Happy Earth Day: How To Use Capitalism To Bring Us Abundant, Cheap And Emission-Free Energy

One of the loudest and most fruitless political disputes in Washington has been about climate change. If you’re even vaguely concerned about climate change, take note: The political climate itself may be changing. Capitalism to the rescue!

Many progressives consider climate change an existential threat to humanity and the environment. They have been stymied by proposing a solution that would impose punitive costs on, well, voters … such as a carbon tax. As polling by Pew consistently shows, climate change continually ranks near the bottom of voter concerns. The economy ranks at the top. Republicans, of course, have been fiercely resistant to imposing the economically punitive measures many progressives endorse. Deadlock.

Over many years of this partisan impasse the magic of free markets, behind the scenes, has begun to change the political calculus. Emerging technologies are reducing energy costs dramatically, using emission-free energy sources such as sunshine and wind. In recently working on a research project funded by the Grace Richardson Foundation I encountered compelling evidence that the emergence of inexpensive, emission-free, energy is fast approaching.

There are opportunities to accelerate these good things, not by subsidies, through targeted tax rate cuts and removal of arbitrary regulatory barriers. Follow along.

We confront the possibility of energy and climate policy becoming what academics call a “valence” (consensus) rather than a “values” (polarizing) issue. Conservatives do not champion climate change. We  are unpersuaded that it threatens to be as catastrophic as many progressives believe. We also are unpersuaded that the proposed costs of addressing it, which are excruciating, pass a cost-benefit analysis.

But we are not “deniers.” It would be reckless to dismiss the possibility that climate change could have catastrophic consequences. Conservatives aren’t reckless.

Dr. Joseph Romm, formerly acting assistant secretary of energy for energy efficiency and renewable energy for the U.S. Department of Energy, now a senior fellow with the Center for American Progress, recently published an impressive book written for the intelligent layman. It lucidly presents the case both for deep concern and and optimism): Climate Change: What Everyone Needs to KnowAs described by the publisher, Oxford University Press:

Climate change will have a bigger impact on humanity than the Internet has had. The last decade’s spate of superstorms, wildfires, heat waves, and droughts has accelerated the public discourse on this topic and lent credence to climatologist Lonnie Thomson’s 2010 statement that climate change “represents a clear and present danger to civilization.” In June 2015, the Pope declared that action on climate change is a moral issue.

This book offers the most up-to-date examination of climate change’s foundational science, its implications for our future, and the core clean energy solutions.

Romm presents worrisome, even potentially apocalyptic, scenarios. Most dramatic, if the global temperature gets high enough to trigger it. might be the potentially dire further climate impact from release of methane from melting permafrost.

But he counsels hope, and action, not despair. He lucidly analyzes the many emerging technologies that could (and already are beginning to) reduce the emission of CO2.

Romm provides a lay reader a consistently fascinating guide, qualifying some, and disqualifying other, technologies. He observes:

… I personally have become more optimistic about humanity’s chances in the last year. … Another hopeful sign is that the key technologies needed to avert catastrophic warming — solar power, wind, energy-efficient lighting, advanced batteries — have seen a steady and in some cases remarkable drop in prices. This price drop has been matched by a steady improvement in performance. Maybe at some point in the past you could believe that climate action was too expensive, but not any more. The nation’s top scientists, energy experts, and governments have all spelled out in great detail that even the strongest climate action is super cheap.”

Super cheap? This would be a transformational development.

What evidence is there that we might be reaching an inflection point in developing emission-free energy sources cheaper than fossil-fuels? The evidence is abundant. Futurist Ramez Naam blogging in Scientific American, on March 16, 2011:

Over the last 30 years, researchers have watched as the price of capturing solar energy has dropped exponentially. There’s now frequent talk of a “Moore’s law” in solar energy. In computing, Moore’s law dictates that the number of components that can be placed on a chip doubles every 18 months. More practically speaking, the amount of computing power you can buy for a dollar has roughly doubled every 18 months, for decades. That’s the reason that the phone in your pocket has thousands of times as much memory and ten times as much processing power as a famed Cray 1 supercomputer, while weighing ounces compared to the Cray’s 10,000 lb bulk, fitting in your pocket rather than a large room, and costing tens or hundreds of dollars rather than tens of millions.

If similar dynamics worked in solar power technology, then we would eventually have the solar equivalent of an iPhone – incredibly cheap, mass distributed energy technology that was many times more effective than the giant and centralized technologies it was born from.

Technological progress is going much faster than even the techno-optimistic Naam believed.  As New York Magazine’s Jonathan Chait wrote last year in The Sunniest Climate-Change Story You’ve Ever Read:

Four years later, in the spring of this year, Naam revisited his post and admitted his prediction had been wrong. It was far too conservative. The price of solar power had already hit the 50-cent threshold. In the sunniest locations in the world, building a new solar-power plant now costs less than coal or natural gas, even without subsidies, and within six years, this will be true of places with average sunlight, too. Taller turbines, with longer and more powerful blades, have made wind power competitive in a growing swath of the country (the windy parts). By 2023, new wind power is expected to cost less than new power plants burning natural gas.

To compensate for the variability of solar and wind, storage mechanisms are required. Bloomberg News reports, in a recent article entitled Wind and Solar Are Crushing Fossil Fuels: “What’s more, the price of batteries to store solar power when the sun isn’t shining is falling in a similarly stunning arc.”

These developments have not been lost upon advocates for free market policy. Among the leading lights of the right are Tea Party Patriots board member and co-founder Debbie Dooley, head of Conservatives for Energy Freedom, and entrepreneur Jay Faison, founder and CEO of Clear Path Foundation. Faison has committed $175 million of his own money to persuade Republicans to take climate change seriously and to use free market policies to end it.

There has been encouraging openness within The American Spectator and a blog on his own site by its senior editor Quin Hillyer, entitled Supply-Side Clean Energy. There has been consistent effort by Grace Richardson Foundation president Rod Richardson, a thought leader in applying free market principles in this sector, to forge coalition between the right and the left.

There is still much to be done. Solar and wind power, while growing by leaps and bounds, now make up a tiny fraction of our energy supply. There is good reason to accelerate the process of the development and adoption of cheap, emission-free, energy by cutting tax rates. Doing so would deliver the goods, goods held dear by Republicans – lower cost energy for consumers – and by Democrats – reducing, and then eliminating, carbon dioxide emissions.

Using conservative means to advance progressive ends isn’t really so odd. (Communism and socialism struggled for a century materially to improve the lot of working people. Using romantic, rather than realistic, means they failed in a big way.) China, adopting free market policies (euphemistically called “socialism with Chinese characteristics”) under the great supply-sider Deng Xiaoping and his successors brought almost a billion people out of subsistence and into affluence so quickly that Karl Marx spins in his grave. When Russia adopted a low-rate flat tax its economy took off like a rocket. (Bernie Sanders, take note!)

I previously cited here the moving words of NASA climatologist and retired astronaut Dr. Piers J. Sellers from his Jan. 16, 2016 piece on climate change in The New York Times Sunday Review:

These engineers and industrialists are fully up to the job, given the right incentives and investments. You have only to look at what they achieved during World War II: American technology and production catapulted over what would have taken decades to do under ordinary conditions and presented us with a world in 1945 that was completely different from the late 1930s.

Key words: “given the right incentives and investments.” The free market is developing, producing, and adopting cheaper and cheaper, emission-free energy. This depends on enterprising men and women focused on technological development and deployment. Technologies are governed by different laws than commodities. By credible estimates such ventures soon will start becoming profitable without subsidy.

Do you wish your electricity bills, or CO2 emissions, or both, to go down? Then it makes compelling sense to reduce marginal tax rates on, and to eliminate unnecessary regulatory barriers. Let the free market work its magic to bring on inexpensive, emission-free, energy.

Capitalism to the rescue, Happy Earth Day to you!

Originating at Forbes.com