Why to RAMP UP renewable energy when gas prices are low....

Today’s post: Wednesday, 1-2-2009

1. We didn’t see the risks in the real estate lending industry’s high risk lending style and how they thought they had passed it on to third parties.

Then after these practices had become so widespread they involved much of the banking industry and an even bigger percentage of the real estate lending industry, something pushed the first domino or two in the row and our credit markets collapsed or very nearly did.

This has caused many people a good bit of pain and stress, even driven some to suicide.

It very probably was mostly avoidable.

But now the incoming administration will print money and try to do the things that will be effective in fixing it—both preventing it in the future and helping our economy recover to where it should have been at that time.

2. In many parts of the United States and the world, now that renewable energy is less directly competitive with burning fossil fuels, the adoption of renewable energy and enthusiasm has slowed.

It’s imperative if we want to avoid an economic collapse that would make the current one look easy & mild by comparison to RAMP UP renewable energy even MORE—NOT less now.

Here’s why.

a) The world’s economy will likely return to good health. And that economic growth will bid the cost of energy back up even higher than it was a few months ago. Over the decades after that more economic growth per capita and population growth will happen to keep the demand for energy high and climbing.

b) But, that can only happen if we have more energy to supply the demand. And, fossil fuels are running out. So most people in the world will become poorer if we don’t bring on-stream enough energy to supply the increasing demand at a reasonable cost.

(We will probably add some nuclear power to the mix & perhaps we should. But we should ONLY do so if we manage the risks of doing that to a failsafe level which means that governments will need to subsidize those costs to make nuclear power even close to economically viable price-wise. And, the likelihood that this risk reduction will be badly underfunded instead makes this a MUCH less safe alternative to renewable energy.)

c) Since fossil fuels are running out and only available in some places, continuing the current system that relies only on fossil fuels runs the risk of sudden and near total discontinuation of supply. So it is totally imprudent to rely only on fossil fuels while not realizing we are gambling with total economic collapse.

d) We likely already have passed the point of CO2 release from burning fossil fuels where we will have large scale economic costs because of global warming. And, particulate air pollution from burning coal and not adequately filtering the smoke is already causing health harm and costs and harm to agriculture in many parts of the world.

When you add all this up, it means that if we want to have prosperity and economic growth instead of economic collapse or economic decline and world wide increases in poverty, we need to MASSIVELY INCREASE our investments in adding renewable energy and energy efficiency infrastructure to our economy—worldwide.

That also particularly true and important for the United States.

We are the world’s largest economic power and will be one of the largest for many years to come. If we do a good job and lead in this area, the rest of the world will likely follow and add some good technologies not invented here.

But the rest of the world cannot get the job done without us and may do too little if we continue to do as little as we have been.

So, since these things are the case, it seems me that while energy prices for fossil fuels are temporarily too low and renewable energy now is less cost competitive than it should be, to get the progress we need will take very strong assistance from the federal government here.

The good news is that the incoming administration of Barack Obama already sounds like it will invest some of its economic stimulus package into increasing renewable energy and energy efficiency in addition to repairing infrastructure and tax relief.

My hope is that once they do what they already plan that they examine what investments in renewable energy and energy efficiency have worked best or will at that time; & then do a second round of economic stimulus aimed only at investments in renewable energy and energy efficiency.

My concern is that we might easily have even worse economic problems if they do not do both these things well.