges are turned into walls of seawater that batter Miami Beach’s west coast and sweep into the resort’s storm drains.” He also claims that the water then “surges across the rest of the island,” which simply isn’t true.

“The effect is calamitous,” McKie writes. Calamitous!

“City life is paralyzed,” he continues. Paralyzed!

Well, it does get hard to park at Whole Foods. Puddles form in front of Walgreens. A few cars have been damaged — or, as McKie described it, “ruined” by “surging seawaters that corrode and rot their innards.” McKie was apparently too lazy to talk to any actual victims of our ongoing calamity, but he did rip off a quote from a laundromat owner who told the New York Times that Alton Road flooding once blocked the entrance to his front door. What’s happening in the Middle East right now is calamitous. A blocked entrance is inconvenient.

Hey, it’s been inconvenient for all of us. I’m bummed that my favorite Alton Road burger joint just closed, although its downfall was the construction mess, not the flooding. But let’s get real. The Pacific island of Kiribati is drowning; Miami Beach is not yet drowning, and the Guardian’s persistent adjective inflation (“calamitous,” “astonishing,” “devastating”) can’t change that. We should fight global warming — and the powers that be, including Senator Marco Rubio and Governor Rick Scott, should stop looking away — because it’s a potential disaster for Miami and the rest of this very nice planet. But we shouldn’t pretend it’s a disaster now.

I get why the Obama Administration wants to emphasize that global warming is a today issue, not a someday issue. I understand that stories about how climate change is already affecting our cities and our farms and our lives — even our wine — can make the issue feel more pressing to ordinary Americans. But fortunately, the effects are not yet calamitous; the reason we ought to DO SOMETHING is that they’ll get calamitous if we don’t. If we think once-a-month ankle-deep water is drowning, then why should Americans care whether we drown?

TIME energy

Electric Cars Will Change the Way You Power Your Home

An electric charging cable is seen connected to the updated Nissan Leaf vehicle during a news conference in Japan, Tokyo, on Tuesday, Nov. 20, 2012.
An electric charging cable is seen connected to the updated Nissan Leaf vehicle during a news conference in Japan, Tokyo, on Tuesday, Nov. 20, 2012. Kiyoshi Ota—Bloomberg/Getty Images

How the homes of the future will generate and store their own electricity, turning your house into a mini-power plant

Electric vehicles are our fastest-growing alternative to oil-derived gasoline. Solar panels are our fastest-growing alternative to coal-powered electricity. They’re both getting less expensive and more effective, driving our clean-energy revolution. And there’s new evidence that these two great tastes can taste particularly great together, transforming how we consume and produce power in ways that will accelerate that green revolution.

The evidence comes from Opower, a firm that uses software and behavioral science to help utilities promote energy conservation — and has amassed the world’s largest storehouse of household energy data along the way. Opower studied the power-consumption habits of about 2,000 plug-in electric-vehicle owners enrolled in “time-of-use” pricing programs. That means they got discounted electricity rates from midnight to 7 a.m., when demand is typically low, but paid a surcharge during peak daytime hours, when demand tends to spike.

Grid managers have to balance supply and demand every second, so big gaps between peak and off-peak demand can create big inefficiencies by forcing them to turn power plants on and off to adjust supply. In theory, the combination of electric vehicles (which can be charged anytime) and time-of-use pricing (which encourages charging after midnight) could help reduce those gaps. It could also help prevent electric vehicles (which alleviate the problem of carbon emissions) from exacerbating the problem of overloaded daytime grids. And that’s basically what the data showed — with a twist.

Opower found that EV owners did respond to the incentives to charge during off-peak hours, using three times as much power as the typical household between midnight and 7 a.m. It’s notoriously tough to get consumers to adjust their behavior, even when it’s in their financial interest, so that’s good news. At first glance, the data from the rest of the day looks like bad news: from 7 a.m. until midnight, EV owners still used 21% more power than the typical household. But this was mainly because they’re richer than the typical household; their houses were bigger and more likely to have a swimming pool. They clearly did the bulk of their vehicle charging after midnight when power was cheap.

The most striking data was from EV owners who also had solar panels. From 7 a.m. to midnight, they used about one-fourth as much power from the grid as the typical household, because they were getting power from their rooftops and often selling power back to the grid. In other words, they took very little from the grid when demand was high — at times even helping to increase supply — and took much more from the grid when demand was low. They helped smooth out demand.

That’s very good news, not only because smoothing out demand is a kind of holy grail for utilities, but because EV owners were 6.6 times more likely to have solar panels than the typical household. Nancy Pfund, a venture capitalist who invested early in Tesla Motors, the hottest EV firm, and Solar City, the leading solar installer, calls EVs “the gateway drug to solar.” Once you stop using hydrocarbons to fuel your car, she says, you want to stop using hydrocarbons, period. “Together, they can be a huge tool for managing our energy load,” Pfund says. “And they’re both taking off.”

Before 2009, when President Obama poured $90 billion into clean energy through his stimulus bill, the U.S. had no EV or solar industry to speak of. It now has nearly 250,000 EVs and nearly 500,000 solar rooftops, and both industries are still growing exponentially; Tesla and Solar City, both Elon Musk ventures, have both enjoyed soaring stock prices since going public. EV battery prices are not yet truly competitive with gasoline, although they’ve dropped 50% in five years, but retail solar prices, which have plunged 80%, are now competitive with fossil fuels in half the country. And the more they’re deployed, the cheaper they’ll get.

EVs are still less than 1% of the U.S. auto fleet, and solar still provides less than 1% of U.S. electricity. In terms of reducing emissions, they are still less significant than hybrid vehicles or wind power or energy-efficient appliances. But they are what the Silicon Valley types like to call “disruptive.” When you put a solar panel on your roof, your home becomes a mini-power plant. When you buy an electric vehicle, you suddenly control an automobile-shaped energy-storage device. It won’t be long before homeowners with both can be mini-utilities, buying power from the grid when it’s cheap and selling power to the grid when it’s expensive. Willett Kempton, a University of Delaware professor, has created electric vehicles that communicate and interact with the grid in real time; they earn about $150 per car per month by storing excess power when the grid gets temporarily overloaded.

That would make the economics of EVs more attractive, accelerating the route to mass adoption. “Net metering” will be similarly important for solar, allowing homeowners to sell power to the grid at attractive prices; as the Opower study demonstrated, time-of-use pricing can also help shape electricity demand. All of this will help create a more flexible, less centralized energy system, incorporating more renewable power without sacrificing reliability when the sun isn’t shining or the wind isn’t blowing, adapting instantaneously to changes in demand and supply with the help of modern information technology and Opower-style Big Data. Our cars (as well as other smart appliances) will optimize their power needs with our utilities, and we can intervene at any time over our iPhones.

You could imagine a future where solar panels and EVs (perhaps with additional backup storage, like the wall-mounted batteries Solar City and Tesla recently launched) help Americans declare independence from the grid, the way mobile phones have set us free from landlines. More likely, though, the clean-energy revolution will just change our relationship to the grid. Our utilities will be as dependent on us as we are dependent on them. And we’ll have power over our power.

TIME NBA

A Heat Fan Who’s Happy for LeBron

Atlanta Hawks v Miami Heat
LeBron James of the Miami Heat looks on during a game against the Atlanta Hawks at American Airlines Arena on November 19, 2013 in Miami, Florida. Mike Ehrmann—Getty Images

It's a bummer, but Miami will be fine

LeBron James took a lot of ludicrous abuse in 2010 for accepting a better job with better co-workers and a better boss in a better city. He was a free agent. He had every right to take his talents to South Beach. I’m an obnoxious Miami Heat fan, so I’m sad he’s returning to Cleveland—sadder than I ever imagined I’d be—but I’m not going to dump on him in Comic Sans. He’s got every right to take his talents home.

I’ve always thought the widespread over-the-top LeBron hatred reflected something more insidious than natural disappointment about his lame ESPN special announcing his departure from Cleveland. He had fulfilled his contract. Thanks to a salary cap designed to save NBA owners from themselves, he had been vastly underpaid. And Cavaliers owner Dan Gilbert had been too cheap and too arrogant to surround him with winning talent. After he left, Gilbert’s infamous open letter—just removed from the Cavs website last week!—revealed some incredibly ugly sentiments. He clearly saw LeBron as the help.

This situation is different in many ways. The Heat organization did right by LeBron. It surrounded him with good players—not quite as good as I thought, at least this year–who played the right way and helped him lift his game.

And owner Micky Arison has been predictably classy about his departure from Miami. That said, LeBron did right by the Heat, too. He fulfilled his contract and then some, leading the team to four straight Finals and two championships. And I can’t emphasize enough how much fun it’s been to watch him play every night. He’s just unbelievably unselfish on the court. He always seems to make the right play. He guards speedy point guards and giant centers and everyone in between. Even after four MVP’s, he’s still underpaid and underrated; I assume he always will be.

But the dude wants to go home. He thinks he can win more titles with Kyrie Irving—I’m trying to be gracious, but how overrated is that guy?—and (probably) Kevin Love than Chris Bosh and whatever’s left of Dwyane Wade’s knees. He’s willing to go work for an owner who trashed him as a heartless coward after raking in millions of dollars off his labor. Well, he’s given me a lot of enjoyment over the last four years, and I’m not going to start questioning his choices now.

Anyway, this isn’t going to be like 2010. We always knew that LeBron was an Ohio guy. This is a bummer, but the people of Miami will be fine.

I mean, it’s not like we have to live in Cleveland.

TIME energy

Obama Restarts Solyndra Program, But Solyndraphobia Could Ruin It

Barack Obama
US President Barack Obama pauses while speaking to people at 1776, a tech startup hub, on July 3, 2014 in Washington. Brendan Smialowski—AFP/Getty Images

Fear of repeating the 2011 failure of the cutting-edge solar-panel manufacturer could drive the Energy Department toward overly safe projects, not environmental intervention

The Obama Administration announced Thursday that it plans to hand out $4 billion in new clean-energy loans, reviving the controversial program that went dark after the notorious failure of Solyndra in 2011. This time, though, the danger is not another Solyndra. The danger is excessive fear of another Solyndra.

Solyndraphobia is perfectly understandable, because the demise of Solyndra—a cutting-edge solar-panel manufacturer that defaulted on a $535 million federal loan—was a political debacle for President Obama. Republicans launched a slew of investigations of the loan, and even though they uncovered no evidence of wrongdoing, “Solyndra” became their one-word critique of the president’s efforts to promote renewable energy.

And even though President Bush signed the bill creating the Energy Department’s loan program in 2005—his administration actually selected Solyndra from among 143 applicants for the first loan—the program became a partisan target, Exhibit A for GOP complaints about Obama’s “crony capitalism.”

Overall, though, the loan program has been remarkably successful. It has poured $32.4 billion into dozens of projects that will help reduce greenhouse-gas emissions, including one of the world’s largest wind farms, a half dozen of the largest solar farms, the nation’s first commercial-scale cellulosic biofuel refineries, the nation’s first new nuclear power plants in three decades, and a factory where Tesla Motors builds electric vehicles that are shaking up the auto industry. It has also financed a few clunkers, including Solyndra and its fellow manufacturer Abound Solar, both victims of an unexpected plunge in solar-panel prices, as well as Fisker Motors, which made beautiful electric vehicles that didn’t sell.

But all lenders make some bad loans. And not every clean-energy firm that receives federal support can succeed in the marketplace; the hope is that some of them will use their government jump-start to beat the odds and change the world. As a White House official once said to me, some Pell Grant recipients become drunks on the streets. That doesn’t mean we shouldn’t help low-income students attend college.

So far, the loan program has only burned through about $800 million of its $10 billion in reserves. Mitt Romney suggested during a debate with President Obama that half of its loans had failed; in fact, more than 95 percent are performing fine. That’s a record most private portfolio managers would envy, and it’s especially remarkable for a program that’s supposed to focus on innovative projects that private financiers won’t bankroll without government help. The goal was to help push promising green technologies across the so-called “Valley of Death,” and it seems to be working. Now that a bunch of huge solar projects have been built with government help, a bunch of copycat projects are under construction with purely private financing. They’ll benefit from the lessons learned in the initial round.

Peter Davidson, who runs the loan programs, says the Energy Department has learned some lessons, too. At the Renewable Energy Financing Forum in New York last week, he suggested that the department’s new round of loans will steer clear of manufacturers like Solyndra. It was an exciting company that had attracted a billion dollars in private financing, and it built its government-financed factory on budget and on time. But when silicon prices dropped and heavily subsidized Chinese manufacturers began selling panels at rock-bottom prices—a generally excellent trend that has sparked a spectacular solar boom in the United States—Solyndra’s business model collapsed and the department ended up looking ridiculous.

“We can deal with technical risk,” Davidson told me. “But when you’ve got manufacturing risk, you’re dealing with all kinds of stuff we can’t control.”

That makes sense. Manufacturing can be a crapshoot. But it would be a shame if Solyndraphobia drove the Energy Department towards overly safe projects that don’t need government help. We don’t need an energy version of the Export-Import Bank, offering slightly cheaper financing to borrowers with no plausible risk of default. The loan program’s main goal should be facilitating disruptive projects in order to reduce our dependence on fossil fuels, not avoiding failure in order to make sure taxpayers recoup every dollar. The Ex-Im Bank’s repayment rate is 99.7 percent; that means it’s very unlikely to have a Solyndra problem, and equally unlikely to accomplish anything useful.

Davidson noted that the most successful first-round clean-energy loans went to wind and solar plants that already had contracts in place to sell their electricity. For first-of-their-kind projects like Crescent Dunes, a Nevada solar thermal plant that will store the sun’s power to generate electricity at night, the government support was absolutely vital even with a contract in place, because private investors were wary of the technical risks. But private investors tend to be more willing to finance second-of-their-kind projects, and the next Crescent Dunes should be built without government loans.

The Energy Department’s new solicitation does suggest it’s looking for the next thing, not more of the old thing. It called for “catalytic” technologies in several areas where breakthroughs are desperately needed, like renewable energy storage, waste-to-energy projects, and “drop-in” biofuels that can substitute for fossil fuels without changes in engines or infrastructure. None of those technologies have been commercial successes yet, and Republicans will be on the lookout for another Solyndra that they can use to tarnish Obama’s legacy and kneecap green energy.

But Solyndraphobia can’t prevent the broiling of the planet. Obama won’t be able to finance more transformative successes like Tesla without financing more embarrassing flops like Fisker. Clean energy is a risky business, and any good program will make bad loans. If we’re not failing, we’re not really trying.

TIME Congress

House Conservatives Are Right: Kill The Export-Import Bank

John Boehner, Kevin McCarthy, Eric Cantor, Richard Hudson
Newly installed House Majority Leader Kevin McCarthy, R-Calif., Former House Majority Leader Eric Cantor, R-Va., Rep. Richard Hudson, R-N.C., and Speaker of the House John Boehner, R-Ohio, met with reporters on February 4, 2014. J. Scott Applewhite—AP

Some corporate subsidies are good and necessary. This is not one of them.

The self-proclaimed fiscal conservatives who run the Republican Party did not object to the bloated agribusiness subsidies in this year’s $956 billion farm bill. They’ve fought for weapons systems the Pentagon doesn’t want and water projects the country doesn’t need. They’ve helped repeal sensible flood insurance reforms designed to slash subsidies for waterfront property. And now they expect us to cheer their efforts to kill the obscure Export-Import Bank, which doesn’t even cost taxpayers money?

Sure, why not? The Republicans may be hypocrites, but they’re right to take aim at the Ex-Im Bank.

The Ex-Im is, as Senator Barack Obama said during his presidential campaign, “little more than a fund for corporate welfare.” It provides cheap credit to foreign borrowers, often cash-flush behemoths like Brazil’s state-owned oil company or the emirate of Dubai, so they can buy products from U.S. exporters, often cash-flush behemoths like Boeing, Bechtel, Caterpillar or General Electric. It’s dearly beloved by the U.S. Chamber of Commerce and the National Association of Manufacturers, but it’s often earned its reputation for crony capitalism. William Jefferson, the congressman memorably caught with cash in his freezer, got his dirty money in exchange for introducing corporate executives to Ex-Im officials, and the Justice Department is now investigating potential corruption inside the bank.

Former House Majority Leader Eric Cantor—like Texas Governor Rick Perry and other talk-a-good-game fiscal conservatives—supported the Ex-Im Bank, and the Obama Administration has defended it as a jobs engine. But Cantor’s stunning primary defeat to Tea Party challenger Dave Brat scrambled the politics of Ex-Im, persuading House Republican leaders to oppose the bank despite the pleadings of the Chamber and some influential corporate giants. Cantor had rolled the Tea Party and House Financial Services Chairman Jeb Hensarling on flood insurance; his successor, Kevin McCarthy, wants to reassure the Tea Party and Hensarling, a potential rival for his job, that the leadership will put conservative principles first.

There aren’t a lot of principled arguments for saving Ex-Im. Its defenders say most of its loans help small businesses, which is technically true when they define “small” as fewer than 1,500 employees. But 30% of the cash it lends goes to Boeing and over 60% goes to 10 large corporations. The bank also boasts that it doesn’t cost taxpayers money—which is true, or mostly true, depending on how you do the accounting—because only 0.3 percent of its loans default. But that’s not evidence the Ex-Im is effective. That’s evidence the Ex-Im is unnecessary. Surely the private sector can provide 99.7-percent-safe loans to massive conglomerates.

This is the problem with arguments that the Ex-Im “supports” about 200,000 jobs; most of those jobs would probably be supported without the Ex-Im. And while exports do help the economy, export subsidies distort the economy, reducing the cost of capital for well-connected companies while putting their competitors at an artificial disadvantage. Paul Krugman recently suggested on his New York Times blog that even though those distortions are inefficient, eliminating the Ex-Im’s modest economic stimulus while the recovery remains soft (and while the Fed would be unlikely to offset its stimulus by raising interest rates) would be worse. I’ve been a dedicated supporter of stimulus—I mean, dedicated—but Krugman’s argument can be used to justify any government program, no matter how absurd. It was a legitimate argument during the cataclysmic freefall of early 2009, but it packs less punch now that the economy is creating jobs at a decent pace.

The best argument for the Ex-Im’s corporate welfare is probably that other nations do it, too. That’s true. It would be nice if the Ex-Im died as part of a global trade deal that forced other countries to slash their own export subsidies and stop picking winners and losers. But since that isn’t a current option, we ought to go first and urge the rest of the world to follow. The direct benefits the Ex-Im Bank provides for Boeing do not outweigh the indirect costs it imposes on everyone else.

Those costs, it must be said, are not astronomical. We have an extremely big government, and the Ex-Im Bank, which finances only 2 percent of U.S. export deals, is an extremely small part of it. And there are times when government ought to pick winners and losers, even though it can be inefficient; for example, I’m a big supporter of federal loans and other programs designed to promote clean energy, because dirty energy is ravaging the planet.

The fate of the Ex-Im Bank, on the other hand, will not affect the fate of the planet. It probably won’t even affect the fate of Boeing, which is perfectly capable of doing deals with Arab petro-states without government-guaranteed financing. So what’s the point of keeping it around and enduring its periodic scandals? Those of us who believe that government should do a lot of important things, like defend the nation and fight climate change and ensure universal health insurance, ought to recognize that government shouldn’t try to do everything. Opposing the Ex-Im doesn’t mean agreeing with the Tea Party notion that government shouldn’t try to do anything—just that it should stop trying to do this.

TIME Environment

We Need to Ditch Our Filthiest Source of Energy: Coal

A Massachusetts Water Resources Authority wind turbine turns beside a 2002 megawatt fossil fuel power plant in Charlestown
A Massachusetts Water Resources Authority wind turbine (R) turns beside a 2002 megawatt fossil fuel power plant in Charlestown, Massachusetts June 2, 2014. The wind turbine powers the MWRA waste water pumping station at that site and the power plant uses natural gas and oil. Brian Snyder—Reuters

Global warming is a terribly complex problem. It’s really a slew of problems: carbon problems and methane problems, electricity problems and fuel problems, sprawl problems and deforestation problems, supply problems and demand problems. We waste too much power, we eat too much meat, we drive too much, we fly too much, we plug in too many gadgets, and we get way too much of our energy from fossil fuels. The expansion of energy options in the developing world, a godsend for billions of people, will further complicate many of those problems.

It can all seem overwhelming. But for the next decade or so, America’s main challenge is relatively simple, because our biggest problem is also our most solvable problem. That problem is coal. It’s our filthiest source of energy, producing one fourth of our emissions and three fourths of our emissions from electricity, despite producing less than 40 percent of our electricity. We need to burn a lot less of it.

This is why President Obama’s new effort to limit carbon emissions at power plants is so important—and, as I wrote last week, so potentially disappointing. Coal provides our best opportunity for major short-term emissions cuts; our coal plants have already slashed generation by 20 percent since 2005, and another 10 percent of the U.S. coal fleet is already scheduled for retirement. But Obama’s Clean Power Plan only envisions a 30 percent overall drop in coal power from 2005 levels by 2030, which would barely move the needle. EPA Administrator Gina McCarthy did suggest to me that her agency’s proposed regulations will do much more than than her agency’s forecasts imply, but there’s not much in the Clean Power Plan that would suggest a major crackdown on coal.

Instead, the EPA projects that we would still get more than 30 percent of our power from coal in 2030. That would be a catastrophe. Coal plants emit twice as much carbon as natural gas, and infinitely more carbon than wind, solar, nuclear and other zero-emissions sources of power. They are also public health nightmares, fouling our air with mercury, soot, and other toxics, shrouding cities in smog and triggering asthma attacks among children. And the coal we burn in our power plants—unlike the petroleum we burn in our vehicles—can be easily and inexpensively replaced without changing our behaviors or disrupting our economy.

Carbon math can be daunting. We need to cut emissions 80 percent by 2050 to stop the broiling of the planet. We need to make serious headway much sooner than that to have any chance of success. Unfortunately, we’re nowhere close to ending our addiction to oil for transportation. Farm-grown fuels like corn ethanol are an eco-disaster, and cost-effective advanced biofuels are still years away. Electric vehicles are incredibly exciting, but they’re still a tiny slice of the U.S. auto fleet, and their batteries, although getting cheaper, are not yet mainstream cheap. Obama’s fuel-efficiency standards have helped our cars and trucks guzzle less gasoline, just as his energy efficiency standards have helped our light bulbs and appliances slurp less power, but reducing our demand in a growing economy is a slow and gradual process.

But we already have cleaner and cheaper alternatives to coal for electricity. Over the last several years, a fracking revolution has unlocked a glut of inexpensive natural gas, while a clean power revolution has made renewables cost-competitive, producing 90 percent of the new generating capacity in the first quarter of 2014. Even fossil-fuel-friendly Republican states like Oklahoma and Texas are replacing aging coal plants with wind, while Georgia and Idaho are replacing coal with solar—not to save the earth, but to save ratepayers money. As these clean alternatives get much cheaper, it’s getting much costlier for coal to comply with Obama’s tighter EPA rules on pollution from mercury and particulates, while fledgling technologies that could help coal plants capture and store their carbon underground have remained stubbornly expensive. Meanwhile, new EPA rules are coming on coal ash and ozone. Electric utilities facing multi-billion-dollar decisions about installing new pollution control equipment have to be wondering whether coal has a viable long-term future.

Tougher carbon rules would help persuade them the answer is no and accelerate the transition to clean power. We ought to get the coal challenge out of the way, so the market can start to address new challenges, such as cheaper storage that will help renewables produce the non-stop power that coal provides now. It’s true that much of the developing world is even more reliant on coal than we are, but we can help lead the world away from the dirty stuff. And the global situation is not as hopeless as some suggest. For example, China’s notorious coal boom is slowing dramatically; its annual growth in coal consumption has dropped from 18 percent to 3 percent in a decade, and its leaders are now pushing efficiency, solar and wind.

In the long run, we are going to need all kinds of disruptions to solve our climate problems. We’ll need cleaner cars, greener lifestyles, denser cities, carbon taxes. We’ll need technological breakthroughs and more aggressive deployment of the clean technologies we already have. But coal has already been disrupted. Its only remaining advantages are politics—even the Obama administration feels pressure to show it isn’t fighting a war on coal—and inertia. For executives of utilities with coal plants, the path of least resistance is to maintain the status quo and delay the inevitable day of reckoning. The best thing we can do for the planet is make sure the reckoning happens now.

TIME

Carbon Rules Show Bad Arithmetic

Why the numbers in the President's Clean Power Plan don't add up

President Obama’s Clean Power Plan–his Administration’s historic proposal to regulate carbon emissions from power plants, hyped by supporters and detractors alike as a revolution in climate-change action–just doesn’t add up.

I say this with some hesitation, even some embarrassment. During Obama’s first term, while environmentalists kept complaining that he wasn’t talking enough about global warming, I kept writing that he was doing more about global warming than anyone who ever lived. His stimulus bill was launching a clean-energy boom, his fuel-efficiency rules were ratcheting down greenhouse-gas emissions from cars and trucks, and his new regulations on soot, mercury and other stuff coming out of power plants were accelerating a shift away from carbon. Coal produces three-fourths of our emissions from electricity, though it generates just over a third of our electricity, and I recently predicted that Obama’s carbon rules would take his well-justified (though often denied) war on coal to the next level.

But while the enviros who spent years trashing Obama’s “climate silence” are now hailing his Clean Power Plan as his crowning climate legacy, I’m underwhelmed. The EPA says that by 2030, it will reduce emissions from power plants 30% from their 2005 levels, but that’s just a forecast–and U.S. power plants are already nearly halfway to that goal. Some of the other forecasts in the 645-page draft are even less ambitious. For example, coal-generated electricity is also expected to drop about 30% from 2005 levels by 2030; it’s already down 20%, and another 10% of the coal fleet is already scheduled for retirement. The plan predicts an absurdly low 21 gigawatts of new renewable-power capacity by 2030, about as much as the U.S. has added in the past two years.

In general, the forecasts in the plan would, if anything, undershoot the current pace of decarbonization in electricity. And to the extent that they do have teeth, they won’t bite anytime soon. States will have until 2018 to submit compliance plans and until 2030 to complete them. So if climate hawks don’t win the next several presidential elections, the rules probably won’t matter much.

I discussed my doubts with EPA Administrator Gina McCarthy, a certified climate hawk, who offered several explanations for her plan’s apparent squishiness. The goal, she suggested, was to fashion a plan that could withstand legal and political challenges and to require “what’s doable, reasonable and practical,” not what’s ideal. The EPA was sensitive to the degree of difficulty: the emission cuts required for coal-heavy Kentucky, West Virginia and Wyoming will be less than 20%. The plan also gives states the flexibility to meet their targets by reducing electricity demand, extending the life of zero-carbon nuclear plants and even improving efficiency at coal plants as well as switching to natural gas and renewables. And overall, despite predictably apocalyptic rhetoric from coal interests, opposition has been surprisingly muted.

“I don’t want to scare any state away. I don’t want to spend years negotiating about what’s achievable,” McCarthy told me. “I want to get this off the ground.”

This helps explain the green movement’s enthusiasm. Enacting carbon rules, any carbon rules, will send a powerful signal to the market about dirty power, especially as the Administration cracks down on coal ash, ozone and other pollutants. It will add uncertainty to the electricity industry’s investment decisions, making utilities increasingly reluctant to pour billions of dollars into the pollution controls required to keep their coal plants online. And it will encourage the rest of the world to follow the U.S.’s lead in international climate negotiations. “This will set expectations, and things will just take off,” McCarthy said.

My question was: If this plan is so disruptive, why does it predict that in 2030, we’ll still get over 30% of our power from coal? Why does it suggest that wind-rich Iowa could get even less of its power from renewables than it does today? McCarthy’s answer was, in effect: It’s wrong. I offered to bet her that the U.S. would add more than 21 gigawatts of renewables by 2030; she said she’d take the over too. “Our model might predict one thing, but my understanding of the world tells me something else,” she said. “These numbers represent the minimum. I think we’ll end up with a much more aggressive impact.”

If we’re still getting over 30% of our power from coal in 2030, the EPA’s plan will be a huge disappointment. It will represent defeat in the Obama Administration’s crucial (though undeclared) war on coal. So it’s encouraging that the plan’s architect doesn’t seem to think it adds up either.

FOR MORE ON NEW ENERGY, GO TO time.com/newenergy

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser