“For we must consider that we shall be as a city upon a hill, the eyes of all people are upon us; so that if we shall deal falsely with our God in this work we have undertaken, and so cause Him to withdraw His present help from us, we shall shame the faces of many of God’s worthy servants, and cause their prayers to be turned into curses . . .”—John Winthrop, aboard the Arbella, 1630.
The fundamental proposition underlying all economics is that human intelligence can direct energy and resources into products and processes that benefit individuals and society. Our basic individual and collective goals are healthy food, physical safety, family and friends, comfortable homes, good education, decent healthcare, and freedom to express ourselves – as well as a healthy ecosystem to support us. Yet these basic needs are not met for most of humanity, and they are appearing less secure than before for those of us who are more fortunate. Humanity is at a crisis of development, and that crisis is named energy.
For more than a century, fossil fuels appeared to be an infinite bounty, and their use fueled a boom in socio-economic development. We used them at an ever increasing rate to support ever growing productivity. Now, unfortunately, we see that fossil fuels are limited after all, and further that their use is changing our ecosystem in dangerous ways. Climate change or no, it is clear that we cannot sustain the current energy consumption habits of the rich world, much less continue to develop and bring underdeveloped regions up to our rich-world standards.
If humanity had a brain – if we had a truly global society rather than a world of suspicious and antagonistic tribal nations – it would be obvious what we must do. Rather than waste resources and intelligence on war and preparation for war, we would collaborate on a massive overhaul of our buildings, transportation systems and economic infrastructure to improve energy efficiency and to shift away from burning fossil fuels. The end result of this transformation would be higher productivity, less climate change, and a greater ability to address hunger, disease, and ignorance. Poor-world regions would benefit from energy-enabled improvements in quality of life, while rich-world populations would continue to prosper.
To achieve this we would:
• Put a large and comprehensive tax on carbon emissions, while reducing income, sales and business taxes.
• Publicly finance construction of a global smart grid, and require smart grid features in appliances.
• Require energy audit and estimated energy cost disclosures for all real estate sales and rental agreements, and for all sales of energy consuming products.
• Provide public financing (primarily via energy bills associated with the building) for residential and commercial energy efficiency improvements.
With these few but transformative public policy changes, the market economy would respond by:
• Building lots of wind farms
• Building lots of natural gas electric plants
• Insulating everything, and building new buildings to be energy efficient.
• Putting solar hot water heaters on every home
• Replacing home furnaces with heat pumps
• Replacing inefficient pumps, fans, and electric motors
• Using sewage and organic wastes for energy generation
• Designing and building lots of advanced nuclear plants
• Shutting down dirty coal plants
• Building solar thermal plants in the deserts
• Switching to electric cars and GNG trucks
• Using algae to produce liquid fuels for air transport
• Building out lots of rail transportation
• Building tide and wave farms in the oceans
• Building PV farms in high-sun, high-demand areas
• Reducing agricultural use of artificial fertilizers through advanced farming techniques
If you would argue with any of these “market response” points, I ask you to put that aside for now. Perhaps “clean coal” deserves a place in the line-up and nuclear power does not, or perhaps you see a future in space-based solar collectors. That’s fine. The free market can generally be counted on to decide among competing technologies, so long as society puts a proper price on the externalities of resource depletion, pollution, and climate change risk.
If the world could put the above policies in action today, I am certain that within three decades the use of fossil fuels would drop to a fraction of current use, and petroleum in particular would be seen primarily as a long-term resource for manufacturing plastics, solvents, and other organic commodities. Some climate change will happen anyway, but we would avoid the worst scenarios. Total energy consumption in the U.S. would conceivably fall by a third or more, while worldwide consumption would likely still have to double due to “catch-up” development in Asia, Africa and elsewhere.
Unfortunately, humanity does not have a brain. Coordinated global action is a process of negotiation and consensus-building. Fortunately, leadership by example can accelerate the process dramatically. If we are honest with ourselves, we can see that the developing nations have a strong argument: the highly industrialized nations established economic leadership largely by their aggressive use of fossil fuel energy, and the “footprint” of industrialization persists as accumulated CO2 in the global atmosphere. It is therefore only just that the nations with the greatest per-capita historical footprint take the lead in cutting emissions, and then transfer our proven efficiency methods and technology to the developing world.
While many European countries and Japan have taken a social stand to be leaders by example, the United States has not. Yet the United States stands out as the nation with by far the greatest historical per-capita carbon footprint. What kind of people are we, if we will not accept any burden of conscience? Ronald Reagan famously echoed John Winthrop describing America as a shining city on a hill – and indeed the eyes of the whole world are on us – but does our city shine only by its Las Vegas lights of consumption, or does the metaphor still apply to our social conscience?
I believe that there are still leaders in this country who are guided by duty and honor more than by money. I believe that there is still a populace who cares, and that we have not irrecoverably slipped into self-centered, self-righteous greed and moral decay. I believe that we won’t wait for global consensus, nor even for Congress. I believe that leadership has already been demonstrated in towns, cities and states, and that continued leadership at these levels will shape first national policy, and then international policies.
Cities and states levy taxes. It is thus within the power of these government entities to shift taxes from productivity (income and sales) to energy consumption. It is within the power of the states and some cities to implement a regional smart grid. It is within the power of state governments at least to require energy cost disclosures on real estate sales and appliances. And it is within the power of most municipalities to provide financing for residential and some commercial energy efficiency improvements. So much of what must be done can be done at the local and state level.
Let us not whine about whether we will be somewhat disadvantaged by moving first in a direction which all must move eventually. It is better to take a small disadvantage ahead of the crowd, in order to gain the benefits of leadership. Let us not shame the faces of those that look to us or cause their prayers to be turned to curses. Let us lead.