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U.S. President Barack Obama’s address to Congress on Tuesday marks the beginning of a new era and is a clear break with the past. Unfortunately I was not able to watch his speech live on February 24th because I was traveling a lot this week. However, I watched it on the Internet yesterday evening and I’m totally convinced that Obama is the first international leader that I think fully understands the enormous opportunities of the new energy age. He is the first politician who got it and has the power to transform the way we use and generate energy. Moreover he knows that the irresponsible and unsustainable lifestyle we have got used to in the last few decades must be changed significantly.

Obama’s address was officially not a “State of the Union” speech, though in fact, it was an account of America’s strenghts, weaknesses, opportunities and threats (SWOT analysis). He mentioned the numerous challenges the U.S. is facing and how he wants to deal with them. Without creating panic, he highlighted the urgency for action and announced the sacrifices every American will have to make to get the American economy back on track.

As Obama said, the U.S. has too long delayed reform, prized short-term gains over long-term prosperity, accumulated massive debt, wasted resources and didn’t meet its responsibilities. His call to take responsibility and “break this destructive cycle” comes at a time of economic uncertainty and a lack of trust. The more encouraging is Obama’s promise that “the United States will emerge stronger than before”.

No doubt it won’t be easy to achieve this goal, but it is perfectly clear that this is the last chance for America to maintain its role as the #1 global superpower and ensure that America’s economy will be the most competitive in the future:

” The only way this century will be another American century is if we confront at last the price of our dependence on oil, and the high cost of health care, the schools that aren’t preparing our children and the mountain of debt they stand to inherit”. 

It stands out that Obama makes energy a top priority:

” the three areas that are absolutely critical to our economic future: energy, health care, and education”

” We know the country that harnesses the power of clean, renewable energy will lead the 21st century.”

And yet it is China that has launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we’ve fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea. Well, I  do not accept a future where the jobs and industries of tomorrow take root beyond our borders - and I know you don’t, either. It is time for America to lead again.”

These are some of the actions Obama proposed to make America the leader in energy technology:

• ” double this nation’s supply of renewable energy in the next three years”
• ” make it the profitable kind of energy”
•  national cap-and-trade legislation
• investments of $15 billion a year to develop energy technologies (”wind power, solar power, advanced bio-fuels, clean coal and more efficient cars and trucks built right here in America”)

Energy, health care and education are the three most pressing structural challenges that need to be dealt with:

• The International Energy Agency recently warned that the next oil shock is ahead and predicts the worst energy crisis ever - a global mega recession resulting from a severe supply crunch. (IEA: Oil supply crunch and mega-recession by 2013)
• The United States has the most expensive health care system in the world per capita, however, Americans are not healthier than e.g. Europeans or Japanese
• To compete in a global economy, education is key! Therefore it’s incredibly bad news that American students were outperformed by students from several other industrialized countries in recent PISA tests.

Obama put it like this: ” In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity, it is a prerequisite”

Doubling  America’s use  of renewable energy from 7% today to 14% in 2012  is an ambitious goal, yet it takes even more to reduce the United States’ dependence on foreign oil.  However, it is a step in the right direction.

His plan to introduce a cap-and-trade system is a good way to fund energy projects and help middle class households offset higher energy prices. Furthermore, cap-and-trade makes burning coal much more expensive while electricity from alternative sources of energy becomes more competitive in the process. Once cap-and-trade is introduced (if Obama manages to convince Congress), possibly in 2012, this will turn out to be a significant source of income for the Treasury. The billions of dollars from auctioning off carbon pollution permits will be absolutely necessary to fight climate change and get away from oil. Though I don’t particularly like cap-and-trade, I admit that it’s probably the easiest way to limit carbon emissions and make renewables competitive by forcing carbon prices up. Since it’s a market-based approach, it makes sense, but ONLY IF the money earned is spent on energy technology or other measures to spur demand for alternative energy.

These posts might also be of interest to you:

Capitalism will survive: Why America will remain the #1 global superpower

it’s time to become energy independent, overhaul the entire economy and infrastructure

How do you feel about globalization?

check out this article on POP+POLITICS

This entry was posted on Saturday, February 28th, 2009 at 9:00 AM and is filed under Economy, Energy, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.