A recent issue of Scientific American featured a “Solar Grand Plan.” Its authors described a way for the United States to obtain nearly 100 percent of its electricity and 90 percent of its total energy, including transportation, from solar, wind, biomass, and geothermal resources by end-of-century. Electricity would cost a comfortable 5 cents per kilowatt hour.
U.S. carbon emissions would be reduced 62 percent from their 2005 levels. Some 600 coal and gas-fired power plants would be displaced. The federal investment would be $400 billion over the next 40 years ($10 billion a year) to deploy renewable technologies and suitable transmission infrastructure.
If that future seems too good to be true, then look at two other studies during the past 13 months that have reached similar conclusions: one sponsored by the American Solar Energy Society (PDF), the other by the Nuclear Policy Research Institute and the Institute for Energy and Environmental Research. All three concur that energy efficiency and renewable energy technologies can satisfy the nation’s demand for power without additional nuclear or fossil-fueled power plants.
If $400 billion seems unaffordable, consider: It’s less money than the federal government already has spent on the Iraq war, only a third of the $1.2 trillion that some experts now predict the war will cost, and only a sixth of the federal government’s current annual subsidies for fossil and nuclear energy.
And if a Solar Grand Plan seems politically implausible, read the newspaper. Last November, the Intergovernmental Panel on Climate Change said we have until 2020 to make major changes in greenhouse-gas emissions. Two weeks ago, the chief executive of Royal Dutch Shell told his staff that world oil demand will outpace supply within seven years. That means rapidly rising oil prices, more recession (the last five recessions in the U.S. were preceded by high oil prices), more power for oil-producing nations like Iran and Russia, and more likelihood of international conflicts.
The more practical — and certainly the more survivable — of these two futures is the Solar Grand Plan, an aggressive national effort to rebuild the economy on a foundation of efficiency and sustainable energy supplies. To get to that future, national energy and climate policy must have a few key ingredients.
First, as I argued in the first two parts of this series, we need sensible federal incentives to overcome the array of market imperfections that stand in the way of energy security. Those incentives must be large enough and sustained enough to allow renewable energy industries to become viable and to allow beneficiaries to use them.
Second, the industries need a substantial, assured market to spur investment. A national Renewable Energy Portfolio Standard would help, along with firm commitments by federal, state, and local governments to purchase solar collectors, wind turbines, plug-in hybrid vehicles, energy efficient equipment, and so on.
Third, the federal government must stop subsidizing the energy technologies that are causing climate change and economic instability — coal, oil, and gas. They are mature industries that can and should stand on their own two feet. Instead, they received nearly $50 billion in federal support in 2006, according to subsidy expert Doug Koplow (PDF). As a result, global warming remains a tax-supported enterprise in the United States even though, thanks to the work of the world’s scientists, we should know better.
As for the nuclear power industry, it receives about $9 billion in taxpayer subsidies each year, according to Koplow. Taxpayers have been subsidizing it since 1948. The industry still hasn’t figured out how to permanently store its wastes, protect its plants from terrorists, guard effectively against nonproliferation or compete in the marketplace without help.
How do we turn federal subsidies from pork into tools of good public policy — public policy, in other words, that truly enhances the security, prosperity and opportunity available to the American people?
- End virtually all subsidies for the oil, gas and coal industries and redirect the funds to research, development and commercialization of new renewable energy and energy efficiency technologies, carbon sequestration projects, programs that help those least able to cope with climate change and the downsides of climate policy, and local efforts to adapt to climate change impacts already underway.
- Conduct an inventory of all other federal subsidies that promote greenhouse gas emissions. Believe it or not, no such inventory has ever been done. Some of these subsidies will be surprising — for example, mortgage interest deductions for McMansions encourage bigger homes that, unless they are true green, are a significant factor in America’s growing energy consumption. To create transparency for the first time in how we subsidize climate change, the inventory should be put on line where everyone can see it.
- Create a nonpartisan, cross-sector presidential commission to recommend which carbon subsidies should be repealed, and which are necessary for national security or economic stability. These recommendations will remove the feedbags from a lot of sacred cows and the cows won’t like it. So, the recommendations should be handled like military base closings — in an all or nothing, up or down package placed before Congress.
- Create a “Climate Protection Performance Standard” for future subsidies. The standard should be based on the full life-cycle performance of the technology, service or resource being subsidized and require high net energy, net emissions, net water and net economic benefits. The standard could also include the subsidy’s projected impact on environmental quality, ecosystem services, energy independence and other critical factors. This week, the New York Times reported that many types of biofuels produce more carbon emissions than they prevent, when factors such as soil tillage and forest-clearing are taken into account. A full-cost life-cycle assessment would bring factors like this to light, rather than committing federal funds on the far-less-objective standard of political clout.
- Establish sliding scales. Subsidy levels should decline over time to spur early action. In addition, subsidies should be awarded on a sliding scale to reward best performers — for example, those activities and products that score best under the Climate Protection Performance Standard.
As we all know, the American people face several urgent issues without a lot of money to address them. Climate change and energy security are among them and are connected with many others, including health care costs and defense spending. We need to invest in our future far more carefully than we are doing today. We need to stop paying one another to destabilize the atmosphere.