21 Jan 2012

How overturning conventional energy wisdom could resurrect real progress in climate talks

Written by Jim Pierobon

Ever since the Copenhagen round of global climate talks failed in 2009, there have been no shortage of prescriptions and declarations about what needs to change. The subsequent failures in Cancun in 2010 and Durban last year underscore the need for a new way of thinking.

There is no denying the world  needs, and is going to be using, a lot more energy. There is also no denying that renewable sources of electricity and transportation fuels — while making inroads — will fall short of meeting a large portion of the demand for decades.

So what, realistically, should clean energy advocates strive to achieve?

Any path forward needs to match wits with climate change skeptics and perhaps even some deniers while demonstrating it is the interests of virtually all nations and their economic interests to participate. Until and unless a sea-change occurs, the economy trumps the climate in these negotiations.

First off, the conventional wisdom about climate change itself needs to change. For starters, a LOT more emphasis can and should be placed on energy efficiency and its immediate economic benefits. Industrialized countries may be barely skimming the long-term potential of this ‘resource.’

At the same time, the energy supply needs to reduce is carbon quotient. With the help of shale natural gas discoveries in the U.S. and, it appears, in China, this development is becoming a game-changer, albeit while handicapping growth in renewable sources of electricity.

But we pretty much already know this. What has yet to enter the mainstream energy discussions are two facets of conventional wisdom that must be overturned for all nation’s to benefit now and in the future by addressing climate change.

Conventional Wisdom #1:  The world uses too much energy

If you honestly believe that, you’re head is stuck virtually in the sand. You’re ignoring Third  World countries and their right to improve their lives with electricity and other energy sources that fuel economic growth. Sure most of us in industrialized countries use more energy than we need. With a few investments, we can use significantly less. But don’t tell that to developing countries most of whose citizens don’t have any energy.

We can overturn this conventional thinking by acknowledging those that do not have enough energy deserve access to it, even if it means watching atmospheric carbon dioxide temporarily rise through — and beyond — 450 parts per million.

There are about 1.5 billion people around the world lacking access to even the most basic energy supplies. This is almost FIVE times the population of the United States and three times the population of the European Union.

Roger Pielke Jr. is a professor of environmental studies at the University of Colorado. CREDIT: Univ. of Colorado

According to The Climate Fix  by Roger Pielke, Jr., a political scientist and professor in the environmental studies program at the University of Colorado, if all of these people were granted energy access and produced the global average per capital emissions of 4.4 metric tons of carbon dioxide, they would add more than 20 percent to global carbon dioxide emissions from the consumption of fossil fuels.

Conventional Wisdom #2: Fossil fuels are too cheap

The thinking has been, not without some logic, that if conventional fuels rise in price, renewable sources will become more competitive in simplistic terms. We’re certainly seeing that in the European Union and in states such as California with solar photovoltaics. But to make progress in other states and parts of the world, an “oblique” strategy espoused by British economist John Kay, and echoed in The Climate Fix, may just work.

Author John Kay asserts "oblique" solutions can bring fresh thinking to policy and market challenges. CREDIT: JohnKay.com

By “oblique,” Kay asserts that, paradoxical as it may sound, “many goals are more likely to be achieved when pursued indirectly.” The indirect route to a an agreeable climate agreement suggests boosting the supply and consumption of energy as much as possible with carbon-free sources wherever possible.

“Obliquity,” Kay states, “is characteristic of systems that are complex, imperfectly understood, and change their nature as we engage them.” The climate change debate fits this bill almost to the letter. It lends it self to seizing the opportunity of  ‘decarbonizing’ the atmosphere and focusing less on the dangers of global warming.

Meeting the demand for a lot more energy — and secure energy at that — presents an opportunity for all innovative companies and governments willing to meet the challenge with renewable or low-carbon sources and fossil fuels. And that requires technological innovation on a massive scale. With innovation, funded in part by governments to leverage private sector investments, we could see a significant expansion of international trade, the economic activity and the trade surpluses and jobs that come with it.

Writes Pielke: “Heading in what might seem to be the wrong direction  . . . may offer the best prospect for getting us to where we should be headed.”

Where should funding for the government innovaton come from? From itself for one, with deadlines for government agencies, including the Armed Services, to meet certain milestones.

Executive Orders and energy laws dating back to President George W. Bush have placed the U. S. well on this path, although more must be done. That ‘more,’ Pielke and other conclude, can come from a low tax on carbon to fund energy innovation that slowly decouples economic growth from carbon emissions and rises as economies shift to cleaner forms of energy.

The Indian government may be the first to recognize the potential for this type of approach. Last year for its new National Clean Energy Fund, India began imposing a tax that is projected to raise, in equivalent U.S. dollars, approximately $360 million annually from the coal mined in or imported by India. Who says developing countries aren’t doing their part? Heck, India is actually leading by example.

Pielke writes the U.S. could start with a $5 per metric ton tax applied “upstream” where fuels are initially produced. “A commitment to a long-term increase in the tax, rising at a pace that keeps pace with energy innovations, provides a forward price signal no company should have too many problems preparing for.

Another “model of a successful tax that I have in mind,” Pielke told The Energy Fix, is the gasoline tax we all pay to support the highway trust fund — the highways are a backbone of commerce and transportation and thus people see the value of the tax.”

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