Reinventing
Energy
by Jeffrey D.
Sachs
NEW YORK– The world economy is being battered by sharply higher energy prices.
While a
few energy-exporting countries in the Middle East and elsewhere reap huge
profits, the rest of the world is suffering as the price of oil has topped $110
per barrel and that of coal has doubled.
Without plentiful
and low-cost energy, every aspect of the global economy is threatened. For
example, food prices are increasing alongside soaring oil prices, partly
because of increased production costs, but also because farmland in the United
Statesand elsewhere is being converted from food
production to bio-fuel production.
No quick fix
exists for oil prices. 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, notably for electricity and
transport. Yet global supplies of oil, natural gas, and coal cannot easily keep
up, even with new discoveries. And, in many places, oil supplies are declining
as old oil fields are depleted.
Coal is in
somewhat larger supply, and can be turned into liquid fuels for transport. Yet
coal is an inadequate substitute, partly because of limited supplies, and
partly because coal emits large amounts of carbon dioxide per unit of energy,
and therefore is a dangerous source of man-made climate change.
For developing
countries to continue to enjoy rapid economic growth, and for rich countries to
avoid a slump caused, it will be necessary to develop new energy technologies.
Three objectives should be targeted: low-cost alternatives to fossil fuels,
greater energy efficiency, and reduction of carbon-dioxide emissions.
The most
promising technology in the long term is solar power. The total solar radiation
hitting the planet 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 the
electricity for much of the rest of the world.
For example,
solar power plants in America’s Mohave Desertcould supply more than half of the
country’s electricity needs. Solar power
plants in Northern Africacould
supply power to Western Europe. And solar
power plants in the Sahel of Africa, just south of the vast Sahara, could
supply power to 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 of new automobiles within the next decade. The idea is that
automobiles would run mainly on batteries recharged each night on the
electricity grid, with a gasoline-hybrid engine as a backup to the battery.
General Motors might have an early version 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,” or CCS, is urgently needed in the major
coal-consuming countries, especially China, India, Australia, and the US. The
key CCS technologies have already been
developed; it is time to move from engineering blueprints to real demonstration
power plants.
For all of these
promising technologies, governments should be investing in the science and high
costs of early-stage testing. Without at least partial public financing, the
uptake of 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 but a few – received crucial public financing in the
early stages of development and deployment.
It is 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 from the
International Energy Agency, in 2006 the USgovernment invested a meager $3
billion per
year in energy research and development. In inflation-adjusted dollars, this
represented a decline of roughly 40% since the early 1980’s, and now equals
what the USspends on its military in just 1.5 days.
The situation is
even more discouraging when we look at the particulars. USgovernment funding
for renewable energy
technologies (solar, wind, geothermal, ocean, and bio-energy) totaled a meager
$239 million, or just three hours of defense spending. Spending on carbon
capture and sequestration was just $67 million, while spending for energy
efficiency of all types (buildings, transport, and industry) was $352 million.
Of course,
developing new energy technologies is not America’s responsibility alone.
Global cooperation
on energy technologies is needed both to increase supplies and to ensure that
energy use is environmentally safe, especially to head off man-made climate
change from the use of fossil fuels. This would not only be good economics, but
also good politics, since it could unite the world in our common interest,
rather than dividing the world in a bitter struggle over diminishing oil, gas,
and coal reserves.
** Jeffrey Sachs is Professor of Economics
and Director of the Earth Institute at ColumbiaUniversity.
Copyright:
Project Syndicate, 2008.http://www.project-syndicate.org/commentary/sachs140
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