Taking our Money Elsewhere
"We're going to take our money elsewhere." Maybe those words will have the impact that “global warming,” “climate change,” “green economy” and others have failed to make on skeptical U.S. policymakers. And who uttered the line above – Mr. Kevin Parker, head of Deutsche Bank’s asset management division – is no less important than what was said. Mr. Parker was quoted in a recent Reuters article that could be ominous for its long-term implications.
One asset manager’s views do not make an imperative, but his are hardly the only ones expressing alarm at America’s inability to get its policy act together to win in the low-carbon economy.
Several studies over the past several months (Rising Tigers, Sleeping Giant; Out of the Running,) have argued the same case. Namely, that the United States is undecided about getting in the race while the European Union, China, India and others are already in the starting blocks. Who will be the winner after the starter’s gun goes off is unclear, but there is no doubt who will be the loser unless we change our ways.
There is still some chance that the Senate will move an energy bill this fall, but the prospects are inauspicious. And if legislation does pass, how meaningful would it be if it lacks a strong renewable electricity standard, “green bank” and carbon-pricing mechanism – to at least get us in the low-carbon game?
If nothing happens the rest of this year, will the 112th Congress be more receptive to enacting major legislation? Consulting the Magic Eight Ball would likely yield a reply of “Outlook not so good.”
So, what next? There are many who think that Washington is incapable of making big decisions anymore (or hold a corollary view that whatever Washington does is wrong). "They're asleep at the wheel on climate change, asleep at the wheel on job growth, asleep at the wheel on this industrial revolution taking place in the energy industry" is how Mr. Parker characterizes Washington these days. But that is too simple a description and offers little in the way of a path forward.
Adapting to and winning in the low-carbon economy is about transformation, and transformations are often difficult. Not impossible, but not without disruptions and discontinuities – economic, financial, political and social. Yet, one of America’s great strengths is its ability to transform itself and come out ahead. So, we press on.
The good news in this is, when the financiers start saying they will take their money elsewhere, policymakers of all stripes begin to take notice. The Market is speaking.