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Why Big Business Won't Lead the Way

Carbon-Free and Still Wrecking the Planet

by STAN COX And WES JACKSON

From the day the prospect of rapid climate change became an officially recognized crisis, it has attracted multitudes of proposed "solutions" that mostly substitute snake oil for crude oil. Now comes a new, better-than-average proposal, Carbon-Free and Nuclear-Free: A Roadmap for U.S. Energy Policy by Arjun Makhijani of the Institute for Energy and Environmental Research (IEER).

The book-length report is to be published this fall and will doubtless draw praise in environmental circles. But unfortunately, judging from the 23-page executive summary now available on the Internet [1], the plan is doomed from the start by its reliance on big business to lead us into the new, green era it portrays.


What IEER proposes and what it doesn’t

IEER is to be applauded for setting a very ambitious zero-CO2 goal, calling for a "hard cap" on carbon emissions, ruling out the dangerously seductive fix of nuclear power, rejecting phony carbon "credits" bought in poor nations, and seeking to eliminate subsidies for biofuels made from food crops. Those features of the report put it head and shoulders above proposals that do rely on such self-defeating strategies.

However, IEER’s recommendations do not go far enough. They allow for sale of emissions allowances–i.e., licenses to pollute–by the US government. And the hard carbon cap would apply only to "large users", meaning companies that consume 100 billion Btu or more per year. "At this level," notes the executive summary, "such users have the financial resources to be able to track the market, make purchases and sales, and evaluate when it is most beneficial to invest in CO2 reduction technologies relative to purchasing credits."

The summary continues: "Private vehicles, residential and small commercial use of natural gas and oil for heating, and other similar small-scale uses would not be covered by the cap." Therefore, we consumers would be free to continue doing our job in this economy: to consume as much as we can.

IEER’s recommendations would impose no green taxes on anything, would permit construction of new coal-fired plants that propose to capture their carbon, would not encourage lower birth rates, and would focus on improvement of private cars and trucks; there is no mention of public transportation in the executive summary. Indeed, the summary’s market-friendly, growth-friendly approach should hold strong appeal for executives.

One graph shows total "delivered energy" rising by about 67 percent by 2050. The bulk of that increase will be achieved through biofuels and "efficiency". Another graph shows the electricity supply remaining more or less constant, implying that the big increases in energy demand will come in transportation.

The vision being advanced by IEER is captured by the first illustration that appears in the summary: a photo of a US Navy parking lot in San Diego in which vast photovoltaic arrays provide shade for the rows of cars.

Market-friendly, growth-friendly

IEER envisions economic growth of 3 percent per year throughout the next half-century and, presumably, beyond. That’s to be achieved entirely through a 2 percent-per-year increase in "efficiency per unit of GDP", which would reduce energy use by 1 percent annually. This is seen as extension of an encouraging trend: "Since the mid-1990s, the rate of energy growth has been about two percent less than the rate of GDP growth …"

But note that the "efficiency" of the past decade has not actually managed to reduce energy consumption. Energy use and carbon emissions per person in the US were the virtually same in 2005 as in 1995. National consumption and emissions rose in step with population, growing by 13 percent over that time [2].

Weighing our energy use in GDP units is mere sleight-of-hand. Why are we now getting more economic growth out of each billion Btus? Here are the percentages of GDP accounted for by some energy-intensive versus less intensive sectors of the economy in 1977 and 2005 [3]:

1977: 2005

Agriculture, manufacturing, and transportation: 33% 16%

Finance, professional and business services, health care, and entertainment: 28% 43%

As we have allowed low-wage nations to do most our manufacturing for us, GDP has been boosted instead by more rapid circulation of money-for-services, without any assurance that those services are fully providing people the necessities of life or making anyone happier. Indeed, polls show the opposite. And as the US GDP has climbed steadily, the "Genuine Progress Indicator", an alternative to GDP that’s designed to measure changes in personal and societal well-being, has drifted in place for decades, never surpassing its peak level of 1977 [4].

Health care, including health insurance, now accounts for a whopping 16 percent of the total GDP[5]. According to Business Week, from 2001 to 2006, the medical industries created 1.7 million new jobs. The net number of jobs created by all other sectors of the economy during those years added up to precisely zero [6]. Even Business Week had to admit, "That sort of lopsided job creation is not the blueprint for a well-functioning economy."

In the past two decades, only two years–1991 and 2001–saw a decrease in the United States’ greenhouse-gas emissions[7], and they were recession years. The "new economy" boom that lay between those recessions may have been built on compact, high-tech gadgetry and clever minds, but it also pushed emissions and resource use to new heights. [8]

A new ball game

Past increases in GDP relative to energy provide no precedent for the future we face. Despite a downturn now and then, it has been easy to squeeze steady GDP growth out of an economy that is using more energy every year. But increasing the GDP/energy ratio by actually shrinking energy use — rather than by the usual trick of inflating GDP — will be a qualitatively different ball game.

That will require restraint by the growth-dependent corporations that dominate the economy, even as each continues trying to get a leg up on the others. If some of those companies or industries can find a way — legal, illegal, or, most likely, in some gray area–to tap into the remaining vast pools of fossil energy, they are guaranteed to do so, as long as business wields the kind of political power it has today.

Today’s single-minded focus on the prospect of rapid climate change misses the bigger picture. It’s not carbon but concentrated energy in the service of profit that made possible the widespread ecological destruction of the past couple of centuries. It wasn’t carbon dioxide that destroyed millions of acres of rainforest and grassland in South America. It wasn’t greenhouse gases that produced vast oceanic "dead zones" near the mouths of the world’s great rivers. It wasn’t global warming that decimated whole unseen ecosystems by plowing up or paving over the world’s best soils.

All of those problems and many more were created by abundant energy and the human hyperactivity that it underwrote. Finding an efficient, carbon-free way to continue and extend human appropriation of the planet’s ecosystems will not get us out of our predicament.

IEER estimates that the federal government would earn $30 to $50 billion per year by selling carbon-emissions allowances to industry. According to the executive summary, "These revenues would be devoted to ease the transition at all levels–local, state and federal–as well as for demonstration projects and research and development." That quantity of money–approximately the amount that taxpayers spend on the US military in a single month or what we spend on pet food and other pet products in a year–would be swamped by destructive economic growth, no matter how much good research and development is funded.

The efficiency trap

IEER’s report fully accommodates the religion of economic growth, and it’s no wonder. A prescription for a carbon-free future that rejects growth would be given no more than a quick glance by major political or economic players. A perpetually expanding economy is the only basis on which they can simultaneously promise better times to the low- and middle-income majority and guarantee eternally expanding wealth to the economy’s top tiers.

So the only politically palatable plans are those that invoke "efficiency", and that is what IEER does. Today’s efficiency enthusiasts, like those of every generation, downplay the observation of nineteenth century British economist William Stanley Jevons that efficient use of energy resources (in his era, coal) stimulates economies and leads to more, not less, consumption.

"In fact," wrote Jevons, "there is hardly a single use of fuel in which a little care, ingenuity, or expenditure of capital may not make a considerable saving. But no one must suppose that the coal thus saved is spared–it is only saved from one use to be employed in others, and the profits gained soon lead to extended employment in many new forms. The several branches of industry are closely interdependent, and progress of any one leads to the progress of nearly all."[9]

Most economists and technological fundamentalists dismiss Jevons’s argument as old-fashioned, noting that he didn’t foresee the myriad new ways modern economies have found and will surely find to save energy and churn out alternative energy. That dodges Jevons’s main point and ignores the history of capitalist economies, which have always found a way to reconcile greater resource efficiency with greater resource consumption, because they must.

In response, the University of Maryland’s Herman Daly, pioneer of ecological economics, has argued that "’Efficiency first’ sounds good, especially when referred to as ‘win-win’ strategies or more picturesquely as ‘picking the low-hanging fruit’. But the problem of ‘efficiency first’ is what comes second." That, as Jevons showed, is a more revved up, hungrier economy. Daly offers an alternative: "A policy of ‘frugality first’, however, induces efficiency as a secondary consequence; ‘efficiency first’ does not induce frugality–it makes frugality less necessary"[10]

A study published in the journal Energy in 2004 [11] considered what the overall effect would be if all households in Sweden followed their government’s recommendations for "green consumption" — steps toward a greener lifestyle like eating environmentally sound food from lower on the food chain, reduced car ownership, better fuel economy, less use of hot water and electricity in the home, and greater use of renewable energy sources. Adopting all of those good habits would clearly cut the household’s expenses, but the researcher assumed that families would spend all that spare income at the same rate in the same overall patterns–only now they would buy "greener" products and services.

Despite new patterns of spending by the hypothetical green Swedes, even a modest one-percent-per-year increase in real per capita income would, by 2020, wipe out all gains in energy conservation, resulting in increased energy consumption. A 2 percent annual income hike (still below IEER’s target of 3 percent GDP growth) would lead to a 29 percent increase in energy use and a 13 percent increase in carbon dioxide emissions, despite 100 percent adherence to the recommended green lifestyle.

Of course, people could choose not to spend the money they saved with green consumption. But unless they stuffed all the cash under their therapeutic Swedish mattresses and kept it there, a way would have to be found to stop that extra income from attacking the ecosphere; for example, it could be captured through taxation and put to work attacking parking lots with picks and sledges to make room for solar-harvesting, food-producing vegetation. That would help begin building the kind of "infrastructure" needed in a zero-fossil-fuel future.

"Bio" isn’t always beautiful

The current economy, geared to satisfy a larger volume of desires every year, is built and sustained by fuels that need only be pulled from the Earth when needed. An economy running on fossil fuels can, if asked, fill the highways with high-tech, efficient cars and find ways to illuminate entire big-box retail stores with efficient LED lamps. But what if an economy built on such easy, rich sources of energy tries to continue growing at a rate acceptable to economists right through 2050 to 2100 and beyond, while relying only on its daily dose of diffuse sunlight for energy? Can it continue to reproduce all the technological gadgetry that will be required? We are confident that it can not.

One very simple requirement of the society envisioned by IEER would be a well-maintained system of roads and highways on which to we’ll drive a whole new generation of super-efficient cars. Carbon-neutral upkeep of those roads won’t be easy. In a 2000 paper [12], our late colleague Marty Bender estimated that current requirements for asphalt alone, if satisfied with "synthetic organic" compounds made from biomass, would consume the equivalent of more than one-fourth of the annual net growth of all the nation’s forest lands. (And what would replace all the concrete that’s now used?) Meanwhile, current consumption of plastics, synthetic fibers, rubber, solvents, and other petrochemicals would use up more than four times as much biomass as the asphalt. But look out: We’re already using the entire net forest growth for other purposes.

Accommodating the needs of the current economic power structure makes things easier politically but makes a mess ecologically . The car culture that has supported the American economy for more than half a century is insupportable in a carbon-free future. The enormous fleet of efficient vehicles rolling through IEER’s 2050 scenario will be powered largely by biofuels. Rightly rejecting federal and state welfare for corn ethanol and other grain-based biofuels (fuels like soy biodiesel, which wipes out 250 pounds of good soil for each gallon of fuel produced), the executive summary focuses chiefly on algae and water hyacinth.

Like most of the 31 impressive technologies listed by IEER as parts of a carbon-free future, algal biofuels remain a highly speculative matter, with a growing number of formerly enthusiastic experts declaring that impossibly high algal biomass yields have been extrapolated from small-scale experiments[13]. (As crop scientists, we’re all too familiar with a general rule that says the smaller the scale of an experiment, the bigger the projected crop yields per acre–and with the corollary stating that crops never come close to achieving those bin-busting yields in practice.)

A photo in IEER’s executive summary shows one of GreenFuel Technologies Corporation’s small-scale algae bioreactors. Critics have charged that GreenFuel predicts thermodynamically unrealistic energy and biodiesel yields that, even if achieved, would be prohibitively costly in money, resources, and land.[14] Millions of acres [15] of flat land given over to apparatuses of concrete, plastic, aluminum, antibiotics, and other materials — as would be required to produce significant quantities of algal fuel–starts to sound even worse than factory farming. Our rule of thumb is this: If we have to grow a crop of fuel in a way that we shouldn’t grow a crop of food, we should be looking for a way to do without that fuel.

IEER’s summary also mentions a better but still not ideal renewable fuel source: prairie biomass. An attention-grabbing report last year in the journal Science [16] predicted that diverse prairie-like plant communities sown on previously degraded lands could be a productive source of biomass to be harvested for fuel. That kind of fuel-farming, done right, would rely on healthy, diverse ecosystems of perennial plants not too different from the natural, erosion-proof vegetation that covered much of this continent before it was plowed up. However, the Science paper’s optimistic projections of the share of America’s energy demand that could be met by such systems depend on many far-from-certain assumptions.

The lesser of two "impossibilities"

An America that committed to IEER’s vision would be a better place than it is today. That vision goes well beyond the timid official strategy of the Sierra Club, for example [17], and — unlike those of the big-enviro groups Natural Resources Defense Council and Environmental Defense [18] — firmly rules out nuclear power.

But where is the plan that shows how to adapt our political and economic institutions to ecological reality instead of trying to adapt reality to those institutions? Unfortunately, that is not the kind of plan that can be described in an executive summary or published in a volume or even a shelf-full of volumes. It will have to evolve–and evolve quickly–as we’re dealing with the inevitable hostility and resistance that will come from a capitalist power structure that will refuse to fit inside the ecosphere, no matter how hard it is squeezed.

Rather than despair, we should assume the thoroughly practical attitude of Herman Daly, who wrote in 2005, "In choosing between tackling a political impossibility and a biophysical impossibility, I would judge the latter to be the more impossible and take my chances with the former." [19]

Like it or not, through either calculated restraint today or bleak necessity tomorrow, we will be facing up to both the political and the biophysical impossibilities. Only deep, enforced cuts in energy consumption–much deeper than one percent per year–will take some of the pressure off of alternative energy sources and bring a solar-powered society within reach.

Stan Cox is a senior scientist and Wes Jackson is author of Becoming Native to This Place and president of The Land Institute in Salina, Kansas. They can be reached at: t.stan@cox.net.

Notes

1. A. Makhijani, http://www.ieer.org/carbonfree/

2. US Energy Information Administration, http://www.eia.doe.gov/emeu/aer/overview.html

3. US Bureau of Economic Analysis, http://www.bea.gov/industry/gdpbyind_data.htm

4. Redefining Progress, http://www.rprogress.org/publications/2007/GPI%202006.pdf

5. International Trade Administration, http://trade.gov/investamerica/health_care.asp

6. Business Week, 25 September 2006

7. US Energy Information Administration, http://www.eia.doe.gov/oiaf/1605/ggrpt/carbon.html

8. J. Perraton, American Journal of Economics and Sociology 65: 641-691 (2006)

9. W.S. Jevons, The Coal Question: An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal Mines, London: Macmillan and Co., 1865. e-book.

10. H. Daly, address to the World Bank, 30 April 2002.

11. E.C. Alfredsson, Energy 29:513-524 (2004).

12. M.H. Bender, Resources, Conservation, and Recycling 30:49-58 (2000)

13. D. Schneider, American Scientist, Sept.-Oct. 2006, http://www.americanscientist.org/template/AssetDetail/assetid/53356

14. K. Dimitrov, http://www.nanostring.net/Algae/CaseStudy.pdf and
http://www.nanostring.net/Algae/CaseStudyFollowup.pdf

15. Based on IEER’s highly optimistic projection of 10,000 gallons per acre per year of biodiesel to come from algae, a million acres of algae "farms" would supply about 5 percent of the nation’s current annual gasoline and diesel consumption (http://genomicsgtl.energy.gov/biofuels/transportation.shtml#consumption)

16. D. Tilman, J. Hill, and C. Lehman, Science 314:1598-1600 (2006)

17. American Solar Energy Society, http://www.ases.org/climatechange/ , a plan thoroughly eviscerated by Don Fitz (http://www.counterpunch.org/fitz04142007.html)

18. NRDC, http://www.nrdc.org/nuclear/plants/plants.pdf and
ED, http://www.environmentaldefense.org/article.cfm?contentid=4470

19. H. Daly, ‘Economics in a full world’, Scientific American, September 2005