In a column for the New York Times titled “There’s Still Hope for the Planet,” columnist David Leonhardt describes why investments in technology – particularly governmental 
investments in clean tech research and development – may be the best bet for reducing CO2 emissions, and may provide a small basis for optimism to those interested in fighting climate change.
Leonhardt argues that renewable energy, which is becoming increasingly cost-competitive with traditional fossil fuels, and the emergence of natural gas as a replacement for coal, make putting a price on CO2 emissions less attractive than investment programs. “Carbon pricing is going to have an uphill climb in the U.S. for the foreseeable future,” he quotes Robert N. Stavins, a Harvard economist and advocate of such pricing, “so it does make sense to think about other things.”
Most experts working on climate change call for a mix of policies that would raise the price of CO2 intensive energy and lower the price of clean energy. However, Leonhardt says that many climate advocates now see innovative technology as the best bet in minimizing climate impacts. Nevertheless, as federal stimulus programs supporting clean energy near their ends, many experts fear that the gap between fossil fuel and renewable energy prices will widen, and that financing will dwindle for clean energy R&D.
Brookings’ Mark Muro, who co-authored this call for robust federal engagement in clean energy technology, agrees that there is reason for optimism, but counters that Leonhardt’s article “is a bit too blithe, and narrow, in suggesting that the total of the needed technology-oriented agenda is the $25-billion-a year-or-more federal R&D investment target my group and others have been advocating for years now. While such a R&D level is necessary to finance research to bring down the costs of clean energy in the future, it will not be sufficient. Also needed are demanding procurement programs and smart public-private finance structures to help deploy clean new solutions and pull in and leverage private, low-cost capital to finance widespread adoption. And a low carbon price would help too!”
Are investments in clean energy, absent other policies, sufficient to reduce CO2 emissions? Are you optimistic about our ability to tackle climate change? Can we rely on technology to stop climate change? Should we?
Alternative energy is dying. For a recent prognosis, check out this article at the Motley Fool. Even the current low prices for wind and solar systems appear to be signs of desperation in the industries, not signs of health.
The past subsidy programs, particularly those in Germany and Spain, succeeded in creating sufficient demand to bring down the cost of wind and solar dramatically over what they had been. They’re no longer all that far from parity. But they’re not there yet, and the subsidies are drying up everywhere. In the near future, it looks like prices for wind and solar will be heading up, as production capacity is lost to a tsunami of bankruptcies.
It’s hard to see how any low budget program of federal technology investments has any hope of turning the situation around. Especially given the constraints under which such investments are made. DOE money goes almost exclusively to early stage speculative research that has no chance of near term payoff. Anything that has actual commercial potential is forbidden, because the government must not be seen as competing with private industry, or of giving help to any company that is competing for for market share against rivals.
It’s possible that a new technological approach, like that advocated by Stratosolar, will happen along and manage to compete with fossil fuels on its own, without subsidies and without fossil fuels being taxed with their true external costs. But it’s a long shot. Being allowed to use the atmosphere as a free dump for CO2 is a huge implicit subsidy to fossil fuels.
I address these issues in depth in my forthcoming book on energy innovation.
Leonhart is basically on track that breakthrough innovation to “make clean energy cheap” is necessary. And not just re climate concerns but a variety of other strategic interests.
In fact, several of those interests — economic recovery/growth, national security, imminent and tangible environmental hazards, etc. — are clearly more compelling than speculative worries about ‘global warming.’ Energy solutions that can cost-effectively meet those urgent needs will have the collateral effect of reducing carbon emissions, but that need not be a central objective. Controversy over the theory of AGW (which is not equivalent to ‘climate change’) may be more of a distraction from than an effective motive for the kind of innovation needed to untangle the energy/carbon policy mess.
Muro et al think technology innovation is not sufficient, but that depends on the scope, form, and nature of the innovation that occurs. Since many governments are sliding toward insolvency and at least diminished resources, a strategy less dependent on national government initiatives may be needed, and indeed may be preferable. I argue that it may also be possible.
Stay tuned.
I’m starting to see this this way myself: “Since many governments are sliding toward insolvency and at least diminished resources, a strategy less dependent on national government initiatives may be needed, and indeed may be preferable.”
The places I see the most things happening are generally partnerships between public and private interests – and the education sector, as well.
To meaningfully reduce carbon emissions, there are three parallel tracks that must be driven at the same time. Technology development in non-ghg-emitting is critical and is what most of the industrialized nations are pursuing. Education at the applications level on the importance of replace older technologies with the newest both to increase economics and reduce emissions and labeling products and services for their ghg content.. And finally elimination of the $800 billion worth of global subsidies for fossil fuels and impediments that skew the market against adopting cleaner, more efficient technology applications.
Scott, I disagree. I think Breakthrough Institute and others of the “emerging consensus” are correct in their view that the attempt to reduce ghg emissions via regulation will continue to fail in the absence of a new, far more cost-effective generation of alternative energy technologies. Education-cum-propaganda aimed at convincing people — who in the US, Europe, and many other countries are seeing their real incomes and wealth decline — that they should pay more for energy than they now do also will continue to fail.
The claim of immense subsidies for fossil fuels is greatly exaggerated. Production subsidies are only a minor share of total fossil fuels sales or energy supply. Without such subsidies (and what constitutes a ‘subsidy’ is a matter of opinion), fossil fuels still would be economically very viable. “Renewable” alternatives, for the most part, cannot be commercially viable without subsidies that comprise a very large share of total sales or energy produced.
The majority of subsidies for fossil fuels, moreover, are on the demand side — chiefly in developing countries where fuel prices are kept artificially low by government intervention. Occasional attempts by such governments to cut back on those fuel subsidies to balance their fiscal books commonly spawn intense, even violent social backlash. Making fossil fuels less affordable by the large, poor populations in such countries will not make solar/renewable alternatives more affordable. It will simply make people poorer. Similarly, governments that are being financially strained by the cost of fossil fuel subsidies will not be less strained by the cost of renewable subsidies.
The great majority of people worldwide want to become richer, not poorer. The only way that ambition can be served is to provide energy systems that (including efficiency) can deliver the utility people demand at no greater or lower cost than the systems they currently rely on.
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The dialogue on technology seems like deja vu. I used to direct the Wirth Chair and now am an advisor to Fuel Freedom Foundation (www.fuelfreedom.org). Technology has been and will always be on the table. But just technologhy will not lead us to the promised land. Without a more focused approach, a reasonable regulatory environment, and sound energy policies, nothing major will take place. What is now in vogue, politically, drill baby drill and all of the above will not cut it. We should grant priority to natural gas. If we do not, paraphrasing ( and editing a bit) Abba Eban in a different context, the nation will fail to miss an opportunity and really miss an opportunity. Natural gas is abundant. I believe reasonable folks can solve the fracking problem. It is purely American in that it is technological. Natural gas can and is being used to power up power plants and is in the process reducing ghg emissions. 13 states have joined a coalition to purchase natural gas cars because they believe higher auto purchase costs will be balanced by lower fuel costs over time and that natural gas autos generate lower , much lower emissions. I dont know why natural gas advocates, generally, do not tout its derivative methanol as a transportation fuel. It is cheaper, cleaner, and safer than gasoline. As a transition fuel, it has less ghg emissions than gasoline ( although not much less) but is on the whole environmentally much better than gasoline….The enemy of the good is often the perfect. We need to open up the transportation fuel market and reduce dependency on oil. Marshall Kaplan http://www.fuelfreedom.org
The reality is that what we do in the U.S. will have little impact on global GHG emissions because over 40% of electricity worldwide is generated from coal. In some of the most populous countries, the vast majority of electricity is coal-based and electric demand is projected to increase substantially, as is the use of coal.
If we are concerned about climate change, we need technology to advance global emissions reductions. I agree with Leonhardt’s premise, however a component of the R&D must be to reduce carbon emissions from coal. Otherwise we are simply increasing energy costs in the U.S. without really making a big dent in global emissions.