It seems that a day doesn't slip by without someone raising the stakes in the alternative-energy poker game. The most recent bombshell wager: Cambridge Energy Research Associates report that alternative energy investments will -- hold on to your hats! -- top $7 trillion by 2030. That's an audacious number by any measure, and normally it would be enough to suck the oxygen right out of a convention of wind-farm enthusiasts. But that's not the half of it. The most startling aspect of the report is that it barely raised a ripple in the investment community. And why should it?
Prompted by Pompey Road in comments, I went looking for some commercials that have been running in rural West Virginia, put out by a company called Walker/Cat that makes heavy machinery for coal operations. (George …
Yes, Thursday night’s Democratic debate will once again be sponsored by the coal industry.
The New York Times published an article yesterday titled "Silicon Valley Starts to Turn Its Face to the Sun": "This is the biggest market Silicon Valley has ever looked at," says T. J. Rogers, the chief executive of Cypress Semiconductor, which is part-owner of the SunPower Corporation, a maker of solar cells in San Jose, Calif."The solar industry today is like the late 1970s when mainframe computers dominated, and then Steve Jobs and I.B.M. came out with personal computers," says R. Martin Roscheisen, the chief executive of Nanosolar, a solar company in San Jose, Calif. Why all the excitement? You need only look at a few numbers and a graph to get the picture.
Putting a price on carbon is probably an unavoidable part of phasing out fossil fuels to fight global warming and air pollution. For years, Peter Barnes has advocated a brilliant means of mitigating many of the harmful economic side effects: take the revenue from carbon taxes or auctions and rebate it back to the people, dividing it equally among each citizen. Barnes advocates doing this via an auctioned permit system. However,the same thing could be done with a carbon tax. Instead of auctioning permits, simply tax those same embedded emissions and rebate that revenue to consumers. Raise the tax periodically to lower emissions. Inevitably, with either a tax or auctioned permits, the price charged for carbon will be passed down the supply chain to consumers. By rebating the revenue back to consumers, you minimize the impact of those price increases. They have to pay more, but they have more money to pay with. You get the price signals to affect behavior, without lowering consumer net income.
This is really, really sad. A group, the Institute for Local Self-Reliance, which has done stalwart work on relocalizing the economy, has let their pro-local passion overcome their principles. Now they simply embarass themselves, beating the drums for corn ethanol, using flackery techniques that would do any corporate PR shop proud. Let's start in:
A year and a half after ceding Cuba’s reins (and reign) to his brother Raul, Fidel Castro has apparently officially resigned after nearly 50 years at the helm. For me, the news brought to mind …
My last post argued that based on the figures Scientific American projected for a slow, partial phaseout of fossil fuels, we could do a full, fast, near-total elimination for between 170 and 240 billion dollars a year -- somewhere less than a third, possibly even less than a quarter, of our military budget. I'd like to offer some other comparisons to put those numbers into perspective: We spent $840 billion buying fossil fuels in 2004, according to page 72 of the 2006 Annual Energy Review (10 Meg PDF). So a 95% reduction in U.S. fossil fuel use will pay back a $170 billion annual investment by a nearly 5 to 1 ratio, and a $240 billion a year investment by well over a 3 to 1 ratio. Yes, the time value of money reduces this a great deal -- but you still end up with a return exceeding that of the stock market during the bubble. Another comparison: we sometimes talk about needing a commitment equal to what it took to win WWII. U.S. war spending grew from less than 2% of our national GDP just before Pearl Harbor, to around 5% immediately after, to around 37% at the peak of WWII defense spending. Yet in the scenarios under discussion, we advocate spending between 1% and 2% of the 13.3 trillion dollar U.S. GDP to fight global warming. So we are not talking about anything like a WWII-level commitment economically. And we don't have to shoot anybody, or get shot by anybody, or drop any bombs. It's about green jobs, clean air, and a cure for our fossil fuel addiction. I think the politics are doable. If the public backs this strongly enough, they can walk right over any of the fat cats who try to get in the way.
Scientific American's grand plan to provide a bit over a third of U.S. energy from solar sources provides insight into what it would cost to phase out all or most U.S. greenhouse emissions. Bottom line: a lot less than current military spending. The total cost of the SciAm plan: $420 billion over the course of that 40 years, or slightly over ten billion dollars per year -- less than current fossil fuel subsidies, less than the new subsidies "clean coal" would require. The authors suggest phasing out fossil-fuel powered electricity over the course of forty years, using a solar dominated electricity grid. They suggest Compressed Air Electricity Storage (CAES) and thermal storage to compensate for the intermittent nature of solar electricity, and High Voltage Direct Current (HVDC) transmission lines to move solar electricity from where it is generated to where it is needed. However, we can't wait 40 years, and we especially can't wait 40 years for a 35% reduction in emissions. So suppose we tripled the investment, and spent over the course of 20 years. That would be about $1.26 trillion, or $63 billion a year over twenty years -- a rounding error in the Pentagon budget. Unfortunately, it is not that simple. The "Grand Plan" saves a lot of money via slow implementation, giving the technology time to develop. Implementing it more quickly, with less mature technology, would cost more, probably requiring more solar thermal and less photovoltaic power (unless PV prices drop a lot faster than SciAm projects). So we can double to ~$2.5 trillion, or $126 billion per year. This is still a fraction of our military budget.
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