ENERGY AND SOCIETY*

by

Charles L. Harper

Population growth, increasing the food supply, and general increases in human living
standards have been possible only because of substantial increases in the amount of energy
we consume. In 1990, the total energy consumption by humans around the world was 14
times larger than it was in 1890, early in the beginning of the industrial era. This growth in
energy consumption outstripped even population growth, which doubled during the same
time period. But at the same time, you should note that the human use of energyits
mining, refining, transportation, consumption, and by-productsaccounts for much of the
human impact on the environment.... [Human societies] are embedded in systems of energy
production and consumption. In other words, energy mediates between ecosystems and
social systems...

Energy is fundamentally a physical variablemeasured variously as calories, kilowatt

hours, horsepower, British thermal units, joules, and so forth. But energy is also a social
variable, because it permeates and conditions almost all facets of our lives. Driving a car,
buying a hamburger, turning on your computer, or going to a movie could all be described in
terms of the amount of energy it took to make it possible for you to do those things. A
kilowatt hour of electricity, for instance, can light your 100-watt lamp for 10 hours, smelt
enough aluminum for your six-pack of soda, or heat enough water for your shower for a few
minutes. All social life, from the broad and profound things to the minutiae of everyday life,
can be described in energetic terms.

In this [paper] I discuss (1) social and environmental problems associated with our
present energy systems... (2) a survey of current energy resources and some possibilities for
alternative methods of producing energy; and (3) some policy issues related to the need to
transform existing human energy systems.

••••

ENERGY PROBLEMS: ENVIRONMENTAL AND SOCIAL

The world’s present energy systems and technologies have four different sorts of interacting
problems: (1) “source problems,” having to do with energy resource supplies, (2) problems
related to population growth and economic growth and development, (3) global
___________________

*REPRINTED FROM: Charles L. Harper, Environment and Society (Prentice-Hall:

Upper Saddle River, N.J., 1996), Chapter 6, pp. 199-243.
economic and eopolitical problems, and (4) sink problems, having to do with the by-
products, pollution, health hazards, and environmental impacts of energy systems and
technologies.

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Source Problems: Energy Resource Supplies

Most of the world’s present energy needs are supplied by finite or nonrenewable resources,
mainly the fossil fuelspetroleum, natural gas, and coal. In 1990 they accounted for
between 80% and 88% of total world energy flows (estimates vary). All other sources, such
as hydropower, nuclear, traditional fuels (wood, dung, plant refuse), solar, and wind power
together comprised the remainder. Those proportions are not substantially different today.

In the 20 years since the pessimistic estimates of oil reserves in the 1970s, known oil
reserves for the world have doubled, and energy analysts now agree that in the near term, the
earth’s supply of fossil fuels is not a problem. Known reserves of crude oil will last until
sometime in the middle of the next century. Natural gas will last at least that long, and even
longer if we become willing to pay a higher price to get at the much larger subeconomic
reserves that are thought to exist. And there is an awful lot of coal in the world, which will
last for somewhere between 200 and 1,000 years, depending whether one projects its current
rate of use or a growing rate of use. But its use carries extraordinary problems and risks
compared to those of oil and natural gas (more about that later). Even though supply
constraints are less immediately constraining than it was thought in the 1970s, even with
more optimistic supply estimates, there are still supply concerns for the mid-and long-term
futures.

Take the case of oil. There is a rough consensus among energy analysts that
continuing the current rates of oil consumption will deplete the earth’s affordable reserves
somewhere between 35 and 80 years from nowin other words, between 2030 and 2072. If
you believe that new oil discoveries will forever push back resource depletion, consider this
remarkable fact: Just to keep using oil at the present rate means that we must discover as
much oil as there is in Saudi Arabia25% of the world’s known reservesevery 10 years.
Hardly anyone thinks that is feasible. Most experts expect little of the world’s affordable oil
to be left by 2059, the bicentennial of the world’s first oil well. Oil company executives
have known this for some time, which is why their companies have been diversifying.
Several years ago, industry-connected analysts such as Robert Hirsch, Vice President and
Manager of Research Services for Atlantic Richfield Oil Company, urged an orderly
transition to alternate-energy technologies in the early to middle twenty-first century.

All projections about how long it will take to deplete fuel and mineral reserves are
expert “guesstimates” themselves, notoriously dependent on assumptions and contingencies
that could change them... But let me note a few obvious possibilities that could change
depletion-time estimates. If trends toward greater energy efficiency in the MDCs, which
consume the largest share of fossil fuels, resume with full force, declining demand could
stretch out supplies many years beyond current estimates. On the other hand, many other
things could happen, singly or in some combination, to shorten the estimated years until
depletion of fuel reserves. These might include lack of success in exploring unknown but
probable geological sources, increased consumption rates that are due to greater than
expected population growth, greater growth of the world market economy, or strong
economic development in the LDCs, which elevates world energy consumption.

In short, we won’t run out of gas or other fossil fuels anytime soon, and there is a lot
more fossil fuel than we thought in the 1970s. But although there is no impending energy

2
supply crisis, there are still reasonable concerns about supplies in the mid-term future, based
on projections of current rates of consumption.

Energy, Population Growth, and

Economic Development

Consider the interaction between future energy needs and future world population growth or
the prospect of successful economic developmentdesperately needed and desired among
the masses of poor people in LDCs around the world. That gives you an even spookier
picture of future energy problems. In 1990, the world’s 5.3 billion people consumed 13.7
terawatts of energy (a terawatt is equal to the energy in 5 billion barrels of oil). But that
aggregated world consumption statistic hides its very unequal distribution among nations. In
1990, the MDCs had about one-fifth of the world’s people, but they consumed almost three-
fourths of the world’s energy. The U.S. alone had 6% of the world’s people but consumed
30% of the world’s energy. Presently, one American consumes as much energy as do 3
Japanese, 6 Mexicans, 14 Chinese, 38 Indians, 168 Bangladeshis, 280 Nepalis, or 531
Ethiopians!

... World population may stabilize in the next century at somewhere between 9 and
14 billion people. (Most demographers now think that the lower number is unrealistic.)
Assume that tremendous progress in energy efficiency makes it possible to provide an
acceptable standard of living like that of Germany to people around the world. Then 9
billion people would consume 27 terawatts, and 14 billion would consume 42. Even the
lower figurevery optimistic on both demographic and technical groundswould double the
1990 world energy consumption, and the higher figure would triple it. Can we expect to
achieve even the lower figure at tolerable costs? As difficult as stabilizing the population
may be, it is likely to be much easier than providing energy for the burgeoning numbers of
people, to say nothing of their aspirations for economic development and the increases in
food, water, and material consumption which that would entail.

If, for instance, the large and growing numbers of Chinese, Indians, Indonesians, and
others become energy consumers who live even remotely close to the present living and
consumption standards of Americans or Europeans, it would place enormous strains on the
supply of global energy resources. The availability of energy is one of the important
constraints on development in the LDCs, but if it occurred around the world in the same
manner as it did in the MDCs, the planet’s energy and mineral supplies would be rapidly
depleted, and the resulting environmental degradation, toxic wastes, and heat-trapping
greenhouse gases would be intolerable.
••••
Sink Problems: Energy and Environment

If energy supplies are now thought less constraining than in the 1970s, environmental
problems that derive from our present energy system are thought to be more severe and
getting worse. Stated abstractly, the most pressing causes of change in human energy
systems may not be source problems but sink problems.

Burning fossil fuels is a major source of human generated CO2, the major heat-
trapping greenhouse gas. The combustion of petroleum products accounted for 40% of the

3
anthropogenic CO2 in 1993. Burning oil products also produces nitrous and sulfur oxides
that damage people, crops, trees, fish, and other species. Much urban pollution is caused by
vehicles, which run almost exclusively on petroleum products. Oil spills, leakage from
pipelines and storage, and leakage from drilling sites leave the world literally splattered with
toxic petroleum wastes and by-products. The ecosystem disruption from oil spills may last
as long as 20 years, especially in cold climates. Oil slicks coat the feathers and fur of marine
animals (e.g., birds and seals), causing them to lose their natural insulation and buoyancy,
and many die. Heavy oil components sink to the ocean floor or wash into estuaries and can
kill bottom-dwelling organisms such as crabs, oysters, mussels, and clams, or make them
unfit for human consumption. Such accidents have serious economic costs for coastal
property and industries (e.g., tourism and fishing). Oil tanker accidents, such as the wreck of
the Exxon Valdez in prince William Sound in Alaska, get the most publicity, but experts
estimate that between 50% and 90% of the oil reaching the oceans comes from the land
when waste oil is dumped on the land by cities, individuals, and industries and ends up in
streams that flow into the ocean.

Coal is hazardous to mine and the dirtiest, most toxic fuel to burn. Mining often
devastates the land, and miners habitually suffer and often die from black lung disease.
Burning it produces larger amounts of particulate matter and CO2 than other fossil fuels.
The combustion of coal accounts for more than 80% of the SO2 and Nox injected into the
atmosphere by human activity. In the U.S. alone, air pollution from coal burning kills about
5,000 people, contributes to at least 50,000 cases of respiratory disease, and causes several
billion dollars in property damage. Damage to the forests of Appalachia, the Northeast,
Eastern Canada, and Eastern Europe can largely be attributed to coal-fired industrial plants.
Reclaiming the land damaged by coal mining and installing state-of-the-art pollution-control
equipment on plants substantially increases the costs of using coal. Indeed, if all of coal’s
health and environmental costs were internalized in its market cost, and if government
subsidies from mining were removed, coal would be so expensive that it would immediately
be replaced by other fuels.

China is currently the world’s leading consumer of coal, which accounts for fully
75% of the Chinese energy budget (similar to Britain in the nineteenth century). China’s
recent phenomenal economic growth (averaging between 7% and 10% per year) has
involved parallel increases in the burning of coal. China is rich in coal with few alternatives.
Presently China accounts for 25% of world coal consumption, and energy planners envision
a 40% increase in the next decade, though extensive health and crop damage are threatening
those plans. China is also the third largest producer of atmospheric CO2 (after the U.S. and
Russia). Because of its dependence on coal, China’s economic development has been far
more energy intensive than most nations, meaning that it gets much less economic output
from each unit of energy. If both the use of coal and the production of CO2 continue at
historic rates, the Chinese production of greenhouse gas will quadruple in less than 40 years
and will surpass that of the U.S. Indeed, much of the future of global climate change
depends very much on how energy-intensive Chinese development will be.

Let me sum up the argument I have been making so far: There is no immediate
energy crisis. A crisis is a rapidly deteriorating situation that, if left unattended, can lead to
disaster in the near future. But there is an energy predicament, that is, an ongoing chronic
problem that, if left unattended, can result in a crisis. The energy predicament includes
future source constraints and the ways in which the present energy system is intimately

4
connected with environmental degradation, climate change, population growth problems, and
the global equity and geopolitical tensions that plague the world. At the end of this [paper], I
will turn to some of the possibilities and options for the transformation of the present system
to address our energy predicament. But there are some clues about these possibilities from
the relationship of energy to society and there are studies of that relationship, which I’ll
discuss next.

THE ENERGETICS OF HUMAN SOCIETIES

The ultimate source of all the world’s energy is radiant energy from the sun. Fundamental to
understanding the energy flows of both ecosystems and human social systems is
understanding photosynthesis. Autotrophic (green) plants transform solar radiant energy
into stored complex carbohydrate chemical forms by the process of photosynthesis. These
are then consumed and converted into kinetic energy through the respiration processes of
other species. Energy filters through the ecosystem as a second species consumes the first, a
third the second, and so on. Unlike matter, energy is not recycled but tends to degenerate
through the process of entropy to disorganized forms such as heat, which cannot be used as
fuel for further production of kinetic energy or to sustain respiration (this entropic property
of energy is the second law of thermodynamics). Such inefficiency means that only a
portion of stored potential energy becomes actual kinetic energy.

This inefficiency and wastefulness occurred under conditions that existed long ago in
the earth’s geological history, when the storage of organic matter in sediment and fossil
deposits created the concentrated energy carbon sinks of petrochemical fossil fuels. These
fuels became almost the exclusive energetic basis of industrial economies during the last
century. Of course, this was a great benefit, because we are now living off the stored energy
capital of millions of years ago, but it is also true that the second law of thermodynamics
(entropy) means that the relatively plentiful supplies of these fuels are ultimately exhaustible.
More precisely, we will never absolutely use them up, but they can become so scarce and
low grade that the costs of the energy and investment necessary to extract, refine, and
transport them exceed the value of their use. We will have to squeeze the sponge harder and
harder to get the same amount of energy, and damage to the environment will increase as we
do so.

Low- and High-Energy Societies

All human societies modify natural ecosystems and their energy flows, but they vary greatly
in the extent to which they do so. Human respiration requires enough food to produce about
2,000 to 2,500 calories a day, but people in all human societies use vastly more energy than
this minimum biological requirement to provide energy necessary for their shelter, clothing,
tools, and other needs. Each person in a hunting and gathering society requires about 5,000
kilocalories per day (a kilocalorie is 1,000 calories), but that makes insignificant demands
on natural ecosystems compared to the average of 230,000 kilocalories used per person per
day in the United States (Table 1).

Table 1 illustrates the prodigious growth of world energy consumption since the
beginning of the industrial era, and the increasing dependence on petrochemicals, as opposed

5
to the traditional fuels of preindustrial societies (e.g., wood, dung, plant wastes, charcoal)
that are still the energy mainstays of many people in the LDCs around the world. Although
the aggregate energy consumption of the world has grown, as Figure 1 illustrates, it is also
important to note that most of that growth is accounted for by the MDCs as high-energy
societies. Indeed, a typical suburban upper middle-class American household consumes as
much energy as does a whole village in many LDCs!

Table 1. Per Capita Energy Consumption in Different Types of Societies

____________________________________________________________
SOCIETY KILOCALORIES PER DAY PER PERSON
____________________________________________________________
MDC (United States) 230,000
MDC (other nations) 125,000
Early industrial 60,000
Advanced agricultural 20,000
Early agricultural 12,000
Contemporary hunter-gatherer 5,000
Prehistoric 2,000
_____________________________________________________________
Source: Miller, 1992:32.

Industrialization and Energy

Industrialization was made possible by new technologies of energy conversion that were
more efficient than traditional fuels. During the first phase in the early nineteenth century,
the dominant technology depended on coal mining, the smelting and casting of iron, and
steam-driven rail and marine transport. The system’s components were closely intertwined,
and the creation of an integrated mining, smelting, manufacturing, and transportation
infrastructure made industrialization possible. By the end of the nineteenth century, the
system was being radically transformed againby electric power, internal-combustion
engines, automobiles, airplanes, and the chemical and metallurgical industries. Petroleum
emerged as the dominant fuel and feedstock for the petrochemical industry.

The main point for you to note is that the current withdrawals of so much energy
from nature in the U.S. and other MDCs require substantial modifications of natural energy
flows. Industrial era agriculture replaced natural species of plants and animals with domestic
agricultural species that could produce more caloric energy to be diverted to human use. It
also created the kind of agricultural monoculture that loses stability, specialized circuits of
energy, and mineral recycling; has lower protection against epidemic destruction; and does
not sustain soil fertility. An MDC city alters natural ecosystems even more radically,
requiring enormous amounts of energy from remote reserves of fossil fuels to power
industry, heating, lighting, cooling, commerce, transportation, waste disposal, and other
services. Compared with natural ecosystems, cities become inert and relatively abiotic, as
concrete separates the soil from contact with life-supporting solar radiation. Wastes are no
longer naturally absorbed but must be transported to waste treatment plants. In addition,
industrial farmers use machinery fertilizer, and fuel manufactured by urban industries. Food
is no longer consumed mainly on the farm but is transported to the cities and processed for
marketing and consumption. MDCs thus have integrated agricultural-industrial-consumption

6
systems that use enormous amounts of fossil fuels and have vastly modified natural
ecosystems and energy flows ...

---

THE PRESENT ENERGY SYSTEM

AND ITS ALTERNATIVES

I mentioned earlier that most of the world’s present energy needs are supplied by finite or
nonrenewable resources, mainly the fossil fuelspetroleum, natural gas, and coal. Another
such resource, uranium, fuels nuclear reactors that provide a small portion of the world’s
energy. Renewable resources also supply a portion of the world’s energy needs.
Hydroelectric power and traditional fuels such as plant residues, wood, or dung provide
small portions of the world’s energy flows. While traditional resources may be overused,
uneconomic, or environmentally damaging, unlike finite resources, they are theoretically
renewable. Other renewable energy sources, such as wind power, solar energy, and
hydrogen, provide only tiny portions of current world energy flows but have great potential
as alternative sources in the future. These are the main subjects of this section.

Fossil Fuels

I discussed supply issues and problems with most of the fossil fuels earlier, so I won’t repeat
that here. But I need to mention some of their advantages. Oil is relatively cheap, easily
transported, and has a high yield of net useful energy. Net useful energy is the total useful
energy left from the resource after subtracting the amount of energy used and wasted in
finding, processing, concentrating, and transporting it to users. Oil is a versatile fuel that can
be burned to propel vehicles, heat buildings and water, and supply high-temperature heat for
industrial and electricity production.

Coal is everybody’s least favorite fuel, but there is an awful lot of it around the
world. Burning coal produces high useful net energy yield and is the cheapest way to
produce intense heat for industry and to generate electricity.

Natural gas, which I didn’t say much about earlier, is a naturally occurring geological
mixture of methane, butane, and propane. In stark contrast to coal, it is clean burning,
efficient, and flexible enough for use in industry, transportation, and power generation. It
generates fewer pollutants, particulates, and CO2 than any other fossil fuel: Natural gas
releases 14 kg of CO2 for every billion joules of energy produced, whereas oil and coal
release 20 and 24 kg, respectively. But methane emissions from leakage and the incomplete
combustion of natural gas is a heat-trapping greenhouse gas 25 times more potent than CO2.

Like oil, natural gas is concentrated in a few parts of the world. The Middle East
and Russia contain about 70% of the world’s known reserves. Although natural gas can be
shipped by pipeline cheaply on the same continent, it must be converted into liquid natural
gas (LNG) and shipped in refrigerated tankers to move it across the oceansat present a
difficult, dangerous, and expensive undertaking.

7
 Besides technical advantages, other advantages of the present system are economic,
political, and institutional. Quite simply, whatever their problems, we have an enormous
“sunk investment” in infrastructures to produce, process, and use the present sources. To
develop new energy technologies that are economical and practical on a wide basis requires
large investments and decades of experimentation. Not surprisingly, the rules of the present
energy economy were established to favor the systems now in place, not new possibilities,
whatever their advantages. Maintaining the fossil fuel system has short-term but very real
advantages for both individuals and the powerful corporate interest groups that profit from
them. Politically, a powerful set of tax biases and subsidies encourage the use of fossil fuels
and favor operating costs rather than long-term investment in alternatives.

Even with these advantages, our energy predicament is, as I noted, that the fossil fuel
age is coming to an end within the next century. We cannot see its end, but its decline is
already visible. World oil production peaked in 1979, and output in 1992 was 4% below that
historic high. Coal production has dropped steadily since 1990, interrupting a growth trend
that had spanned two centuries. Only natural gas is expanding output rapidly (33% since
1979) and is ensured a substantial future growth. What will replace fossil fuels? Fifteen
years ago, most experts would have said, with little hesitation, nuclear energy.

Nuclear Energy

Nonmilitary uses of nuclear energy produce electricity. In a nuclear fission reactor, uranium
235 and plutonium 239 are split by neutrons to release a lot of high-temperature heat energy,
which is in turn used to power steam turbines that generate electricity. Nuclear plants are
much more complex to operate and control than coal plants, because of the complicated
systems required to regulate, modulate, contain, and cool the reaction (which is, after all, the
same kind of nuclear fission reaction in the atom bombs of World War II).

I’m sure you are aware that it is a very controversial way of producing energy. In
fact, as I write this, nuclear energy looks very much like a technological option that is
slowly failing. Earlier forecasts suggested that by the turn of the century, nuclear energy
would produce 25% to 30% of the world’s total energy flow. But after 44 years of
development and enormous government subsidies around the world, in 1992 the 424 reactors
in the world produced only about 19% of the world’s electricityand less than 5% of the
world’s total energy flow. Since 1975, no new nuclear power plants have been ordered in
the U.S., and 120 previous orders have been canceled. Around the world, plans for the
expansion of nuclear energy have stalled or scaled down, even in France and Japan, countries
that invested most heavily in the nuclear option. Why?

The first reason is well-known: the risks of nuclear meltdowns and accidents and,
more recently, of the problems of low-level nuclear waste disposal have tarnished the
public image of the nuclear option. Three Mile Island and Chernobyl became household
words. German and Swedish scientists estimated in the late 1980s a 70% probability of
another nuclear meltdown accident somewhere in the world in the 1990s. But there is more.

A second, and less widely appreciated problem is that the planning, construction, and
regulation of nuclear plants make them a very uneconomic investment; perhaps inherently so
in relation to other options. A state-of-the-art coal-fired plant is a much less costly way of
generating electricity. Cold, hard economics may be a more potent barrier to the expansion

8
of nuclear energy than negative public opinion, or even cadres of antinuclear activists.
Nowhere is this clearer than in the vaunted French system, which supplies about 75% of
French electricity. Growing technical problems have led to extensive maintenance and
repairs costing billions of francs. Because the system is highly standardized, it has generic
flaws; for instance, reactor vessel heads need replacing throughout the system. In fact,
France has been forced to sell energy to neighboring countries at bargain prices to run plants
at even partial capacity. In 1989, the firm that builds French reactors lost $720 million, and
the cumulative debt of the national utility is now $46 billion, greater than France’s entire tax
receipts in 1988. The Japanese are having similar problems.

Furthermore, dismantling and securing the world’s aging stock of spent reactors and
the transporting and disposing of nuclear wastesissues that we are just beginning to
addresspose safety hazards, political problems, and economic costs that may exceed those
of the development and operation of plants. In 1993, the U.S. Office of Technology
Assessment issued a report saying that “long term prospects for the nation’s 107 [aging]
nuclear power plants are increasingly unclear”.

Third, a nation that has the technical capacity for nuclear power can also build
nuclear weapons, and so the diffusion of nuclear energy contributes to the potential
proliferation of weapons and very directly to geopolitical tensions. Not only has the nuclear
club expanded (to include such nations as China, Pakistan, India, and Israel), but as I write
this, several international “rogue” nations, such as Libya, Iraq, and North Koreaonly
minimally open to international inspection and treatiesare widely suspected of using the
development of nuclear electricity as a cover for developing a covert nuclear weapons
capability.

Fourth, the physical potential for nuclear energy to contribute to the expansion of
world energy needs over the next century is questionable, particularly so when compared
with the much greater potential of fossil fuels. Uranium ore is not a plentiful mineral in the
earth’s crust. German nuclear expert Wolf Häfele estimates that operating only existing
plants, and even assuming a 15% increase in operating efficiency, would contribute only
one-fourth as much to world energy flows as would the potential use of oil and natural gas,
while exhausting known fuel reserves and producing mountains of irradiated wastes over the
next century.

These estimates assume existing nuclear technologies, and I should note that others
are on the technological drawing boards. One is the so-called breeder reactor, which uses a
fission reaction that would greatly stretch fuel reserves, but its practicality, safety, and
economic viability are many decades away. The ultimate technological fantasy of nuclear
scientists is a fusion reactor, which would harness the operating principle of hydrogen
bombs. A fusion reactor would generate energy by fusing at a very high temperature two
hydrogen isotopes (deuterium and tritium). Those isotopes are vast and plentiful (and can
be produced from ordinary seawater for a few cents a gallon). Fusion reactions leave no
toxic wastes. But they require temperatures ten times as hot as the sun (about a 100 million
degrees Fahrenheit!) to stimulate the reaction to even produce energy. No one knows how to
safely contain such reactions, and the net energy required far exceeds the amounts of energy
produced (it has, in other words, a large negative net energy). Research about fusion
reactors has been going on for about 44 years now. Even optimistic estimates project that
with an investment of billions of dollars, a working commercial model might be produced by

9
2030, and that it would take to perhaps 2100 for nuclear fusion to become a significant part
of world energy flows.

Even with all of these problems, many energy planners and environmentalists argue
that nuclear energy has a role in the development of global energy systems, particularly since
the growth of concern with global warming. Nuclear energy produces no CO 2 and does not
contribute to acid rain or other combustion residues that contribute to ordinary pollution or
respiratory diseasesthough the storage of nuclear wastes is an acute problem. But for
nuclear energy to be viable, questions about safety, waste, and nuclear weapon proliferation
would have to be addressed by a globally administered institution. And that will not be easy.

Renewable Energy Sources

Perpetual and renewable energy sources are both the oldest energy sources used by humans
and those with the greatest potential to provide energy and address the many environmental
and social problems created by the present system. Taken together, energy from flowing
water, biomass (plant and animal remains), wind, and sun could meet 50% to 80% of our
energy needs by 2030 and perhaps sooner if combined with improvements in energy
efficiency. But with the exception of hydropower (a mature technology that generates
electricity from water-driven turbines), all are potential sources, and none makes a
significant contribution to the present world energy flows. The principles of generating
energy with each are well established, but in the mid-1990s they are not practical or
economic on a large scale. But their practicality and affordability are rapidly developing.

Hydropower

Hydropower uses water from dammed reservoirs to turn turbine engines, which generate
electricity. Hydropower generated about 20% of the world’s electricity (6% of the total
energy flow) in 1989. It produces 50% of the electricity in the LDCs, close to 100% in
Norway, 74% in Switzerland, and 10% to 14% in the United States. It is highly dependent
on topography and annual changes in stream flow, and in much of the world, the potential
for hydropower is already developed. Hydropower is a mature technology, with a moderate
to high net energy yield, and fairly low operating and maintenance costs. Hydropower dams
produce no emissions of CO2 or other pollutants. They have an operating life span of two to
three times that of coal or nuclear plants. Large dams can be used to regulate irrigation for
recreation and flood control. On the other hand, construction costs are high, and they are not
environmentally benign. They destroy wildlife habitats, uproot people, and decrease natural
fertilization (resilting) of prime agricultural land and fish harvests below dams, which make
their development inappropriate in many parts of the world, particularly in the LDCs.

Biomass

Most of the world’s people, about 80% of the residents of LDCs, burn traditional fuels, such
as wood, charcoal, dung, or plant residues, for fuel. Such fuels have a low net energy yield
and are dirty to burn, producing a lot of carbon particulate, CO2, and carbon monoxide as by-
products. Heating a house with a wood or charcoal stove produces as much particulate
matter as heating 300 homes with natural gas. But although people in LDC cities may buy

10
wood or charcoal, the great human virtue of traditional fuels is that most who use them do
not purchase them. In rural areas, the women and children usually gather twigs and branches
or animal dung for cooking fuel instead of buying wood. Because most of the population in
LDCs is poor and depends largely on non-commercial sources of energy, per capita use of
commercial energy is much lower than in MDCs. So, ironically, even though 80% of the
world’s people use such fuels, they account for only a minute proportion of the world’s total
energy flows.

Unlike fossil fuels, biomass is available over much of the earth’s surface. If
consumed at a sustainable rate, the CO2 released when it is burned exactly balances the CO2
reabsorbed by plants during photosynthesis and thus would not contribute to global warming.
But while in principle renewable and environmentally benign, the pressure of growing
populations has often stripped the land of trees and vegetation in the search for fuelwood,
contributing to deforestation and desertification. The forests of China have been cut down
for centuries, and the search for fuelwood today exacerbates desertification, soil erosion, and
environmental degradation today in much of sub-Saharan Africa, Nepal, and Tibet. To
appreciate the ecosystem ramifications, note that in the late 1980s, about 23% of the global
CO2 emissions were from deforestation in the LDCs.

Traditional biomass fuels can be used to produce other fuels. In many LDCs, small
devices called biogas digesters, or biogas generators, use bacteria to convert plant wastes,
dung, sewage, and other biomass fuels to methane gas. Such biogas generators are small and
simple to build and operate; individual villages and households can build and operate them.
After the generation of methane, used for lighting and cooking, the solid residue can be
recycled for fertilizer for food crops or trees. If allowed to naturally rot, traditional fuels
would themselves produce atmospheric methane, which is a greenhouse gas much more
potent by volume than CO2. So even though they do produce CO2, methane or biogas
generators used by the millions of LDC villages around the world could actually help reduce
global warming.

China has an estimated 7 million such units, and India has another 750,000, most
constructed since 1985. Such small biogas generators can vastly improve household life and
protect the environment by efficient recycling of plant and animal refuse. They reduce
deforestation by reducing the necessity to cut trees. But they have costs and limits. The
supply of biomass fuel stock often varies seasonally, and if used in biogas generators, fuel
stock availability for its usual use as crop fertilizer is reduced. Additionally, it takes so much
energy to search for and collect biomass fuel stock that biogas generators have a relatively
low net energy yield, and they can’t produce enough energy for really large-scale energy
projects. Still, biogas digesters, or generators, have several great virtues for use by LDC
villagers: They can protect the environment while significantly improving the household life
of rural villagers. They can do so without making them dependent on expensive energy from
big companies or cities. Aside from modest start-up loans, they can be built and operated by
the villagers themselves.

Where low-cost biomass fuel is readily available, there are other possibilities. In
Brazil, for example, highly sophisticated industries have been developed to convert plant
residues (from sugarcane, sugar beets, sorghum, and corn) into ethanol. Large fermentation
and distillation facilities now produce the ethanol that powers much of the auto and truck
fleets, cutting oil imports and producing over 500,000 jobs in the ethanol industry. But it

11
required government subsidies of over $8 billion to develop, which many poorer LDCs
would be unable to capitalize. Among the MDCs, Denmark and Sweden have invested
heavily in large-scale biogas digesters. In the U.S., mixing ethanol with gasoline stretches
gasoline supplies and reduces pollution and carbon emissions, but without state subsidies,
this is relatively expensive because growing corn is expensive. Still, even in the U.S., there
is great potential for inventing biomass-produced substitutes for the oil used in autos and
coal-generated power plants.

Wind Power

Wind generators basically hook up modern windmills to electric generators to directly

produce power. In 1990 there were enough wind turbines to equal the energy from several
large coal or nuclear plants. They were mainly in California, where “wind farms” produced
enough power to meet the residential needs of San Francisco, and in the Netherlands,
Sweden, and Denmark. Although its contribution to current world energy flows is minute, at
its current growth rate, wind power (13%) is one of the world’s most rapidly expanding
electricity sources. The cost of wind power fell 70% in the 1980s; by 1990 it was lower than
the costs of nuclear-generated electricity and only slightly higher than coal-generated
electricity. By the mid-1990s, it is expected to be economically competitive with coal.
Declining costs derived largely from organizational learning, that is, standardizing
procedures, better mass production techniques, siting generators more effectively, and
scheduling maintenance at times of low wind.

Wind power can only be produced in areas with enough wind. When the wind dies
down, you need backup electricity from a utility company or some kind of energy storage
system. Furthermore, unlike coal or oil, which pack a lot of energy in a small amount of
fuel, the amount of wind that blows across each square meter carries only a little bit of
power. It takes the combined effort of many wind generators installed across large areas of
land to produce as much energy as a single fuel-burning power plant. Even with these
limitations, wind power has a vast potential. In some areas the wind blows continously, such
as in the 12 contiguous U.S. Rocky Mountain and great plains states from the Canadian
border to Texas, a region that contains 90% of the wind power potential in the United States.
Wind-generated energy in this region would far exceed local demand. Two states, Montana
and Texas, have enough wind satisfy the whole country’s electricity needs, and the whole
upper Midwest could supply the nation’s electricity without siting any wind turbines in either
densely populated or environmentally sensitive areas. Similar windswept areas around the
world could produce a substantial proportion of the world’s electricity needs. England and
Scotland alone have enough wind potential to satisfy half Europe’s electricity needs, and the
potential for wind power in China could triple the nation’s current electricity usage. Wind
generators produce no CO2 or other air pollutants during operation, they need no water for
cooling, and their manufacture and use produce little pollution. The land occupied by wind
farms can be used for grazing and other agricultural purposes. In sum, wind energy is no
longer a research project: It works cheaply and reliably enough to compete with other energy
sources. Its principal disadvantages are aestheticmany people consider wind generators
unattractive visual pollutantsand they may interfere with local TV transmission when sited
close to urban areas.

12
Solar Energy

The direct use of energy from the sun has the greatest potential as an alternative energy
source. An enormous amount of radiant energy falls on the earth’s surface, which—if
trapped and converted into usable forms—could theoretically supply the energy needs of the
world. The total potential of solar power is vast but, like wind power, it is variable only,
possible where and if the sun shines, without storage mechanisms or backup systems. The
intensity of solar radiation varies by latitude and with the weather, but still, solar energy is
available 60% to 70% of the days in the northern tier of American States and 80% to 100%
in the southern half of the country. In the sunny regions closer to the equator, which include
many LDCs, the potential for solar energy is enormous.

Solar energy is now practical for space heating and to heat power. The technology of
using solar collectors for space and water heating is relatively simple. For an investment of a
few thousand dollars, using skills possessed by the average carpenter, it is possible to retrofit
an older home to reduce the use of natural gas or coal-generated electricity for heating water
or rooms. A passive solar heating system captures sunlight directly within a structure through
windows or sunspaces that face the sun and converts it into low temperature heat. The heat is
stored in walls and floors of concrete, adobe brick, stone, or tile, and released slowly during
the day and night. Active solar heating systems have specially designed collectors, usually
mounted on a roof with unobstructed exposure to the sun. They concentrate solar energy,
heat a medium, and have fans or pump systems that transmit space heat or hot water to other
parts of a building.

The potential for reducing American’s aggregate heat bill in this manner is very large.
On a lifetime-cost basis, solar space and water heating are inexpensive in many parts of
United States. But for those who rent or move frequently, such investment are less attractive.
It would require public incentives (e.g., tax credits) and a lead time of several decades to
convert existing housing stock to decentralized space and water heating. In many warm
sunny nations, such as Jordan, Israel, and Australia, solar energy supplies much of the hot
water now.

Photovoltaic (PV) electricity is produced directly when solar radiation is absorbed by

semiconductor cells that create an electric current. You are probably familiar with the PV
cell that energizes small calculators and wristwatches. In many ways, PV electricity is the
superb energy source: It creates no pollution, has no moving parts, and requires minimal
maintenance and no water. It can operate on any scale, from small portable modules in
remote places to multimegawatt power plants with PV panels covering millions of square
meters. And most PV cells are made of silicon, the second most plentiful mineral on the
earth’s surface.

Unlike windmills and passive solar heating, which are relatively simple technologies,
producing silicon semiconductor solar cells is a high-tech business, with considerable costs.
The main obstacle to the spread of PV technology is its price, currently about five times the
cost of fossil fuel-generated electricity. The costs of enough solar panels to heat an average
American home can range between $15,000 and $20,000.

As you might guess, at that price, PV electricity presently accounts for a small portion
of world energy flows. But, surprisingly, special global niche markets have increased

13
demand, at an average rate of 15% per year. PV supply electricity for at least 30,000 homes
(20,000 in the U.S.), many villages in LDCs, including 6,000 villages in India. PV lighting
units have been installed in Colombia, the Dominican Republic, Mexico, and Sri Lanka.
Most of these homes and villages are in remote areas where it costs too much to operate
diesel generators or bring in electric power lines. PV cells are used to switch railroad tracks,
and to supply power for rural health clinics, water wells, irrigation pumps, battery chargers,
portable laptop computers, ocean buoys, lighthouses, and offshore oil-drilling platforms.

Most governments have failed to invest in the potential of PV electricity(as well as

the other alternatives technologies I have been discussing). Fossil fuels and nuclear energy,
with their powerful companies and political lobbies, receive the most government support
and subsidies. MDC governments, for instance, invested $289 million in PV research and
development in 1991, compared with $898 million in coal research and $4.49 billion in
nuclear reactor research. In the U.S., government funding for solar research fell 80% in the
1980s, but in the mid-1990s it rose slowly, as it did in several European nations.

Even with weak government support for solar development, private researchers and
investors continued to dramatically reduce the price of PV electricity, as they did with wind
power. The costs of PV electricity dropped precipitously, from $60 per kilowatt hour in
1970 to $1 per kilowatt hour in 1980 to 20 to 30 cents per kilowatt hour in 1990. In 1994,
the United Solar Systems Corporation in the U.S. announced a new thin-film technology that
would cut current costs in half and bring the cost of PV electricity to about what today’s
electricity costs are with existing technologies. Although its price has meant that now the
market for PV electricity is not large, at those prices, it would rapidly find buyers.

Photovoltaic electricity has some costs and disadvantages. Like wind energy, solar
energy is diffuse, so solar panels take up considerable space, compared with other sources of
energy. Unlike wind generators, land occupied by solar panels cannot be used for grazing or
agriculture. But solar panels can sit on rooftops, along highways, and in sun-rich but
otherwise empty deserts. Furthermore, the use of land would not be excessive. Hydropower
reservoirs use enormous amount of land, and coal needs more land than solar generators, if
the area devoted to mining is included. New multilayer PV cells are being developed with
gallium and cadmium, which are much rarer minerals than silicon and may limit PV
expansion in the future, and their production may produce toxic materials.

Hydrogen Fuel

Hydrogen could be produced by using solar, wind, or conventionally produced electricity in

some combination to split water molecules into oxygen and hydrogen atoms. This process,
water electrolysis, should be familiar to you if you took high school chemistry. Hydrogen is
a clean-burning fuel, with about 2.5 times more energy by weight than gasoline. When it
burns, it does not produce heat-trapping greenhouse gases, but combines with oxygen in the
air to produce ordinary water vapor. Hydrogen can be collected and stored in tanks like
propane is today or can be transported by pipeline. It can be combined with reactive metals
to form solid compounds called hydrides, which could be stored and heated to release
hydrogen when it is needed as fuel for a car or furnace. Unlike gasoline, accident with
hydride, tanks would not produce dangerous explosions. Hydrogen is a versatile fuel that
could be used for transportation, heating, or industry.

14
 Switching to hydrogen and away from fossil fuels as our primary fuel resources would
mean a hydrogen revolution on a far-reaching and profound scale. It implies technical and
social transformations that compete in scale with those of the historic agricultural and
industrial revolutions. Theoretically, it would eliminate most air and water pollution, greatly
reduce production of heat-trapping greenhouse gases and the need for scarce fuel reserves,
moderate economic problems associated with fluctuating energy prices, and loosen energy
constraints on economic development. Because it could produced anywhere, it could reduce
the geopolitical tensions and costs produced by energy dependence among nations. The
technological vision most attractive to environmental thinkers would be to generate
electricity by PV solar, wind, or some other ecologically benign technology, and in turn use
that electricity in electrolysis to generate hydrogen fuels for use in industry and
transportation.

What’s the catch? Well there are some big ones. One barrier is technical: It takes
lots of electricity from some source to produce hydrogen by water electrolysis, so the net
energy yield is very low. Even if solar technologies develop in the next two decades, the cost
of producing electrolytic hydrogen on an energy-equivalent basis would be twice the cost of
present gasoline prices in the United State. But if all the health, environmental, and
geopolitical costs of gasoline that I noted earlier... were internalized in its cost, hydrogen
may be as cheap or cheaper. But to be of much use in transforming our present energy
predicament, the practicality of hydrogen fuel awaits the development of effective and
affordable electricity from alternative sources. Other barriers are social and institutional.
Switching from a carbon- to a hydrogen-based economy would mean changing all of the
economic infrastructures that are now in place, literally redoing the technical basis of the
world’s economies—all of them. The investments to do this, which are very large even if
spread over decades, would be opposed not only by individuals but also by energy
companies, electric utilities, and automobile manufacturers andprobablypublic policy
makers that could hasten the process. Why? Because the present energy system (with its
externalities and subsidies) is cheap enough for consumers, and energy producers are doing
just fine making money with the current energy system.

In sum, hydrogen power is only a theoretical potential, but it is an enormously

attractive one. It would be particularly valuable when or if land or water constraints become
serious. Some experts estimate, for example, that the PV hydrogen equivalent of the world’s
present total fossil fuel consumption could be produced on 500,000 square kilometers—less
than 2% of world’s desert.

Efficiency as a Resource

Even with these technological alternatives to a fossil fuel-based economy, it is important that
you recognize that the cheapest, easiest, and the fastest way to transform our energy system
to overcome the present energy predicament is to promote energy efficiency and
conservationin other words, to reduce the demand for energy. Energy efficiency means
producing the same final energy services—lighted, heated, and cooled rooms; transport for
people and freight; pumped water; turning motorsbut using less energy. It means the same
or better material quality of life but also less conflict over siting facilities and, for many
countries like the U.S., less foreign debt and political overhead costs to maintain access to or

15
control over foreign resources. Automobiles, jet aircraft, buildings, home appliances,
industrial motors, copper smelters, and virtually everything else that uses energy can be
made much more efficientby amounts that range from 30% to more that 90%. Unforeseen
synergies between new materials, engineering techniques, microelectronic devices, and
combustion technologies have increased the potential for further efficiencies in
transportation. At least 10 auto companies have prototype cars that drive on 65 to 130 mpg,
and leading-edge technical discussions are beginning to speak of 160-mpg autos that are
safe and cost competitive with today’s cars. Efficiency measures could reduce electricity
consumption in the U.S. by 30% to 75%. Fluorescent bulbs now available could reduce the
amount of electricity required for lighting by 90%, and newly engineered home appliances
(refrigerators, air conditioners, dishwashers, etc.) consume only 10% to 20% as much
electricity as the currently conventional ones do. Great efficiencies could be achieved in the
construction and retrofitting of homes and buildings. For instance, insulating superwindows
in all U.S. buildings could save twice as much energy as the U.S. now gets from Alaskan oil.

Similar savings can be achieved in the industrial sector, which currently accounts for
40% of energy use in MDCs. Adjustable speed drives, high-efficiency motors, advances in
integrated process design, control technology, cogeneration, and recycling all promise
significant savings. Japanese auto manufactures, for instance, can produce cars in half the
time and at a quarter of the costs that they could in the late 1980s (which highlights the role
of economic competition as a powerful driving force for energy efficiency). The economies
of scale that for so long impelled energy producers to centralize production are declining.
The arrival of new gas turbines, small engines, solar cells, and other technologies often has
made decentralized production more efficient. Not only is decentralization now more
efficient, but it may offer LDCs a method of economic development without the highly
centralized, capital-, and technology-intensive power plants that have dominated energy
production until now.

Calculations of how much energy could be saved through efficiency depend greatly
on the technical and political biases of the people who do the calculating. But on the
conservative end of the range, it seems certain that the North American economies could do
everything they now do with currently available technologies and at current costs, using half
as much energy. That would reduce the worldwide usage of oil by 14%, coal by 10%, and
gas by 15%. Similar or greater efficiency improvements are possible in other MDCs and
LDCs. Evidence for this magnitude of improvements is not just technical speculation.
Europeans now use about half the energy per capita that U.S. and Canadian citizens use and
have an equivalent life-style (see Figure 1 again). These possibilities for “mining” efficiency
are producing a profound shift in thinking about the environment among the business
community. Economic thinkers traditionally viewed protecting the environment and saving
resources as policies of economic restraint and costs (even though cleaning up pollution did
produce money for the companies that did the cleaning). But many now envision a vast
future market efficiency (which was about $200 billion in 1990 and is expected to at least
double by the year 2000). Re-engineering the economies of the world to be more efficient
not only may be a profitable market for investors but also may be the basis for a virtual
second industrial revolution. Nations that fail to develop green industrial policies and
technologies are likely to lose out economically as well as environmentally...

16
THE TRANSITIONS AHEAD:
OPTIONS AND POLICIES

I noted earlier that we have an energy predicament, not a current energy crisis. But that
predicament has intrinsic causal linkages, even if invisible, with other very real social and
environmental problems... In the LDCs, the energy predicament is related to deforestation,
desertification, developmental barriers, poverty, and hunger. The energy predicament is
related to problems that periodically boil over into real crises, such as the Gulf War and the
Exxon Valdez oil spill. Furthermore, the energy predicament is still volatile enough that
many energy experts believe that major energy crises during the next century are quite likely.
As former U.S. Secretary James Schlesinger said in the late 1970s, “The energy crisis is over
until the next energy crisis.” But most ominously, our present energy system is thought to be
the chief culprit in the most serious if still hypothetical threat to the future of humanity:
global warming. The important point for you to recognize it that the web of connections
between our energy predicament and the myriad of human social and environmental
problems means that some kind of energy transition is ahead, whether we like it or not.

But what kind of transition? How should society respond? To the point: How can the
historic energy transition on which societies embarked, largely unaware at the beginning of
the industrial era, be steered consciously toward a more supportive and sustainable
relationship between energy, society, and the environment?

Energy Scenarios for the Future

The problems of desirable energy futures are certainly not a lack of technical options. I hope
you were convinced by the foregoing discussion that we now have a rich menu of technical
possibilities for developing efficient, affordable, and environmentally friendly energy
sources. Technically workable and economically viable alternatives to our present system are
here now, or can be within decades, given sufficient investment. Nor is there much
disagreement among energy experts and environmental scientists about what an energy-
sustainable society would look like in broad outline. This is true even when the views of
industry-related experts are considered. For instance, Ged Davis, Director of Energy
Planning for the Shell International Petroleum Company, has mapped out two possible
scenarios for future energy transformation. In his view, a continuity scenario held
(unreasonably) by some rests on continuing present trends. A sustainable world energy
scenario presumes that global environmental issues will be on the international agenda by the
mid-1990s. Underlying both scenarios is the assumption that by 2010 world population will
total seven billion and gross world product will have doubled.

In the continuity scenario, consumer habits and ways of life are not expected to
change significantly, and the price of crude oil will probably rise gradually, although its
trajectory may be volatile. Even given the current rate of increases in energy efficiency,
world energy consumption would increase 50% to 60% by 2010, and the global mix of fuels
would remain substantially the same as today. Thus, global CO2 emissions would also
increase by 50% to 60%. Implicitly, the continuity scenario holds that more of the same is
sustainable and that climate change is either not a serious issue or is something to which
humans can adapt. In any case, the present energy system does not lend itself readily to a
flexible, quick response to such problems. An intractable technical infrastructure (in which

17
power plants may last from 20 to 40 years), long lead times (from blueprint to operation,
many energy projects may span a dozen or more years), and entrenched public perceptions
(of costs, environmental acceptability, and need) all make for a system laden with inertia.

Davis argues that in contrast the sustainable world scenario, reflecting the preferred
energy futures of most energy experts, assumes radical improvements in efficiency and
stabilizing energy demand after 2000. Coal use would contract rapidly, as would oil more
gradually. At the same time natural gas consumption would surge rapidly as a cleaner
transitional carbon fuel. Hydropower and renewable energy sources (biomass, wind, solar)
would increase by at least 60%. The present rapid development of electric fuel cells to
power autos and trucks would continue. Sometime in the middle of the next century,
hydrogen generated by renewable generated electricity would replace natural gas as the
concentrated fuel for many transportation and industry needs. In the sustainable scenario,
CO2 emissions would peak and begin to decline after 2000, though they would remain 15%
higher in 2010 than in 1990.

Socially, the sustainable world energy scenario would involve a system that is more
decentralized, more innovative, and more competitive, as various renewable technologies
compete to provide portions of the world’s total energy budget. Initiative would shift (1)
from producers to consumers, (2) from energy supply to an emphasis on energy services, and
(3) from quantity to quality of energy. Corporate responses to a sustainable world energy
system might include a new breed of energy companies, driven by a desire to provide a
broad range of leading energy technologies to its customers. In the new business
environment, utilities might grow more service oriented. Creative alliances might arise
between fuel companies and manufacturers of combustion equipment to produce fuels,
engines, and production processes yet unanticipated. Energy concerns might increasingly
inform urban and regional planning, encouraging an integrated bicycle-auto-mass transit
system. Existing diesel-powered mass transit systems might be replaced with nonpolluting
“maglev” trains now existing in European prototypes. Urban zoning might encourage the
planting of shade trees and using light, reflective colors in buildings to reduce energy use in
urban areas. In the long term, the urban sprawl that has characterized North American cities
(e.g., Los Angeles) would surely begin to contract back to the denser population patterns and
multiple family dwellings that still characterize relatively affluent life-styles in many
European cities (e.g., Amsterdam and Copenhagen and older American cities such as Boston
and Philadelphia). There efficiencies result from living close to where one works, shops and
finds recreation.

As you can see, the experts’vision of a sustainable world energy system is a complex
one that would entail not only technical but profound economic, social, and cultural
transformations as well. (How many affluent suburban North Americans would like to live in
the densely populated cities of Northern Europe?)

CRYSTAL BALL GAZING: ENERGY FORECASTS

As you might guess, there has been considerable interest in trying to empirically forecast
energy futures. The prototype of these was the study by the Club of Rome in the mid-1970s,
which predicted the rapid depletion of energy supplies noticeable by the turn of the century.
That was, by popular acclaim, a forecasting debacle. Nothing of the sort is going to happen.

18
But then what? The early 1990s saw four significant attempts to forecast energy futures.
They are all couched in terms of the energy scenarios mapped out earlier, and they differ
dramatically. Two of them, by the World Energy Council (WEC), an international energy
industry group, and the international Energy Agency (IEA), an international governmental
body, project the continiuty scenario until 2050 or so, with significant growth in fossil fuels
(and perhaps nuclear energy). They both project that renewables (solar, wind, small
hydroelectric, biomass, etc.) will account for a small proportionmaybe 5%of global
energy needs to the middle of the next century. But they differ significantly: The forecast of
the WEC projects an unprecedented decline in energy intensity and is therefore less
menacing than that of the IEA. But both studies agree (1) that the overwhelming proportion
of increase in world energy consumption will be in fossil fuels, (2) that most growth will
originate in economic growth in the LDCs, and (3) that the transformation to a sustainable
energy scenario will require fundamental changes in world energy regimes. Of the two
projections , energy experts consider that of the IEA to be the most painstakingly realistic
and analytically rigorous.

But there are other voices in this futuristic discourse. In sharp contrast, a Shell Oil
business-environmental study group projects a future in which renewable sources will grow
to dominate world energy production by the year 2050. The Shell Oil group has a legendary
track record for projecting better energy futures. (They alerted the company to the possibility
of oil problems in the 1970s.) So, according to science writer Tim Beardsley, “when Shell
talks, everyone listensparticularly when Shell talks to itself.” The Shell group argues that
renewables will be fully competitive by 2020, and that fossil fuel technologies will be
unable to lower costs as quickly as the young upstarts. They believe that the “business as
usual scenarios of the WEC and the IEA are fundamentally flawed.” Shell has considered
green energy futures before; the remarkable thing about their new work as that they believe
that the transformation to sustainability will be driven by price changes, rather than
draconian government controls.

The fourth projection agrees with that of the Shell group. More popular and
accessible to laypeople and policymakers, Worldwatch Institute, like the Shell group,
projects a rapid transformation to sustainability , primarily driven by price. They note that
renewables are close to being price-competitive with fossils fuels. They note that many
important global energy players have significant investments in their development (e.g.,
Mitsubishi, Westinghouse, Enron). The Worldwatch forecast foresees a turbulent near future,
as large energy companies struggle to preserve the status quo and as newer firms and their
environmental allies fight to change government policy and open energy markets to greater
competition. but they argue that the energy establishment may be like IBMovertaken by
smaller competitors who are better able to anticipate the coming revolution.

So what should you make of these four forecasts? The most intellectually
conservative answer is that you can find expert support for almost any outcome you think is
reasonable. But if you plan to live for another 40 to 50 years, you should be able to answer
for yourself which of these forecast is the most accurate. You will live through it.

Policy: Barriers and Opportunities

19
As with most empirical forecasts, the preceding forecasts focus more on technological and
economic matters (supposedly more knowable and quantitative) and consign social
processes, policy debates, and political struggles to the realm of the unknowable. Only the
Worldwatch forecast dwells at length on political-economic conflict, but mainly as
competition between established firms and young upstarts in future turbulent energy markets.
But let me close by setting aside these (largely) economic and technical arguments to focus
more directly on politics and policy.

What policies would hasten the transition to a sustainable energy system, and what
are the barriers and opportunities for policy that would promote and manage the transition?
Where do we begin? By what policy instruments? How do we find the political will to
overcome the inertia of the present system? At least five circumstances and barriers make a
transformational energy policy difficult.

One barrier is that, like many other social problems, the salience of the energy
problems follows an issue-attention cycle, a cycle of rising and falling concern that is due to
energy-related national events and the volume of media coverage they attract. Now that the
energy crisis of the 1970s is over, supplies have increased and prices have moderated, there
is less public concern or media coverage of energy issues. Thus the combination of public
concern and media attention that would impel political action is at a low ebb. The same has
been the fate of global warming, which was the premiere social problem after the long hot
summer of 1988 but has since “cooled”.

A second obvious barrier is making policy for change when energy is relatively
cheap. Investing in efficiency and a transition to new fuels is difficult when short-term
market forces run counter to longer term goals of a more sustainable and environmentally
friendly energy system. From the perspective of the individual consumer, it is hardly rational
to absorb costs of conservation and change when no shortage looms. In addition are the
problems of bureaucratic interest and organizational mandates. A principal purpose of the
utility company is to sell electricity at a profit. Conservation policies that reduce demand and
perhaps profitability as well run counter to managerial objectives. In the short run, then,
institutional as well as individual interests run counter to the normative stance favoring long-
term conservation and transformative policies.

Third, energy policies have been fragmented, contradictory, and often paralyzed. In
the U.S., energy policy has been separated by fuel, with different institutional associations,
interests, and regulatory bureaus for each type, with few attempts at broader coalition
building. Coal interests have dealt with the Bureau of Mines; gas and oil, with the
Department of Interior; and uranium, with the Nuclear Regulatory Commission. The net
result of the government energy policies has been to intervene into market forces
unnecessarily with supply-side policies that subsidize costs and increase consumption rather
than promote efficiency and alternative fuel development.

A fourth barrier to effective energy policy is that it needs to work on a global basis.
Even dramatic improvements in energy efficiency and renewables will not be sufficient to
protect the global environment if they are confined to the MDCs. And pleas from the rich
countries to solve global environmental problems through global energy restraint will fall on
deaf ears in the LDCs unless the MDCs can find ways to help them achieve increased
economic well-being and environmental protection at the same time. Why should LDCs

20
worry at all about saving energy when their prime concern is generating economic growth,
which include increasing the availability of energy services? The answer is that energy
efficiency reconciles the simultaneous goals of development and environmental protection.
Still, LDCs face hard choices. I noted earlier both the perils of the continued reliance by the
Chinese on coal as well as the enormous potential for wind power in China.

I should note parenthetically that, although it is true that the LDCs are currently in a
phase of growing energy intensity, the potential for helping them leapfrog over a fossil fuel-
dependent phase is substantial. From wood stoves to cement plants, LDCs can limit energy
consumption and expenditures while expanding the services that energy provides. While
LDCs currently require one-third to two-thirds more energy per kilowatt generated than in
the MDCs, the potential for efficiency and wind and solar-generated power is enormous in
the sun-drenched southern hemisphere. In combination, efficiency potentials in industry,
buildings, transportation, and agriculture are staggering. By investing $10 billion a year to
tap them, LDCs could halve the rate of growth of their energy demand, lighten the burden of
pollution on their environments and health, and staunch the flow of export earnings into fuel
purchases. Gross annual savings would average $53 billion for at least 35 years, according to
experts from the U.S. government’s Lawrence Berkeley Laboratory.

Unfortunately, the thrust of foreign aid and assistance from agencies such as the
World Bank encourages expanding supply and consumption rather than efficiency. For
instance, a bank-supported plan in the southern Indian state of Karnataka projected a goal of
9.4 gigawatts of power by the year 2000, including the building of massive centralized coal
and nuclear power plants at a cost of $17.4 billionan amount equal to 25 times the energy
agency’s current budget. An alternative plan, emphasizing conservation, efficiency, and
decentralized production, designed by Indian energy expert Amulya K. N. Reddy, would
provide the same energy services at less than half the energy demand at a much lower unit
cost of electricity and would produce only 5% as much greenhouse gas as the state-designed
plan.

----

What are the opportunities for making effective energy policy? First, a broad and
effective public education campaign about energy problems is needed. Because concern over
energy per se is currently in a low trough, an effective campaign would seek to increase the
awareness of the role of the world’s current energy system in relation to environmental,
health, economic, and geopolitical concerns, for which there are substantial levels of public
awareness and concern. Second, policy should try to create a substantial efficiency market.
Demand-side management, increasing efficiency, and rebuilding over energy system around
renewables should be justified not only as costs or responses to threats, but because they are
profitable. This implies an important task for experts and the practitioners of cost-benefit
analysis to internalize the full costs of our current energy system. The environment benefits
from burning less coal, oil or gas, and this has spin-off benefits in terms of health-care and
health insurance costs, global warming, CO2 in the atmosphere, the nation’s balance of
payments, and so on. Attempts to quantify and aggregate these impacts are underway, but
they have not proceeded to the point that can be useful in policy discussion and debates. A
well done cost-benefit analysis is the best offense against both internal and external attacks,
because its bottom line says that efficiency and lower demand are sound investments.

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 Crises come and go, while predicaments persist. During times such as the present,
when energy shortages appear remote and no crisis seems imminent, the challenge for
humanity is to create the popular support, political will, technical progress, investments, and
global cooperation necessary to construct a sustainable world energy system.

* * * * *

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