In this piece I just wrote on economic incentives for wind, I suppose I should have pointed out this obvious fact: most of the people calling for an end to the subsidies for wind are, in one form or another, rooted in the vast profit structure of the fossil fuel industries. The energy policy they support is not the fair-minded, market-driven approach I discussed, in which the externalities (damage to human health and the environment) are “priced in” to what we are paying for electricity from, for instance, coal-fired power plants. In fact, it’s the opposite; in the main, they are bitterly refusing to deal with, or even acknowledge, the catastrophic effects of their operations.
First, turning these incentives on and off, and the uncertainty that this process breeds, is a huge deterrent to the capital formation necessary for a profitable and efficient wind industry. But at least as damaging to the overall benefit of wind is the fact that the grid’s ability to accept more energy from this source varies hugely from one location to another. The idea that bureaucrats will come up with a plan that will provide sane, long-term incentives for the wind energy industry to do the right thing is fanciful at best.
This serves as another reminder of the value of letting market forces work themselves out. Imagine a truly market-based approach:
Want to burn coal? No problem, just pay the full costs, including the damage to our lungs and natural environment. If that’s unacceptable, don’t burn coal. It’s the same thought process that we use when we buy a new car or a bottle of wine: if the price is too high, we look elsewhere.
Want more nuclear reactors? Fine, but don’t ask the tax-payer to subsidize them by paying the insurance premiums, dealing with the waste for the next 500,000 years, and covering the many other costs that come as a direct result.
Pretty soon (i.e., immediately) the cost of solar and wind – as well as geothermal, biomass and hydrokinetics) look quite attractive. Having said that, don’t look for government support if you want to build wind farms in Oregon, where the availability of hydro is enormous and the cost of base-load and dispatchable energy for peak conditions is very low.
It would be interesting to see Adam Smith’s “invisible hand” at work in the energy markets, in a world without artificial supports.
When we look at the people whose life’s work revolves around improving conditions for humankind, we observe that most of these individuals are not wealthy. Not only are their endeavors not focused on profit, but in many cases, their efforts actively fly in the teeth of the most profitable industries on the planet – whether that means Big Energy, Food, Pharma, Medical, etc.
That’s what makes Elon Musk’s story so remarkable. As you listen to this interview, which he did last month for one of the fabulous “Ted Talks,” note the thinking that motivated all this: “While I was in university, I realized that sustainable transportation and energy was the biggest problem we need to solve in this century.”
Here’s a guy who’s taken on humankind’s greatest need (ironically, one whose importance it greatly underestimated) and has created some extremely successful businesses built around solving it. I’m hoping there’s a lesson to be learned here for all of us: “doing the right thing” and “making a buck” are not necessarily mutually exclusive.
Here’s a terrific piece on climate change, which contains a very powerful infographic, and makes the point that it’s wrong to include this phenomenon as an “environmental problem.”
Say what?
Unlike other pollutants, e.g., particulate matter that falls out of the atmosphere in a period of weeks or months, carbon dioxide stays in the atmosphere for decades or centuries. We’re not talking about “additive,” but about “cumulative” effects.
I’m reminded of a high school biology paper I wrote on noise pollution, in which I concluded that this was a negligible issue, since it would cease to be a problem the very second that we stopped creating it. My teacher found my reasoning to be cavalier — but I still maintain that I had a decent point there.
The real issue with CO2 in the atmosphere is that bringing its concentration down to 350 parts per million, i.e., where scientists say it needs to be if we are to avert catastrophe, requires both aggressive reductions in fossil fuel consumption (which accounts for 80% of the contributions) as well as a significant amount of time.
Here’s a “TED Talk” recorded just last month featuring Elon Musk, the driving force behind PayPal, then Tesla Motors, SpaceX, and Solar City. What a wild ride it is to listen to a guy who thinks at this level. He really didn’t have a ready answer to the question: “How do you think in a way that is different from other people? In other words, how do we train ourselves — and our children in their schools — to think as freely and creatively as you do?” The best he could manage is that he thinks from the principles of physics and works his way up, rather than laterally, making small variations on what other people are already doing.
I find it interesting that some of these arenas require far more creative thought than others. I’m not sure I see that in PayPal (wasn’t someone going to become the standard in online payment systems?) – or in Tesla (isn’t a Ferrari-like electric vehicle a fairly obvious development?) – or even Solar City, as its business model has been in place for decades). But SpaceX? A re-usable rocket that will make humankind space-faring and multi-planetary? Wow – that’s big.
Of course, the main thing that makes Musk’s thinking so important and compelling is that it’s aimed at the over-arching problems confronting our species. As a child, he realized that we need to replace fossil fuels as the source for all our energy-related applications — including transportation — and simply moved from there to ask: If you accept that, what should you do?
Here’s a conversation I’m having with a friend about the mess at Fisker, i.e., the departure of the company’s founder.
Craig: That’s incredible about Fisker. What do you make of all this?
Friend: It reminds me of John DeLorean in the 1980s and the movie “Tucker” about Preston Tucker in the 1940s. These were very talented, ego-intensive designers, like Henrik Fisker. You have to be willing to play the corporate bureaucracy game in the auto industry, and it involves a boatload of cash flow and is very labor intensive. The automotive sector is filled with stories about engineers and designers clashing, and the same with designers and accountants/bean counters. Fisker Automotive has been facing the big squeeze for several months. I expect a bankruptcy filing or low-priced Chinese investment, or both, like A123 Systems. Fisker makes a very fine car that I’ve enjoyed driving, but it will probably go away.
Craig: In the 4 – 5 years that I was seeing Fisker at the auto shows in L.A. and Detroit, I noted that each year, a) they seemed to be equally far from completion, and b) that the “booth babes” and the ropes around their zillion-dollar prototype were keeping any of us in the media from getting anywhere close to even touching the car. That perturbed me, but not as much as this:
Personally, even leaving out personalities and corporate politics, I’m not sure the car itself has what it takes (had what it took? ) to be successful. Imagine you’re one of the rare breed that:
Is willing and able to pay $100K for a car
Wants an EV, presumably because of environmental / geopolitical concerns
Is worried about range, and thus prefers a PHEV (plug-in hybrid) to a BEV (battery electric)
If I were in that situation, I’d get a full-loaded Tesla-S, and be done with it. I wouldn’t be carting around a heavy, expensive, and defect-prone internal combustion engine.
Of course, the real “game” in the automotive world isn’t catering to a handful of movie stars who can pay whatever they want for their cars. Rather, it’s offering affordable transportation that slowly (or, better yet, quickly) erodes the 230 million gas- and diesel-powered cars and trucks on our roads (while we retire the remaining coal plants).
The market has a way of jettisoning the bad ideas of the world, regardless of the charisma of the proponent. Another recent example in a slightly different realm was Shai Agassi’s pitching battery swapping in the United States, a landmass of 3.5 million square miles. Here’s the poster child for a bad, utterly impractical idea. But that didn’t deter Agassi – for a few years, at least. Yet the idea did finally come down with a crash.
I check out several sources for the global energy news every morning, including one, aptly titled, The Global Energy Report, and I’m always gratified to see concentrated solar power (CSP) making its way to the front of the conversation. This is happening, by the way, far faster and more often than Americans may realize, as the sun-drenched regions of Southern Europe, as well as Northern Africa and the Middle East, are running hard in this direction.
I’m particularly impressed with the progress that oil-rich nations like the United Arab Emirates are making. It’s impressive – and telling — that countries that could have been wringing money out of their crude reserves are the most progressive in terms of renewable energy. When you think about it, this shows a deep-seated understanding of a core fact of 21st Century life on Earth: our dependence on fossil fuels is foolish, supremely irresponsible, and outrageously expensive in every conceivable sense of the word.
The inauguration of Shams 1 is a major breakthrough for renewable energy in the Middle East. Just like the rest of the world, the region is faced with meeting its rising demand for energy, while also working to reduce its carbon footprint. Shams 1 is a significant milestone, as large-scale renewable energy is proving it can deliver electricity that is sustainable, affordable and secure.
I often wonder, after all my work in this field, why I don’t have the same level of clout in terms of getting things done. Well, the guy is a sultan; that probably doesn’t hurt. All kidding aside, anyone using his influence for the clean energy cause is all right with me.
Our family just returned from another mini-trip to look at prospective colleges with our younger child, Valerie, pic here taken years ago.
The relevance to renewable energy and sustainability may appear dubious at first, though I have to say that I was amused by this afternoon’s tour leader who went on at length about her school’s leadership in recycling. “We had won the intercollegiate championship several years in a row, though we just got nipped last year and finished a disappointing second. So, if this is the school of your choice, make sure you bring as much plastic, paper, and aluminum cans as you possibly can.”
This is bound to come across as lacking in the ol’ school spirit, but we’re missing this point here. If we care about the environment, we don’t want to recycle more stuff; we want to use less stuff. Ironically, the colleges that finish last in this competition could have the best record vis-à-vis the environment; the idea of a contest to see how much tonnage we can cart off to recycling centers misses the point in a huge way.
In any case, I know many readers’ families are making their ways through their college tours, dealing with the many thrills as well as the not-insignificant moments of stress, ultimately coming to terms with the fact that their babies will soon be out of the nest, flying on their own wings. My very best wishes to you all.
If I had to live on exactly three foodstuffs for the rest of my life, I’d choose oysters, mangoes and beer. Perhaps I could do better nutritionally if I were to study the subject seriously, but it would be hard to beat the culinary enjoyment.
The article linked above explains, in a very readable presentation, how the rising levels of carbon dioxide in our atmosphere is causing a steady lowering of the oceans’ pH, and that the increasingly corrosive seawater is making it hard for young oysters to build shells. Author Brendon Bosworth writes:
Like the atmosphere, the world’s seas are burdened by our fossil fuel use and deforestation. The ocean has sponged up a quarter of the carbon dioxide humans have produced since the Industrial Revolution, steadily lowering its pH. Today’s seas are 30 percent more acidic than their pre-industrial ancestors. By the turn of the century, scientists anticipate they will be 150 percent more so…. Even if man-made carbon emissions ceased tomorrow, the West Coast would face decades of increasingly corrosive water because the ocean is laden with CO2 from decades past and will continue to absorb the CO2 already in the air, slowly changing its chemistry. “The train has already left the station,” says Richard Feely, a senior fellow at NOAA’s Pacific Marine Environmental Laboratory in Seattle. “If we don’t reduce carbon dioxide emissions, we’ll (see) conditions that will be corrosive to more species.”
I just finished editing the last interview transcript for my current book project, “Renewable Energy – Following the Money,” which I conducted with Jerry Taylor of the Cato Institute. Jerry is brilliant, and he’s perfected his ability to articulate his core, heartfelt beliefs, i.e., that Libertarianism is the only fair and practical way to address social conflicts — in this case, differing approaches to energy policy. As a former Libertarian myself, I can’t think of too many 90 minute segments of my life from which I’ve learned more.
But, while the process here was edifying, it was frustrating as well. Insofar as this was an interview and not a debate, I didn’t think it proper to challenge Jerry’s assertions to the effect that the threat of climate change is both modest and distant. I’m sure my guest was not deliberately misquoting the numbers, nor the people from whom those numbers came. Nonetheless, our time together was riddled with quotes like:
We are talking about significant damages from climate change that don’t begin for about 100 years. If you look at the IPCC median estimates, the damage seems relatively modest but after about 100 years you get some serious damage functions if you accept median IPCC estimates.
Significant damage from climate change won’t begin for 100 years? Another interview guest for the project, Dr. Rajendra Pachauri, Director of the IPCC, certainly wouldn’t agree.
Not everyone can be right here. Personally, I’m swayed by those without an obvious agenda. The Cato Institute is funded largely by the fossil fuel industry. But the U.S. Navy? If you believe there is some sort of political agenda for the Navy’s suggesting that climate change represents a pressing, short-term threat, I’ll be interested to hear how you might substantiate that claim.
Btw, the photo above shows the retreat of the glacier on Mount Kilimanjaro between February 1993 and the same time in 2000. If the melting of the large masses of the Earth’s ice doesn’t give one pause, I’m not sure what will.
