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Yesterday, I heard a very controversial but very interesting talk at the Fortune Brainstorm Green Conference here in Pasadena. It was by Bjorn Lomborg, and he spoke about some of the economic issues of going green. He strongly challenges many of the traditional assumptions people have about what they can and should do to make a difference. The most eye-opening to me was the ideas that the only way we are going to make a real difference is to invest on a monumental scale in new technologies that are wildly disruptive. I had a gut feeling that this was a good way to go, and that’s why I try to work on, but he had some economic arguments supporting his thesis that were very persuasive.
The strongest argument he made — in my opinion, at least — was that rather than have a Kyoto protocol, or carbon tax or cap and trade to spur investment in new technologies, why not just invest DIRECTLY in new technologies. He proposed a miniscule 1/20th of 1% fraction of GDP from all the major countries going into a major $25B per year investment fund to invest in new technologies. He claims that that would make 10 times the difference, and cost 1/10th as much (in other words, 100x more effective) than the indirect method. He also said this would be more fair by country, because countries with much bigger GDP’s would contribute so much more.
It was a very compelling argument. He had 5 others that were compelling. He’s very controversial, but now I want to read his book and test his thoughts with some more rigor.
His talk alone made the conference worthwhile — but there were 50 other great speakers to make it even better. Fortune Magazine did a great job on this one, and I hope Marc Gunther and David Kirkpatrick decide to do this again.
People, not things or technology, will change the outcome of environmental issues. And I mean, avoiding the dilution of useful changes in personal habits, by avoiding the whole investment cycle for new contraptions and concepts that need to be designed, built and implemented, thereby causing untold delays in cutting carbon output. Here’s a simple example: When TV goes digital, upgrade your house or apartment with an antenna that also captures wind (VAWT as seen at http://en.wikipedia.org/wiki/Vertical-axis_wind_turbine). The technology is there. You’ll get digital HDTV. The wind turbine will sell power back to the grid. The technology exists. Nothing fancy in the mechanical generation of power with wind, and nothing computerized needed to monitor speed, direction or rotation of the upright blade. What you save in CATV or satellite bills each month (approx., $100), will pay for the $1200 antenna/windmill, plus the power that is routed back into your electrical panel –and the grid– whenever the wind blows. Not satisfied, then add a small, thin-film, pyramidal solar panel that captures power from all directions. Buy an fully electric car for short transport, maybe something like the ZENN (we have a number of cities that allow their use https://www.greenautos.com), and most major metropolitan areas are moving in that direction as well. So whether you tile your roof with grass or white asphalt tiles to reflect or absorb sun, you’re at least making an effort. If every home has a wind turbine and saves $1,200 per year, the cost is a wash. But the long term benefit is a 5% to 25% reduction in overall carbon output for residential homes. Imagine that…?
The reason they’re not investing directly in new technologies and instead try and put that through incentives for adopting the Kyoto protocol is because too many people spent too much time coming up with the Kyoto crap and can’t let it die.
At least that’s my take on it. While these people understand the concept of sunk cost when it comes to other people’s money, they don’t seem to grasp it when it comes to their time.
Someone made a comment on one of my blog posts that my view was “similar to Bill Gross’” so I came here to find out if I should be offended or honored
I’ll want to read some more before I come to a conclusion but so far. I noticed you also had an engineering background so maybe that explains the connection the commenter made.
The post is here if you’re interested http://www.bergenjerseyforeclosures.com/blog/info/entry/where_should_house_prices_really
(sarcasm:) Yes! What we really need is a Stalin-style massive bureaucracy-laden 5 year plan to achieve new energy technology. (:end sarcasm)
The reason to do the cap and trade or similar approach is that bottom-up innovation works — let the free market have at it and whoever comes up with the best solution makes the most money, and all the mediocre or unsuccessful approaches go by the wayside. If the incentives are right, you get many truly innovative plans being tried. Some work, some don’t. But you have lots of people willing to try long-shot solutions — the truly revolutionary ideas — because if they work out there is such a big payoff. This is how to really achieve major advances. If you go for a massive top-down approach, you have a bureaucracy from the beginning. Despite typically being wasteful and inefficient, with central planning the people in charge are more likely to focus on approaches with a high chance of success. This means things that are less revolutionary, more mediocre, but better understood. So — if you’re lucky — at the end you have a massive pork-barrel project that mostly does what you want, but at much greater expense than was initially promised. If you’re unlucky, the central approach ends up a complete boondoggle.
Where do we go from here? Oil is returning to natural levels. This will put a short term hamper in alternative enrgy investment. Of course it does not eliminate the potential but i believe it may lead to consolidation which means sharing of technology. Both good things in my opinion. Additionally the government will incldue energy inevstment in any stimulus package so hold on to your hats until Januray February and we should take off again.
My 2 Cents
Phil
Why isn’t everyone getting behind thorium nuclear?
Thorium could safely provide all of our domestic electrical energy requirements for several centuries.
This summarized Washington press release proves that someone is listening:
Sen. Orrin G. Hatch (R-Utah) and Harry Reid (D-NV.) recently introduced legislation that would pave the way for thorium nuclear-fuel reactors in the United States. The Thorium Energy Independence and Security Act of 2008 would establish offices at the Nuclear Regulatory Commission and the Department of Energy to regulate domestic thorium nuclear power generation and oversee possible demonstrations of thorium nuclear fuel assemblies. Using thorium for nuclear power has a number of potential benefits over conventional uranium. As a resource, thorium is abundant in the U.S. and throughout the world.
A thorium fuel rod would remain in the reactor about three times as long as conventional nuclear fuel, cutting the volume of spent nuclear fuel by as much as two-thirds. Also, thorium nuclear fuel would significantly reduce the possibility that weapons-grade material would result from the process. Finally, a thorium fuel cycle could be used to dispose of existing plutonium stockpiles, which is the national security goal.
“Our nation has focused mostly on mixed oxide nuclear fuel cycles, and our regulatory structure reflects that,” Hatch said. “With the growing interest in thorium nuclear power in the world and in the U.S., it’s time we made sure our government has a regulatory infrastructure in place to accommodate this new generation of nuclear power.” Speaking about the bill, Bruce Blair, president of the World Security Institute said, “This legislation reflects an enlightened grasp of the importance of supporting nuclear power while suppressing nuclear proliferation.
“This bill is a giant step for the United States toward the development of a safe, secure and independent energy future,” said Jack Lifton, business development and corporate communications Director of Thorium Energy Inc. (www.ThoriumEnergy.com). Thorium Energy is a resource company that owns property in Lemhi Pass, Idaho, where it is generally believed that the largest veins of thorium-rich minerals in the world are located. Analysis of the deposits shows them to be either the highest grade or in the top tier of the highest grade known anywhere on Earth.
Good post, adding it to my bookmarks!
Just read some other comments on your blog, and I agree with the general impression, your doing a great job!Keep it up!
Your writing style is quite a usefull role model for me - I have recently started my own blog and I am finding it hard to write articles!