Barrel Strength

When the Climategate scandal erupted, do you recall that Google listed far fewer references to it than did Bing and other search engines?

The attached interview with Dan Reicher, chief of energy plans for Google, and a former Assistant Secretary for Energy in the US government, explains why.

“Turns out, the answer is technology. Reicher — a former Department of Energy assistant secretary who now directs Google’s investments in clean energy — believes that exposing the hidden costs of dirty fuels will set off a rush of investment in new energy innovations. He says carbon pricing is an “essential signal we have to get to.” Right now, “money is sitting there to make significant investments,” he says, but the cash flow is sidelined because the incentives aren’t there.”

Let us deconstruct carbon pricing. According to Google it is “the true price of carbon combustion.”

What is the true price? Clearly it is not the price you currenly pay. On the contrary, it is the price you would pay if Google and its minions manage to add all the taxes they think you should pay to deal with the effect of using fuels. Guess what they are? Taxes for global warming caused by using carbon-based fuels.

What global warming?

“As Reicher puts it, “putting a serious price of carbon will both get us closer to the serious energy reductions we need to make but also accelerate the domestic development and adoption of these technologies.” It’s that last part that’s good for business. When government holds up its side of the “triangle of technology, policy, and finance” that Reicher says is essential for green development, it spurs the private investment and innovation that keeps businesses strong.

That’s where Congress comes in. The most important policy is carbon pricing. That’s what will change the economic fundamentals, augmented by other programs — like energy efficiency standards and government revolving loans to bring new ideas to the market. The technology and finance sides are ready and able; but we’ve been waiting for too long for the policy piece that can complete the puzzle.

Google hopes the Senate will act quickly to jumpstart what it thinks will be an economic bright spot in the current downturn. Reicher doesn’t really care how it’s done, saying there are “various ways to get to a carbon price.” Whatever packaging it comes in, a price on carbon will ultimately be good for that company and many others.