Energy + Stuff + Services = Economy and Jobs
We have many challenges in our society and world today. We have developed an economy and society which runs on very cheap energy and assumes unlimited resources with which to develop nearly infinite amounts of stuff – for a materialistic, consumption-oriented economy. With over 7 billion people on this one little planet, our days of large houses, big inefficient cars and trucks, ultra-cheap energy and water, and tons of stuff will soon be over.
Energy is the basis and foundation of the economy and of society and civilization. Most of our energy is derived from the burning of fossil fuels (coal, oil, and natural gas) to produce heat. That heat is used in three major segments of the economy:
building heating, generally via natural gas;
transportation, generally via gasoline and diesel combustion; and
electricity generation, primarily via steam turbines, most of that fueled by coal combustion, with natural gas starting to play a significant and growing role.
All combustion produces heat, but also produces enormous quantities of carbon dioxide (CO2), a greenhouse gas now in large part (with the help of natural gas – methane) responsible for global warming and significant climate disruption and change.
It is the unique molecular structure of CO2 and methane (CH4) which is responsible for their heat absorption properties, resulting in the greenhouse effect. This is not theory, scare-mongering, or fantasy – this is fact. We have released so much CO2 to the atmosphere and the oceans that the planet is on the verge of catastrophic change. Thus, we must wean our economy from fossil fuels, quickly. We need to use less energy.
The United States uses, per capita, about two times more energy than any other advanced, modern nation. We waste it. The overall price of energy (electricity, gasoline, natural gas) could go up 15 to 20% without costing us a dime more, because simple energy savings attitudes and actions would save 15 to 20% of the energy we now consume – on average.
There are some who say we must develop nuclear energy, because it does not produce CO2.
My general impression at this point is that the time ‘window’ for large scale nuclear energy closed with the Fukushima disaster. Germany and other nations are beginning to fully phase out their existing nuclear facilities. The ‘window’ for nuclear actually closed some 20 or more years ago, as it simply could not and cannot compete economically with readily available and cheap fossil fuel – generated electricity. And now it cannot compete with the constantly improving renewable energy technologies. There may be a role for small, modern reactors to produce electricity, but even that is not very likely given current attitudes and economics.
But we do live – and have been living – in a ‘nuclear’ era. Earth’s solar energy is produced by a natural nuclear fusion reactor 100 million miles away. That energy is free, safe, distributed, and economically ‘competitive’. It is easily collected, used or stored, and can be delivered as needed. It also facilitates a transition to distributed power collection and generation.
The two recent books:
Reinventing Fire, Avery Lovins, 2011; and
The Third Industrial Revolution, Jeremy Rifkin, 2011
present the situation and the pathway towards a truly sustainable energy system.
Congressional District 2 has some of the highest solar energy density in the United States – and a great deal of largely flat, dry land. District 2 should and can become the ‘nuclear’ energy center of Utah – a major solar energy producing region for the state and the nation. Such activities will invigorate rural towns and regions.
In addition District 2 has substantive wind and geothermal energy potential. The potential for wind is already realized in the Milford area – in Beaver and Millard counties – with the opening of Phases I and II of First Wind, the largest wind farm in Utah. This has revitalized both counties, providing education, jobs, and resources for students and residents. See:
Tooele Army Depot is embarked on a major project to develop sustainable electrical energy, for its use and for other Department of Defense facilities:
The BLM has identified a set of areas ideal for renewable energy generation. Many more are being identified and studied. BLM has produced a wonderful map identifying those regions in the state with significant renewable energy resources, including transmission lines.
District 2 also has sites – and projects underway – for massive energy storage, via compressed gas storage and its controlled release (Delta)
and via hydro storage (pumped water and hydroelectric generation) at Parker Knoll, south of Koosharem.
These 2 huge (1000 Megawatts each) storage projects overcome the argument that wind and solar are ‘intermittent’ sources of energy.
When a Washington County commissioner tells me that his county has no energy resources, while gazing wistfully at the Eastern Utah section of the map on my business card, it reinforces my commitment to try to help people challenge those old assumptions – to encourage them to peer out of that encasing, rigid conceptual box and begin to think fresh and creatively. Washington County should and could be a major source of and supplier of solar energy. Yes, there are economic issues; yes, coal is cheaper (today, just barely); yes, we love mining and coal truck driving, but…times are changing. We could help lead, rather than simply plod, follow, and complain. At least, let’s not get in the way.
An introduction to some current energy issues is at:
Stuff (Resources) – There’s another major component to the economy – stuff. There’s a great, irreverent skit (called Stuff) by George Carlin which really gets at the heart of the problem – and the challenge:
Here’s another one, now more popular, cleaner, and well known, by Annie Leonard: The Story of Stuff. http://vimeo.com/6366233 . And a very recent one:
Basically our economy is based on cheap energy and cheap stuff. Cheap stuff is shopping, malls, big cars to haul our stuff, and big houses to house and store our stuff (thanks, George Carlin); and big storage units to store stuff, until we can afford a bigger (a non-’starter’) house to store that stuff, too.
Stuff has to be made from something – that’s called resources. It may be metal (mined from the Earth, purified, and processed), plastic (made from fossil fuels in chemical plants), etc. All the stuff you own and buy has to be made from something – from matter. And energy is used to mine, refine, process, shape, assemble, transport that matter (now stuff) to you. And nearly all that energy today results in CO2 production. See:
We have reached the limits of CO2-based energy generation, because of the greenhouse effect and climate change; and we are also reaching the limits of mineral resource extraction, due in part to the realization that we need to partially preserve some of the remaining lands on our little planet. I’ve summarized these two limits in this All There Is graphic:
We are in the process of transforming to a more sustainable economy – meaning slower growth – in both energy, stuff, and population (it is people which use energy and acquire stuff).
Our economy cannot ‘recover’ to the way it was – dependent on cheap, wasteful energy and oodles of cheap, much of it unneeded, stuff. People who say we are in a slight downturn just don’t get it. The few who do get it aren’t really being heard –yet:
Chris Martinson (Crash Course);
Richard Wolf (Capitalism Hits the Fan);
Paul Gilding (The Great Disruption).
This isn’t about fantasy and wishful thinking – it’s about reality, creativity, responsibility. Our kids and grandkids don’t want to inherit a trashed, chaotic planet, nation, and state.
Sustainable Economy and Sustainable Jobs
So how do we transition to a sustainable economy? It’s not easy, which is why politicians don’t talk about it – most don’t even begin to understand the need, the challenge, the opportunity.
Tim Jackson’s recent book: Prosperity without Growth: Economics for a Finite Planet, 2011, is a good beginning.
First, many of us need to be paid less, work less required hours, do our jobs better, and develop fulfilling uses for our leisure time.
Those on the higher end of the salary scales need to work less hours (with less pay, of course) to provide work and pay for others. Yes, this goes against most of the economics assumptions and practices of the last 40 years or so. Many of our old assumptions must be challenged in a world of finite resources. We cannot depend on continuous growth, nor constant increases in ‘productivity’. A sustainable economy means a no-growth economy – a dynamic and vibrant economy without the requirement for growth and infinite resources. The economy and society will ‘grow’ in other dimensions – in education, health, recreation, creativity, etc. It just cannot use much additional stuff or energy.
An old book which can be very helpful in the transition is John W Gardner’s Excellence, 1961. He says we need to have the time to do our very best – we need excellent plumbers, cabinet makers, teachers, doctors, nurses, lawyers,… They need the time to do their jobs well – to be excellent. We need more service workers – more in the caring professions – social work, psychology, counseling, mentoring,…
How to get there? One major and easy way (once passed and implemented!) is a highly progressive income tax, as we had during Eisenhower, Kennedy, and the early years of the Nixon administrations. If income taxes on the current 1% (roughly $500,000/year in annual income) were much higher, say 70% (as they were in 1980), then there would be less incentive to earn a $500,000/year (or higher) salary. That professional could work less hours, have time for family, community service, other good deeds, etc. For those who do indeed want to earn large salaries, the incentive is still there to do so – you just have to earn, say, $100 Million to ‘take home’ $30 Million.
A similar tax is the progressive consumption tax, sort of a ‘luxury’ tax – essentially a tax on income minus savings – on the money available to buy stuff.
The move towards a sustainable economy means less acquisition of stuff – particularly ‘unneeded’ or ‘excessive’ stuff. For the rich this means smaller and fewer cars, smaller and fewer homes, smaller yachts and planes, etc.
Income inequality can be more fully addressed with a new Alternative Inequality Tax or ‘rising tide tax’ – dealing with the so-called ‘Brandeis Ratio’ (or Gini Index) measure of income inequality: http://www.nytimes.com/2011/12/19/opinion/dont-tax-the-rich-tax-inequality-itself.html.
Such progressive taxes help address the severe income inequality in the United States.
Those on the lower end of the salary scales would have very low tax rates, allowing them to live (albeit simply and perhaps frugally) on their income, but without having to hold two or more jobs. Thus they, too, would now have more time for family, recreation, and for achieving some level of excellence and satisfaction in their work. If we can move to somewhat higher minimum wages – to a more living wage – and with access to reliable and affordable health care – then we would be well on our way to addressing our severe jobs problem.
Finite resources means more expensive resources – if we try to do business as usual. This encourages reuse, design for disassembly and recycling, innovation to permit design and development which requires less expensive supplies (resources),… – this all means new jobs.
Energy is the driver of all economy and all life. A sustainable economy means a more energy-efficient economy and thus a more environmentally sustainable economy. Simple fees on non-sustainable sources of energy would encourage energy efficiency, innovations in product design and development, and innovations in truly renewable energy sources…and many more jobs. The Fee and Dividend plan proposed by Dr. James Hansen and the Citizens’ Climate Lobby would accomplish these goals with great overall benefit to the national economy:
Most of us do not (strongly) object to taxes to discourage use of cigarettes and alcohol, nor taxes and fees to discourage pollution, fraud, etc. Such positive ‘behavior’ taxes and fees are generally accepted. Taxes or fees on fossil fuels, thus encouraging much more efficient use and encouraging alternative sources of energy, are no different than taxes on tobacco or alcohol.
A sustainable economy, to be dynamic and vibrant, needs innovation, creativity, entrepreneurs, etc. – and this requires some capital and investment. We need to incentivize innovations and activities which actually facilitate sustainability. We need to dis-incentivize financial transactions which further complicate and hinder the transition to a dynamic, vibrant, sustainable economy. One way to begin is to implement a financial transaction tax or fee. A simple 0.1 to 0.5 percent tax on trades is a good proposal:
Britain, Singapore, and Hong Kong already do this with no ill effects – in fact some 40 countries apply such approaches. The tax discourages financial market short-term speculation activities.
In the USA today most government revenues are generated via:
Income Taxes (Federal Government and many states), via a slightly progressive formula;
Property Taxes (State and regional, local governments); and
Sales Taxes (State and regional, local governments).
Many countries use a flat Value Added Tax (VAT) – sort of a national sales tax – as a means to generate needed revenues.
As we now know, there are several other approaches, including
financial transaction taxes,
inequality taxes, and
carbon taxes or fees.
The challenge is to ‘use’ taxes to generate needed revenues AND to encourage behavior in the best interests of a sustainable society and economy.
There’s obviously more to study, discuss, and consider before moving forward with legislation to simplify and overhaul taxes and revenues, but this is a good foundation and a good beginning. We must get over our old, outmoded, now implicit assumptions – get out of our boxes – and look and move forward. It really isn’t that hard.