Earth: The Sequel
May 19 2008 William writes:
The book delivers an optimistic outlook of how the United States can realistically address its energy security vulnerabilities and global warming impacts by putting the new energy companies on an equal playing field with their fossil fuel competitors. Krupp and Horn argue that internalizing the environmental costs of fossil fuels with a CO2 cap and trade system will allow the market, not the government, determine which companies and technologies can reduce greenhouse gasses most efficiently and provide energy at the lowest cost. The reality of the solutions are shown with explanations of the leading energy and environmental service companies in operation today. The book is comprehensive update of the status of renewable energy technologies and the economic and political landscape that faces them.
“A revolution is on the horizon: a wholesale transformation of the world economy and the way people live. This revolution will depend on industrial technology, capital intensive, shovel-in-the-ground, industries - and will almost certainly create the great fortunes of the the twenty-first-century.”
cap and trade vs specific regulations
A CO2 cap and trade system, not taxes or emission regulations, will reduce the greenhouse gases most efficiently. The effectiveness of these two approaches are clearly shown by comparing the 1977 clean air act to the 1990 clean act. Both acts attempted to reduce power plant sulfur dioxide (SO2) emissions that had been shown to cause acid rain. The 1997 legislation stated all new power plants could not emit more than a set ceiling of S02 and that the reductions had to be accomplished by installing scrubbers in the smokestacks. This added large costs to the power plants and did not reduce the overall national emissions of S02 because older plants were largely exempt from the regulations. The 1990 clean air act imposed a maximum SO2 emission level that was 50% lower than the current levels and distributed emission permits between the existing power plants. The power plant owners were able to chose the technologies that worked the best and sell an emission credits they did not use. In 5 years US utilities cut emissions 30% more than the law required, increase electricity generation from coal 6.5% and still reduced retail electricity rates. Using a cap and trade system instead of defined regulations substitutes the bureaucratic government regulatory institutions with the efficient invisible hand of the free market.
level the playing field
Renewable energy entrepreneurs have a hard time competing in a 5 trillion dollar energy industry where oil companies spend $60 million a year in lobbying and receive $6 billion a year in subsidies. Policies that support all energy technologies evenly will give the market the best chance to determine the best solutions.
solar
In 2005 the world’s solar energy-generating capacity grew by 44 percent. If that pace can be sustained over the next few decades, by 2050 the sun could supply ten times as much energy as the earth needs. Such a growth rate might seem like wishful thinking. But it is worth remembering that the semiconductor industry has grown at an even faster rate for a similar length of time.
MY THOUGHTS
A great update to the energy business and technology landscape. The thesis of needing a cap and trade system to internalize the environmental costs of fossil fuels and create a new market for renewable energy technologies is the best thing the United States can do right now. However, I wish the book had detailed exactly how the carbon credits would be distributed. Krupp being the president one of the leading environmental law groups in the country known for advocating policies that are both environmentally and business friendly could have dedicated a chapter explaining a detailed plan or example policy to be enacted. The Kyoto protocol was discredited to some degree because of their CO2 distribution plans favoring the European companies. CO2 emissions are also much more difficult to regulate because their are so many sorces (power plants, cars, people, even rotting plants). Also why doesn’t the book have footnotes. A half page list of websites at the end of the book hardly demonstrates adequate research for a book of such importance. I was only looking for references when the questionable idea of using solar energy in Spain to fill dams in Norway (p67) was proposed.
Favorite quote from the book:
Climate change and the new energy revolution are like tidal waves. When a tsunami moves through the ocean you can’t see it. But when it reaches the shore it becomes a hundred foot wave.
Categories: Books