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Don’t Pin Your Hopes on a “Green” EconomyThe U.S. economic "engine" may not run on renewable fuel |
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| By Steve Balogh in Business, Conservation, Energy, Green Building, Green Living, Hybrids, Peak Oil, Solar, Transportation | July 16, 2008 | ||
Both presidential candidates have stumped for a new “green” economy. To me this smells of the supposed transformation to the “information economy” touted only a decade ago. Fortune had this to say on June 30th:
What senators McCain and Obama believe about U.S. energy policy matters – hugely. To fight global warming, the next President will oversee the transition to a new, green economy , which will result in one of the biggest business transformations of the 21st century and potentially one of the largest transfers of wealth since the creation of the income tax.
(emphasis mine)
Leaders, lauded by environmentalists for jumping on the green bandwagon, have promoted alternative energy technologies, alternative transportation, green homes, etc. It is my belief that these politicians care less about the state of the environment, and more about maintaining the status quo growth of the economy. The manufacturing economy in the 1970’s and 1980’s faced the insurmountable obstacles of higher energy prices, inflation, and globalization of trade, and rapidly declined. While many continue to pin their hopes on the “information age” to continue to propel the US economy – technology stocks remain at less than half their value achieved in the initial boom, US economic growth has been anemic, and job creation minimal. Decoupling of the information economy from the real economy did not take place, and the promises of six figure IT jobs for workers laid off from manufacturing jobs did not pan out. Likewise, I fear the “green economy”, for all of the good that it may do for the environment, will be unable to be the next engine of economic growth.
Why not? The reasons are three-fold. First, the credit crunch. Business start-ups require infusions of capital in the form of business loans and venture capital. If the current trend in business lending continues to worsen, funds will become less available for new businesses, and the higher interest rates may make borrowing unaffordable. The highly technical nature of many “green” jobs and businesses require high start-up costs and a long term commitment. Consumers, too, will find it difficult to finance large investments in personal alternative technologies, home upgrades, or retrofitting without access to cheap home equity loans.
The second factor that will limit the growth of green industries and infrastructure is the consumer’s shrinking pocket book. Electric-hybrid cars like the Chevy Volt promise to dramatically improve fuel mileage and transportation. But at a cost of over $40,000, how many struggling American families will be able to afford these vehicles? Promising alternative energy technologies, like solar electric and geothermal heating/cooling, also require massive up front costs. While never having to pay a utility bill again sounds wonderful, the nearly $100,000 cost to do so (Solar PV + Geothermal) is cost prohibitive. “But surely costs will come down as the technologies are adopted,” you say. Maybe, maybe not. If the cost of energy continues to rise, manufacturing processes and installation costs for solar and geothermal will also continue to rise. Barring a massive government subsidy, these technologies may stay out the reach of many Americans for decades.
These subsidies if enacted would require increased taxation at the federal, state and local level. With the economy on life support, tax revenues declining, and health care costs for aging baby boomers rising rapidly, how else will we pay for such a plan? While I support carbon taxes as a means to reduce greenhouse gases, surely the increased tax burden on consumers will reduce out of pocket spending.
The third factor is our crumbling infrastructure. Today, many cities rely upon water and sewer systems that are over a century old. The electric grid is aging and is incapable of supporting the proposed transition to 25% renewable energy production. Bridges, roadways, and rail system maintenance has been delayed over the years, and will require massive spending to maintain systems. Projects like these require tremendous amounts of energy, and the expense grows each year that they are delayed. The required spending on infrastructure projects will further strain state and local budgets with a resulting decline in available funds for “green” projects. Our national debt is already approaching $10 trillion, a number that is quite unfathomable.
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I don’t want to give the wrong impression, I do favor programs to encourage home retrofitting, public transportation investment, and alternative energy projects. I just worry about the ability of “green” technology to power the entire U.S. economy, given the dire straits we are in. The reduced availability of cheap energy is reverberating through our economy. Any actual shortages of gasoline, heating oil, and diesel would sound the death knell for our consumer driven economy.
Trying to fuel the US economy with “green” initiatives can be likened to trying to run all of our 250 million vehicles on ethanol. Just because the technology exists, doesn’t mean that it is feasible to do so. My advice? When politicians start campaigning on “green economies”, make sure you listen to what they are saying out of the other side of their mouths.
[green jobs pic from here]
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kerry bradshaw said,
What the Chevy Volt will actually cost when it gets into large scale production after two years is a guessing game, but A123 Systems is confident that their battery costs will go down quite a lot. Obviously, an electric car’s greatest cost is the battery, even for a range-extended electric like the Volt. but it clearly will have the most cost effectiveness of all those
upcoming BEV vehicles, which not only are not viable alternatives to a gas powered car, despite the propaganda from certain segments of the green community who are particularly ignorant about such things and mistakenly believe that an all-electric MUST be the greener way to go. In fact, an all-electric means as a side effect that the driver must own and maintain two cars and that for trips that cannot be made with his BEV (which can be as short as 40
miles each way) must be made in an all-gas vehicle, whereas the range-extended electric can
niot only make such trips by itself, but also use a lot of electic mileage along the way, in addition to using a whole lot less fuel. The problem with t he gren community is that they
are almost invaiably really dumb folks. Take the Sierra Club, for example, whose member have blocked nuclear power and thereby caused global warming. Only one of their original founders has admitted that he was mistaken and is trying to push the only viable carbon free method of we have of producing power. Sorry wind meisters, but your primitive, unreliable, unpredictable and impotent means of generating power is now passe and seen as yet another example of the con that greenies have committed in their quest to be earth-saving heroes. Once again, they have spent tons of taxpayers money and accomplished zilch. We are about to start examining closely all green claims with some scientific methods and not believe such things as the lies from greenies about those “100 megawatt” windfarms that will never average more than 20 to 25 megawatts and during critical peak demands, practically none, which means that those windmills can never replace fossil fuel plants and their cost must be duplicated in order to build dispatchable power generators – another expensive side effect the greenies conspire to withhold from public view. We are going to crush all those transparently absurd and primitive and useless technologies that th green morons have been shilling for – like most wave, wind, and useless solar voltaic. I predict that the future of electrical power generation belongs to the PBR nuclear technology now being developed and about to go commercial in South Africa. We may as well start tearing down those hideaous and useless windmills tomorrow. Let’s bill the lying crooks at the Sierra Club for their removal. That would be justice
with a capital “J”. It’s fun ripping green propaganda to shreds, don’t you think? Let’s
hear some response so I can rip you again. What’s a matter? Chicken?
Don’t Pin Your Hopes on a “Green” Economy | Techspedia™ said,
[...] Both presidential candidates have stumped for a new “green” economy. To me this smells of the supposed transformation to the “information economy” touted only a decade ago. Fortune had this to say on June 30th: What senators McCain and Obama believe about U.S. energy policy matters – hugely. To fight global warming, the next President will oversee the transition to a new, green economy , which will result in one of the biggest business transformations of the 21st century and potentially on The Rest Of The Story at Technorati … [...]
tom c gray said,
Anyone who thinks the Volt will cost $40,000 in five years, when it will start to penetrate
beyond the early adopters, should have his head examined. When devices like nanophosphate
li ion large cell batteries go into mass production the prices go down. A123 Systems estimates down by over 50%. That makes the Volt very affordable. Besides, it’s child’s
play to prove that the effect of 1 Chevy Volt will equal 12 Toyota Prius hybirds in
the amount of gasoliine saved. The correct Volt mileage is 280 MPG while commuting,
each 100 Volts needing 9.6 gallons per day’s comuting, while each 100 Prius commuters uses over 70 gallons per day. And if 1/3rd Volts recharge at the workplace, their mileage jumps to over 400 MPG and they use 6 gallons, or about 1/12th as much gasoline as the Prius commuters use. So one million Volts will do the work of 12 million Prius vehicles.
Your giant mistake was in assuming that a Volt wouldn’t have a lot of effect in relatively
small numbers. You are wrong. I wonder if you’ll admit it?
bob said,
It is too bad you do not understand “green technology” any better than the bandwagon jumpers you decry.You premise is wrong, your arguments stilted, and your conclusions “GIGO”.
Properly implemented the green economy will not only run better than a petrochemical economy it will run healthier. People will live richer. Real wealth will replace phony paper assets controlled by the privileged few.
The big problem with the transition is everybody will listen to the same brain dead morons responsible for our current situation. The people who actually know how to smoothly transition us from one to the other with no disruption have been continually discredited by the corporate structure for years.
We can actually take a step up the ladder of cultural evolution while not missing anything except lead poisoning, endemic asthma, widespread obesity (pun intended), and epidemic diabetes.
We can start today, if you have the balls to give up your puerile view of the situation.
Steve Balogh said,
I guess I touched a nerve there. Let me respond to a few things.
@Kerry, easy on the coffee intake buddy.
First on the Volt. Yes, I know it seems like I am picking on GM. But, if you’ve read my earlier posts, I am actually a big fan of both the car and the choice in technology. My singular point for this article is that even I, a supporter of the Volt, environmentalist, and someone who makes a moderate amount of money could not afford that car at $40,000. Other “early adopters” will have to do so for me until the five year window that you speak of, when the battery cost comes down. @tom, I don’t have mpg numbers from GM yet. I am not sure where you received your information. I certainly believe that the Volt will have a impact on gasoline consumption, if it is mass-marketed, available across the US, reliable and affordable. Just keep in mind that there are 250 million other vehicles already on the US streets and highways. Again, not saying we shouldn’t try – but it’s just not as easy as flipping a switch.
@bob, you say “Properly implemented the green economy will not only run better than a petrochemical economy it will run healthier. People will live richer. Real wealth will replace phony paper assets controlled by the privileged few.”
I agree, but here’s the rub, how do you propose we “properly implement” this green economy? If there is a simple “smooth transition” out there, why don’t you link to it? I’d love to read it.
Maybe I’ll turn out to be a Doubting Thomas. That all of our “green” dreams will come true. But responses so far require a healthy dose of faith. Given the way things have been run by the PTB and the poor response of the masses to hold them accountable, I have a hard time believing.
and Bob, I think that I do have “balls” for calling bullshit on the “green economy”. We -will- do many great things in this country. We will implement technology that I can’t even dream of now. Whether that technology can keep our economy buoyed and allow for a smooth transition to a non-consumer based economic system, not based on environmental exploitation, and hydrocarbons remains to be seen.
The Truth About... said,
siouxgeonz said,
Snork… we can all just get that “secret technology” in the banner ads! There’s your green economy and information technology gettin’ together…
T_DeYoung said,
Wow. Such strong positions with some of you….
Personally, I think that we’re going to create jobs needed to build, install and maintain sources of energy that meets demand. I’m wondering how much doubt there is regarding that the mix of new sources of energy will have less of an environmental impact than the mix of past new sources. The trend is suddenly toward energy independence and clean energy. I think that is a good thing.
While I won’t argue one way or other that this is going to transform the economy, I will say that current trends are an opportunity for business and workers and my opinion is that this is a good thing. I might even go so far as to say that I’m excited about the future in those regards.
How about some optimism? I have plenty!
Richard Millington said,
I generally agree, but not on all points.
There will be massive opportunities in the green sector. Those that learn the key skills, or have the right educational background will be able to take advantage of it.
In the UK we’re already seeing a rapidly rising number of vocational courses in installing solar panels, and learning how to help homes generate their own electricity.
The bigger problem might be retraining people that are most likely to do this work. Those that might lose their jobs in the ‘old’ economy, need to be convinced, and feel happy, to retrain for jobs in the greener economy. That’s going to generate some pretty tough resistence.
drivin98 said,
little late to this party, but just so you know, the first two commenters are actually the same person. He also posts comments under his actual name, “Kent Beuchert”. Go ahead and Google the names and you’ll find literally thousands of similar comments on articles mostly about electric cars.
Utility Warehouse said,
Just had a solar panel added to my roof here in the UK, it’s really great and feel good that I’m doing my ‘green’ bit!