One of the ongoing arguments that the forces opposed to dealing with climate change make is that transitioning the grid to renewables will be economically devastating. A nuance that’s emerging is that a mixed grid with lots of fossil fuels is economically superior. It isn’t, and it’s worth pulling together the set of arguments for why.
January 23rd, 2019 by Michael Barnard
We have to start by asking ourselves what we mean when we say ‘economically superior’. The Exxon-Valdez disaster of 1989 spilled 35,000 metric tons of oil into sensitive waters off of Alaska. Was that an economic benefit or negative? It depends on what lens you use. One of the odd impacts of the spill was a short-term economic uptick in jobs and business due to the massive oil spill cleanup efforts. In the long term, tourism, fisheries and related industries have continued to be impacted, but if you picked your timeframe the disaster could be read as an economic benefit.
Similarly, the US healthcare system has a very high per-capita cost with poorer outcomes than other roughly equivalent societies, yet the healthcare industry in the USA is a massive economic driver. Is the poor structuring and payment system in the USA a net economic benefit or a net economic negative?
In context of economic benefits, we have to cast our nets across a broader rather than narrower set of topics and a broader rather than narrower timeframe in other words.
Power generation mixes
The question boils down to whether a solely renewable grid is superior to a grid with a remaining substantial percentage of fossil fuel generation mitigated with carbon capture and sequestration.
The first contains a couple of variants that are worth exploring a bit. The first variant is a fully electrified economy, with industry, agriculture, transportation and the like all using electricity generated by renewables and stored in some interim form, mostly batteries but also hydrogen in some cases and (cleaner) manufactured hydrocarbons in others. The second variant adds biofuels from woodchips, biodiesel, and biomethane sources to the mixture with continued thermal generation of electricity and greater continued use of internal combustion and diesel engines for transportation.
The partially fossil fuel grid assumes that the negative externalities of fossil fuel generation and transportation fuels can be managed. The expectation is that these will be internalized in the cost rather than remain uncosted negative externalities. This includes carbon dioxide and methane emissions which cause global warming, with the Pigovian tax being some combination of a straight carbon tax, cap and trade, and regulation. This would enforce carbon capture and sequestration in theory, although the practice remains so uneconomic it’s hard to see it working. Pollution negative externalities include loss of productivity via multiple causal mechanisms, additional burdens on healthcare systems and premature loss of life.
The timeframe is important. Carbon emissions today create economic impacts 20–100 years from now. Pollution emissions today create economic impacts that are both immediate and long-term, as the Exxon Valdez example shows. Burning fossil fuels for transportation and generation, in other words, requires us to view longer term, not quarterly or annual economic cycles.
There are a couple of additional pieces to the puzzle. A key one is viability. Can we actually transform our global economy to one powered by renewable energy, regardless of storage?
Yes, we can. The go-to source for this is the work of Dr. Mark Jacobsen out of Stanford. The Solutions Project he spearheads looks at the transformation globally through 2050. That gives us the timeframe necessary, but to be clear, Jacobsen is only looking at direct economic impacts of jobs and the like. He’s ignoring negative externalities in his work.
Renewables create a lot more jobs than the increasingly capital-intensive fossil fuel industry. Putting up 100 3.3 MW wind turbines across a few dozen square miles of Idaho and then maintaining them takes more people than the equivalent generation in gas or coal.
This can perhaps be most clearly seen in the jobless recovery in Canada’s oil sands, where economic recovery did not see a return of the thousands of jobs for workers whose jobs had been automated in the efficiency drive of the recession. Traveling to Brazil is instructive, as Petrobras remains a governmentally-owned oil company and is vertically integrated. There are half-a-dozen service people at every gas station and it takes four times as much labor per barrel in their refineries. This is because Petrobras is a governmental mechanism for balancing employment numbers, not an efficiently run organization. It’s a dying breed globally, when even Saudi Aramco has floated shifting to private ownership.
Right now in the USA, there are more people employed in the solar industry alone than in the entire fossil fuel industry. Add in wind generation and the necessary transmission and distribution of electricity. Add in Tesla’s employees and all of the businesses working on the transition to electrified transportation. There’s a big jobs gain to be had in the transition.
Read more on the CleanTechnica original document.