I spent last week at a conference immersed in the views of professionals working to advance energy efficiency resource intelligence. I shall spare you the wonky details, but I do want highlight what strikes me as a key takeaway.
A few facts to set the stage:
Here's the point, somewhat provocatively put:
Nos. 1 and 2 constitute a challenge to our naive economic worldview; No. 3 indicates that tackling climate change will mean disenthralling ourselves of that worldview.
Market economics (of the familiar neoliberal variety) has shaped public attitudes far beyond academia. Many propositions that Americans now take for granted spring from it: taxes are bad, regulation is burdensome, markets can solve virtually any problem, the self-interested rational economic actor is not only a metaphysical fact of life, the atomic unit of the economy, but a moral model. The assumption that addressing climate change (or indeed addressing any environmental problem) will be costly is a subspecies of the belief that markets always allocate capital efficiently, and thus that government efforts to rechannel capital are by definition less efficient and more costly than the status quo. (Yes, academic economists are cognizant of market failures, but what's at issue here is not academic economics but the broader sociopolitical cosmology. What are the assumptions, the things that "everyone knows" to which market failures are seen as marginal exceptions?)
That's why when you hear an establishment journalist interview DOE head Steven Chu about climate change, virtually every question is about cost -- won't that cost a lot? What's that cost? Isn't that costly? After all, if these things were cheap or even cost-effective, the private sector would have done them already, right?
When smart energy advocates claim that shifts in policy can produce large dividends, they're inevitably dismissed as promising "something for nothing." Dig into that phrase a little and at its root you find faith: the faith that if "something" were available, rational market actors would already have acted to obtain it. The claim that government can make (or induce) investments that offer substantial returns simply doesn't compute.
But energy efficiency refutes that view. Studies show -- at this point beyond reasonable doubt -- that there is money lying on the ground that nobody's picking up. Lots and lots of money. This isn't some marginal phenomenon. We're talking about "cost-negative" investments that can in the next few decades increase the aggregate efficiency of the economy by 20, 30, 50 percent. That's enormous. That's a central fact of our economic life, not a peculiar marginal phenomenon. People are behaving irrationally on a massive, massive scale.
In Anglo economic circles it's fashionable to think that the "market-based" solution of raising the price of carbon will, like a push on Archimedes' lever, solve the problem. But speaker after speaker after speaker at the conference -- from governments, NGOs, and large businesses -- explicitly noted that a price on carbon, particularly of the size expected in the first years of a trading program, is not enough. It shifts incentives at the margins, but nothing like what's necessary. People must be spurred, nudged, and directly incentivized to make these investments. You need strong, consistent, and clear regulations -- "standards and targets" was the drumbeat. In some cases it's about removing or reforming ineffective existing regulations.
There's need for public-private partnerships to restructure markets or create new ones. There's need for direct government investment, massive public education, moral suasion, sharing of best practices. The problem of efficiency is not one problem with one solution but thousands, even millions of granular problems requiring painstaking work to address.
The point is, collective action is necessary. Market economics leads to a strangely passive view of public life, wherein our collective welfare is entrusted to markets, to millions of allegedly rational individuals. Our welfare is allowed/hoped to happen. But here we have a problem -- the deterioration of the atmosphere -- that presents us with great urgency, and a solution -- resource intelligence -- that requires our active intervention.
We know what we want; we know how to get it. We do not have to sit back, waiting anxiously, for the market to provide it on its own.
Commercial and Industrial customers will drive these types of changes, not small private residences (irrational consumers). And the best way to drive these changes is through utilities curbing load with COSTS. Give a business a lower electrical rate to accept outages during peak loads (demand response), use time of use rates to make production during peaks prohibitive and encourage production off-peak, etc. etc. Bottom line, businesses change their behavior because of cost incentives. You can call it efficiency over their competitors, but it really comes down to shaving costs.
I think the only way to motivate people to become more energy efficient is through a constant drumbeat of education. Put more air in your tires, seal your windows, wrap your furnace - and by the way you'll save a lot of money. If the message is repeated enough they'll get it.
If the price of oil rises, they'll get it even faster. Energy efficiency, videos, info: http://www.dasolar.com/alternative-energy/energy-efficiency
Breakthrough technology will rapidly make possible future electric and hybrid cars that need no fuel or external battery charge.
They can turn into power plants when parked. Imagine vehicles need no fuel and that pay for themselves - by wirelessly selling power to the local utility.
This will become a cost-competitive alternative to building new coal and nuclear power plants.
It reflects one application of new technologies that tap energy sources never before commercialized.
Scientists will be understandably skeptical until independent laboratory validation takes place.
That is on the horizon, as is production of self-powered generators - as well as demonstration devices for schools and universities.
See http://www.chavaenergy.com for more information concerning these and other revolutionary technologies.
They are inherently inexpensive and have surprising potential to accelerate rapid reversal of our economic and energy concerns.
I remember visiting my in-laws (wife's grandma), and seeing a huge, drafty house. Heating bills in the winter were astronomical and they couldn't afford an air conditioning system. My wife told them they could get a state inspector in who would get them free insulation and other help. They refused because they are conservitives and didn't want government help. How do you help someone like that?
I do think a carbon tax is a good idea, because it can reduce other taxes, we may as well punish carbon waste rather than income production or sales...
I would also like to see a tax on cars based on the MPG, such a tax would reduce the incentive to car companies to push bigger cars that get a better profit margin (the reason ford, GM, etc. pushed the hummer and friends over smaller cars). If you set a tax of $200 per MPG worse than 30, you would cut the incentive those companies have to encourage buyers to get big cars.
Also in 100 years, whether environmentalists in the currently developed nations want it or not, newer non-petroleum related energy sources will be leading the show. Fusion, space based solar, and biofuels using cellulosics or algae will be in the lead and the carbon question will be moot.
In the mean time we stare at our shoelaces perplexed as to whether we should stumble foreward or enlist a topologist to explain why they are knotted together. Let's get over our technophobia and fund energy research and infrastructure advancement...and let the cap and trade idea be exposed for the complex bait and switch that, like the derivatives market, it really is.
The most important difference in the case of energy is that we already have other competing forms of energy, which we keep artificially cheap. Integrated circuits have no competitors, all development of computing power required integrated circuits, hence the market had no choice. No serious investment can be made in a brand new form of energy until it is demonstrably feasible, and even then there will be competitors for that investment, which will include the archaic fossil fuels as they get more and more rare and expensive to obtain- yet still hold incredible advantages in being easy to convert to energy and also the most versatile organic raw material we know.
The effect of feedback loops and ecological chain-reactions cannot be well predicted, but should definitely be feared. And the phrase "Minor amount of obscurant gasses" reveals a complete lack of understanding of the atmosphere, or perhaps some form of wish-fulfillment.
And I'd love to know how, exactly, we have devised a way to defeat tsunamis...tsunamis?!?
Rising sea levels are one thing, trying to stop a tsunami with anything man-made is patently ridiculous. Tsunamis measuring a few dozen feet high are destructive enough, and there are perfectly plausible natural disaster scenarios (earthquakes and landslides) which could result in a 1,000 to 2,000 foot tall wave hitting a populated coastline. Even if we knew hot to build some kind of sea wall that could protect the vast sea level populations of the planet from the "typical" tsunami- it would be prohibitively expensive to try, not to mention their impact on the ecosystem, not to mention that it is, again, patently ridiculous.
The problem here is that lots of those costs, savings and revnues are not easily quantifiable and as usual in ecomics some assumptions need to be made.
The term energy efficiency is appropriate for comparing the consumption of energy, whereas the term resource intelligence is more about how beneficial the natural resources are used and what the impact is on other natural resources, such as clean air, water,etc.
As an example, what would the impact of mass introduction of fuel-cell cars be in terms of energy efficieny and resource intelligence? I am not so sure that overall, the fuel-cell car would be more energy efficient than others. But even if it weren't the best solution in terms of energy efficiency, it would by far still be the best solution in terms of intelligent use of resources.
http://krotovajanora.wordpress.com/2009/05/04/where-are-the-fuel-cell-cars/