What We Must Do

“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.

las vegasThe 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.

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6 Responses

  1. Rick says:

    That’s all well and good. But, how do you get there from here. Humanity doesn’t have a brain, but humans do have a nature. Being a boss, I know that I get greater productivity out of my workers by giving them an incentive (bonus, time off, praise, etc) than I do by taxing them (belittling, overworking, punishment, etc.). Government should control the business environment, not the process. Give Exxon the incentive and you would have all of the green energy you need. Over tax them, they’ll act very human.
    And I agree with you that much can be done on a local level, if only the local entities could keep big government out of the way. And that’s becoming increasingly more difficult.

  2. Bryan K Long says:

    Thanks for the comment, Rick! Yes, it’s all about proper incentives — generally positive ones work best. But negative incentives work too, if they are paired with positives. Putting a tax on carbon emissions will have the desired effect of reducing them, but also the effect of increasing energy prices and thus an undesirable increase in the cost of producing everything. Pair that up with a proportional reduction in income tax and/or sales tax, however, and you can offset the pain without eliminating the incentive: capital investments in energy efficiency or green energy are more easily justified in terms of energy cost savings. Of course, over time if energy/carbon consumption goes down, government tax revenues tied to carbon taxes will go down as well. At some point, the government will need to raise the carbon tax, and the cycle starts again.

  3. Rick says:

    Never ending cycle, this government thing. I can promise this. They can call it a “carbon tax” (that evil stuff!), but once a green energy source begins to make a profit. The government will start taxing it too.

  4. Ron Wolf says:

    after a few days of reflection and some reading here’s my gripe/suggestion with your post (a little) and the idea of ecological economics (a lot).

    i think, in a reductionist way, that an essential moral goal and basic human need is being overlooked here – that of access to satisfying and healthy work.

    i was just reading that the current manufacturer price for jeans made in China is less than $3/pair and visions of the sweatshop appear. sitting all day at the machine, no doubt poor lighting, ventilation, noise, repetitive stress. you get the picture. yet all of that might fit perfectly well within the framework of ecological economics.

    perhaps its a silly dream that all can perform and have access to meaningful work that doesn’t trash their body and mind. is it any more silly to dream of an economics that puts ecology first?

    yes, perhaps ecology needs to come first so that we continue to have a livable world. but the moral world will have both. not that its perfect (i’ve seen the coffee plantations), but i want my coffee to be both organic and fair trade.

  5. Bryan K Long says:

    Thanks Ron! I agree completely that the need for access to satisfying and healthy work is an absolutely essential need. I also think that fundamental to econosystemics. A sweatshop making jeans for foreign consumption exploits both people and environmental resources (cotton is environmentally expensive, but we do not internalize the environmental costs). If the externalities of energy, land and water were priced into the jeans, the quality of the jeans would become much more important to the purchaser. Durability/quality would require more conscientious labor. With the proportion of cost formed by labor lower, and the need for quality higher, the manufacturer would be willing to spend more on employee training and satisfaction. At the same time, the higher price would lead consumers to take better care of their jeans. In total, however, the volume of production would fall and fewer jobs would be available in energy production, fertilizer production, cotton farming, cloth making, jeans manufacturing, and jeans retailing. Looking at this industry in isolation, we would have fewer, more satisfied workers in the industry, but other ex-workers unemployed and potentially more desperate than they were in the sweatshop. There is lots of other work that needs to be done to improve our environment and infrastructure, but how to pay for these efforts and how to train the unemployed to do this work is an extremely difficult problem.