Who created the miracle of renewable energies? | Opinion
As terrible as many things are in the world, the climate is unique in that it poses an existential threat to civilization. And it is horrible that so many political figures are strongly opposed to any serious action to deal with this threat.
Despite this, there is still a chance that we will do enough to avert catastrophe – not because we have become wiser, but because we have been lucky. We thought it would be difficult and expensive to significantly reduce greenhouse gas emissions, but not as much as anti-environmentalists claimed.
Over the past twelve years, however, we have experienced a technological miracle. As well documented in an article by Max Roser, the costs of solar and wind power, once considered crazy hippie fantasies, have plunged to the point that fairly modest incentives could lead to a rapid reduction in fossil fuel use. .
But was it really luck? This miracle – in fact two miracles, since producing electricity from the sun and the wind involves completely different technologies – did it come when we needed it? Or was it a consequence of good political decisions?
The answer is that there is good reason to believe that politics – the Obama administration’s investments in green energy and European subsidies, especially for offshore wind – have played a central role.
What is the rationale for this conclusion? Let’s start with the fact that neither wind power nor solar power was a fundamentally new technology. Windmills have been in wide use at least since the 11th century. Photovoltaic solar power was first developed in the 1950s. And as far as I know, there haven’t been any major scientific breakthroughs behind the recent dramatic drop in the costs of both technologies.
What we are examining, on the contrary, appears to be a situation in which the increasing use of renewable energies is itself leading to cost reductions. For solar and wind power, we’ve seen a series of incremental improvements as energy companies gain experience, big reductions in component prices as things like turbine blades go into production. in series, etc. Renewable energies, as Roser points out, appear to be subject to learning curves, in which costs decrease with cumulative production.
And here’s the thing: When an industry has a steep learning curve, government support can have huge positive effects. Subsidize such an industry for a few years, and its costs will decrease with experience, and eventually reach a tipping point where its growth will become self-sustaining and subsidies will no longer be needed.
This is arguably what has happened, or is about to happen, for renewable energies.
The American Recovery and Reinvestment Act of 2009 – Obama’s Stimulus – was primarily intended to deal with the collapse in demand that followed the 2008 financial crisis. It helped a lot but still got a bad rap. because he was malnourished and therefore failed to produce a rapid recovery. (And no, it’s not hindsight. I was yelling at the time.) But that also included significant funding for green energy: tax breaks, grants, government loans, and loan guarantees.
Some of the government-backed projects have gone awry and Republicans have made political hay on the losses. But venture capitalists expect some of the companies they support to fail; if that never happens, they don’t take enough risk. Likewise, a government program to advance technology is doomed to end up with a few lemons; if not, it does not extend the border.
And in retrospect, it looks like these Obama initiatives have really pushed the boundaries, shifting solar power in particular from expensive technology to limited adoption to the point where it is often cheaper than power sources. traditional.
Obama’s policies have also helped wind power, but I suspect a lot of the credit goes to European governments, which heavily subsidized offshore wind projects at the start of the last decade.
In short, there is very good reason to believe that government support for renewables has created a cost miracle that might not have happened otherwise – and this cost miracle could be the key to saving us. of a total climate catastrophe.