Several months ago, I wrote about the dangers of climate change. I concluded by saying that although we’re all in a lot of trouble if we don’t change our behavior, we’re unlikely to do so because the financial incentives aren’t there. Several days ago, my brother—who is currently in Copenhagen taking classes on artic ice and climate change from the world’s foremost ice and climate change experts—sent me the link to this Ted Talk and this book, Reinventing Fire, by Amory Lovins. Although I’ve only had time to see the Ted Talk, I wanted to write about it today in order to give all of us time to participate in the White House’s Big Block of Cheese Day. (While the facilitated portions of Big Block of Cheese Day will have ended by the time we publish this, we’ll still be able to tweet to the appropriate officials with a couple hours to spare.)
The thesis of Reinventing Fire is quite simple, and can be broken down into two parts: (a) we have all of the technology we need to cut our carbon emissions by 85% by 2050, and (b) the financial incentives are now aligned such that the private sector is investing and following through on these alternative energy capabilities. If this thesis comes to fruition, the book contends, the private sector would save five trillion dollars by 2050, and the energy system would support an economy that is 158% bigger.
The technology, as Lovins explains, is neither new nor complicated. He wants to replace the metal in all cars with ultra-light carbon fiber material, as Audi, BMW, and Volkswagon have already announced plans to do. These carbon fiber plug-in hybrids could get 230 miles a gallon. Soon, any car company not making such cars will, as Lovins puts it, be making typewriters in a computer world. And building new cars isn’t the only way to help the environment; companies can save energy simply by updating logistics and shipping routes. Between 2005 and 2010, Wal-Mart reduced its fuel consumption by 60% solely through better logistics and design of its heavy trucks.
Currently, buildings consume almost half (49%) of all US energy and ¾ of electricity. This is not cost effective. The Rockefeller Foundation and the Deutsche Bank announced that investing $270 dollars into updating the energy efficiency of buildings will net $1 trillion of energy savings in ten years. Businesses are starting to realize this: In 2010, the Empire State building replaced its old windows with new, energy efficient windows, and it changed its cooling systems. In three years, it had made back its money. Dow Chemical, General Electric, and News Corporation, to name other examples, each invested money into improving the energy efficiency of their buildings, operations, and products. Dow Chemical invested a billion dollars and returned over nine billion dollars. 79 big institutions have signed on to the Billion Dollar Green Challenge. These institutions are investing a total of one billion dollars into projects that conserve energy through updates and enhanced efficiency.
We can do more than just improve our efficiency. The world is fully capable of running almost entirely on renewable energy. We’re starting to get close to making that a reality: In 2010, four German states were between 43% and 52% wind powered; Portugal had 45% of its power coming from renewable energy; and Denmark had 36%. Because of this, Lovins explains,
In 2010, renewables other than big hydro, particularly wind and solar cells, got 151 billion dollars of private investment, and they actually surpassed the total installed capacity of nuclear power in the world by adding 60 billion watts in that one year … In contrast, the net additions of nuclear capacity and coal capacity and the orders behind those keep fading because they cost too much and they have too much financial risk. In fact in this country, no new nuclear power plant has been able to raise any private construction capital, despite seven years of 100-plus percent subsidies.
The question, then, in my mind is why does President Obama continue to trumpet a commitment to coal and oil when the private sector has already moved on? Recently, as my brother pointed out to me in an email, President Obama boasted that he’s opened “up more than 75% of our potential oil resources offshore. We’ve quadrupled the number of operating rigs to a record high. We’ve added enough new oil and gas pipelines to encircle the Earth, and then some.” Why are we doing this when we know—and, more importantly, when our companies know—that we can get our energy instead from wind and the sun?
For private corporations, as Lovins demonstrates in his talk and book, it’s now to their financial advantage to wholeheartedly support alternative fuels, and it’s clear they are now doing so. It’s hard to understand why our President can’t keep up.