Wednesday, August 31, 2016

The $8 Trillion Fight over How to Rid America of Fossil Fuel

Economists agree it can be done, but differ on how much it will cost.

Transmission power line (Credit: By Yummifruitbat) Click to enlarge.
Geoffrey Heal, an economist at Columbia Business School, recently published a National Bureau of Economic Research working paper that asks what would it take—over the next three-and-a-half decades—to cut U.S. greenhouse gas emissions to 80 percent below their 2005 level?  That’s not a made-up target:  It’s the goal the Obama administration submitted (PDF) to the UN.  It’s also the long-term goal the U.S. will bring to G20 negotiations next week.  And it shows up in the 2016 Democratic Party Platform (PDF) upon which Hillary Clinton is running for president.  (Republican candidate Donald Trump has rejected the science of global warming.  Libertarian candidate Gary Johnson recognizes climate change and is open to a carbon tax.)

Among scientists, however, there is agreement.  Two Harvard economists, after trawling through voluminous, authoritative research, said last year that the odds of an utterly catastrophic finale to humanity’s atmospheric experiment is about 10 percent.  That’s a conclusion that can focus minds pretty quickly—and perhaps turn the expenditure of trillions of dollars over three decades into only a tough, but manageable, problem.

Doing the math
Heal’s main goal is to figure out, in a policy-agnostic, nonpolitical way, the economics of replacing 66 percent of U.S. energy output—the coal and gas used for electricity generation—with renewable energy or a combination of renewables and nuclear power.  “I wanted a way of doing it that was transparent,” Heal said, “in which anybody who was interested in it can understand, and—if they disagreed—they can go back and do it their own way.”

His thinking goes like this:
  • Split the 66 percent into half-solar and half-wind generation, and then price out the panels and turbines.
  • Assume that the U.S. will need to boost its transmission grid by 25 percent, which won't come cheap since high-voltage lines run as much as $3 million a mile, plus substations and interconnections.
  • Subtract the cost savings from never having to buy fuel because sunshine and wind come gratis.
  • Also deduct what we're expected to invest to upgrade the old energy infrastructure.

Read more at The $8 Trillion Fight over How to Rid America of Fossil Fuel

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