issue: Transportation & Infrastructure

Who are the U.S. Investment Heroes of 2013?

Posted on by The Progressive Policy Institute

In our newest report, “U.S. Investment Heroes of 2013: The Companies Betting on America’s Future,” we highlight the top U.S. Investment Heroes of 2013, as ranked by their U.S. investment.

PPI’s ranking of U.S. Investment Heroes for 2013 is led by AT&T, which invested almost $20 billion in the U.S. in 2012. The top five are rounded out by Verizon, Exxon, Chevron, and Intel, and together these five companies invested over $66 billion in the U.S. during the last year.* Total U.S. investment by the top 25 companies amounted to almost $150 billion last year, spent on high-speed broadband deployment, oil and natural gas production, and new corporate and retail facilities.

Telecommunications and cable, energy, and technology dominated this year’s Investment Heroes list, comprising 18 out of our top 25 companies. The fact that these three sectors are driving U.S. private fixed investment reflects their importance in driving U.S. economic growth.

Given the importance of investment as a path to sustainable growth, it is essential our economic policies make domestic business investment a priority. In our report we put forward four ways to encourage more U.S. investment: simplify the corporate tax system, invest in workforce training, don’t over-regulate innovative industries, and free up more spectrum.

*See full report for complete methodology and definitions.

 

U.S. Investment Heroes of 2013: The Companies Betting on America’s Future

Posted on by The Progressive Policy Institute

For too long, U.S. policymakers have focused narrowly on boosting consumers’ buying power, assuming that the productive end of the economy will take care of itself. Yet the last decade of slow growth shows that debt-driven consumption is not a sustainable strategy for expanding economic opportunity or lifting U.S. living standards. In contrast, a high-growth strategy requires strong investment—private and public—in our nation’s productive and knowledge capacities.

It’s time for progressives to rebalance the consumption-investment equation. Total domestic investment fell drastically during the recession and has yet to fully recover. A big part of the problem is the public sector. With gridlock in Washington and financial troubles at the state and local level, government real spending on productive assets from highways and bridges to computer equipment, net of depreciation, is down by half compared to the average level of the 2000s.

Investment by the private sector is doing better, but taken as a whole still falls way short of what the country needs to generate jobs and growth. As shown in Figure 1, business investment, outside of housing, is still 20 percent below its long-term trend. There are several reasons why private business investment is failing to reach its potential. Globalization, weak demand, deleveraging and a shortage of workers with technical skills all contributed to the investment fall-out and subsequent investment gap. And as PPI has documented elsewhere, the sheer accumulation of regulations over time can discourage capital investment and innovation.

Within this gloomy picture, however, are some bright spots—companies that continue to place big bets on America’s future, creating jobs and raising productivity in the process. Surprisingly, in a world of information overload, identifying these major contributors to the U.S. economy is not an easy task, since most companies do not break out their domestic capital spending. That’s why we undertook our second annual report on “U.S. Investment Heroes,” making a systematic analysis of publicly available information to rank nonfinancial companies by their capital spending in the U.S.

PPI’s ranking of U.S. Investment Heroes for 2013 is once again led by AT&T, which invested almost $20 billion in the U.S. in 2012. The list then follows with Verizon, Exxon, Chevron, Intel and Walmart. Together, we estimate these companies invested almost $75 billion in the U.S. in 2012, an astonishing total almost twice the GDP of Wyoming. Over the last year, these companies have poured capital investment into the deployment of high-speed broadband, oil and natural gas production, and new corporate and retail facilities.

As a general principle such spending provides both direct and indirect benefits to Americans. For example, a variety of studies suggest that investment in fixed and mobile broadband creates jobs. In fact, PPI Chief Economic Strategist Michael Mandel estimates that since Apple introduced the iPhone in 2007, the economy has created over 750,000 jobs related to mobile apps.

Indeed, telecommunications and cable companies are a major driver of U.S. investment today, sparking the rise of what we call “the data-driven economy.” The digital transformation of the U.S. economy would not be possible if high-speed fixed and mobile broadband networks were not in place. That’s why encouraging private investment in our nation’s broadband infrastructure is rightly a major priority for the Obama administration. Beyond that, robust private investment in smart devices, sensors, and “big data” analytics is sparking the emergence of the “Internet of Everything,” which could boost productivity and job creation in ‘physical’ industries such as manufacturing and transportation.

Our ranking of U.S. companies investing in America also shows the tremendous role energy—oil and natural gas production and power generation—has on U.S. economic growth. The shale oil and gas boom has turned old assumptions about energy scarcity on their head. It is lowering input costs for U.S. chemical companies and helping to revive U.S. manufacturing. It may also turn the United States into a major energy exporter, while creating jobs at home.

This report is the third in PPI’s “Investment Heroes: Who’s Betting on America’s Future” research series. That so many companies are choosing to invest elsewhere—or not at all—makes it all the more important to recognize those that are placing their bets on America’s future.

Download the memo.

 

Can the Internet of Everything bring back the High-Growth Economy?

Posted on by The Progressive Policy Institute

The United States and the other major advanced economies are currently stuck in a seemingly endless twilight of slow growth. The numbers are ugly: The April 2013 forecast from the International Monetary Fund predicts that economic growth in Europe will average only 1.7% over the next five years. Japan is projected to average only 1.2% growth. Germany, held up as a paragon of success, is expected to grow at only 1.3% annually.

The United States is doing better than Europe and Japan, but not by much. The nonpartisan Congressional Budget Office is currently projecting that the underlying growth rate of the U.S. economy—the so-called ‘potential’ growth—is around 2.2% annually, compared to an average of roughly 3.3% in the post-war period.

Both Democrats and Republicans in Washington, miles apart on most issues, have accepted the slow growth scenario. That helps explain, in part, the political gridlock in Washington. An economy growing at barely over 2% per year doesn’t generate enough income to pay for everything that Americans need: Social Security and Medicare for the aging population, defense spending sufficient to handle critical threats, and support for essential government investment in basic research, education, and infrastructure. The longer that the slow-growth assumption gets locked in, the more it becomes a self-fulfilling prophecy.

Yet we are not stuck with the slow-growth scenario and the endless and frustrating Washington policy debates about dividing a shrinking pie. Over the past year, a series of studies from research institutes and industry have laid out a compelling new vision of a highgrowth future—one that that could revolutionize manufacturing and energy, create employment for the jobless generation, and bring back rising living standards.

These new studies—from organizations such as the McKinsey Global Institute, GE, Cisco, and AT&T—describe the economic potential of a new wave of technological innovations known as the Internet of Everything (IoE)—also sometimes called the Internet of Things, the Industrial Internet or Machine to Machine. (Though as discussed below, the Internet of Everything is a broader, more accurate concept than the other terms, encompassing much more than just ‘things’.)

Taking the McKinsey projections as a base, we estimate that the Internet of Everything could raise the level of U.S. gross domestic product by 2%-5% by 2025. This gain from the IoE, if realized, would boost the annual U.S. GDP growth rate by 0.2-0.4 percentage points over this period, bringing growth closer to 3% per year. This would go a long way toward regaining the output—and jobs—lost in the Great Recession.

Equally important, from the macro perspective, the result will be a shift to growth that is not just faster, but higher quality. Rather than being fueled by consumption and borrowing, the Internet of Everything will lead to an economy built on production and investment, with much more extensive education and training built right into the fabric of the economy rather than being separated out.

Download the memo.

The FCC’s Incentive Auction: Getting Spectrum Policy Right

Posted on by The Progressive Policy Institute

As the Federal Communications Commission (FCC) considers how to allocate the broadcasters’ spectrum in the upcoming “incentive auction,” it should be guided by economic principles designed to maximize social benefits. To date, the spectrum policy debate largely has been driven by considerations of the private benefits of carriers such as Sprint, T-Mobile/MetroPCS, U.S. Cellular, and other small carriers (collectively, the “smaller carriers.”).

In April, the Department of Justice (DOJ) weighed into this debate by advocating “rules that ensure the smaller nationwide networks, which currently lack substantial low-frequency spectrum, have an opportunity to acquire such spectrum.” Although it is natural instinct to root for the little guy, ensuring the livelihood of smaller carriers is not an appropriate policy objective, as that would counsel a range of subsidies and tax credits for handpicked competitors. Indeed, maximizing the number of wireless competitors is not the appropriate objective either; using spectrum allocation as a tool for reducing wireless concentration would require divvying up the spectrum in such thin slices as to render the resulting allocation virtually useless. The problem with these narrow objectives is that, if pursued to their logical extreme, the resulting policies would sacrifice massive (and growing) economies of scale associated with providing the capacity needed to support mobile video, telemedicine, distance learning, and a host of other bandwidth-intensive applications that consumers and small businesses are demanding from their mobile devices.

The spectrum policy debate must be informed by the tradeoffs inherent in spectrum aggregation: more (smaller) firms versus more robust wireless networks. As wireless consumers increasingly demand that their wireless devices support bandwidth-intensive applications such as mobile video, the optimal allocation of spectrum tilts in favor of more robust wireless networks. Focusing narrowly on reducing wireless concentration could result in a spectrum allocation under which wireless carriers lack the incentive to deploy next-generation technologies. If policymakers fear that “too much” spectrum in the hands of any one carrier raises anticompetitive issues, there are several ways to address those concerns that do not undermine investment in next-generation wireless broadband networks, and the attendant innovation that such investment engenders.

Download the entire backgrounder.

A Simple Solution for America’s Looming Commercial Debt Crisis

Posted on by The Progressive Policy Institute

As the housing sector continues its apparent recovery, some U.S. lawmakers are turning their attention to a looming crisis in the commercial real estate market, which is threatened by an avalanche of debt as loans made during the heady days of the early aughts start coming due over the next five years.

Reps. Kevin Brady, R-Texas and Joseph Crowley, D-N.Y., this week introduced a bill that would make it easier to finance this coming wave of debt. Following similar proposals in the Senate and President Obama’s budget, it would stop penalizing foreign investors in U.S. commercial property.

Here’s the problem they’re trying to solve: colossal amounts of real estate loans – totaling more than $1.7 trillion – are due to mature from now to 2018. Commercial mortgages are not like your average home mortgage. They aren’t fixed at a rate for 30 years. The standard commercial loan must be refinanced, paid down or sold after 10 years. What’s coming now is a huge wave of commercial debt that originated in the bubble years between 2003-2008.

Back then, real estate values were inflated and lending standards much looser. That means we can expect significant volumes of maturing mortgages to be in some sort of distressed state. In a 2010 Congressional oversight report, lawmaker’s panel served up this scary scenario:

A significant wave of commercial mortgage defaults would trigger economic damage that could touch the lives of nearly every American. Empty office complexes, hotels, and retail stores could lead directly to lost jobs. Foreclosures on apartment complexes could push families out of their residences, even if they had never missed a rent payment.

Continue reading at U.S. News & World Report.

Telecom/Broadcasting Industry Leads in Investment Spending

Posted on by The Progressive Policy Institute

While I was waiting for my plane at Heathrow on Sunday, I spent a bit of time looking through BEA statistics on investment spending by industry. (That activity may sound remarkably dull and boring, but remember I read stuff like this so you don’t). I put this together this little table showing which industries invested the most in equipment and software in the years 2007-2011

News flash: The top industry for investment in equipment and software from 2007 to 2011 was broadcasting and telecommunications. In many ways, that’s not surprising, given the data-driven economy, but it’s good to see in black and white.

Healthcare would be number one by a small amount if we combined hospitals and ambulatory care services.

‘Mysterious Divergence’ Between Investment and Profits: A Side Effect of Globalization

Posted on by The Progressive Policy Institute

Last week the FT did a long article on the broad divergence between U.S. corporate profits and investment. https://www.ft.com/intl/cms/s/0/8177af34-eb21-11e2-bfdb-00144feabdc0.html#axzz2aKVhUHNE  The author, expressing surprise at the strength of profits compared to the weakness of corporate investment, ran through a long list of potential reasons, included the financial crisis, the information revolution,  short-sighted managers, mismeasurement of intangible investment,  and monopoly power.

Notably missing from the article, though, is any mention of globalization. In fact, the author apologizes in the comments, noting that “Globalisation is another possible factor that I couldn’t manage to fit in.”

But globalization gives the simplest explanation of the “mysterious” divergence. Because of the way that the national statistics are constructed, increased investment in China can produce higher domestic profits in the United States.

How does this work?  Suppose that a large retailer is sourcing a product from an American supplier.  Then a Chinese manufacturer invests $100 million in a Chinese factory to make the same product for half the price(aided by all of the Chinese infrastructure spending ).

When the retailer shifts from the American supplier to the Chinese supplier at the lower price,  the retailer makes some gain in profits, and passes some on to the consumer.  All of those extra profits are booked by economic statisticians as domestic profits.

Ta da! An increase in investment overseas shows up as domestic profits. Imagine the same story multiplied a hundred fold, and that goes a long way to explaining why the divergence is happening in the US.

The larger story, though, is that we have to start thinking globally rather than domestically. I don’t know whether global profits diverge from global investments, but we have to figure in China and other developing countries as well. Second, if we are talking about a fall in the labor share of income, we have to add in rising wages in China as well.

National income accounting is just that—national. And that may give misleading answers in an era of globalization.

 

 

Five Key Objectives for a Progressive Broadband Policy

Posted on by The Progressive Policy Institute

For many progressives, “getting the Internet right” means addressing what they see as undue market power in the provision of broadband and, even more so, the potential for the abuse of that market power, as the Internet is seen as a landmark tool for social and political empowerment. Crafting a progressive broadband agenda that protects consumers and allows for innovation is key to the future of broadband in America.

In my latest report, Shaping the Digital Age: A Progressive Broadband Agenda, I outlined a progressive broadband policy agenda that consists of five key objectives:

  1. We must close the “digital divide” by leveraging all platforms. Given the dispersed populations across the country we should integrate a cloud-based, wireless framework or a mixed system in which signal is taken over wirelines to hubs that serve wireless customers. But the idea that “it must be wired” has been dispelled by the rapid advance of wireless broadband.
  2. We must bring more spectrum—the “airwaves” that “fuel” wireless—to the market to alleviate the spectrum crunch. Greater use of auctions, encouraging spectrum sharing, and looking to the government to give up its unused spectrum are all possibilities.
  3. We must explore “informating” key sectors of the economy. Broadband has the power to transform non-market sectors of the economy such as health, education and the environment. These entities will be driven by more than just market signals, and for that reason, we should look at positive programs to improve their performance.
  4. We must protect personal privacy. Movement within the broadband space invariably creates a trail of data. Progressives must honor rights of privacy in the digital age that and look at the role of transparency and choice in protecting consumers.
  5. We should examine the role of the Federal Communications Commission. The FCC labors under outdated law. While many of its missions—such as public safety—are legitimate, we should realistically evaluate limitations on its ability to deal with the real challenges of the digital age.

The fact that the Internet has become a driving force in shaping daily life doesn’t mean that it can’t be governed primarily by market forces. In fact, those forces have already delivered a competitive, innovative, and rapidly disseminating broadband network. There is a more appropriate policy agenda for progressives that would achieve important progressive goals in a way that “neutrality” and other regulatory forays cannot and will not.

To read the report, please visit https://www.progressivepolicy.org/2013/07/shaping-the-digital-age-a-progressive-broadband-agenda/

“Cut and Invest” vs. Austerity

Posted on by The Progressive Policy Institute

President Obama’s new budget attempts to define a progressive alternative to conservative demands for a politics of austerity. Having just returned from a gathering of center-left parties in Copenhagen, I can report that European progressives are wrestling with the same challenge, and are reaching similar conclusions.

There was wide agreement that the wrong answer is to revert to “borrow and spend” policies that have mired transatlantic economies in debt, while failing to stimulate sustained economic growth. The right answer is a “cut and invest” approach that shifts spending from programs that support consumption now to investments that will make our workers and companies more productive and competitive down the road.

“You can only have a Nordic model if you’re competitive,” declared conference host Helle Thorning-Schmidt, prime minister of Denmark. “In this country, we cannot tax more; it’s that simple,” she added. “If you like the welfare state, if you want to sustain it, you have to take the tough decisions.” Continue reading ““Cut and Invest” vs. Austerity” →

What Superdome Blackout Says About American Competitiveness

Posted on by The Progressive Policy Institute

In his Forbes article, Thomas J. Basile argues that the Superdome Blackout is a symbol of America’s aging infrastructures which drive down American Competitiveness. He cites Michael Mandel:

Even Michael Mandel of the Progressive Policy Institute lamented last year that Obama’s allocation of stimulus funds did little to help solve the problem because too much money was spent elsewhere.

Read the entire article here.

AT&T’s Investment Challenge to Corporate America

Posted on by The Progressive Policy Institute

The economy is improving, but the U.S. is still struggling with an investment drought. Capital spending by business is 26% below the long-term trend, and has not yet recovered to pre-recession levels. By comparison, personal consumption has topped its pre-recession levels, and is much closer to the long-term trend.

Against that backdrop, it is notable that  AT&T announced yesterday that it  expected  a capital spending budget of $22 billion per year for the next three years. To put this in perspective, the *entire* motor vehicle industry invested less than $20 billion  in the United States in 2011.

In some ways, AT&T’s willingness to make a public announcement of a capital spending target three years out is a challenge to Corporate America (though the company certainly does not frame it this way). By making this public statement,  AT&T is effectively saying that it believes in the communications revolution, data-driven growth,  and the strength of the U.S. economy.

Why can’t other companies make the same sort of public announcement of  long-term capital spending goals and offer additional certainty to the still recovering U.S. economy? Truthfully, growth is suffering more from investment uncertainty than from regulatory uncertainty. If large companies pledged to maintain or increase domestic capital spending over the next three years, it would go a long way to boosting economic and job growth.

With the election now over, the Obama Administration should hold up AT&T–and other companies willing to invest in America–as examples of what to do right. If Obama wants a high-growth economy with prosperity for all, he needs to encourage more companies to make the same kind of bet on America’s future.

This piece was cross-posted from Innovation and Growth.

Republican War On Economic Data is Anti-Business and Anti-Growth

Posted on by The Progressive Policy Institute

The House Republicans appear to be conducting a war on economic data. They seem to think that defunding data collection is all gain and no loss.

In fact, the anti-data Republicans are really anti-business and anti-growth. Government spending on economic data collection should be thought of as fully equivalent to investment in long-lasting infrastructure. When we build highways or airports, we expect them to be used by the private sector for economically-valuable activities. Highways facilitate the sale and use of automobiles, the construction of homes, the transportation of goods. Airports make air transportation possible, fostering all sorts of jobs and growth.

Just like spending on highways and airports, government investment in economic data collection provides a long-lasting boost to private sector economic activity and to private sector growth. To give one very simple example: Political polling would be much more expensive and less accurate if the pollsters did not have access to government economic and demographic data. The government data enables the pollers to make sure their sample correctly represents the actual population.

Continue reading “Republican War On Economic Data is Anti-Business and Anti-Growth” →

Stop the Uncertainty Surrounding Ex-Im Bank

Posted on by The Progressive Policy Institute

Late yesterday marked a formal end to the two-year debate on whether the Export-Import Bank (Ex-Im), the U.S. export credit agency, deserves to live to see another day. (It does.) What was once a routine process for Ex-Im reauthorization was held back by congressional charges of corporate welfare by the Tea Party. But while the decision to reauthorize the Bank for another two and a half years is good, the fact that it took so long is not: at this rate negotiations for the next round will have to begin before this legislation is finalized. That is a heavy drain on congressional and Ex-Im Bank resources. One has to ask, is there a way to avoid the same extended debate next time around?

Yes, with a little more clarity on why two-year long ideological attacks on Ex-Im creates uncertainty that hurts U.S. companies and detracts from Ex-Im’s effectiveness. As someone who worked at the Bank for almost three years, I’d like to offer some of that clarity.

Continue reading “Stop the Uncertainty Surrounding Ex-Im Bank” →

The Government Investment Drought Continues

Posted on by The Progressive Policy Institute

Sometimes things are not what we think they are. The conventional notion is that government has become more important under President Obama, while the private sector has stagnated. Yet in some ways the data tell a different story. Take a look at this chart:

The top (blue) line shows that private nonresidential investment has rebounded smartly since early 2009, when President Obama took office. Residential investment first dropped, and then mostly came back.

Continue reading “The Government Investment Drought Continues” →

A National Infrastructure Bank: A Road Guide to the Destination

Posted on by The Progressive Policy Institute

Download the entire memo.

President Obama has proposed a National Infrastructure Bank, a simple declarative sentence that left most listeners wondering what he meant. The confusion arises partly because the administration did not follow up the president’s remarks with a specific proposal, but also because the operations of such a bank have never been fully fleshed out. Felix Rohatyn and I have elsewhere laid out the broad outline of how such a bank would function,1 and that description serves as a good starting point for our expectations regarding the president’s proposal and what Bank-type proposals generally ought to do.

As many writers have noted, American infrastructure is depreciating rapidly – we are likely well below the replacement rate of investment in roads, mass transit, airports, ports, rail, and water assets. The logical implication is that we need to invest more. But more investment in and of itself will not move us towards having the right mix of infrastructure assets in place.

The current mix results from one of two selection processes. The first is devolution to the states (for example the cost-sharing grants delivered by the Highway Trust Fund), and the second is selection by Federal agencies (e.g., the Corps of Engineers). At worst, these processes lead to politically motivated outcomes, either because state governments favor some projects for wholly non-economic reasons, or because the Congress can muscle the selection process from the federal agencies. The most recent transportation authorization bill, passed in 2005, made the word “earmark” famous by incorporating a stunning $24 billion of them – the price of having a law passed. Insofar as we have given the task of project selection to the political process, it would be surprising if this kind of event didn’t happen, not that it sometimes does.

Politicized project selection is one of several problems associated with the current process. But it is one of the reasons why a National Infrastructure Bank is so important and so urgently needed: not just because a bank might be able to lever federal dollars, but because it can use the existing dollars more wisely and obtain a higher public return.

What follows, then, is a description of the role a National Infrastructure Bank could play, taken from the perspective of the specific problems in the current process it might solve. This perspective also allows us to evaluate the administration’s proposal.

In a nutshell, Rohatyn and I propose that we collapse all of the federal “modal” transportation programs into the Bank. Any entity – whether state, local, or federal – would have standing to come to the Bank with a proposal requiring federal assistance. The Bank would be able to negotiate the level and form of such assistance based on the particulars of each project proposal. It could offer cash participation or loan guarantees, underwriting or credit subsidies, or financing for a subordinated fund to assure creditors. Any project requiring federal resources above some dollar threshold (on a credit scoring basis) would have to be approved by the Bank. Additionally, we imagine that some part of the funding for existing modal programs would be converted into block grants sent directly to the states and large cities to be spent on projects too small for the Bank’s oversight. Such grants could also be used for those programs desired by the states that do not pass muster on terms proposed by the Bank.

This is more a vision of infrastructure policy than a blueprint for the immediate future. Admittedly, it will take years and a meticulous reorganization to produce this configuration. But the best way to measure our progress in infrastructure policy (and the merits of the administration’s proposal) is not to see how quickly we adopt the Bank’s specific features, but to see how the Bank addresses the underlying infrastructure policy flaws it is designed to fix.

Download the entire memo.

Nuclear Risk in Perspective: Making Fact-Based Energy Choices

Posted on by The Progressive Policy Institute

March 11, 2011 was a day of calamity the Japanese people will never forget. According to the National Police Agency of Japanthe Tōhoku earthquake and tsunami left 15,841 dead, 5,890 injured and 3,490 people missing (as of December, 2011). Mother Nature’s freakish, one-two punch also triggered the partial meltdowns of four reactors in the Fukushima Daaichi complex, one of the worst commercial nuclear power plant disasters in history.

The Fukushima incident has stoked nuclear dread around the world and led some to conclude that nuclear power is too risky. Perhaps the most dramatic shift in public attitudes has been in Germany, where a conservative-led government recently unveiled a plan to close down all the country’s nuclear power plants by 2022.

Americans, however, should not endorse this knee-jerk anti-nuclear policy. For the foreseeable future, nuclear power will remain a vital part of a balanced and realistic national energy portfolio. Moreover, as champions of reason and science, U.S. progressives have a responsibility to avoid panicky overreactions and instead undertake a clear-eyed assessment of the actual risks of nuclear energy.

Generating electricity—like getting out of bed in the morning, or any other human activity—carries inherent risks. That’s true regardless of the fuel used to generate power. Instead of carefully weighing and comparing such risks, however, some environmental activists have tried to pose a false choice between “clean” and presumably safe renewable fuels like wind, solar and geothermal energy, and “dirty” fossil fuels or allegedly “unsafe” nuclear power. This dichotomy has nothing to do with science.

No sensible person is against renewable energy. But it will probably be a long time—likely decades, not years—before such sources have a realistic prospect of providing the base load needs of our national economy, let alone meeting the growing requirements of the entire globe. The Obama administration takes a more realistic approach in including nuclear energy along with other non-carbon emitting sources in its “Clean Energy Standard.” To understand why this is the case, we first need to review a few of the often overlooked, but important subtleties of electrical power generation.

Download the memo.