Posted on 24-2-2003

Restructuring the Energy Economy
By Lester Brown

WASHINGTON, DC, February 20, 2003 (ENS) - The key to restoring climate
stability is shifting from a fossil fuel based energy economy to one based
on renewable sources of energy and hydrogen. Advancing technologies in the
design of wind turbines that have dramatically lowered the cost of wind
generated electricity to the point where it can be used to produce hydrogen
from water, along with the evolution of fuel cell engines, have set the
stage for a dramatic restructuring of the world energy economy.

The good news is that this shift is under way. The bad news is that it is
not happening nearly fast enough to avoid a climate disrupting buildup in
atmospheric carbon dioxide levels.
www.earth-policy.org/Indicators/indicator5.htm

The burning of each of the three fossil fuels is now either growing slowly
or declining. From 1995 to 2001, the use of oil, the world’s leading source
of energy, expanded by just over one percent a year. Natural gas, the
cleanest and least climate disruptive of the three fossil fuels, grew by
less than three percent a year.

The burning of coal, the dirtiest and most carbon intensive fossil fuel,
peaked in 1996 and has dropped by six percent since then. This historical
peaking, marking the first decline in the use of a fossil fuel, may be
followed by a similar peaking in oil use within the next five to 15 years.

In contrast, renewables, starting from a small base, are growing at an
extraordinary pace. Worldwide, wind electric generation grew by 32 percent
a year from 1995 to 2001. In 2001 alone it grew by a robust 36 percent. And
in the United States, wind electric generating capacity jumped by a
phenomenal 66 percent in 2001.
www.earth-policy.org/Indicators/indicator10.htm

Solar cell sales, growing by 21 percent a year from 1995 to 2001, are
likely to grow even faster in the years ahead. Once economically
competitive only when used in satellites and pocket calculators, solar
cells are now becoming competitive for residential lighting in Third World
villages not yet connected to the grid.

In Andean villages, for example, the monthly installment cost - with a 30
month payment period - on an array of solar cells to provide lighting is
comparable to the cost of candles. A similar price relationship exists for
the more remote villages in India that depend on kerosene lamps for light.
www.earth-policy.org/Indicators/indicator12.htm

Another renewable source, one with a largely overlooked potential, is
geothermal energy, which is growing at four percent a year. This is a vast
resource and one that is likely to figure prominently in the energy
economies of the Pacific Rim, particularly where widespread volcanic
activity indicates that geothermal energy is close to the earth’s surface.

The western coasts of South America, Central America, and North America
have an abundance of geothermal energy. Perhaps the geothermally richest
region is the western Pacific, including Indonesia, the Philippines, Japan,
and the eastern and southern coasts of China. Another rich region is the
Great Rift Valley, which stretches through East Africa up into the Middle
East. In fact, the entire eastern Mediterranean is geothermally well
endowed. Some countries have enough geothermal energy to meet all their
electricity needs.

Hydroelectricity, which supplies over one fifth of the world’s electricity,
has expanded by two percent a year since 1990. In contrast to the other
renewable sources of energy, the growth in hydropower is losing momentum as
suitable sites for new dams are scarce and as public opposition mounts to
large scale inundation of land, the associated displacement of people, and
the disruption of ecosystems.

One of the difficulties in restructuring the energy economy is that doing
so typically depends on small, fledgling industries challenging large, well
established, often heavily subsidized industries. One way to accelerate the
restructuring needed to stabilize climate is to adopt full cost pricing,
requiring that those using energy pay the full cost of doing so.
Fortuitously, the fastest growing fossil fuel is natural gas, which is the
obvious transition fuel from a carbon based energy economy to a hydrogen
based one. The natural gas infrastructure, including distribution networks
and storage facilities, can easily be adapted for hydrogen as gas reserves
are depleted.

As the effects of climate change become clearer, the public’s desire to
avoid extreme climate events will intensify. As this happens, pressure to
raise carbon taxes and reduce income taxes may well rise, providing a
strong economic incentive for energy restructuring.

The new century is bringing new directions in the world energy economy. The
last century was characterized by the globalization of energy as oil
emerged as the leading energy source. Indeed, the entire world became
heavily dependent on one region, the Middle East, for a disproportionately
large share of its energy.

Now as the world turns to wind, solar, and geothermal as the primary energy
sources and to hydrogen as an end use fuel, the energy economy is
localizing, reversing the trend of the last hundred years.


{Lester Brown is president of the Earth Policy Institutute based in
Washington, DC. This article is from “The Economic Costs of Ecological
Decline,” Lester R. Brown, Janet Larsen, and Bernie Fischlowitz-Roberts,
The Earth Policy Reader, W.W. Norton & Co., NY: 2002.
www.earth-policy.org/Books/index.htm}