"It's the best summation of humanity's converging ecological problems and the best roadmap to sovling them, all in one compact package." —David Roberts, Grist on Plan B 4.0: Mobilizing to Save Civilization.
Chapter 9. The Accelerating Transition
The energy economy that is now powered largely by coal and oil will be powered increasingly by solar and wind energy. During the last century the world relied heavily on coal mines and oil fields. This century is witnessing a shift to renewable energy.
Several forces are converging to advance this great transition. Economically, it is being driven by the falling costs of renewables. Technologically, it will be fostered by the ability to run vehicles on electrons instead of hydrocarbons. Socially, there is strong and growing public opposition to coal and nuclear power. And geologically, there are increasing limitations on the easy extraction of carbon-rich fossil fuels from the ground. These forces, coupled with limits on how much carbon the atmosphere can hold without the planet warming into a dangerously erratic climate regime, are presenting a challenge unlike any civilization has faced before. 1
The transition has many players. They include environmental groups, leading universities, forward-looking corporations and governments, and a committed collection of savvy investors. We are all stakeholders. In the broadest sense, everyone who breathes cleaner air, drinks cleaner water, and benefits from a more stable climate will come out on top as the energy transition proceeds.
Rapid change is becoming a way of life. The very geography of the energy economy is changing. In the old one, the world was heavily dependent on oil, much of it concentrated in a few countries in the Middle East. For many importing countries, energy supplies were half a world away. 2
This century, as the world shifts to solar and wind, the energy economy is localizing. Our power source can be as close as the roofs over our heads. Instead of a small group of corporations and countries producing and controlling most of the world’s energy, people everywhere will be in the energy business, meeting their own energy needs with solar panels.
Like any major transition from one era to another, there will be winners and losers. From a business vantage point, the companies that manufacture and install solar panels and wind turbines are expanding rapidly. For example, the market for solar panels is growing at a staggering 50 percent a year. As photovoltaic (PV) prices continue to fall, electricity markets are being turned upside down. In more and more places, electricity from solar panels is beating the average grid cost of electricity—and even coming in at half the cost or less. Old energy sources like coal are starting to lose out. As Amory Lovins of the Rocky Mountain Institute puts it, “Ordering new coal plants in the face of renewable mandates and emerging carbon trading is akin to buying up carriage-makers just as automobiles began to relieve London's horse-manure crisis.” 3
The great transition involves changes within cities. This will mean a shift away from the near-total dependence on car ownership that dominated life in industrial countries over the last century, particularly in the United States. The focus instead will move to car sharing, bike sharing, and walkable communities. Smart urban transport planning everywhere will focus on people instead of automobiles, systematically expanding not only the use of buses, subways, and commuter rail but also bike lanes, sidewalks, and bike and pedestrian trails.
As the need for cars diminishes and the world automotive industry shifts from internal combustion engines to electric motors that are three times more efficient, the market for oil will shrink. The pipelines that once linked oil fields with refineries will one day be worthless. Oil refineries will dwindle as the older, less-efficient ones are closed first. The corner gas station will be replaced by a battery recharging station for electric cars. 4
Government policies are still an important component of the energy transition. Governments have used several basic policy instruments to support the move to carbon-free renewable sources of energy. One is the feed-in tariff (FIT), which typically guarantees renewable energy producers—from rooftop solar owners to large-scale wind farm operators—grid access and a long-term purchase price for their electricity. By the start of 2014, some 70 countries, including many in Europe, were using FITs to encourage investment in renewables. In India, there are 14 state-level FITs in addition to a national one. Gujarat’s feed-in policy, a prime component of its broader Solar Power Policy that went into effect in 2009, has helped crown it as India’s leading solar state—with enough PV capacity as of early 2014 to power 825,000 Gujarati homes. 5
Another government measure is to mandate that a certain amount of electricity generation be from renewable sources. Called renewable portfolio standards (RPS) or quotas, these policies are in place at the national level in some two dozen countries. More than 50 states and provinces in various parts of the world have them as well, including 15 states in India and 29 states plus the District of Columbia in the United States. Iowa, which now gets more than 25 percent of its electricity from the wind, in 1983 enacted the first RPS anywhere in the world. 6
RPS policies in the United States generally require utilities to get anywhere from 10 percent to 40 percent of the electricity they sell from renewable sources, with California and Hawaii at the upper end of that range. In his early 2015 inaugural address, Governor Jerry Brown proposed that California strive to increase its renewables mandate from 33 percent by 2020 to 50 percent by 2030. 7
Tax credits are also used to support deployment of wind and solar power. U.S. wind power installations historically have soared in years when there was a wind energy production tax credit of a couple of cents per kilowatt-hour—and plummeted when Congress allowed the tax credit to lapse. And for solar power, an investment tax credit worth 30 percent of the installed cost of a residential or commercial rooftop system has helped spur the recent rapid spread of PV. Some 36 other countries also have national production or investment tax credits for renewable energy. 8
Such pro-renewables policies help level the playing field with artificially cheap fossil fuels that have been subsidized long past their debuts on the energy scene. The energy transition would be supercharged by systematically putting a price on carbon to convey more accurately the true social and environmental costs of burning coal, oil, and natural gas. 9
Done right, pricing carbon sends a powerful market signal and guides decisionmakers toward more-sustainable choices. Imagine the effect of incorporating fossil fuels’ full costs to society in fuel prices. From the marring of landscapes to water and air pollution and climate change, we know that fossil fuel reliance is extraordinarily costly. 10
Putting a price on carbon can involve implementing a carbon tax, a cap-and-trade system, or a combination of the two. With cap-and-trade programs, regulators set a limit on emissions, and polluters can either reduce their emissions or buy emissions permits on the carbon market. The market sets the price. 11
A carbon tax, in contrast, is a far simpler instrument: a tax on each ton of carbon dioxide emitted. It could be applied at the wellhead or mine or at the point where fossil fuels are processed or used. Revenue from a carbon tax can go toward environmental, clean energy, or efficiency programs, can be offset by a reduction in taxes on labor, or can be returned to consumers directly via a dividend. A means of returning money to people helps ensure that most families, particularly lower-income ones, end up better off financially with the carbon tax than they were before. 12
Carbon taxes are widely endorsed by economists as a way to correct a market failure. N. Gregory Mankiw, who was Chairman of the Council of Economic Advisors under George W. Bush, writes that “cutting income taxes while increasing gasoline taxes would lead to more rapid economic growth, less traffic congestion, safer roads, and reduced risk of global warming—all without jeopardizing long-term fiscal solvency. This may be the closest thing to a free lunch that economics has to offer.” Writing in the Financial Times in early 2015, former U.S. Treasury Secretary Lawrence Summers advocates a carbon tax in the United States, starting at $25 per ton of carbon dioxide (CO2) (about 25¢ per gallon of gasoline), with revenue split between infrastructure improvements and labor tax credits. 13
Some 40 countries have either implemented or are planning national carbon pricing mechanisms, according to a May 2014 World Bank report. They typically target one or more economic sectors; the power and industrial sectors are nearly always included. The Bank counted a further 23 subnational jurisdictions pricing carbon. Seven regional cap-and-trade pilot programs are already under way in China, for example. When China rolls out its planned national cap-and-trade program in 2016, roughly a quarter of global carbon emissions will then be priced. 14
Critics often warn that carbon taxes and cap-and-trade systems will be an economic burden, but examples to the contrary abound. Ireland set a carbon tax on natural gas and oil consumption in 2010, covering roughly 40 percent of national greenhouse gas emissions. By 2013, emissions had dropped by some 6 percent, even as the economy grew. In May of that year, Ireland expanded its carbon pricing to include peat and coal. Former Energy Minister Eamon Ryan summed up the situation: “We just set up a price signal that raised significant revenue and changed behavior. Now, we’re smashing through the environmental targets we set for ourselves.” 15
The province of British Columbia in Canada implemented an economy-wide carbon tax of $10 per ton of CO2 in 2008, rising to $30 per ton by 2012. By design, the tax is revenue-neutral: cuts in other taxes, such as income and business taxes, offset the rise in fossil fuel prices. Since the carbon tax went into effect, British Columbia’s per person consumption of gasoline and other petroleum products has declined 15 percent—three times the national rate—while its economic growth has kept pace with the rest of the country. 16
In the United States, data through 2013 show that the nine northeastern and mid-Atlantic states belonging to the Regional Greenhouse Gas Initiative (RGGI) cap-and-trade program reduced their power sector emissions 18 percent since the system was launched in 2009. Over the same period their collective economic growth outpaced the other 41 states, where emissions fell just 4 percent. If the RGGI states continue to spend most of the revenue from pollution permit auctions on efficiency measures, they could reap a net economic benefit of $8 billion by 2020. 17
Indeed, investing in energy efficiency is generally a good economic bet. While it is exciting that wind and solar power are increasingly cost-competitive with fossil fuels and nuclear power, it is generally cheaper to invest in energy efficiency than to build new generating capacity. The International Energy Agency reports that in 2011, efficiency gains since the 1970s in 11 of its member nations—including Australia, Japan, Germany, and the United States—saved those countries more than $740 billion in avoided energy costs. 18
There is an enormous potential to reap substantial energy savings in each of the major energy-consuming sectors: lighting, buildings, appliances, industry, and transportation. For example, about 20 percent of global electricity consumption goes to lighting. If all the world’s lightbulbs were switched from traditional incandescents to compact fluorescents, which use 75 percent less electricity, some 270 coal-fired power plants could shut down. This shift is already starting. Going further, replacing incandescents with LEDs (light-emitting diodes) can reduce electricity use by up to 90 percent. For perspective, replacing a single 100-watt incandescent bulb with an LED can save enough energy over the bulb's lifetime to drive a Toyota Prius hybrid-electric car from New York to San Francisco. 19
The world’s most dynamic system for upgrading efficiency standards is Japan’s Top Runner Program. In this system, which was introduced in 1999, the most efficient products marketed today set the standard for those sold in the future. Companies have 3–10 years to comply once a new standard is set. Depending on the technology, products have seen efficiency improvements of anywhere from 22 percent to 99 percent. Between 2005 and 2010, for example, refrigerators sold in Japan became 43 percent more energy-efficient. As of late 2014, some 30 product categories were subject to Top Runner standards, including air conditioners, computers, household appliances, industrial motors, lighting, and even light-duty cars and trucks. With the Top Runner Program continuing a decades-old commitment to energy efficiency in Japan, it is no wonder that consumers the world over associate Japanese automotive, appliance, and electronics brands with efficiency. 20
Some national governments are planning major changes to reduce fossil fuel use. India, for instance, wants to replace 26 million rather inefficient diesel- or grid-powered irrigation pumps with solar-powered pumps, potentially saving the government billions of dollars in fuel and electricity subsidies. The plan would require farmers to switch to highly efficient drip irrigation systems to qualify for the program, meaning that both fossil fuel and water use would drop. It is expected that these pumps will pay for themselves in one to four years. This massive prospective shift to carbon-free and water-efficient irrigation pumping is yet another building block in the new world energy economy. 21
The Indian government is also prodding several state-owned companies, including some in the fossil fuel and hydropower industries, to invest in solar power projects. Deploying large amounts of solar capacity will further reduce the cost of solar power through economies of scale. One of these companies, Coal India, which mines more coal than any other firm in the world, committed in late 2014 to set up 1,000 megawatts of solar projects in Andhra Pradesh, Telangana, and elsewhere. The agreement was signed with another state-owned firm, Solar Energy Corporation of India, which will build, operate, and maintain the plants. 22
Even oil-exporting Saudi Arabia, a desert country of 29 million people, is planning to harness its wealth of solar radiation in a big way. If the 41,000 megawatts of PV and solar thermal power plants that are operating, under construction, and planned were online today, Saudi Arabia could generate up to two thirds of its electricity from the sun. 23
Some European leaders in the energy transition are looking to go even further. Denmark, getting 39 percent of its electricity from the wind as of 2014, aims to bring this share to 50 percent by 2020. By 2035 all electricity and heat in that country should come from renewable sources. And by 2050 the goal is for all energy, including that used for transportation, to be renewable. In Scotland, a net exporter of electricity, renewable sources account for some 30 percent of electricity generation. The target for 2020 is for renewables to generate the equivalent of 100 percent of Scotland’s electricity usage. 24
Ireland, now generating 17 percent of its electricity from wind, plans to get 42 percent from renewable sources by 2020, mostly wind power. Europe’s largest economy, Germany, plans to increase its renewable electricity share from some 25 percent in 2013 to at least 40 percent in 2025. By 2050, Germany wants this to reach 80 percent. 25
Many cities are establishing their own ambitious goals for renewables—setting an example for national governments to move more boldly to phase out fossil fuels. San Francisco, for example, plans to get all its electricity from renewables by 2020 while it also moves to a zero-waste economy. Wellington, New Zealand, wants to get at least 78 percent of its electricity from renewables by that year. Munich, Germany, is aiming for 100 percent by 2025. Paris is planning to meet 25 percent of its total energy demand with renewables by 2020. 26
States are also propelling the energy transition. In Germany, four states now get half or more of their electricity from wind energy. Within the United States, Texas, California, Iowa, and South Dakota are providing wind power leadership. Japan’s Fukushima prefecture, still recovering from the 2011 nuclear meltdown, has pledged to get 100 percent of its electricity and heat from renewables by 2040, partly by developing 1,000 megawatts of offshore wind capacity. 27
As of mid-2014, three provinces and three major cities in China have voluntarily committed themselves to reversing history by substantially reducing coal consumption by 2017. These include a 19 percent drop for Tianjin, 21 percent for Chongqing, and 50 percent for Beijing. These cuts could help China achieve its national goal of capping coal use by 2020 even sooner than that. 28
Although the planned reduction in coal use in China is both huge and unprecedented, the shift has rather obvious origins: the sheer effect of air pollution. For many—including the elderly, small children, and those with respiratory and cardiac illnesses—the pollution is so intense that breathing is literally life-threatening. Beijing has suffered through several major instances when pollution levels soared well beyond the margin of safety, termed “airpocalypses” by the media. As data on air pollution have become more widely available on the Internet, pressure for reducing coal use has intensified. Greenpeace China sums it up: “Citizens have started to demand a quality of life that cannot be measured in money—cleaner air and a healthier future for their kids. How long it will take to achieve truly clean skies in Chinese cities will be influenced by these agents of change.” 29
Tired of living in cities where breathing is dangerous, people from all walks of life in China are demanding change on the energy front. China is now also getting a wakeup call from the market. New regulations designed both to improve air quality and stabilize climate are making it more difficult for coal burning to continue in a business-as-usual fashion. The South China Morning Post reported in July 2014 that financial bonds tied to China’s coal mining industry were facing the prospect of default as coal use slows down. 30
Some banks are waking up to the fact that getting involved in the energy transition can yield strong returns. Large investment institutions, such as Morgan Stanley and Goldman Sachs, are channeling tens of billions of dollars into renewable energy. Stuart Bernstein, who coordinates Goldman's investment in this area, talks about “a transformational moment in time” as renewable energy takes off. Thinking long-term by investing in the transition to a cleaner energy future, he says, “will be important from a societal perspective, and it will be good business for us and our clients.” 31
The commitment of several billionaires to carbon-free energy is a promising driver of the energy transition. Warren Buffett, the wealthiest member of this group, had invested some $15 billion in the development of solar and wind energy by early 2014. This includes a giant solar complex in California that will be the world’s largest when completed in 2015. In June 2014, Buffett announced, “There’s another $15 billion ready to go.” 32 Also investing in energy from the sun is Ted Turner, who has teamed up with Southern Power—a subsidiary of the coal-heavy energy firm Southern Company—to acquire seven solar power plants. Turner is also looking at the potential for investing in wind. 33
Denver-based Philip Anschutz, who made billions in oil and gas, is committed to the construction of a 3,000-megawatt wind farm in south-central Wyoming and also to building a transmission line that will carry wind-generated electricity over 700 miles to California, Arizona, and Nevada. For wind developers in Wyoming, a state with a wealth of wind resources but only 580,000 people, California’s 38 million residents represent a very attractive market. 34
Michael Bloomberg, one of the most successful entrepreneurs of his generation and a former three-term mayor of New York City, is also helping speed the transition. His $50 million donation to the Sierra Club’s Beyond Coal campaign in 2011 has strengthened efforts to close coal-fired power plants. But perhaps even more important than the money itself was the symbolic statement it made, given Bloomberg’s status in the business world. When Michael Bloomberg says coal must go, people listen. 35
Bloomberg, an independent, also teamed up with fellow billionaire Tom Steyer, a Democrat, and Republican Hank Paulson, former Secretary of the Treasury under George W. Bush, to chair a project called Risky Business that is designed to quantify the economic risks associated with a changing climate. Steyer, a former hedge fund manager turned climate activist, has launched a nationwide climate education campaign in hopes of countering the people who deny that the climate is changing, and thus help mobilize support for an all-out effort to switch to carbon-free renewable energy. 36
Businesses turning to renewable energy are reaping savings. A number of leading corporations are lowering their electric bills with emissions-free on-site solar power. In 2014, telecom giant Verizon installed solar PV systems totaling 10 megawatts across eight of its facilities in California, Maryland, Massachusetts, New Jersey, and New York. This $40 million investment nearly doubled the solar power capacity the company had installed since it launched an on-site energy program in 2013. 37
Walmart, America’s largest retailer, is also pressing ahead. By late 2014 it had installed roughly 260 solar power systems on its U.S. buildings, each one generating 10–30 percent of the facility’s electricity supply. The company’s goal is to install up to 400 more PV systems at its U.S. facilities over the next four years. In May 2014, CEO Bill Simon described Walmart’s move to go solar: “It’s a business decision. The renewable energy we buy meets or beats prices from the grid.” By taking its renewable energy and energy efficiency goals to its global operations, Walmart estimates that it will reap $1 billion per year in energy savings by 2020. 38
Each quarter, the U.S. Environmental Protection Agency (EPA) releases a ranking of companies, schools, and municipalities using green power. In late 2014, the top five firms were Intel, Kohl’s Department Stores, Microsoft, Google, and Walmart. Intel, Kohl’s, Staples, and Unilever were among the 600 entities that generated or purchased enough electricity from renewable sources to satisfy all of their electricity needs. Apple was not far behind, at more than 90 percent. 39
One of Google's most recent renewable energy investments, an 82-megawatt solar PV array in southern California, provides some powerful imagery of the energy transition. The solar project is being installed on an abandoned oil and gas field, where production had declined precipitously and was no longer profitable. So instead of creaking derricks pumping a dwindling supply of oil, this 700-acre site will soon feature solar panels silently turning the sun's energy into carbon-free electricity. 40
Among the large industrial companies increasing their use of renewable energy is the aerospace giant Boeing. Almost half of the electricity it uses across its operations now comes from renewable sources, including hydropower. At Boeing’s facility in North Charleston, South Carolina, renewables provide 100 percent of the electricity needed, either from the 10-acre rooftop PV array on an aircraft assembly building or from purchased renewable energy certificates. 41
Another large firm using renewables is the global building efficiency and automotive technology company Johnson Controls. Close to 20 percent of its electricity comes from renewable sources. The company is also shifting its vehicle fleet to more-efficient hybrids and electric vehicles. By 2013, it was saving $1.4 million per year in fuel costs. 42
The EPA also publishes a list of companies and institutions that sign long-term contracts for renewably generated electricity. Many are specifically for wind-generated electricity. A major benefit of these purchase agreements is that a company can get a guaranteed low price. Among the entities keen to buy green power are Google, with two 20-year contracts totaling a stunning 720 million kilowatt-hours per year, sourced from wind farms in Iowa and Oklahoma, and the state government of Illinois, with a 10-year contract for roughly 50 million kilowatt-hours per year. 43
The University of Oklahoma, which sees itself as a leader in the energy transition, buys enough renewably generated electricity to satisfy three fourths of its needs. This facilitated the construction of the 101-megawatt OU Spirit Wind Farm near Woodward, Oklahoma. And Oklahoma State University is now getting 71 percent of its electricity from wind farms. To the east, Ohio State University, one of the largest U.S. universities, gets 23 percent of its electricity from green sources. Its goal, an ambitious one, is to become a carbon-neutral campus. 44
Aside from shaping the needed policies, governments are also huge energy consumers themselves. The U.S. government occupies nearly 500,000 buildings of various sizes and has almost 600,000 vehicles. Because it is far and away the country’s—not to mention the world’s—largest consumer, spending some $500 billion per year for goods and services, it can use its purchasing power to accelerate the energy transition. Various regulations require its buildings, vehicle fleets, and electronics purchases to meet certain efficiency standards. Besides saving energy, this also saves taxpayer money. 45
In December 2013, President Barack Obama announced that the federal government would require that 20 percent of the electricity it uses come from renewable sources by 2020. This is a near tripling of the earlier goal of 7.5 percent. In an earlier address to Congress, Obama acknowledged the economic and geopolitical importance of the energy transition: “The country that harnesses the power of clean, renewable energy will lead the 21st century. And yet, it is China that has launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we’ve fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea.” 46
The U.S. government is also moving the market by requiring increases in fuel efficiency for all vehicle manufacturers. In 2013, the average new car got 24 miles per gallon. By law, this will rise to 54 miles per gallon in 2025, a doubling in 12 years. Part of the fuel economy improvement will come from having more hybrid-electric or all-electric vehicles (EVs) for sale. Further helping to facilitate the transition to cars that run on electricity, the United States is offering, among other incentives, a federal tax credit of up to $7,500 to encourage the purchase of electric vehicles and plug-in hybrid electric vehicles (PHEVs). Additional tax credits in some states take that benefit even higher. 47
China, which got off to a slow start with electric cars, is now planning a major push. In 2013, its sales of all-electric cars totaled a meager 14,600 and the figure for plug-in hybrids was only 3,000. But with at least a dozen new electric car models coming to market in the next several years, China is expecting a huge jump in sales. 48
In Norway, the world leader in promoting electric vehicles, EV sales topped 6 percent of all car sales in 2013. In the Netherlands, where the government gives a 10–12 percent tax break for electric vehicle purchases and supports more than 400 charging stations, the figure was 4 percent. France uses fees on inefficient vehicles to fund rebates for electric vehicles. It will soon have 200 new charging stations along its highways as part of a European Union–supported pilot project. 49
Ultimately EVs and PHEVs will challenge the dominance of traditional gasoline- and diesel-powered vehicles, and this may happen sooner than most people realize. The global financial services firm UBS projects that by 2020 battery costs will be slashed in half, making electric vehicles cost-competitive with traditional cars. With annual savings of up to $2,400 expected on fuel costs, the electric car becomes the obvious choice. 50
Improving economics for solar power could also factor into the future of electric vehicles. As costs come down for both battery storage and home solar systems, UBS expects that in much of Europe the combination of rooftop solar power, battery storage, and electric vehicles will be extraordinarily attractive to the average customer. By 2020, the investment will pay for itself within six to eight years, after which electricity for home use and car charging is essentially free for the solar system’s remaining lifespan, a dozen years or more. UBS forecasts conservatively that as it becomes easier to “fill up” with solar energy, 1 in every 10 new cars registered in Europe will be all-electric a decade from now. 51
The energy transition is also being assisted by a vigorous divestment campaign directed at coal, oil, and natural gas companies. This campaign, which originated with Bill McKibben and the group he co-founded, 350.org, has helped open a major new front in the effort to phase out fossil fuels. It found fertile soil on college campuses. Focusing initially on university endowments, it has expanded to include pension funds and individual investment portfolios. Increasingly, fund managers are being urged to sell stocks in coal, oil, and natural gas companies and to invest in the energy sources of the future. 52
As the public mood regarding our energy future changes, companies involved in the coal, oil, and gas industries will carry a stigma. Just as tobacco firms were stigmatized a generation ago because of the health-damaging effects of smoking cigarettes, fossil fuel companies will suffer because of their role in disrupting the earth’s climate. While the anti-tobacco campaign focused on personal health, this one is tied directly to the future of civilization itself. 53
The energy transition amounts to a massive restructuring of the global economy. Initially this energy transition was driven by government incentives, but now it is also being driven by the market. With the market today favoring both solar and wind energy in many locations, the transition is accelerating, moving much faster than anticipated.
The recent growth of renewable energy generation in an expanding group of countries makes it clear that solar and wind energy are no longer fringe energy sources. If Denmark can get over half of its electricity from wind for an entire month, other wind-rich places can do the same. When wind eclipses coal on some days in the United Kingdom, we get yet another glimpse of what is possible. And when the electricity from wind farms overtakes that from nuclear power plants, as it has done in China, it becomes clear that wind is a mainstream source of energy. 54
Power systems everywhere will look different. They will be made up of millions of solar panels, in many cases tied into a smart and flexible grid getting power from wind turbines as well as from geothermal and hydroelectric projects. In one sense, developing countries have an advantage because they can take a shortcut to the new energy economy, building it as they develop. Just as they bypassed the need to install telephone wires and poles when they turned directly to cell phones, they can avoid the need for an electric grid by going directly to rooftop solar panels.
The biggest question facing civilization is, Will the energy transition proceed fast enough for the world to avoid catastrophic climate change? No one can say with certainty. Only time will tell. But exciting change is afoot. The industrial revolution set the stage for disrupting the earth’s climate. This new energy revolution is setting the stage for stabilizing it. Ambitious renewable energy targets are being surpassed years ahead of schedule. National wind and solar power production records are routinely being shattered. As victories in shuttering coal plants mount, as new clean energy systems are built, and as transportation systems are electrified, a tipping point could be near.
The energy transition will change not only how we view the world but also how we view ourselves. With rooftop solar panels to both power homes and recharge car batteries, there will be a degree of personal energy independence not known for generations. Our relationship with the natural world will change from one where we are in conflict with nature to one where we are more in sync with it. Coal plant smokestacks that dirty the air and alter the climate will be replaced by solar panels on our rooftops and wind turbines turning gracefully in the distance. Welcome to the clean energy era.
ENDNOTES:
1. For additional information, see Intergovernmental Panel on Climate Change, “2014: Summary for Policymakers,” in Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge, U.K., and New York: Cambridge University Press, 2014); and Carbon Tracker Initiative and Grantham Research Institute on Climate Change and the Environment, Unburnable Carbon: Wasted Capital and Stranded Assets (London: 2013).
2. U.S. Department of Energy (DOE), Energy Information Administration, World Oil Transit Chokepoints (Washington, DC: 10 November 2014).
3. BP, Statistical Review of World Energy June 2014 (London: 2014); Vishal Shah, Jerimiah Booream-Phelps, and Susie Min, 2014 Outlook: Let the Second Gold Rush Begin Update (New York, NY: Deutsche Bank Markets Research, January 2014); Lazard, Lazard’s Levelized Cost of Energy Analysis—Version 8.0 (September 2014); Amory B. Lovins, “Let’s Celebrate, Not Lament, Renewables’ Disruption of Electric Utilities,” RMI Outlet, at blog.rmi.org, 6 February 2014.
4. Three times more efficient in Gary Kendall, Plugged In: The End of the Oil Age (Brussels: WWF, March 2008), pp. 79–86.
5. REN21, Renewables 2014 Global Status Report (Paris: REN21 Secretariat, 2014), pp. 76-77, 129, 209; Government of Gujarat, Energy and Petrochemicals Department, Solar Power Policy—2009 (Gandhinagar: 6 January 2009); capacity from Bridge to India, India Solar Compass: Quarterly Update on the Indian Solar Market (New Delhi: January 2014), p. 10; FIT-driven from Bridge to India, India Solar Handbook (New Delhi: November 2012), p. 7; “A Tale of Two Markets: How National and State Incentives are Spurring Solar in India,” Greentech Media, 3 November 2011; average residential electricity consumption in Gujarat calculated from Amit Garg et al., “An Assessment of Household Electricity Load Curves and Corresponding CO2 Marginal Abatement Cost Curves for Gujarat State, India,” Energy Policy, vol. 66 (March 2014), pp. 568–84, with installed capacity from Bridge to India, India Solar Compass: Quarterly Update on the Indian Solar Market (New Delhi: January 2014), p. 10, and with 18 percent capacity factor from RESolve Energy Consultants, Sunrise in Gujarat: Year 2012 in Review (Chennai: 2013), p. 16.
6. REN21, op. cit. note 5, pp. 79, 130, 211; Database of State Incentives for Renewables & Efficiency (DSIRE), “Renewable Portfolio Standard Policies,” map available at www.dsireusa.org/documents/summarymaps/RPS_map.pdf, updated September 2014; Iowa wind share from American Wind Energy Association (AWEA), “American Wind Power Reaches Major Power Generation Milestones in 2013,” press release (Washington, DC: 5 March 2014).
7. “Transcript: Gov. Jerry Brown's Inaugural Address,” L.A. Times, 5 January 2015; DSIRE, op. cit. note 6.
8. DSIRE, “Renewable Electricity Production Tax Credit (PTC),” at dsireusa.org/incentives/incentive.cfm?Incentive_Code=US13F, updated 14 November 2014; AWEA, “Federal Production Tax Credit for Wind Energy,” at www.awea.org/Advocacy/content.aspx?ItemNumber=797, viewed 17 November 2014; Solar Energy Industries Association, “Solar Investment Tax Credit (ITC),” at www.seia.org/policy/finance-tax/solar-investment-tax-credit, viewed 17 November 2014; REN21, op. cit. note 5, pp. 89–91.
9. International Energy Agency (IEA), World Energy Outlook 2014 (Paris: 2014), pp. 93–94, 239; Harald Heubaum, “Has There Ever Been a Level Energy Playing Field? Putting Renewables Subsidies in Context,” Carbon Brief, at www.carbonbrief.org/blog, 20 August 2012; Nancy Pfund and Ben Healey, What Would Jefferson Do? The Historical Role of Federal Subsidies in Shaping America’s Energy Future (San Francisco, CA: DBL Investors, September 2011).
10, IEA, op. cit. note 9, pp. 93–94; Global Subsidies Initiative (GSI), Achieving the G-20 Call to Phase Out Subsidies to Fossil Fuels, policy brief (Geneva: October 2009), p. 2, and GSI, “Fossil Fuels—At What Cost?” at www.iisd.org/gsi/fossil-fuel-subsidies/fossil-fuels-what-cost, viewed 27 February 2013; Paul R. Epstein et al., “Full Cost Accounting for the Life Cycle of Coal,” Annals of the New York Academy of Sciences, vol. 1,219 (February 2011), pp. 73–98.
11. World Bank, State and Trends of Carbon Pricing 2014 (Washington, DC: 2014); World Bank, “State & Trends Report Charts Global Growth of Carbon Pricing,” press release (Washington, DC: 28 May 2014).
12. Kristin Eberhard, “All the World’s Carbon Pricing Systems in One Animated Map,” Sightline Daily, 17 November 2014; World Bank, State and Trends, op. cit. note 11.
13. N. Gregory Mankiw, “Gas Tax Now!” Fortune, 24 May 1999, pp. 60–64; Lawrence Summers, “Let This Be the Year When We Put a Proper Price on Carbon,” Financial Times, 4 January 2015.
14. Eberhard, op. cit. note 12; World Bank, State and Trends, op. cit. note 11.
15. Elisabeth Rosenthal, “Carbon Taxes Make Ireland Even Greener,” New York Times, 27 December 2012; Environmental Protection Agency, Ireland’s Provisional Greenhouse Gas Emissions in 2013 (Wexford, Ireland: December 2014), p. 9; Environmental Protection Agency, “Climate Change: Responses,” at www.epa.ie/irelandsenvironment/climatechange, viewed 5 January 2015.
16. Alan Durning and Yoram Bauman, “All You Need to Know About BC’s Carbon Tax Shift in Five Charts,” Sightline Daily, 11 March 2014.
17. Hannah Fairfield, “Best of Both Worlds? Northeast Cut Emissions and Enjoyed Growth,” New York Times, 6 June 2014; Kristin Eberhard, “Reggie Recommends,” Sightline Daily, 27 June 2014.
18. Lazard, op. cit. note 3; American Council for an Energy-Efficient Economy, “New Report Finds Energy Efficiency is America’s Cheapest Energy Resource,” press release (Washington, DC: 25 March 2014); IEA, Energy Efficiency Market Report 2014 (Paris: 2014), p. 16.
19. World total electricity consumption for lighting is 20 percent of electricity consumption from IEA, “About Lighting,” at www.iea.org/topics/energyefficiency/subtopics/lighting, viewed 5 January 2015; up to 90 percent less energy than traditional lighting from U.S. Environmental Protection Agency (EPA) and DOE, Energy Star Program, “Lighting,” at www.energystar.gov/index.cfm?c=lighting.pr_lighting_landing, viewed 7 January 2015, and from Cree, Inc., “FAQ General,” at www.cree.com/Lighting/Tools-and-Support/FAQ-General, viewed 13 January 2015; world reduction in electricity used for lighting if household incandescent bulbs were replaced with compact fluorescents based on calculations by Earth Policy Institute in Lester R. Brown, “Worldwide Shift from Incandescents to Compact Fluorescents Could Close 270 Coal-Fired Power Plants,” Plan B Update (Washington, DC: 9 May 2007); energy savings enough to drive a Prius from New York to San Francisco based on Larry Kinney, Lighting Systems in Southwestern Homes: Problems and Opportunities, prepared for DOE, Building America Program through the Midwest Research Institute, National Renewable Energy Laboratory (Boulder, CO: Southwest Energy Efficiency Project, June 2005), pp. 4–5.
20. Hidetoshi Nakagami, “Present Status of Energy Efficiency and Conservation Policies in Japan,” presentation to Innovation for Cool Earth Forum, Tokyo, 8 October 2014; IEA, Energy Efficiency Market Report 2013 (Paris: 2013), pp. 172-75.
21. Natalie Obiko Pearson and Ganesh Nagarajan, “Solar Water Pumps Wean Farmers from India’s Archaic Grid,” Bloomberg, 8 February 2014.
22. Smiti Mittal, “World’s Largest Coal Miner Announces 1 GW Solar Power Plan,” CleanTechnica, 10 December 2014; “Coal India Signs Pact for 1,000 MW Solar Power Projects,” The Hindu Business Line, 8 December 2014; Solar Energy Corporation of India, “SECI Signs MoU with Coal India for Development of 1000 MW of Solar Projects,” at seci.gov.in/content/news_update/seci-signs-mou-with-coal-india-for-development-of-1000-mw-of-solar-projects.php, viewed 7 January 2015.
23. U.N. Population Division, World Population Prospects: The 2012 Revision, electronic database, at esa.un.org/wpp, updated 14 April 2014; REN21, op. cit. note 5, pp. 64, 126; current electricity needs from BP, op. cit. note 3.
24. Jesper Nørskov Rasmussen, “Wind Turbines Reached Record Level in 2014,” at energinet.dk/EN/El/Nyheder/Sider/Vindmoeller-slog-rekord-i-2014.aspx, 20 January 2015; goals from REN21, op. cit. note 5, p. 119, and from Justin Gillis, “A Tricky Transition from Fossil Fuel,” New York Times, 10 November 2014; electricity and heat in 2035 from Danish Government, The Danish Climate Policy Plan: Towards a Low Carbon Society (Copenhagen: August 2013), p. 7; Scottish Government, Energy in Scotland 2014 (Edinburgh: 2014), pp. 6, 29.
25. Current wind share in Ireland calculated by EPI from monthly reports in EirGrid, “All-Island Wind and Fuel Mix Report,” at www.eirgrid.com/operations/systemperformancedata/all-islandwindandfuelmixreport, viewed 20 May 2014; 2020 Ireland goal and Germany from REN21, op. cit. note 5, p. 119; mostly wind from EirGrid Group, Annual Renewable Report 2013 (Dublin: 2013), p. 4.
26. REN21, op. cit. note 5, p. 132; San Francisco Department of the Environment, “Zero Waste,” at www.sfenvironment.org/zero-waste, viewed 18 December 2014.
27. Carsten Ender, “Wind Energy Use in Germany—Status 31.12.2013,” DEWI Magazine, no. 44 (February 2014), pp. 35–46; AWEA, op. cit. note 6; Sophie Yeo, “Fukushima to Use 100% Renewable Energy by 2040,” Responding to Climate Change, 31 January 2014; Ari Phillips, “Fukushima Pledges to Go 100 Percent Renewable While Japan Grapples with Nuclear Future,” Climate Progress, blog, at thinkprogress.org/climate, 5 February 2014.
28. Pledges from Li Shuo and Lauri Myllyvirta, The End of China’s Coal Boom (Greenpeace East Asia, 2014), p. 4; Edward Wong, “In Step to Lower Carbon Emissions, China Will Place a Limit on Coal Use in 2020,” New York Times, 20 November 2014.
29. Jennifer Duggan, “China Hit by Another Airpocalypse as Air Pollution Cancer Link Confirmed,” (London) Guardian, 24 October 2013; Louisa Lim, “Beijing’s ‘Airpocalypse’ Spurs Pollution Controls, Public Pressure,” NPR, 14 January 2013; vulnerable groups include children, elderly, and those with respiratory or cardiac illness from Clean Air Partnership, “Air Pollution and Your Health,” at www.cleanairpartnership.org/air_pollution_and_your_health, viewed 12 November 2014; quote from Li and Myllyvirta, op. cit. note 28, p. 9.
30. “Chinese Coal Miner Faces Bankruptcy as Cash Supplies Dwindle,” South China Morning Post, 8 July 2014; China’s new climate regulation from World Bank, State and Trends of Carbon Pricing 2014 (Washington, DC: 2014), pp. 64–67.
31. Giles Parkinson, “Goldman Sachs Sees 'Transformational Moment' in Renewables Investment,” RenewEconomy, 31 January 2014; Nelson D. Schwartz, “Banks Look to Burnish Their Images by Backing Green Technology Firms,” New York Times, 10 June 2012; Morgan Stanley, 2013 Sustainability Report (New York: 2014), p. 27; John Vidal, “Big Power Out, Solar In: UBS Urges Investors to Join Renewables Revolution,” (London) Guardian, 27 August 2014.
32. Forbes, “The World's Billionaires,” at www.forbes.com/billionaires/list, updated 18 November 2014; Noah Buhayar and Jim Polson, “Buffett Ready to Double $15 Billion Solar, Wind Bet,” Bloomberg, 10 June 2014; Todd Woody, “Warren Buffett In $2 Billion Solar Deal,” Forbes, 2 January 2013; Anupreeta Das, “Warren Buffett Puts Wind in Berkshire’s Sails,” Wall Street Journal, 23 October 2014; SunPower Corp., “MidAmerican Solar, SunPower Corp. Synchronize Solar Star Development to the Grid,” press release (Phoenix, AZ, and San Jose, CA: MidAmerican Solar and SunPower Corp., 9 January 2014); Felicity Barringer, “Warren Buffett’s Big Bet on Renewables in Nevada,” New York Times, 7 October 2014.
33. Turner Enterprises, Inc., “Turner Renewable Energy,” at www.tedturner.com/renewable-energy, viewed 18 November 2014; Southern Company, “Southern Company Subsidiary and Turner Renewable Energy Acquire New Mexico’s Largest Solar Facility,” press release (Atlanta, GA: 23 May 2014); wind power from Phillip Evans, Turner Enterprises Inc., e-mail to J. Matthew Roney, Earth Policy Institute, 25 November 2014.
34. Christopher Helman, “America's Oil And Gas Billionaires,” Forbes, 4 March 2013; Mark Jaffe, “Phil Anschutz and Wind Energy in Wyoming: Entrepreneur's Latest $9 Billion Idea,” Denver Post, 20 January 2013; Power Company of Wyoming, “Putting Wind to Work for Carbon County,” at www.powercompanyofwyoming.com, viewed 4 September 2014; Ari Phillips, “Wind Farm Powering a Million Homes Nears Approval Deep in Coal Country,” Climate Progress, blog, at thinkprogress.org/climate, 11 August 2014; TransWest Express LLC, “Delivering Wyoming Wind Energy to the West,” at www.transwestexpress.net/index.shtml, viewed 23 October 2014; Kara Choquette, Power Company of Wyoming, e-mail to J. Matthew Roney, Earth Policy Institute, 24 October 2014; U.S. Census Bureau, State & County Quickfacts, at quickfacts.census.gov, electronic database, updated 8 January 2014.
35. Bloomberg Philanthropies, “Bloomberg Philanthropies Commits $50 Million to Sierra Club’s Beyond Coal Campaign,” press release (New York: 21 July 2011).
36. Risky Business, “About the Project,” at riskybusiness.org/about, viewed 6 January 2015; Henry M. Paulson, “The Coming Climate Crash,” New York Times, 21 June 2014; Jaime Fuller, “Tom Steyer’s Long Road to Becoming the Environment’s Donor-in-chief,” Washington Post, 27 February 2014; Coral Davenport, “Meager Returns for the Democrats’ Biggest Donor,” New York Times, 6 November 2014.
37. Stephen Lacey, “Verizon Executive on $40M Solar Investment: ‘It’s About Driving Shareholder Value,’” Greentech Media, 26 August 2014; Verizon, “Verizon Plans Major Expansion of Its On-Site Green Energy Program,” press release (New York: 25 August 2014).
38. Largest retailer from Fortune, “Fortune 500 2014,” at fortune.com/fortune500/wal-mart-stores-inc-1; Walmart, “Environmental Sustainability: Energy,” at corporate.walmart.com/global-responsibility/environment-sustainability/energy, viewed 16 November 2014; Walmart, “Walmart Puts Price of Solar Power on Rollback,” press release (Mountain View, CA: 9 May 2014); Walmart, “Walmart Builds on Leadership of Commercial Solar Deployment and Expands On-Site Solar Energy Projects,” press release (Bentonville, AR: 20 November 2014); Walmart, “White House Energy Event, Remarks by Bill Simon,” transcript (Mountain View, CA: 9 May 2014).
39. EPA, Green Power Partnership, National Top 100 Partner List (Washington, DC: 27 October 2014); EPA, Green Power Partnership, 100% Green Power Users (Washington, DC: 27 October 2014).
40. Nick Coons, “A Solar Project on Top of an Old Oil Field in California’s Kern County,” Official Google Blog, at googleblog.blogspot.com, 10 September 2014; Heather Clancy, “Google's $145 Million Clean Energy Investment Puts Solar Atop Old Oil Field,” Forbes, 13 September 2014.
41. Boeing, “2014 Environment Report: Cleaner Operations,” at www.boeing.com/aboutus/environment/environment_report_14/3.1_cleaner_operations.html, viewed 14 November 2014.
42. Johnson Controls, 2013 Business and Sustainability Report (Milwaukee, WI: 2014), p. 34.
43. EPA, Green Power Partnership, Long-term Contracts (Washington, DC: 27 October 2014); NextEra Energy Resources, “NextEra Energy Resources Signs PPA with Google Energy to Supply Wind Power,” press release (Juno Beach, FL: 21 April 2011).
44. EPA, “University of Oklahoma Partner Profile,” at www.epa.gov/greenpower/partners/partners/universityofoklahoma.htm, viewed 6 January 2015; Silas Allen, “University of Oklahoma, OG&E Tout Wind Power Partnership,” NewsOK, 19 February 2013; EPA, “Partner Profile: Oklahoma State University,” at www.epa.gov/greenpower/partners/partners/oklahomastateuniversity.htm, viewed 6 January 2015; Ohio State University, Office of Energy and Environment, “Ohio State Receives Green Power Partner of the Year Award from U.S. EPA,” at oee.osu.edu/green-power-partner-2013.html, 23 September 2013; EPA, “Partner Profile: The Ohio State University,” at www.epa.gov/greenpower/partners/partners/theohiostateuniversity.htm, viewed 6 January 2015; carbon-neutral from The Ohio State University, Climate Action Plan (Columbus, OH: April 2011).
45. Government occupies nearly 500,000 buildings and has some 600,000 vehicles and spends $500 billion per year from Matthew Daly, “Obama to Feds: Boost Renewable Power 20 Percent,” Associated Press, 5 December 2013; Jason Miller, “Inside the World's Biggest Buyer,” Federal News Radio, 11 June 2012; information on federal efficiency standards can be found at DOE, Energy Efficiency and Renewable Energy (EERE), “Government Energy Management,” at energy.gov/eere/efficiency/government-energy-management, viewed 5 December 2014.
46. New goal in “Federal Leadership on Energy Management,” presidential memorandum (Washington, DC: White House, 5 December 2013); old goal in Daly, op. cit. note 45; Barack Obama, “Address to Joint Session of Congress,” 24 February 2009, at www.whitehouse.gov/the_press_office/Remarks-of-President-Barack-Obama-Address-to-Joint-Session-of-Congress.
47. Figure of 24 miles per gallon in 2013 from EPA, Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975 Through 2014 (Washington, DC: 2013), p. 4; 54.5 miles per gallon in 2025 from EPA, Office of Transportation and Air Quality, “EPA and NHTSA Set Standards to Reduce Greenhouse Gasses and Improve Fuel Economy for Model Years 2017-2025 Cars and Light Trucks,” fact sheet (Washington, DC: August 2012); federal tax credit for electric vehicles and plug-in hybrid electric vehicles from DOE, EERE, “Federal Tax Credits for Electric Vehicles Purchased in or After 2010,” at www.fueleconomy.gov/feg/taxevb.shtml, viewed 19 September 2014; additional tax credits in some states from Plug-in America, “State and Federal Incentives,” at www.pluginamerica.org/incentives, 4 December 2014.
48. Zachary Shahan, “China 2013 Electric Car Sales Report,” Clean Technica, 27 January 2014; “BMW Sees China as Biggest Electric Car Market by 2019,” Bloomberg News, 28 May 2014.
49. EV share of car sales from Amsterdam Roundtables Foundation and McKinsey and Company, Evolution Electric Vehicles in Europe: Gearing up for a New Phase? (Amsterdam: April 2014), p. 10; incentives from Tali Trigg and Paul Telleen, Global EV Outlook: Understanding the Electric Vehicle Landscape to 2020 (Paris: IEA, April 2013), p. 20; European Commission, “200 Charging Points for Electric Vehicles to Open in France with EU Support,” press release (Brussels: 15 December 2014).
50. John Vidal, “Big Power Out, Solar In: UBS Urges Investors to Join Renewables Revolution,” (London) Guardian, 27 August 2014; Patrick Hummel et al., Global Utilities, Autos & Chemicals: Will Solar, Batteries and Electric Cars Re-shape the Electricity System? (Zurich: UBS, 2014).
51. Vidal, op. cit. note 50; Hummel et al., op. cit. note 50.
52. Atif Ansar, Ben Caldecott, and James Tilbury, Stranded Assets and the Fossil Fuel Divestment Campaign: What Does Divestment Mean for the Valuation of Fossil Fuel Assets? (Oxford: University of Oxford, 2013), p. 19; “About Fossil Free,” at gofossilfree.org/about-fossil-free, 30 September 2014.
53. Ansar, Caldecott, and Tilbury, op. cit. note 52, pp. 10, 14.
54. Kjetil Malkenes Hovland, “Denmark's Wind Power Output Rises to Record in First Half,” Wall Street Journal, 3 September 2014; RenewableUK, “Wind Power Beats Nuclear and Coal in Record-breaking August,” press release (London: 1 September 2014); BP, op. cit. note 3.