Wednesday, May 25, 2011

Renewable Energy as the Poor Orphan Child of US Energy Policy

Call me dramatic, but compared to the heavily subsidized oil and gas industries, renewable energy has long been the poor orphan child of US Energy Policy.  Oil and gas subsidies have existed for decades and beyond that, geopolitical capital in the form of diplomacy and military interventions in oil-rich regions of the world have kept these fossil fuel industries strong and vital.  It seems very disengenuous then, when someone tells me that renewable energy has to prove that it can stand on its own without federal subsidies. 

The short answer is, of course various forms of renewable energy WILL have to stand on their own in a balanced market economy.  My argument is with those who believe that solar or wind or biofuels, or any other renewable energy competitor for our public and private energy dollars, must be able to compete with cheap methane (natural gas) and coal, in order to survive in our free-market economy.

That all sounds very reasonable from an ideological point of view.  The problem is, there is no such thing as a "free" market economy.  Even the staunchest liberatarian who knows what's what will tell you that every market is regulated, and that every commodity or service has public dollars propping it up either directly (oil, gas, agriculture, aerospace, information technologies, auto manufacturers, and of course, the banking and finance industries), or indirectly, through market regulations by federal or state agencies, or from local financial support decided upon in city or township councils for tax-incremental financing or other such incentives.  We're all on the public dole somehow, like it or not.  Which markets should we favor in our regulatory policies is a matter of debate.  And that debate is about our values.  What is important to us?  Short-term profiteering by multinational oil and gas interests?  Or long-term sustainable economic growth, jobs, and (oh yeah), a cleaner environment for our children's future?

The truth is renewable energy technologies will require long-term public support for R&D, for commercialization, and for market development and support.  Part of the challenge will always be engineering, and part will always be financial.  Put it this way, how many years earlier would the Hummer brand have gone out of business if there was no such thing as low-interest financing?  Or a leasing program with only $1995.95 due at closing?  How many people could afford to pay $40,000 or more by just writing out a check at the Hummer dealership and be able to drive home with that brand new urban assault vehicle?  And, let me ask you, what is the return-on-investment for that purchase?  These questions are always put to renewable energy investments, and some of the purchase decision is a straight financial analysis, and part of it is related to values and priorities.  Part of the answer for renewables is making available competitive financing options.  The other part of the answer is putting our money where our mouth is and facing the facts regarding pollution and global climate change, and doing right by our children, and protecting our nation and our planet for future generations beyond our own lives.

For the perpetually skeptical renewable energy consumers who argue that solar, wind, or other clean energy technologies are too expensive:

Step one = Admit that there is no free-market economy (producers, the service economy, and consumers are all interdependent on each other.  It goes way beyond straight supply and demand cost-benefit analysis.)

Step two = Acknowledge the presence of global climate change, and the threats of unmitigated greenhouse gas emissions.  Our congress has passed resolutions denying the existence of global warming and has recommended that the science be studied further before any serious action be taken.  This is complete baloney and highly reckless and irresponsible.  We know man-made greenhouse gas emissions are the problem.  We know we must reduce our appetite for burning fossil fuels to that of approximately 80% of 1990 levels of emissions.

Step three = Gradual incentivized changing of the guard.  US Energy Policy must begin rewarding low-carbon intensive technologies (non-nuclear, see post from Earth Day), and the US Environmental Protection Agency must start regulating large and medium greenhouse gas emitters with a gradual, legally-binding system to create an ever-growing market demand for renewable energy by making fossil fuel energies more and more expensive.  The external costs of burning coal alone are incredibly expensive for our healthcare system and for the children and adults who suffer and endure conditions such as asthma and mercury poisoning from coal use.  We need a system that internalizes the costs of global climate change and internalizes the costs to society in general, from the cheap and under-regulated fossil fuel industries.  We need to find a way to make it (more) profitable for coal, oil, gas, and nuclear industries to invest in RE manufacturing and commerce, and much less profitable for them to continue feeding our addiction to cheap fossil fuels.  Even without regulation, oil and gas will become much more scarce by mid-century.  And resources like clean potable water will start to be a limiting factor when it comes to hydro-fracking for cheap methane (natural gas).  We can't put off the transition to get off of fossil fuels until then.

The romantic image of the rugged individualist who conquers society and nature and makes his own destiny by setting out for the untamed wilderness that was the wild west in the 1800's--that image is not only an historical mirage and quite frankly a hollywood genre of its own, it also serves neither the individual nor the society as a whole.  It is our shared struggles and our shared riches that make the social fabric of our country strong.  Lending a helping hand, smiling at strangers in public, and yes, paying our share of the taxes required to keep America great are what should make up that romantic and exciting image we all cherish.  Let's get beyond partisan politics and make that dream a reality!

That is my romantic and optimistic view for today -- focusing on what is good for the future of our nation and the world, not what is good for the quarterly profit statement or for the billionaires who help fund our nation's republican party.

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