Nouriel Roubini is a professor of economics at New York University's Stern School of Business.

Nouriel Roubini, one of the earliest voices to speak out on the shaky economic underpinnings of our financial system and resulting economic crisis in which we now find ourselves entangled, opined in the New York Times that within the first half of this century, the U.S. Dollar will no longer be the dominant reserve currency of choice.  This will have far reaching effects on our nation both domestically and abroad for the coming Century.

As Dr. Roubini states,

Today, the United States is running huge budget and trade deficits, and is relying on the kindness of restless foreign creditors who are starting to feel uneasy about accumulating even more dollar assets. The resulting downfall of the dollar may be only a matter of time.

Continuing that,

If China and other countries were to diversify their reserve holdings away from the dollar – and they eventually will – the United States would suffer. We have reaped significant financial benefits from having the dollar as the reserve currency. In particular, the strong market for the dollar allows Americans to borrow at better rates. We have thus been able to finance larger deficits for longer and at lower interest rates, as foreign demand has kept Treasury yields low. We have been able to issue debt in our own currency rather than a foreign one, thus shifting the losses of a fall in the value of the dollar to our creditors. Having commodities priced in dollars has also meant that a fall in the dollar’s value doesn’t lead to a rise in the price of imports.

While this inconvenient truth of deteriorating U.S. currency leverage bears much semblence in size, scope and complexity to the inconvenient truth of global warming, there is in fact a single solution that will simultaneously confront and help solve both of these problems.  Dr. Roubini reveals this solution by concluding,

Now that the dollar’s position is no longer so secure, we need to shift our priorities. This will entail investing in our crumbling infrastructure, alternative and renewable resources and productive human capital – rather than in unnecessary housing and toxic financial innovation. This will be the only way to slow down the decline of the dollar, and sustain our influence in global affairs.

We couldn’t agree more with Dr. Roubini and we think the moment to make our national priority shift is now.  While the Stimulus Package (ARRA) enacted by Congress and the Obama Administration earlier this year was a significant step in spurring renewable energy and energy efficiency investment, the Waxman-Markey Climate Bill, now moving forward after several weeks of intense negotiations among the 57-member House Energy and Commerce Committee, is our best chance to set a new national paradigm in how we supply and use our energy resources.  And it’s not just super-intelligent economists who see this critical need – a sweeping majority of Americans understand what it will take to address global warming, despite a few remaining members of Congress who are out of touch on the issue and continue to try holding us back.  Why would we want to let so much potential for new green jobs, economic growth and cleaner environment go to waste?

Oh, it’s also worth mentioning that while American leadership has been asleep at the wheel the past several years to advance clean energy technologies, China already made a bid (proudly with NRDC’s assistance) to beat us at advancing technological solutions (see here and here) to solve global warming.  In the spirit of healthy and fair competition among both nations towards meeting our critical climate goal (at least 80% by 2050), we gladly continue to fuel both sides toward greater innovation and investment in clean energy.

Congressman Joe Barton is the ranking Republican on the House Energy and Commerce Committee.

The ever quotable climate change skeptic Rep. Joe Barton has dismissed cap and trade legislation as “dead” before arrival and has instead decided to launch his own version of climate change legislation. The Barton plan, with an additional 200+ amendments waiting in the wings, would strip the EPA of its authority to regulate greenhouses gases under the Clean Air Act, and would increase US dependence on high-carbon polluting energy sources.

A plan, that in simplest terms would INCREASE our carbon pollution, reduce our energy security, and do nothing to help re-power the American economy.

While Barton doesn’t speak for all Republican’s in the House Energy and Commerce Committee, he clearly seems to agree with former speaker Newt Gingrich’s view that the US can “drill, drill, drill” its way to energy independence.

The Barton plan’s claim that the US can become energy independent through a policy of “drill, drill, drill” is an embarrassing bit of self delusion and Barton should know it. Access to credit and high commodity prices are far bigger drivers of investment than access to new oil and gas fields on the OCS. The truth is that domestic production is driven by the prices the oil and gas firms can charge us. When the price is painfully high, they “drill, baby, drill”  but when the price drops as it has in the past year those drill rigs disappear faster than cockroaches when you turn the light on.  In Sept 2008 there were over 2,000 production drill rigs in operation; last month there were only around 900, a nearly 60% drop.  This didn’t happen because the government put lands off limits.  It happened because the companies who want us to believe their only interest is in bringing us as much cheap oil and gas as we can possibly burn, lose interest when the price drops.

True energy security can only be gained by wasting less and from diversifying our energy resources, and the Waxman-Markey bill looks to create an investment environment to not only drive efficiency but also give us the tools to build cleaner cars, capture carbon from coal-fired power plants, and develop a new low carbon, technology driven energy economy. Indeed, given Barton’s desire to increase our domestic oil production, he should embrace the provisions in the Waxman-Markey bill that will provide enough cheap CO2 to help recover over 45 billion barrels of domestic stranded oil through enhanced oil recovery (EOR) with CO2 that now pollutes our air.

Instead, the Barton plan relies on taxpayer subsidies that you and I will pay for to coax business to consider cutting their pollution. And his plan contains a witches brew of “drill everywhere” ideas, like a mad addict looking for a piece of fresh skin to stick the latest needle in.  The  indiscriminate  “all of the above” frenzy in the Barton plan will do nothing to improve our energy independence, help the economy recover, or reverse the trend of jobs losses in the manufacturing sector. The truth is that job losses are expected to continue to decline for our energy intensive industries through 2016 under the business as usual path proposed by the Barton plan.

US manufacturers, hobbled by the recent economic downturn, are desperately looking for ways to create demand and the Waxman-Markey bill does just that. It provides the economic resources to create trillions of dollars of demand for low carbon energy services that will benefit the economy and grow jobs for decades to come.

One example of an industry that will benefit from increased energy efficiency investment under cap and trade is the US semiconductor industry. According to a new report from ACEEE, “smart” sensors created by the semiconductor industry have already cut our electricity bills by about 20% over the past 40 years, eliminating the need for 184 additional power plants and saving the average household $613 a year as of 2006.  The study continues to show that semiconductors “have the ability to continue to drive economic growth, protect and enhance our environment, and pass on a better world to future generations.”

ACEEE sees potential to save an additional $1.2trln in energy costs through the year 2030 through “smart” grid technologies enabled by the semiconductor industry. Technologies that have a better than 2-1 payback in energy savings and would create 935,000 new jobs in the United States. Technologies that will be enabled under the Waxman-Markey bill, as utilities and manufacturers are given transition assistance funding to invest in low carbon solutions. Investments based not on goodwill, but on their high return on capital under climate legislation.

In sum, Barton plan will not provide America with energy solutions but rather with energy illusions. As disasterous as “drill, drill, drill” is as a climate policy, it is even worse as an economic policy. We need to find ways to reverse the loss in manufacturing jobs, cut our dependence on oil, and ensure America’s place as a global economic leader, and “drill here, drill now” will not get us there. While no expects it to be an easy transition, as Nobel Prize-winning economist Paul Krugman recently said, “if you really believe in the magic of the marketplace, you should also believe that the economy can handle emission limits just fine.”