Much current discussion of the ACES climate bill that passed the House
is about whether it will really cost one postage stamp per person per day,
or maybe two stamps.
This is like arguing what microcomputers will be used for in 1980.
I fondly recall a prediction that
“We’ll never sell millions of them unless there’s one in every doorknob!”
Well, look at your average hotel today: there’s one in every doorknob.
As for modeling innovation, that’s always been the Achilles heel of economic forecasting. In this piece, Eban Goodstein and Hart Hodges trace a history of cost overestimations around environmental regulation. Again and again, models have underestimated the pace of business and technological innovation.
Today’s modelers surely do all they can to incorporate innovation. (As Brad notes, the CBO tries.) But there are constraints to how precisely this can be done. In 1980, McKinsey reported to AT&T that mobile subscriptions would rise to 0.9 million by 2000. The real number turned out to be … 109 million. (This factoid is among many interesting tidbits in
this presentation from Vinod Khosla.)
Vinod Khosla was one of the founders of Sun Microsystems,
the company that mainstreamed computer workstations,
has long been a venture capitalist,
and has been investing successfully in renewable energy for years.
The little red square in the Nevada desert is all the area it would
power the U.S. with solar panels.
And that’s before further efficiency improvements.
No reason it all has to be in Nevada, of course:
Georgia has a lot of sun.
Distributed is better than centralized.
My favorite parts are actually not in the bill itself; they’re analysis by the Congressional Budget Office (CBO):
Protect consumers from energy price increases. According to estimates from the Environmental Protection Agency, the reductions in carbon pollution required by the legislation will cost American families less than a postage stamp per day. CBO calculates that the legislation will cost the average household less than 50 cents per day.
And if that wasn’t enough:
According to the CBO score of the legislation, ACES meets PAYGO requirements. For scoring purposes, CBO considers the creation of allowances as an increase in revenues and the free distribution of allowances as an offsetting outlay. Using this methodology, CBO estimates that the legislation will raise federal revenues by $846 billion over ten years and increase direct spending by $821 billion, resulting in a net $24 billion reduction in the federal budget deficit.
ExxonMobil (XOM) , ConocoPhillips (COP), Chevron (CVX) and the American Petroleum Industry denounced the bill,
If the oil industry hates it, there must be something good about it.
Now we’ll see if it can get through the Senate without the oil industry turning
benefits for renewables into renewable subsidies for the oil industry.
And the coal industry. The picture is of the Scherer coal plant in Juliette, Georgia (near Macon),
which is the biggest single point source of carbon dioxide emissions in the U.S., and about the third biggest in the world. Most of the electrical power used in Lowndes County currently comes from this plant.
This installation was done by Georgia Solar Power Company. Ben Browning of Georgia Solar Power brought in Craig Overmiller of Texas Solar Power Company to assist with this one, but from now on Georgia Solar Power should do fine on its own.
Click on the pictures for more pictures on flickr.