President Obama's announcement of a $20 billion escrow fund to help pay for Gulf economic damages from the oil spill likely won't be enough to cover projected damages to the economy, environment and livelihoods in the region. Early this month, I've estimated those costs potentially to be in the $50-80 billion range, not including clean-up costs.
Ultimately, BP might not be able to afford the damages it is responsible for, as its North American unit has assets valued at about $50 billion. The US and Obama should look at other ways of balancing the ledger, by reducing U.S. oil and gas subsidies ($15-35 billion per year) and transferring those funds to Gulf clean-up, environmental and economic restoration while creating a true foundation for clean energy and alternative fuels development.
Obama called during his Tuesday White House address for a new energy economy: "For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we've talked and talked about the need to end America's century-long addiction to fossil fuels...Time and again, the path forward has been blocked--not only by oil industry lobbyists, but also by a lack of political courage and candor."
This demand was also made at the beginning of his presidency when he kicked off numerous clean energy and alternative energy funding measures, mainly through ARRA funding to US Department of Energy programs.
In his early Oval Office days, Obama even went after sprawl, the energy inefficient, destructive and now economically bankrupt car-dependent form of development that has also dominated the United States "for decades," but that rarely is addressed by national policymakers in the executive or legislative branches of government.
Then came Spring 2009 to Spring 2010, a lost year for energy and sustainability policy, when all minds and actions at the White House were about health care reform. President Obama rarely mentioned cleantech or sustainability policy. His staff were up to their eyeballs in health care discussions, with one day a month dedicated to a staff meeting on "the environment" (with no regular meeting devoted to clean energy jobs or sustainable economic development).
Was it any wonder that comprehensive climate change and energy legislation have since floundered in the Senate? There has been little attempt to project statistically or show how more sustainable technologies--wind, solar, alternative fuels, green building and infrastructure, water conservation technologies--are fast becoming become one of the more dominant economic sectors globally.
Meanwhile, sprawl and its economic (foreclosure meltdown); health (obesity); environmental and energy consequences (import more oil or drill ever deeper domestically) are running rampant, with little "political courage and candor" in admitting that all the latest technologies will do little do overcome these deep-rooted structural and economic phenomena.
There are untold billions of dollars we will collectively save if the Obama Administration, Congress and our communities are willing to examine and reform the root causes of the BP disaster.
Damage from spewing Gulf oil is occurring to millions or billions of life forms in nature, from plankton, to plants, to fish and aquatic species, to mammals and humans.
Planetary climate change from burning oil, gasoline and other fossil fuels is accelerating, and some developing nations suffering the worst early effects are human equivalents to the innocent pelicans and sea turtles gasping at this very moment for their last breaths.
Who is setting up the escrow fund to repair global destruction from climate change? Costs have been estimated at $80 to $500 billion annually and these will be steadily rising as drought, desertification, heat waves and catastrophic flooding impacts become more severe.
This is a tough question for any entity or nation to answer. The longer we wait in the United States to even pose the question of climate change reparations, however, the more the oil wells, pipelines, tailpipes and smokestacks will be uncontrollably spewing with the meter running, reducing our options in times of future crisis.
We need to get creative now, and go beyond creating mere taxes, penalties and escrow funds, and restructure our assumptions about the role of government, business and economic development.
Globally down to the level of our communities and neighborhoods, we need to awaken to the realization that the time of crisis is now upon us. We must respond in a scale that is appropriate to ensuring that quality of life is an issue not just for elite nations or people, but also for the "small people," whether in the United States or in developing nations, as well as for the biological tapestry that sustains us and the global economy.
Warren Karlenzig is president of Common Current, an internationally active urban sustainability strategy consultancy. He is author of How Green is Your City? The SustainLane US City Rankings and a Fellow at the Post Carbon Institute.