Sunday, April 20, 2014
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The Climate Change Debate’s Willpower Fallacy

COPENHAGEN – There is a dangerous misperception that willpower and political agreement are the only missing ingredients needed to combat global warming. In fact, there is also a colossal technological hurdle. Ending our reliance on fossil fuels requires a complete transformation of the world’s energy systems.

No alternative form of energy is efficient enough to compete with fossil fuels at scale. Other than nuclear power – which is still much more expensive than fossil fuels – all of the known possibilities require significant research and development.

Consider the frightening, absurd fact that the research relied on to advance the cause of carbon cuts uses economic models that simply assume that technological breakthroughs will happen by themselves. On our current complacent path, with a meager $2 billion of public funds spent annually worldwide on researching and developing green energy sources, the necessary breakthroughs will not happen in time.

In that case, governments will try to cut carbon emissions through taxes and trading schemes without effective replacements. We will then make virtually no impact on climate change in the future, while in the shorter term there will be significant damage to economic growth, leaving more people in poverty and the planet in a much darker place than it could be.

Keep in mind that global energy demand will double by 2050. Use of fossil fuels – though much maligned by some – remains absolutely vital for economic development, prosperity, and our very survival. Alternative sources of energy have been hyped by corporate lobbyists and a credulous media to appear far more ready for widespread use than they really are.

An oft-repeated claim is that Denmark – where politicians will meet in December to negotiate a successor to the Kyoto Protocol – receives one-fifth of its power from wind, making it by far the highest share in the world. Denmark is presented as a model for the rest of the world to follow, evidence that green job creation has been proven easy, and that wind power has been shown to be a cheap alternative.

But the reality, revealed by a recent study by the Danish Center for Political Studies, is that less than 10% of the Denmark’s electricity demand is met by wind, because much of the power is produced when there is no demand and is sold at very low cost to other countries. This also means much less CO2 reductions in Denmark, where a ton of CO2 is reduced at more than six times the current average cost in the EU.

Danes pay the highest electricity rates of any industrialized nation, on average about $0.38 per kilowatt hour, compared to $.08 in the United States. The Danish wind industry is nearly completely dependent on taxpayer subsidies to support a modest workforce. Each new wind-power job costs the Danish taxpayer at least $119,000 (€81,000) per year. The government subsidy has shifted employment to less productive employment in the wind industry, meaning that Danish GDP is approximately $270 million lower than it would be if the wind-sector workforce was employed elsewhere.

The report concludes bluntly, “No Danish wind industry to speak of would exist if it had to compete on market terms.”

Together, wind and solar energy supply a tiny fraction – less than 0.6% – of the world’s entire energy needs. This is not just because they are much more expensive, but also because there are massive technological hurdles to overcome to make them efficient. First, direct-current lines need to be constructed to carry solar and wind energy from the areas of highest sunshine and wind speeds to the areas where most people live.

Second, storage needs to be invented so that when the sun doesn’t shine, and the wind doesn’t blow, the world still gets power. Indeed, according to Chris Green and Isabel Galiana of McGill University, even with these breakthroughs, the intermittency and variability in wind and solar energy means that they are unlikely to be able to supply much more than 10-15% of grid-based electricity without massive investment in such storage systems.

For this to occur, public funds on research and development must be increased dramatically. We cannot rely on private enterprise alone. As with medical research, early innovations will not reap significant financial rewards, so there is no strong incentive for private investment today.

As the Copenhagen Consensus, as well as the World Bank recently advocated, R&D investments on the order of $100 billion a year will be needed if wind and other alternative technologies are to become truly viable. That is ten times more than is spent by governments now, but remains a fraction of the cost of the ineffective carbon cuts that have been proposed.

Carbon taxes could play an important role in funding research and development. But our current approach to combating global warming – focusing primarily on how much carbon to try to cut through taxes, rather than on how to achieve this technologically – puts the cart before the horse. We are not on the right path to preventing the suffering that will result from global warming.

What is required is not simply political will. A prosperous future requires abundant sources of energy. We face a daunting task to find credible alternatives to fossil fuel.

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