How unconventional oil changes the world

Michael Levi: I think Hurricane Sandy has put the debates into a prominent place, which is essential to moving it forward.

Ultimately, I still believe that carbon pricing in one form or another is essential to achieving deep cuts in economically-sensible ways. That can come in the form of a tax, resurgent cap and trade, or clean energy standard; there are all sorts of ways to do carbon pricing. In the long haul, I think you come back to that, particularly if you care about doing this is an economically-efficient way.

James Stafford: What changes in public interest on climate change have you noticed over the years? Do you think that at this rate climate change will ever gain the support it needs to be effectively tackled?

Michael Levi: Ever is a long time. I think we are back in a building phase. If you look at the first decade of this century, you had a solid 5 or 6 years that was really about building broad support for action on climate change, about test driving different approaches, and by the time you got to 2008, there was actually pretty broad support, particularly in the Senate for action on climate change. You had 2 presidential candidates competing to see who had the best climate strategy. Then you had the financial crises. You had intense polarization. You had a deep, deep recession, and climate action became a much lower priority.

A lot of people got used to saying in early 2009 that we would come back to climate change when the economy got better. The only mistake that people made in that analysis was thinking that that was only a couple years off. It turns out that it is even further off.

One of the emerging barriers to action on climate change is that doing things to exploit oil and gas have been set up as 100% incompatible with serious efforts to deal with climate change. That stark choice makes it very difficult to build coalitions that will move anything forward. We have actually moved in the last couple of years into a considerably more difficult situation than we were even 4 years ago, when a candidate like John McCain could say, 'I support oil and gas production, and I support a strong cap and trade system.' The president talks about things like that today, but gets considerably weaker support for it, and that ultimately needs to change.

James Stafford: How can this change?

Michael Levi: I have a book out next spring, talking about this. The first step is for each side to recognize that accepting a lot of what his opponents want will not fatally undermine what it wants. Oil and gas will need to understand that serious action on climate change will not fundamentally undermine what they want to accomplish in the next decade or two. People who want to take action on climate change need to fundamentally understand that expanding access to US oil and gas production will not fatally undermine their own goals. Compromise is not an oxymoron.

The second thing that needs to happen is there needs to be some rebuilding of trust. That is difficult; you do not just do it by hanging out more at the bar. You need to do small deals that show that you can work together.

You can think of all sorts of ideas; you could tie royalties from increased oil and gas production to financial support for renewable energy. You could provide support for carbon capture and storage demonstrations that support enhanced oil recovery. You can work to improve environmental permitting so it is easier to build pipelines and power lines that take renewable energy to places where they can be used.

There are a host of things that are small (but not trivial) win-wins that might help rebuild confidence. Ultimately, both sides need to accept that a political deal is better than trying to go for an outright win.

James Stafford: What role do you see renewable energy playing in the future?