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Plan for a Green Energy Economy

The world today faces economic challenges of a scale that used to be beyond imagination.  Modern industrial economies have been using oil as their major energy source since the early 1900s.  Political leaders and economists commonly believed that there was so much oil to be found, drilled, and used that worldwide supply would only run out in the distant future, if ever.  Unfortunately, researchers have been warning for the past few decades that the unexpected growth of industry has used up most of the world’s oil supply, to the point that oil is becoming scarce while the size of newly-discovered oil fields have dramatically shrunk.  Today, the world faces the harsh reality that we are running out of oil and will have to change the world economy from being driven by oil to using a new energy source.  Today’s worries over the pollution, health hazards, and climate change associated with fossil fuels makes the need for change even more desperate.

Scientists have been studying many different proposals for new energy sources over the past few decades, and these studies have picked up momentum in just the past few years.  Biofuels (liquid fuel made from vegetation), Ethanol (from corn), Natural Gas Vehicles, Hydrogen Fuel Cell Vehicles (HFCVs), and Battery-Energy Vehicles (BEVs) have been proposed to replace our reliance on gasoline (an oil-based fuel) as the major transportation fuel.  Recent research has proven that Hydrogen (HFCVs) and Battery (BEVs) are most efficient and have the least amount of negative environmental results. (Mark Z. Jacobson, “Review of solutions to global warming, air pollution, and energy security,” Energy and Environmental Science, 2009, pages 148-149.  The entire article can be read at http://pubs.rsc.org/en/Content/ArticleLanding/2009/EE/b809990c)  However, the use of HFCVs and BEVs required the increased use of electricity, which the United States mostly generates by burning coal, natural gas, and nuclear material.  All three of these American electricity sources are dirty, contributing huge amounts of carbon dioxide (CO2) that lead to pollution and climate change.  When one considers that coal and natural gas will also run out eventually, just like oil, we realize that we must also largely replace these U.S. electricity sources with clean, renewable power.

The following pages present a plan to do just that: build a renewable energy infrastructure that would supply all American energy needs projected for the year 2030.  The Plan assumes that most vehicles will be BEVs, so much of the electricity produced will go to charging electric cars.  We can generate enough electricity by relying primarily on wind, water, and solar power, all of which are natural, clean, renewable, and will never run out.  The cost for building such infrastructure will be high (about $16.5 trillion), but well worth the investment.  When compared to U.S. government spending during World War II, the last time the American nation faced a national crisis and successfully overcame it, one realizes that the American government easily has the ability to fund Green Energy construction without breaking its budget.  In fact, after considering the psychological, military, and economic benefits of not having to rely on oil, one realizes that the United States cannot afford to avoid building the Green Energy system for much longer.

 

Meeting U.S. Energy Demand

 

Research shows that world energy demand will be 16.9 trillion watts (also known as “terawatts” or TW) by the year 2030.  Research further reveals that U.S. energy demand will be 2.8 TW, or 16.5% of total world demand.  (Mark Z. Jacobson and Mark A. Delucchi, “A Path to Sustainable Energy by 2030: Wind, water and solar technologies, can provide 100 percent of the world’s energy, eliminating all fossil fuels,” Scientific American, November 2009, page 60)  Jacobson and Delucchi also argue that the total cost of building a renewable energy supply system to meet all world demand will be $100 trillion.  (Jacobson and Delucchi, “A Path to Sustainable Energy by 2030,” page 64)  Therefore, we can reasonably estimate the cost of building such a system in the United States alone from these three vital statistics, as the table below shows.

Energy Demand and Infrastructure Costs

Measure                                                   World                     U.S.

Energy Demand in 2030                 16.9 TW             2.8 TW

Percentage of World Demand        100%                   16.5%

Infrastructure Costs (trillion)        $100                    $16.5

According to recent projections, building a worldwide renewable energy system would cost $100 trillion.  If the United States demands 16.5% of world energy, then it will probably cost about $16.5 trillion to construct in the U.S. alone.  That is a huge cost, but within reach once we start planning on how to get the money.

 

Raising the Money for Green Energy Investment

 

$16.5 trillion is an intimidating amount of money, about the size of the entire U.S. economy today.  The Federal government is the only body capable of raising so much cash, but the government’s total Debt is already 100% of its economy – which worries many economists.  Therefore, government should not attempt to borrow the money.  Government must find other means of paying for building the massive Green Energy infrastructure, even when we consider that we could break the $16.5 trillion up into ten years of spending at $1.65 trillion per year.  Several options to raise the money exist.

The best funding option is to raise taxes on a group of people that can afford to pay a slight increase and who have enough overall wealth to fund the Green Energy project.  We could raise a 2% tax on Wall Street transaction that would give the government an estimated $1.4 trillion per year.  That leaves $250 billion.  That last amount can be found by creating a $20 tax on every metric ton of carbon pollution created by the fossil fuel industry – which would raise about $118 billion per year while also giving an incentive for energy companies to move away from burning fossil fuels to generate electricity.  That would leave about $132 billion in money to be found per year, which could be taken from the estimated $1.179 trillion per year in revenue raised from a Fair Tax code proposed in the Plan for a Rational Budget (pages 39-42).  In total, we can fully fund the Green Energy project by creating the following system:

Sources of Green Energy Funding

Source                                           Tax Rate                 Revenue (billions $)

Wall Street Tax                              2%                                    1,400

Carbon Tax                            $20/metric ton                        118

Fair Tax Contribution                                                               132

Total                                                                                              1,650

The Wall Street Transaction Tax is capable of raising the $1.65 trillion per year needed to building the Green Energy infrastructure in ten years.  A 2% tax will not destroy the Wall Street class of wealth that currently dominates much of American politics while paying little in current taxes.  Most of the rest of the country pays about 7% in sales taxes, so Wall Street should not complain about paying a 2% tax for 10 years.  In fact, a 2% tax on Wall Street Transactions would mean that an investor looking to buy $10,000 worth of stock would only have to pay $200 in tax!  Such a small fee is obviously affordable to for the rich and will pay most of the cost of building a renewable energy system that will benefit all Americans.  The remaining $250 billion per year can be raised by a new carbon emissions tax and by taking the last leftover amount from the increase in federal revenue if we implement a new, fair tax system suggested in the Plan for a Rational Budget.

The money is there.  We just need to build the political will to tax it and use it for a Green Energy project that will improve the lives of all Americans.  We know that such national will exists because we have seen examples of it during past national emergencies, most clearly and powerfully during World War Two.

 

The Nation at War

 

The United States won World War II so decisively because its population largely believed that the war was forced upon them and that it was necessary to rid the world of dictatorship.  Building an expensive and ambitious renewable energy system will require a similar amount of motivation and dedication from most Americans.  American soldiers fought World War II on real battlefields while the American “homefront” fought on a moral battlefield against enemies they viewed as evil.  Americans were particularly motivated by a rage against Japan for its sneak attack at Pearl Harbor, Hawaii in December 1941 (which many still use to justify the destruction of 67 major Japanese cities during the war and the atomic bombings of two more Japanese cities in 1945).  Americans understand that the United States today is faced with similar sneak attacks in the form of international terrorism that struck on September 11, 2001.  Middle-Eastern terrorists are obviously motivated by a desire to force the U.S. to end its meddling in Middle-Eastern countries.  Such meddling is only done to guarantee American access to Middle-Eastern oil reserves, so the best way to end that meddling is to build a domestic U.S. energy production network.  In short, we can defeat Middle-Eastern terrorism by investing in the Green Energy Plan, building an internal energy system, and withdrawing from the Middle-East – which would be far easier, productive, and humane than simply bombing terrorist groups into surrender.

Americans believed in the 1940s war effort because they wanted to save the world from Fascism and dictatorship.  Similarly, today’s Americans should realize that the oil economy creates possibly larger threats to human freedom because reliance on oil has clearly created nearly all of the United States’ current wars.  Oil is also getting more scarce, which means that energy prices (particularly gasoline) will rise dramatically.  Using oil has harmed humanity through pollution’s effects on human health and climate change.  Like World War Two, Americans should view the creation of a Green Energy system as a battle for the future of human freedom from war, scarcity, poverty, and health and environmental damage.

These ideas have been pointed out for many years, even by political leaders.  Even a U.S. president made these comparisons as far back as 1977.  President Jimmy Carter called energy conservation and rebuilding proposals “the moral equivalent of war” (Jimmy Carter, Address to the Nation on Energy, April 18, 1977, which can be read and watched at http://millercenter.org/scripps/archive/speeches/detail/3398).  We can and must win that war in the next 10 years.  We know how much energy we will need, we know the technology already exists to meet those needs, we know how to pay for building the infrastructure, and we know that Americans have risen above similar national challenges in the past.  We only lack the ability to force our political leaders to put the plan into effect.  We may have to change the U.S. electoral and budget systems to gain that power over our politicians.  My suggestions for such changes can be read for free at www.machineryofpolitics.com

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