Rewiring the World with Clean Energy
REWIRING THE WORLD WITH CLEAN ENERGY
Many creative schemes have been proposed to pacify our inflamed atmosphere. Unfortunately, virtually all of them address only domestic emissions.
The reality, of course, is that the problem is global. If the countries of the West were to cut emissions dramatically, those cuts would be overwhelmed by the coming pulse of carbon from India, China, Mexico, Nigeria and the large developing economies.
One plan to rewire the world with clean energy involves three macro-level strategies to propel a global transition to non-carbon energy.
* In industrial countries, withdraw all subsidies from fossil fuels and redirect equivalent subsidies to non-carbon energy sources;
* Create a large global fund of about $500 billion a year to transfer clean energy technologies to developing countries; and,
* Incorporate within the Copenhagen framework a progressive Carbon Intensity Standard that rises by 5 percent per year.
The urgency cannot be overstated: the deep oceans are warming, the tundra is thawing, the glaciers are melting, infectious diseases are migrating and the timing of the seasons have changed.
In the next few decades, we will see increasing crop failures, more water shortages, uncontrolled migrations from areas which can no longer support their populations and a succession of extreme weather events which will cripple national budgets.
This plan was designed to provide one model of the scope and scale of action that is appropriate to the magnitude of the climate crisis.
* The subsidy switch: the U.S. currently spends more than $12 billion a year to subsidize oil and coal. In the industrial countries overall, those subsidies have been estimated at more than $90 billion a year.
Those industrial country subsidies should be rapidly phased out and redirected to clean energy sources. (A tiny portion of the U.S. subsidies would be used to retrain or buyout the nation's coal miners.) The lions' share of the subsidies would be used by major energy companies to retrain their workers and become aggressive developers of fuel cells, wind farms, and solar systems.
That same subsidy switch would activate an army of energy engineers and entrepreneurs -- with successively more efficient generations of solar film, turbines and tidal devices -- in a burst of creativity that would rival the dot.com explosion of the 1990s.
* The global fund of about $500 billion a year for several years to jumpstart renewable energy infrastructures in developing countries. Virtually all poor countries would love to go solar; virtually none can afford it.
The fund could be financed by a carbon tax in industrial countries or a tax on international air travel. A third alternative, a tax on international currency transactions, would involve the private banking system in implementing the transition. Today the commerce in those swaps amounts to about $5 trillion per day. A tax of a quarter-penny on a dollar would exceed (a roughly estimated) $500 billion a yearfor wind farms in India, fuel-cell factories in South Africa, solar assemblies in El Salvador, and vast, solar-powered hydrogen farms in the Middle East.
Since currency trades are electronically tracked by the private banking system, the banks would receive a fee to administer the fund, avoiding the need for a new bureaucracy. That fee would offset the banks' loss of income from the contraction in currency trading. Moreover, the administration of the fund by the banks would minimize corruption and ensure the money goes directly to clean energy projects. As renewable infrastructures take root in developing countries, the fund could be phased out.
* The progressive Carbon Intensity Standardis the basic driver of the plan. It would harmonize the energy transition in a way that emissions trading cannot.
Under this Standard, every country would start at its current baseline to increase its carbon fuel efficiency by 5 percent a year. To comply, each country would produce the same amount as the previous year with five percent less carbon fuel. Alternatively, it would produce five percent more with the same carbon fuel use as the previous year. (Domestic cap-and-trade programs could be very useful in helping countries meet their goals.)
Since no economy grows at five percent for long, emissions reductions would outpace long-term economic growth.
For the first few years, countries would achieve the 5 percent reductions simply by eliminating the waste -- the 'low-hanging fruit' -- in their current energy systems. As those efficiencies became more expensive to capture, countries would meet the progressive efficiency standard by deploying clean energy technologies which are 100 percent "carbon efficient."
That, in turn, would create the mass markets and economies of scale for renewables that would bring down their prices and make them competitive with coal and oil.
A nation's compliance could be measured simply by calculating the ratio of its carbon fuel use to its gross domestic product. That ratio would have to change by 5 percent a year.
In sum, the subsidy switch would propel the metamorphosis of oil companies into energy companies; the progressive Carbon Intensity Standard would harmonize the transformation of national energy structures; and the competition for the new $500 billion a year market in clean energy would power the whole process.
A worldwide transition to renewable energy would also dramatically reduce the significance of oil -- and with it our exposure to the political volatility in the Middle East. A diverse renewable energy economy -- with its home-based fuel cells, stand-alone solar systems, regional windfarms -- would make the electricity grid a far less strategic target for terrorists.
Most significantly, development economists tell us that energy investments in poor countries create far more wealth and jobs than equivalent investments in any other sector.
A properly framed global energy transition would create millions of jobs in developing countries and begin to redress the economic inequity that threatens to split humanity irreparably between rich and poor.
Stepping back, a plan of this magnitude would turn impoverished and dependent countries into trading partners. It would raise living standards abroad without compromising ours. And in a very short time, it would jump the renewable energy industry into a central, driving engine of growth of the global economy.
Finally, at the risk of being overly visionary, because energy is so central to our existence, a common global project to rewire the world with clean energy could be the first step on a path to peace even in today's profoundly fractured world: Peace among people and peace between people and nature.
(For a much more detailed explanation of the plan, see:
( c) Ross Gelbspan