Not Markets but the People are making the Green Energy Revolution

The propaganda against the green energy revolution contains all the same predictable elements as the propaganda against anti-slavery movements or later against anti-tobacco findings.

We are told that everything is determined by markets, which are the most efficient way to make decisions. So when the markets want green energy we’ll have it.

But markets are an arena of decision-making that is shaped by public values, by politics and government policy, and by awareness of hidden costs (externalities). These things don’t distort markets, they are part of what a market is. Take premises. If you begin with a conviction that it is all right to buy and sell human beings, then markets will be happy to create a slave trade. Slavers then argue that you don’t have a right to interfere in their practice of free enterprise. Likewise, if you believe it is all right to sell people a product that has a high likelihood of killing them, like tobacco, then the market will be happy to assign stock prices to tobacco companies and put the product in the futures market like any other commodity. The same things would happen if we decided it is all right to poison people with arsenic (not very different from selling them cigarettes, which are coated with extra nicotine to addict them, except that the product takes effect more quickly).

Purely economic markets are amoral. They don’t care if we are destroying our children’s and grandchildren’s world. They can’t decide, or can’t decide quickly enough, about climate change.

Second, markets in modern capitalist countries are often a function of coporate influence, not just prices. Ohio environmental protection head, George Elmaraghy, has just been forced out, allegedly because of pressure on a Republican governor from Big Coal. Oil also has a very effective lobby that causes government often to favor hydrocarbons even when that is irrational. Prices are set in part by government policy, and its premises, not just by abstract markets. The government decisions include matters of infrastructure. Redoing the electrical grid would help green energy; government, i.e. the people, would have to decide to do that, as Portugal did.

Even good public policy, such as San Francisco’s push for green energy, can be stymied by vested interests such as utilities companies.

If giving the utilities a new business model is necessary to get them on the side of green energy, then let us make that public policy. But let us not pretend that wind and solar are being impeded in San Francisco by their supposedly high cost compared to toxic, catastophically expensive hydrocarbons.

Markets can’t decide about climate change because they operate in a governmental space that has been occupied by Big Oil, Big Gas and Big Coal.

Third, economists and policy-makers refuse to count externalities in their market calculations. Coal-fired power plants generate ‘cheap’ electricity, but they emit mercury and other toxins, pollute with coal ash, and are going to submerge New Orleans and Miami in this century. So that’s cheap?

Wind, solar and geothermal are at grid parity with hydrocarbons in many markets even if we don’t count externalities. If we do, they are amazingly cheap, insofar as they don’t destroy, like, the planet.

Germany’s Energiewende or Energy Turn is so badmouthed by Big Oil trolls precisely because it is so successful. Germany set a new record for its solar electricity generation in July, of 5.1 terawatt hours, a little more than it got from wind energy last January. Germany’s governmental policies, including a feed-in tariff, have offset installation and other start-up costs and made Germany a leader in solar energy generation, with 400 megawatts per million persons, compared to the US at 20 Megawatts per million persons. In the US, subsidies & infrastructure from the government distort the market toward hydrocarbons. Germany is what the real world looks like, in all its complexity, where consumers are choosing green energy and deploying state policy to shape the premises of the market. They think reducing CO2 emissions is a public good, just as fighting human trafficking and reducing cigarette use are.

Another piece of common trolling is to point out that wind and solar are still a tiny piece of the energy pie. But Japan has just put in enough renewable energy to replace two of the 6 reactors at Fukushima. The statistics tell us about the past, not the immediate future. Two-thirds of all photovoltaic cells in existence were installed in the past 2.5 years, and they will double every two years for the foreseeable future.

20 Responses

  1. Germany and Spain are the only two nations ahead of Japan in aggregate solar power capacity.

    Japan’s government has provided subsidies and a feed-in tariff to encourage solar power expansion.

    Japan’s aggregate solar power capacity has incresed from 19 megawatts in 1992 to 7,000 today.

    America has been grossly laggard in its promotion and expansion of solar power as a safe and viable alternative energy source.

    • From where do you get your numbers? Italy is number two, the US is number three while Japan and China shares the number four spot. Spain is number five. All according to wikipedia:
      link to en.wikipedia.org

      As a Swede, I’m actually a bit proud that Sweden doesn’t participate in this race. We’re at 3 W solar PV/capita, while Germany is at 400 W/capita.

    • I heard the US is at 10GW. Obviously well behind Germany (32GW last I heard). China has the most aggressive program. The US is one of the larger growth markets, as Europe is suffering from financial distress. [World at 100GW]

      But Juan is too optimistic. The claim was we tripled in the last 2.5years, but will only double in the next 2.5. That is sub exponential growth. The PV growth rate is clearly slipping.

      At least solar is wildly popular with the people, including those who routinely vote for clean energy obstructionists.

  2. I don’t know what it will take to break the grip big oil has on civilization; possibly something as simple as when embarking on a long journey; taking that first step.
    Which is to say we have taken that first step and consumers (I am addressing responsible customers; not consumerism) do have a say; but only if they are NOT willing to take the shit doled out by big business. Consumerism is a disease perpetrated by the irresponsible wealthy business owners.
    Personal boycotts (I boycott) are not particularly effective if only one person is doing it (but I applaud the effort) . But the power of multiples changes things.
    One step at a time…

  3. Keep posting these Juan. This is not “AN” issue but “THE” issue our country and world face today. Everything else, from the NSA scandal to the political crises in Egypt and Syria, constitutes re-arranging the deck chairs on the Titanic.

    Those growing up in the 70s and coming of age in the early 80s such as myself were warned that there would no longer be elephants in Africa due to human encroachment and poaching, that down the road we would be asking, Who lost the elephants?

    Now we will be asking, it appears, many more and far more serious questions, such as, Who lost the oysters? Who lost the polar bears? Who lost the phytoplankton? Who lost Venice? Who lost the Nile Delta? Who lost Bangladesh?Who lost the polar ice caps? Who lost the snows of the Himalayas and the water sources for millions? Who lost the vegetables of California’s central valley? Or, worst of all, who lost the hops of the American Northwest for our beer? Who lost the wines of Spain and Italy? Who lost the apples for hard cider?

    And if you think I exaggerate or am alarmist about the last few of these questions, then you need to read some of the agricultural journals to which your average farmer subscribes. Hops, apples, and wine vines will be gone from their present regions within the next century at current rates. Polar ice caps are one thing, but Italy without wine and Venice is a very different kettle of fish.

    Thank you Exxon-Mobile, and thank you broken US political system, and thank you US public willfully choosing to collectively fail with every ballot you cast, and thank you media for false balance and assistance with a massive disinformation campaign.

    Horrific.

    • Yes, the polar areas are truly the last frontier.

      Consider the fact that by the 1500-1600s much of the remotest areas of Western China were being traversed and their cities mapped by Western European explorers, however the Northwest Passage in Canada was not discovered until the last 100 years. Their are islands the Arctic Circle in Canada (e.g. Brock Island) which were only discovered by aerial surveys following the end of World War II.

      One sad manifestattion of global warming affecting that region is the decimation of the Peary caribou. Scientists have charted hundreds of carcasses of these animals that have died as a direct result of global warming. The warming has caused ground snow to melt and later re-freeze as thick ice, thus denying these caribou access on the ground to the plant life which they graze upon – thus many die from malnutrition.

      The impact such as that felt by the Peary caribou population is not generally well-known or publicized – but needs to be.

      • Bearing in mind what has always happened to “Frontiers,” I guess that does not bode well for the last relatively unstripped part of the planet.

        Here’s what we’re in for:

        link to bbc.co.uk

        Here’s Kerry’s disgusting (or delightful, if you happen to be a Taker of Frontier Wealth) pronouncement, in case you missed it the first time around:

        link to huffingtonpost.com

        As to ungulates, if they can’t be monetized, they have no value. Maybe you could come up with a futures contract on the date of last living wild Peary caribou? Maybe the moral hazard machinations would encourage some bettor to at least prolong the species beyond the exercise date…

        Or this: link to google.com

  4. When it gets to the point that ranchers in drought stricken Texas, are selling their aquifer water rights to oil companies for fracking, you know we are very close to the end of oil as the dominant energy source.

    Thanks very much for continuing to write about this.

  5. “Third, economists and policy-makers refuse to count externalities in their market calculations.”

    Hey! Economists teach the problem of unpriced externalties, and the use of taxes and other policies to fix them, in econ 101 at any respectable university. Don’t throw us in with the idiot polcy-makers.

    • The only economists who can become policy-makers are the ones approved by big business. The rest, most Americans never hear about. Besides, markets look simple, and externalities look complicated. Real turn-off.

  6. Did you know it would be impossible to end slavery if it were still part of our ‘economy’ today because of the lobbyists? With global warming we are facing a danger and moral hazard as great as slavery, with no Lincoln in sight, and a very weak abolition movement. Between the CIA and the lobbyists there is no room for change. Only war and profits and the dominance of destruction.

  7. Maybe some of that oil and gas company propaganda has backfired on them.

    Huffington Post has an article here which says the oil and gas industry is the most hated in America.

  8. Solar power in particular is a very good thing – it’s largely decentralized, making it less vulnerable to disruption. Today’s electrical grid relies on a small number of large centralized power generation systems. This is a result of the physics behind these generation systems (the bigger the dam, the more efficient the turbine, the bigger the petrochemical-powered plant, the more efficient the generator, etc.)

    Small-scale solar installations, however, are highly efficient. This makes decentralized power systems possible. Failure of any one generator can easily be compensated by other generators. This makes solar an excellent hedge against natural disasters or terrorist attacks. One wonders why the folks so frightened of terrorist attack don’t point this out to people that go out and purchase inefficient home-sized conventional generators.

    • This is the part of the story that few discuss. To imply that major institutions are on the verge of collapse is to imply the entire American narrative of progress via corporate expansion is a lie. So we can’t even begin to use non-corporate metrics to evaluate the quality of our lives in an alternative model. And if a collapse actually occurs, like in the financial sector, all anyone knows how to do is try to patch it back up and make it look the way it did before.

      Ironically, the more precarious this all becomes, as in a declining empire, the less we are willing to gamble on new models that might fail completely and take down the whole system. So no one with real power is willing to take any risk at all with alternative energy.

  9. Just for additional background info. Germany is highly unionized and their corporations are required to have union representatives on their boards. This provides a more democratic balance to the decisions and seems to prevent the egregious decisions of the psychopathic boards in America. It’s not a fluke that the decline of unions preceded the recent corporate decisions producing this rape of the planet and it’s less well off inhabitants.

    • That is true, and yet those union reps were unable or unwilling to stop German corporations from building union-busting factories in Tea Party zones like Alabama and South Carolina. This makes me wonder if the German workers understand that they’re about to be sold down the river.

  10. interesting read from truth-out.org last week by Margaret Flowers & Kevin Zeese:

    “A coalition in Boulder, Colorado, is leading the way to create an energy utility that phases out the use of coal while it increases the use of wind, solar and renewable sources of gas. It has done extensive research to demonstrate that this can be accomplished while maintaining similar or cheaper rates and improved reliability. It has developed a roadmap and tools that other communities can use.
    Throughout the process, the Boulder Energy Future Project engaged its current utility, Xcel Energy, but Xcel has shown no interest in negotiation and cooperation. As the Boulder project nears success, Xcel is becoming more aggressive in its efforts to undermine the project.”

    link to truth-out.org

  11. Another example of bias in covering the German struggle to transform their electricity grid: if wind/solar fails, Germany has no reasonable place to go for more energy except buying natural gas from Russia or Iran, strengthening its relationship with those regimes. American capitalist apologists should be cheering Germany on with its current course.

  12. There may be another, more general problem at work.

    So many people, confuse a method of governance with an economic system, as if capitalism were a valid system of governance. Much has been done to confuse this issue and we now have a large segment of our population who support corporate welfare without concern for their own interests or those of their community or their own environment. It is as if the principles of humane governance and an economy to further our endeavors and interests were somehow wrong-minded!

    It’s easy to sway us when we are alienated, divided. Oligarchs have become quite adept at utilizing this spin strategy to rip the very fabric of our very human requirement to feel a part of a community, presenting an amoral system as somehow better, fairer and more “even-handed” than one that supports human values and human welfare, which would include a switch to green energy to our own benefit. In this case, we’re traded corporate profits for our own well being.

    Finally, it is more difficult to monopolize green energy or make such large profits (ahem, not counting externalities), which is probably one of the greatest obstacles to utilizing better, less destructive sources.

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