There is a myth permeating our nation’s energy policy and energy economy, which holds that renewable sources of energy cannot meet our outsized electricity demand, let alone power our entire economy. That myth is not only entirely untrue; it depends on the flawed assertion that the only way things can be is the way that they have been. The fact is: we can more easily achieve sustained energy independence with clean energy than by any other means.
There is far more clean energy supply—wind, sunlight, water and underground heat—than we could possibly consume. In fact, were the technology and infrastructure in place, there is more than enough of each of these to power our entire economy many times over. With wind and solar, the technology already exists to harvest all of our needs from clean energy.
The catch? We have to deploy it. In fact, we have to produce it, and then deploy it, across a smart grid which we will need to build. Those who favor retaining the specific revenue streams already controlled by the fossil fuels industry like to talk about how this would be “expensive”. We would have to “spend” huge amounts to produce this new infrastructure.
What they leave out is that there is a fundamental difference between spending and investment. They leave it out, because on this score, it is very inconvenient to remind anyone of the difference between spending and investment. Those same interests heavily favor investment in new infrastructure to carry out the arduous, risky, and low-return-to-the-wider-economy work of extracting carbon-based fuels, but they don’t like to compare the long-term economic viability of resources that must be depleted in order to be used against resources that are abundant, renewable and cannot be depleted.
The way the comparison shakes out, new spending on fossil fuels infrastructure is, in many ways, putting us deeper in the proverbial hole, while new spending on the smart grid and clean energy infrastructure will give us a vibrant new economic opportunity, on which we can continually build.
Instead of some dollars being invested and some burned, every dollar devoted to clean energy is an investment in new economic development and new leverage for consumers.
We do need to invest in new infrastructure: whether we just upgrade and maintain our industrial and transport infrastructure, invest in new fossil fuels production or build a cutting-edge smart-grid-based clean energy economy for the 21st century, we need major new investment. An infrastructure bank can help with this, but we need something else to help channel major private investment into innovative startups.
We need a national cooperative renewable energy start-up incubator.
The fossil fuels industry will cry foul, arguing that no industry should get assistance, but they will refuse to forego their world-economy-leading subsidies or the near 100% tax breaks they get. They will also argue that businesses that “need help” cannot compete and so will be expensive.
In both cases, the opposition point of view is deeply logically flawed.
First of all, the entire global energy economy is shaped by government-backed market manipulations: subsidies, price incentives, price controls, industry tax reductions, development tax credits, capital gains tax adjustments, special licensing agreements, bilateral trade deals, exclusive regional market agreements, and utility monopolies.
But more importantly, the argument about whether a business “needs help” in the present market environment ignores what factors will drive long-term economic viability, pricing dynamics, and the good of the consumer. Over the long term, finite carbon-based mineral fuels will run out, even as global demand expands dramatically; those economies still beholden to them will see ever-increasing costs, and a corresponding erosion of expectations for growth and wealth-generation.
The clean energy economy will replace the fossil fuels economy, and the present economic landscape, dominated by a heavily assisted fossil fuels industry, is holding back progress on that transition. New businesses that cannot compete because an entire marketplace is rigged to favor the status quo are not “bad bets” or inherently inviable; they are a new way forward that suggest we need a new landscape for the production, distribution and consumption of energy.
The smart grid is necessary for long-term energy economy stability, whether we are using carbon-based fuels or clean energy resources. But in the fully developed smart-grid energy marketplace, clean energy resources will be a far better investment: they will respond favorably to new investment, giving ROI for every dollar; fossil fuels will be hampered by their limited reserves, their burning of what consumers spend, and their massive negative externalities, which governments and consumers are already tired of paying for.
The renewable energy start-up incubator, then, would:
- Favor local control of energy production;
- Channel public and private investment into innovative technologies, new business models and small start-ups;
- Establish a cooperative platform for sustained job-creation;
- Host lifelong learning seminars, retraining programs, and aid for educational improvement;
- Motivate a re-imagining of leading manufacturing standards;
- Restore relevance to every point across the investment-manufacturing-work-and-community landscape.
Among the main goals would have to be:
- Keeping world-leading clean-energy intellectual property in the United States;
- Accelerating the pace of innovation in zero-carbon energy technologies;
- Creating a whole new category of innovation-based high-rewards jobs;
- Revitalizing communities abandoned by the fossil fuels industry, outsourcing and the banking crisis;
- Restoring reason and reliable value to trends in credit, lending and economic growth;
- Securing the nation’s energy economy against carbon-based fuel speculation.
We need to remember that when government works with the private sector to harness the energy and imagination of the marketplace—which includes not only corporate boards but also small businesses, consumers, communities, start-ups and scientists, engineers and policy-makers—we can restore a citizen-centered reason to leading-edge economic activity.
As Doris Kearns Goodwin said this week on Meet the Press, “government is our collective will”. The goal should be for it to work in tandem with the best instincts, talents and imagination people across the economic landscape have to offer.
In the wake of the banking crisis, with banks refusing to carry out market-wide loan modifications, to restore rational balance of value to the lending and home-buying markets, with consumers losing affluence, in real-dollar terms, and businesses afraid to invest in hiring, we need to restore citizen-centered reason to the economic activity that is guiding our course into the future.
A locally-controlled, national cooperative renewables start-up incubator could channel public and private investment, in optimal fashion, into the businesses with the best hope of securing long-term value for our communities and our consumer economy.
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Originally published September 5, 2011, at TheHotSpring.net
The Poet Economist 