The carrot is public subsidization of emissions-free fuel development. The stick hits carbon emitters with a price for polluting. The trillion-dollar question is what variant of each – or combination of the two – will be most effective at combating climate change and least damaging to the economy.

In the United States, President Barack Obama already doled out a carrot in the form of his administration’s energy stimulus bill which earmarks $78.6 billion for clean energy projects. This represents a huge shift in North America’s energy direction and will help the continent catch up to European clean energy technology, says Daniel Kammen, a scholar in the field from the University of California, Berkeley. The environmental policy adviser to the president visited Alberta this spring.

Kammen’s message in an Alberta Oil interview – that the central challenge of this century will be to replace the vast fossil-fuel infrastructure with a new economy based on low-carbon technologies – is somewhat ironic. He delivers it between giving directions to his Calgary taxi driver. The irony is not that this Berkeley professor is in Calgary rather than California during the last dregs of the Canadian winter but rather that he is preaching energy efficiency in Canada’s sprawled out, made-for-car oil capital, where rooftop solar panels of the type Californians love would spend much of the year covered in snow. But it is in this city, where livelihoods are dependent on energy trade with the U.S., that people should be – and are – paying attention to the new president’s direction.

Obama’s carrot is “the largest investment in energy both in energy efficiency and energy research that we’ve ever seen,” says Kammen. It will provide jobs, reduce emissions and provide opportunities for North American researchers not only to develop technology but also to see it implemented. He notes that the world’s largest wind power company is Danish, but technology developed for its products largely resulted from U.S. research.

Now that winds favorable to renewable energy have literally shifted, the U.S. is being looked at by international renewable energy companies as the number 1 investment location for their projects. Even though Alberta has no policy encouraging renewable energy development save for a development fund for bioenergy, it is getting its own attention. This spring, the Irish firm Mainstream Renewable Power spent $850 million to acquire an 80 per cent share in Alberta Wind Energy Corp., the province’s largest wind developer. The deal significantly bolsters the financing the firm needs for its plans to nearly double the province’s generation of wind power.

In the U.S., Kammen points out that clean energy schemes are not waiting for Obama’s financial aid before making a start on projects. Local “carrot” projects are being developed and implemented to gently nudge consumers into greater energy efficiency.

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