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Thursday, April 24, 2008

"Reinventing Energy"

Jeffrey Sachs summarizes some of the ways we can respond to higher energy prices:

Reinventing energy, by Jeffrey D. Sachs, Project Syndicate: The world economy is being battered by sharply higher energy prices. ... No quick fix exists... Higher prices reflect basic conditions of supply and demand. The world economy – especially China, India and elsewhere in Asia – has been growing rapidly, leading to a steep increase in global demand for energy... Yet global supplies of oil, natural gas and coal can’t keep up easily...

In order for developing countries to continue enjoying rapid economic growth and for rich nations to avoid a slump, it is necessary to develop new energy technologies. Three objectives should be targeted: low-cost alternatives to fossil fuels, greater energy efficiency, and reducing carbon dioxide emissions.

The most promising technology in the long term is solar power. Total solar radiation hitting the Earth is about 1,000 times the world’s commercial energy use. This means that even a small part of the earth’s land surface, notably in desert regions, which receive massive solar radiation, can supply large amounts of electricity...

For example, solar power plants in America’s Mohave Desert could supply more than half of that nation’s electricity needs. Solar power plants in Northern Africa could supply ... Western Europe, while solar power plants in the Sahel of Africa, just south of the vast Sahara, could power much of West, East and Central Africa.

Perhaps the single most promising development in terms of energy efficiency is plug-in hybrid technology for automobiles, which may be able to triple the fuel efficiency ... within the next decade. The idea is that vehicles would run mainly on batteries recharged nightly on the electricity grid, with a gasoline-hybrid engine as a backup... General Motors may have an early version of this by 2010.

The most important technology for the safe environmental use of coal is the capture and geological storage of carbon dioxide from coal-fired power plants. Such carbon capture and sequestration ... is needed urgently in major coal-consuming nations...

For all of these promising technologies, governments should be investing in the science... Without at least partial public financing, the uptake for these new technologies will be slow and uneven. Indeed, most major technologies that we now take for granted – airplanes, computers, the internet and new medicines, to name just a few – received crucial public financing in their early stages of development and deployment.

It’s shocking and worrisome that public financing remains slight because these technologies’ success could translate into literally trillions of dollars of economic output.

For example, according to the most recent data in 2006 from the International Energy Agency, the U.S. government annually invested a meager $3 billion in energy research and development. In inflation-adjusted dollars, this represents a decline of roughly 40 percent since the early 1980s and now equals what the U.S. spends on its military in just a day and a half. The situation is even more discouraging when we look at the particulars. ...

Of course, developing new energy technologies isn’t America’s responsibility alone. Global cooperation ... is needed to increase supplies and ensure that energy use is environmentally safe... This not only is good economics, but also good politics, as it can unite the world in our common interests, rather than dividing it in a bitter struggle over diminishing oil, gas and coal reserves.

    Posted by on Thursday, April 24, 2008 at 12:51 AM in Economics, Environment, Policy | Permalink  TrackBack (1)  Comments (38)

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