I have an energy plan (and lots of energy).

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Rubio's Energy Plan Fights Market Forces

Paula Dwyer writes editorials on economics, finance and politics for Bloomberg View. She was London bureau chief for Businessweek and Washington economics editor for the New York Times, and is a co-author of “Take on the Street: How to Fight for Your Financial Future.”
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Marco Rubio wants to shift his party from doubters to believers on climate change. Unlike some of his Republican presidential rivals, the Florida senator accepts the scientific consensus that global warming exists -- and that humans have played some part in making it worse. 

But there's a twist to his enlightenment. Rubio also says the U.S. alone can do little about the problem, no matter how tough its regulations, since "America is not a planet." President Barack Obama's carbon rules "will not do a thing to lower the rise of the sea," he said at the Republican debate last month. "But what they will do," he said, "is make America a more expensive place to create jobs." Thus, Rubio says, they worsen income inequality by putting a disproportionate burden on the poor and struggling middle class.

His strategy, in short? To target two liberal causes -- environmental protection and economic equality -- with one lump of coal.   

"Maybe a billionaire here in California can afford an increase in their utility rates," he said at the debate, "but a working family in Tampa, Florida, or anywhere across the country cannot afford it.” 

Of course, Rubio has to attract Republican primary voters. So far, according to polls, they favor Donald Trump, who believes climate change is a hoax. Yet being a climate denier in a potential general-election campaign would make a Republican candidate sound like a philistine, and do nothing to help him attract millennials, who overwhelmingly favor government action -- 80 percent in one poll -- to slow climate change. 

So if he accepts the science, what does Rubio think the U.S. strategy should be?

In a speech on Friday in Ohio, he unveiled his specific response. Instead of making carbon emissions costly, as Obama would do, at no small short-term cost to jobs and the economy, Rubio called for doing more to develop them -- in Alaska, offshore, in every state. 

In other words:  Drill, baby, drill. He barely mentioned climate change. 

Rather than move his party forward, Rubio is falling behind. By sticking to this message, he is missing out on one of the biggest opportunities of his lifetime to champion market forces to improve the economic prospects of the younger voters he hopes to attract. 

After all, much of the planet is busy plotting climate-change initiatives ahead of a December summit in Paris of almost 200 world leaders. The goal is for countries to commit to policies that collectively will keep the earth's temperature from rising no more than 2 degrees Celsius, considered the point of no return by most scientists. 

The U.S. is promising to cut emissions below 2005 levels by 26 percent to 28 percent by 2025. The European Union proposes to cut emissions at least 40 percent by 2030, against a 1990 baseline. Chinese President Xi Jinping, while in the U.S., pledged to set up a carbon-trading system by 2017. Brazil has one-upped them all by announcing it will seek to reduce carbon emissions by 37 percent by 2025 from 2005 levels. 

The private sector is also ahead of Rubio. Dozens of large U.S. companies, some of whose executives are meeting with Obama at the White House today, have pledged to take more aggressive action on carbon emissions. The list includes Johnson & Johnson, Intel and electric utility PG&E.  

Fossil fuels now meet 90 percent of global energy needs, according to Bloomberg New Energy Finance. Coal, oil and natural gas accounted for 67 percent of the world's electric-power generation last year, and will still generate 44 percent of electricity by 2040. 

Renewable sources -- wind, solar, hydropower -- generate only 5 percent of the U.S.'s electric power. Worldwide, they provide a mere 9 percent, says the United Nations Environment Program.

That may seem like slow progress, but energy markets are changing rapidly. In 2013, for example, more global renewable capacity was added than for coal, natural gas and oil combined.

Private studies show that Obama's clean-power plan could lower utility bills and by 2040 add 273,0000 net new jobs to make and install solar panels and wind turbines, build cleaner power plants and install pollution controls. All of this activity, the studies say, will result in faster growth than with fossil fuels alone.

One driver is declining prices. A solar panel costs about 50 cents a watt now, down from about $10 a watt in the 1990s. Even if government subsidies for solar power decline to 10 percent from 30 percent now, solar will be cheaper than fossil-fuel power in 36 states by 2016.

By 2023 it will be cheaper to install turbines to generate wind power than to build new natural-gas plants. That will be the case even without federal subsidies, which expire in 2017. In parts of Europe, wind is already the cheapest source of new electricity generation.

No, the wind doesn't blow all the time, and the sun doesn't always shine. But the utility of the future will deal with nature's capriciousness by combining small-scale solar (installations on rooftops of homes and companies) with utility-scale natural gas and, in some cases, nuclear power to deal with seasonal changes and peak demand. 

Markets in the U.S. and the rest of the planet are headed for a decarbonized future, spurred on by government regulation and incentives. Millennials are the ones who will benefit from policies that hasten the shift.

It's disappointing that Marco Rubio -- the Republicans' "candidate of the future" -- hasn't yet said how the U.S. can stay competitive in this transition.  

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Paula Dwyer at pdwyer11@bloomberg.net

To contact the editor responsible for this story:
Katy Roberts at kroberts29@bloomberg.net