Energy Policy for the Coming Decades: Renewables and Energy Efficiency

Summary.  Global warming continues to proceed unabated, producing more, and more severe, extreme weather events.  These include heat waves, drought, floods, forest wildfires and beetle infestations of stressed forests.  These events cause major personal, physical and economic harms to society.  Seeking to minimize the further emission of greenhouse gases originating from the burning of fossil fuels, we should install renewable energy sources and develop energy efficiency practices.  In this post we summarize the contents of several previous posts that have presented various aspects of these subjects.  The benefits of renewable energy and energy efficiency projects include reducing greenhouse gas emissions, reducing dependence on foreign sources of fossil fuels, helping stabilize the atmospheric CO₂ concentration, lowering the rate of worsening of extreme weather events, rapid payback from energy efficiency projects, and significant job creation.  The U. S. should develop national policies and practices to implement renewable energy and energy efficiency as rapidly as possible.

Introduction. Long-term global average temperatures have been increasing at a growing rate since the beginning of the industrial revolution because of the increasing rate at which humans have been burning fossil fuels to drive machines and technologies.  All fossil fuels produce carbon dioxide (CO₂) when they are burned.  CO₂ is a powerful greenhouse gas that traps a part of the heat that would ordinarily be radiated from earth back out to space, retaining that heat in the earth’s atmosphere.  Although CO₂ has been part of earth’s atmosphere for millions of years, the additional CO₂ accumulating from mankind’s activities has led to a greater amount of heat being retained in our atmosphere, producing global warming. 

Energy use in the U.S. has been growing in recent decades (except during the recent Great Recession) and is predicted to continue expanding in coming decades.  To the extent that that growth is powered by fossil fuels, our CO₂ emissions likewise will continue to grow. 

Global warming has been directly correlated with destructive extreme events in the U. S. and around the world, because increased atmospheric temperatures make climatic and weather events worse.  Extreme weather events in the U. S. include droughts, floods, and wildfires coupled with forest beetle infestations. 

Organization of This Post. In this post we integrate material from several earlier posts.  They are identified further below in the Details section by reference number in the first table, and then summarized by their reference numbers in the following tables. They present analyses of first, harms and damages inflicted by extreme weather events whose severity is at least partly due to global warming, second, the benefits to be gained by undertaking renewable energy projects with comparable investment costs, and third, the benefits to be gained by implementing increased energy efficiency.

Analysis and Conclusions. 

Harms and damages from extreme weather events. The damages brought about by extreme events induced by global warming represent one side of a coin characterizing global warming.  Anecdotes in References 1, 2 and 3 provide anecdotal examples of extreme weather events that have led to severe harms, major economic costs from damage and extensive societal displacements.  Most, but not all the examples are localized in the U. S.   One that is not relates to the extensive and prolonged heat wave covering western Siberia, Russia and eastern Europe.  Attendant harms included decreased wheat harvests whose effects were ramified around the world, leading to increased commodity prices for wheat during that season.  Another study concluded that worldwide, yields of wheat and maize (corn) have decreased from 1980 to 2008.

In the U. S., drought has worsened the frequency and severity of forest wildfires.  Drought has also worsened infestations of western forests by pine bark beetles, to an extent three times greater than destruction by wildfires.  River floods have also worsened in recent years.

Reference 6 documents various estimates nation-wide of direct and indirect economic damage arising from drought, wildfires and floods in the U. S.  The costs amount to several billion dollars from each type of event, in any given year.  Hundreds of human lives have been lost, major property damage has occurred, and economic activity in affected areas has been negatively impacted for considerable periods of time after the event because properties and other physical facilities have been destroyed.  A major factor in considering the harms from these extreme events is that they are not predicted in advance, and so plans for countering them cannot be programmed or budgeted by governmental authorities.  Rather, expenses of reacting to these events must be found on an emergency basis, frequently resulting in unscheduled increases in taxation.

Benefits of renewable energy and energy efficiency.  The reverse side of the global warming coin relates to projects and practices implementing renewable energy and energy efficiency (REEE) that reduce greenhouse gas emissions. Reference 4 describes several anecdotal examples of recent and planned projects that develop wind energy, and both photovoltaic and thermal solar energy.  These examples show that large scale electric generation projects cost up to US$5-6 billion, create 1,000-1,500 jobs during construction for each, and about one-fifth that number during operation.  The projects provide electricity at competitive rates, when calculated over the full life cycle of the projects.

A comprehensive nation-wide analysis of renewable energy generation for the U. S. as a whole is presented in Reference 5.  Many millions of jobs are predicted to be created under an assumption, for example, that 40% of electric generation will be from renewable sources nationwide by 2030.  In California from 1972-2006 an energy efficiency program has led to US$56 billion in savings, and created about 1.5 million jobs.  Future development of land-based and offshore wind energy in the U. S. should create more than 1 million jobs, while providing electricity at competitive rates.

In a letter to the editor of the New York Times published Sept. 14, 2011, David Foster, executive director of the BlueGreen Alliance, notes that US$93 billion devoted to environmental projects through the American Reinvestment and Recovery Act saved or created just under 1 million jobs.  This represents roughly US$100,000 per job, which appears to be an excellent macroeconomic return for the invested funds.  The projects ranged from new environmental manufacturing to an efficient power plant for a factory, to mass transit and energy efficiency retrofits.  These data show that investment in renewable energy and efficiency projects provide major benefits to the energy economy, and to the national economy.

The reverse side of the coin also entails energy efficiency programs, such as those described in References 7 and 8.  Implementing efficiency practices can reduce (greenhouse gas-producing) energy use by up to 30% by 2030, according to the U. S. National Academies.   Energy efficiency projects typically are effective enough that the cost of the project is recovered through savings on energy expenses in very short times.

Benefits of REEE projects.  Developing REEE projects provides significant economic and societal benefits, which are exact opposites to the harms created by global warming and extreme weather.

• Greenhouse gas emissions are reduced.  This blog has pointed out that our atmosphere is like a CO₂ bathtub whose faucet continues to deliver more CO₂ (from burning fossil fuels), but whose drain is essentially closed.  This builds up more and more CO₂ in the atmosphere, making global warming worse.  CO₂ remains in the atmosphere for at least 100 years, so it is imperative to bring emissions as close to zero as soon as possible, in order to stabilize atmospheric CO₂ at a level that keeps global warming as low as possible.  Developing REEE helps accomplish this.
• When balanced, society’s emergency expenditures necessitated by responding to extreme weather disasters are comparable to society’s investments in REEE.  We the world over need to stabilize the CO₂ bathtub in order keep extreme weather events from getting much worse.  The analyses in our previous posts, summarized here, make it very clear that preventing losses totaling many billions of dollars a year in the U. S. can effectively “pay” for the REEE projects that contribute to stabilizing atmospheric CO₂ at as low a level as possible.  It is important to realize that merely lowering the rate of emitting new greenhouse gases still raises the level in the CO₂ bathtub.  Rather, the world needs to strive toward near-zero emissions.
• Developing REEE creates large numbers of jobs in both construction (short-term) and operation and maintenance of facilities (long-term).  This is highly beneficial to the economy of the U. S.
• The physical, economic and societal harms arising from extreme weather events should be minimized as a result of developing REEE.  Loss of life, property losses, forest and agricultural losses, indirectly affected economic activity and psychological distress should remain smaller.
• Developing REEE is done with planning and programmatic foresight.  This contrasts with the need for emergency responses to extreme weather events which cannot be predicted in advance.
• Renewable energy delivers electricity at a lifetime cost for a project that is comparable to current prices for electricity generated from fossil fuels.
• Energy efficiency projects and programs pay for themselves in relatively short time periods.
• Developing REEE should reduce or eliminate the dependence of the U. S. on imports of fossil fuels from abroad.

For at least these reasons, the U. S. should develop national policies and practices to implement REEE as rapidly as possible.  The goal has to be to reduce emissions of greenhouse gases to near zero as rapidly as possible.

Details.

Earlier Posts on Global Warming Blog. Reference will be made here to the following earlier posts, using the numbers shown:

Reference	Linked Post Title
1	Decreased Worldwide Crop Yields Are Tied to Global Warming
2	Extreme Wildfire Events and Global Warming
3	Economic Costs of Extreme Weather Events Due to Global Warming
4	Economics of Renewable Energy
5	Expanded Employment and Economic Activity from Renewable Energy
6	Estimated Costs of U.S. Extreme Weather Events
7	Energy Efficiency in Public Buildings: The “Low Hanging Fruit” of Mitigation
8	Energy Efficiency: A U. S. National Academies Report

Anecdotal Documentation of Extreme Weather Events From Around the World.  Floods, droughts and extremes of hot weather have plagued regions of the world in recent years.  The frequency and/or severity of these events are greater than in earlier years, say, at times more than fifty years ago.  Here we summarize events discussed in earlier posts, in tabular form.

Refer-ence	Event and Characterization	Economic Damage
1	Worldwide production of staple crops over the period 1980-2008, using data from 1960-2000 as a reference. Yields of maize and wheat declined by 3.8% and 5.5%, respectively.  Rice and soybean yields not affected.	Average commodity prices predicted to increase by between 6% and 19%.
1	The total amount of CO2 taken up worldwide by green plants, and converted into vegetable matter, was tracked from 2000 to 2009.  The total CO2 taken up declined by about 1% as the global average temperature increased.	Potentially threatens global food security and future biofuel production. Weakens the ability to absorb additional CO2 that arises from burning fossil fuels.
2	After the mid-1980’s the frequency of wildfires in the western U.S. was 4 times greater than the average frequency from 1970 to 1986.  The total area consumed was more than 6 ½ times greater.  Higher temperatures during spring and summer correlated highly with the frequency increase. The season for reported fires also grew longer by more than 2 months. Projections of future warming due to increased greenhouse gases reinforce the recent trends of more and larger forest wildfires.
3		Expenditures by the U. S. Forest Service for fighting wildfires grew to over $2 billion per year by 2008.
3		Extended direct, indirect and societal losses from wildfires continue to accumulate after they are extinguished.  They may grow to many times the immediate suppres-sion costs.  Two examples from 2000 and 2003 are US$1 billion and US$1.3 billion.
2	Up to 18% of U.S. southwestern forests were lost from 1997 to 2008, about one-fourth to fires and the remainder to bark beetle infestations. These losses are due to the extreme conditions of aridity and high temperature that prevailed over this period, and correlate with predictions of a climate model. The model predicted future forest between about 15% to 45% decrease in growth in the period 2050-2099 compared to the period 1950-1999.
3	Massive flooding in Pakistan in 2010 caused losses including 1,980 deaths and over 100,000 farm animals lost.  The flooded area totaled more than 100,000 square km (38,600 sq. mi).  The flood impacted the lives of more than 20 million people.  1.6 million homes were lost, and flooding of agricultural lands lasted several months.  At least one season’s worth of seed was destroyed. Indian climate scientists have documented an increasing frequency of extreme rainfall events, and a decreasing frequency of moderate events, over India between 1951 and 2000, as the globe has been warming.	Estimated damage, relief, recovery, and reconstruction costs, if converted to the comparable purchasing power in the U.S., amount to US$200 billion.
3	A large area of Russia experienced extreme heat in the summer of 2010.  The central zone affected experienced 7 day temperatures higher than the average for the period 1970-1999 by about 10-12ºC (18-22ºF); a larger zone, extending from France well into Siberia was about 6-7ºC (11-13ºF) higher.  This heat wave probably broke 500 year temperature behavior.  A climate model incorporating increased atmospheric greenhouse gases predicts that “mega-heatwaves” are 5 to 10 times more probable than in the past over the coming 40 years.
3	The extreme temperature trend across Russia detailed in the previous entry caused a drought that severely decreased its wheat crop during 2010.  The crop failure amounted to one-third of the normal harvest.	Direct crop loss estimated at $8.1 billion.  Worldwide staple food prices increased. Price of wheat rose by US$100 per metric ton.

The following table focuses only on the U. S. The full national costs from classes of extreme weather in recent years are summarized.  These costs are borne by both the federal government and the private sector, in areas such as the insurance industry, reconstruction and lost economic activity.

Refer-ence	Source in the U. S. of Loss and Damages	Human Losses and Economic Damage, US$ millions
6	Wildfires, 2000-2010	Depending on year, 0 to 19 deaths; US$20 million to US$2.8 billion damages; up to 10 million acres burned.
6	Forest destruction by pine bark beetles	3x greater than losses from wildfires. Colorado and Wyoming have lost 3.5 million acres. In 2003 more than 10 million acres were lost.
6	Drought, 2000-2010	Depending on year, Property damage as high as US$774 million; Crop damage as high as US3.1 billion; Other estimates as high as US$6.2 billion for 2006.
6	Drought, 2011	Commodity price increases from July 2010 to July 2011 as high as 84% for corn; Commodity food price index 25% higher.
6	River floods, 2000-2010	Depending on year, As high as 103 deaths for 2010; Property damage as high as US$3.9 billion; Crop damage as high as US$2.3 billion; Other estimates as high as US$15 billion total damage for 2008.

Global warming contributes to the worsening of extreme weather events.  Depending on the region of land, there can be an increase in temperature accompanied by greater aridity, leading to drought and increase in wildfires and beetle destruction, or an increase in the moisture content of the air leading to increased precipitation that cause major flooding to occur.

By replacing fossil fuels as sources of energy with renewable energy sources, it is possible to minimize the continued release of greenhouse gases into the atmosphere.  The following table presents some anecdotal examples of renewable energy projects, including information on overall investment costs and beneficial creation of new jobs.

Refer-ence	Renewable Energy Technology	Cost of investment; effect on employment
4	Wind energy	Dramatic increase in installed capacity, reaching 35,000 MW in 2009. Employed 85,000 people in the U.S. in 2009. Levelized cost for wind-generated electri-city was US$0.05-0.06/kW-h as of 2005.
4	Solargen photovoltaic (PV) energy project	250 MW expandable to 1,500 MW. Project cost is US$750 million.
4	U.S. Department of Energy guarantees 3 PV solar projects	Guarantees US$4.5 billion. Expect 1,330 MW capacity; Expect 1,400 construction jobs.
4	Blythe thermal solar power project.	Capacity is to be 1,000 MW; Cost estimate US$5-6 billion; Over 1,100 construction jobs for 3 years; 220 permanent operations jobs.
4	Nine other thermal solar projects in California	If approved, 4,300 MW capacity; 8,000 construction jobs; 1,000 operations jobs

The table below summarizes analyses of nationwide expenditures and economic benefits that have been estimated for implementing renewable energy capability in the U. S.  The achievements shown were accomplished without economic incentives such as a tax on carbon use or a cap-and-trade penalty system.

Refer-ence	Renewable Energy Technology	Cost of investment; effect on employment
5	Meta-analysis of job creation by renewable energy, 2009-2030	Assuming a 40% renewable portfolio standard, estimate over 4 million new full time job years over this time; 0.76% per year improvement in energy efficiency adds 3 million new full time job years.
5	California’s energy efficiency program 1972-2006	Per capita electricity use remains constant while U. S. nationwide use increases 40%; Households saved US$56 billion; About 1.5 million full time equivalent jobs were created, having a payroll of about US$45 billion; For every job lost in fossil fuel energy, 50 new jobs created in the California economy.
5	California’s AB 32, the Global Warming Solutions Act, mandates renewable standards by 2050	California’s economy will increase by about US$76 billion; Household incomes will increase by up to US$48 billion; About 403,000 jobs in efficiency and other fields related to climate action will be generated.
5	Land-based wind energy	Jobs in wind energy could expand from 85,000 workers to as high as 1,275,000 jobs by 2030.
5	Offshore wind energy	Adding 54 GW of offshore wind to U. S. generating capacity by 2030 would create US$200 billion of new economic activity, including the creation of 43,000 new permanent direct jobs; Cost of electricity would be US$0.10/kWh by 2020, and US$0.07/kWh in 2030
5	Solar energy	93,500 workers as of Aug. 2010, adding 26% more in 2011

Energy efficiency.  In addition to renewable energy sources, implementing energy efficiency measures offers significant opportunities for reducing emissions of greenhouse gases.  Examples are included in the following table.

Refer-ence	Energy Efficiency Measure	Cost of investment; effect on employment
7	Energy Service Companies (ESCOs) retrofit of existing government, commercial and residential buildings	$40 billion in projects since 1990; $50 billion savings in energy costs; 330,000 person-years of direct employment; and 420 million tons of CO2 not emitted.
7	According to McKinsey and Co., about $550 billion worth of energy renovation work on public buildings can be found in the U. S.
7	Significant energy savings are realized immediately, resulting in short payback periods.	Reduced energy and maintenance costs provide 30-35% savings
7	ESCOs participate directly in the funding and guarantee that the completed project will afford the anticipated savings.	Avoids need for bonding authority. ESCOs participate in risk burden of financing. Net savings may be applied for other purposes, including support for additional efficiency projects.
8	The U. S. National Academies report, “Real Prospects for energy Efficiency in the United States” shows how energy efficiency can make significant contributions to reducing emissions of greenhouse gases by 2030.	Reduced emissions can be achieved in residential and commercial buildings, in the transportation sector, and in industrial processes. By 2030 the energy savings could be 26-30% below the usage forecast without efficiency measures in place. Technologies to achieve significant gains in energy efficiency exist at this time, or will shortly become practical. For electricity, the energy savings that can be achieved are large enough to reverse the need to install new generating facilities.

© 2011 Henry Auer