November Cleantech Roundup: A Bug’s Life; Is the Carbon Tax Dead? Wind vs. Coal; Climate Reports.
Clean Energy Trust’s cleantech roundup highlights interesting cleantech news and perspective, from policy changes to technology updates and investment news.
Interesting Posts
A Bug’s Life
Shayle Kann published a great piece that makes a series of predictions about the future of energy over the next 40 years. It is very informative, but also fun and easily digestible.
While his predictions envision a world that looks very different than today, in some places we think he actually wasn’t aggressive enough. While Shayle thinks voice control will overtake keyboards as the primary way of interacting with computers, my colleague Ben thinks kids born this year will be controlling computers with their minds. Similarly, Shayle predicts the rise of indoor agriculture, increasing to make up 20% or more of produce, up from very little today. Ben also thinks we’ll be getting way more than 20% of food from inside. After all, as the population grows, we’ll need to get more efficient with our agriculture; indoor agriculture (often, stacks of vegetables grown hydroponically) can yield more than 10 times the output per square foot, compared to open fields.
One area that Shayle didn’t get into? Whether there will be a federal price on carbon in the future. I think the answer to that is “definitely” and I think it will happen in the next 10 years. Link to Shayle’s post
The Carbon Tax is Dead, Long Live the Carbon Tax
On election day, Washington state voted against instituting a carbon tax for the state. In a piece recapping that loss (“The Carbon Tax Is Dead, Long Live the Carbon Tax”), Tyler Cowen points out that just because voters are opposing carbon taxes doesn’t mean they won’t accept them in some form. As he puts it,
In the American context, I don’t view the unpopularity of the carbon tax as merely reflecting the influence of special interests. The American people apparently feel that government ought to be able to solve this problem without imposing a new tax burden on them.
For all the talk about disillusionment and cynicism in American politics, this view represents a strange kind of optimism. If this issue really is so important, some voters must be thinking, surely you politicians can find a way to solve it without making us pay for everything. Don’t we give you enough money already? There is something admirable about this attitude, even if it doesn’t apply best to this particular case.
I agree with him here — although I think voters were short-sighted in opposing the carbon tax that was proposed in Washington state, I also understand that people do not like raising their taxes. Indeed, it is why I think a carbon dividend is a great idea, where the revenues raised from the carbon tax is returned to consumers.
Lo and behold, just this sort of carbon dividend legislation was just introduced by a small bipartisan group in the House. It won’t be law anytime soon, but I expect something similar to this legislation will be what eventually does get passed.
Or, then again, maybe not — I recently read that the populations who tend to find carbon dividends most appealing from a policy perspective are also the population who is least interested in taking action on climate change (so I guess I’m an outlier in this crowd). Link to Tyler Cowen’s post
Levelized Cost of Energy and Storage 2018
Lazard is out with its annual levelized cost of energy analysis. In their words:
Lazard’s latest annual Levelized Cost of Energy Analysis (LCOE 12.0) shows a continued decline in the cost of generating electricity from alternative energy technologies, especially utility-scale solar and wind. In some scenarios, alternative energy costs have decreased to the point that they are now at or below the marginal cost of conventional generation.
While this is just another set of data that reflects the trend of alternative energy continuing to get cheaper as they scale, the report notes we are approaching an interesting inflection point. Wind and solar are getting cheap enough that building new renewables (wind in particular) is starting to compete with the marginal cost of continuing to operate coal and now nuclear power plants (natural gas plants are cheaper to operate. Although energy transitions tend to happen slowly, this data is a reminder that the transition to renewables is likely to pick up speed in the coming years. Link to the Lazard Report
4th National Climate Assessment
A report recently released by the US Government indicates climate change could cause major damage to the world, including eliminating 10% of the US economy (gross domestic product) by 2100. So, that’s not good. The report also notes that previous climate predictions have been largely born out by more recent observation.
There is always some uncertainty in climate projections, but scientists’ estimates about the effects of global warming to date have largely been borne out. The variable going forward, the report says, is the amount of carbon emissions humans produce.
So, scientists are pretty good at estimating global warming (that’s good) but this warming has indeed happened (that’s bad). That said, there is a silver lining — the report does point out that the eventual outcomes are largely dependent on how we choose to act (or not act), and proposes several good policy solutions:
But the new report also emphasizes that the outcomes depend on how swiftly and decisively the United States and other countries take action to mitigate global warming. The authors put forth three main solutions: putting a price on greenhouse gas emissions, which usually means imposing taxes or fees on companies that release carbon dioxide into the atmosphere; establishing government regulations on how much greenhouse pollution can be emitted; and spending public money on clean-energy research.
These policy recommendations are a reminder that, while managing our global emissions is a big challenge, we don’t have and should not be waiting for a single silver bullet; the United States (as well as the rest of the world) just needs to put practical policies in place to incent businesses and individuals to emit fewer emissions, while investing in clean energy innovation to ensure we continue to develop new technologies that help us continue to decarbonize our economy.
At the end of the day, is this report going to change a lot of minds? No. Indeed, here’s a Wall Street Journal op-ed response to the climate report:
This counterpoint piece argues that 10% of the economy is not that big a deal, and is not the catastrophe people are predicting. As my colleague Ben notes, this might be the case in the United States, but it makes no reference to global problems that could be created or exacerbated by climate change. Global drought, war, and migrant crises could have enormous and catastrophic effects not captured in this economic analysis. These are the dynamics that many worry about.
And let’s think about this idea that 10% knocked off the economy not being that big a deal for a moment. Even if it wasn’t going to be a huge crisis, wouldn’t we still want to avoid it if we knew how to? For example, if our colleague Paul (an active woodworking hobbyist) lost one of his fingers in a shop accident, this would not destroy his life. After all, it is only 10% of his fingers. That does not mean, however, that he shouldn’t take precautions to avoid cutting off his fingers. It might mean that he needs to put more safety procedures in place or move a little more slowly, but these adjustments are a small price to pay for keeping 100% of his fingers.
Regardless of one’s perspective on taking action to address climate change, this report is another useful data point on the changes occurring in our climate. Additionally, it may make it more difficult to ignore climate change issues when implementing federal policy in the future, since these are the government’s findings (it makes it harder for the government to argue in court that we don’t need to worry about the climate impacts of changing a regulation, for example, because this data is in the record). We should also note that while that 10% figure was included in the report, it probably deserves a more nuanced look at what that analysis does and does not assume. Link to the New York Times story on the 4th National Climate Assessment
Other Links
Ben recommends this podcast on a utility worker in Puerto Rico turned folk hero for his efforts following Hurricane Maria. Link
Hal Harvey is out with a new book that explains the most effective policies we need to put in place in order to decarbonize our economy. Link
Bill Gates sounds off about the need to address the majority of global emissions that sit outside the electricity sector. Link
How to Commercialize Solid-State Batteries Without Going Bankrupt. Link
Not Cleantech
Ben Evans’ presentation on the state of tech today (it’s not you, he’s speaking extremely quickly in it, but still worth a watch). Link
For Further Reading:
These publications and newsletters are what I typically pay attention to and are great sources for cleantech and investing news.
Energy:
- GreenTech Media — Good source for news and analysis on all kinds of clean energy.
- Axios’ Generate — Daily energy news roundup, with coverage that includes (but is not limited to) federal goings-on
- The Energy Gang Podcast — weekly cleantech news digest podcast produced by Greentech Media
Investing and Technology:
- Axios’ Pro Rata — Weekday morning newsletter by Dan Primack
- Money Stuff — Weekday opinion piece from Matt Levine at Bloomberg on finance
- Benedict’s Newsletter — Ben Evans’ weekly summary of interesting tech and investing news, along with his own interesting takes
- A VC — Blog by Fred Wilson of Union Square Ventures — lots of interesting commentary on venture investing in general, and blockchain in particular
