The Energy Indicator focuses on energy intensity in the US economy. Energy intensity is a measure of the efficiency with which energy is used. This Energy Indicator is a key to the overall efficiency of our economy. The widespread blackouts experienced over the past decade drew attention to the electrical grid and the extent to which it had been “orphaned” by privatization and deregulation. Our GNP has been growing with less energy input in the past 25 years, since the first OPEC oil embargo in 1973. Yet, energy expert Dr. John A. “Skip” Laitner demonstrated with his paper at the 2004 meeting of the International Energy Agency that the potential for further conservation and energy-efficient technologies has been vastly under-estimated. (See Laitner’s presentation on the Energy Indicator page.) Great progress on energy efficiency has been achieved since the 1980s, as documented by DOE, ACEE and IEA.
Energy efficiency can mean less waste, higher, cleaner profits, more comfortable homes, communities, and travel with less pollution. The transition from here to there is illuminated in the Energy Indicator. Already, the solar, ocean, wind, and other renewable energy sectors are growing rapidly, along with hybrid electric cars, fuel cells and off-grid electric generators. Wind energy is the fastest growing renewable source, up 32%, while solar photovoltaics use is up 21% since the mid-1990s. Fuel cells and hydrogen have at last caught the attention of the venture capital and investment community.
Unfortunately, the World Economic Forum finds that the fastest growing source of energy overall is fossil fuels. The recent boom in shale, oil, gas and tar sands is highly inefficient, requiring huge quantities of water and energy, which is not reflected in prices. Social and environmental costs to local communities and actual CO2 emissions in methane releases are also not calculated or priced. These new fossil fuels provide greater US energy independence. The war in Iraq and Afghanistan and other conflicts in the Middle East together with growing Chinese demand have contributed to keeping oil prices above $80 per barrel (and at times well above $100). The Middle East conflicts keep the US vulnerable to the global geopolitics of oil. The often obsolete US infrastructure and our older manufacturing sectors keep us in an uncompetitive position, even as our Internet-based and services economy grows. The United States lags behind the UK, Germany, Italy, Japan, France, the EU, Australia and China in energy efficiency (ACEEE, 2012). Our reliance on low-fuel efficiency cars and fossil fuels, especially in agriculture, decreases our flexibility in the face of volatile oil prices.
The Obama Energy plan is laden with subsidies to the fossil fuel and nuclear industry. While President Obama supports electricity and hydrogen-powered fuel cells as one replacement to the internal combustion engine, his “all of the above” policy is unrealistic. The fight is over shifting electricity generation to renewable solar, wind, geothermal and hydro and whether hydrogen will be based on renewable energy. So far, the nuclear and fossil-fuel industries are still winning their lobbying efforts to control the production of electricity, hydrogen, and shifts away from central utilities and long transmission lines to micro-grids and locally controlled energy.
All these issues of restructuring our economy fuel the debate over climate change. As predicted by many, the Kyoto Treaty has been ineffective along with Europe’s “cap and trade” emissions trading system. The scientific evidence overwhelmingly points to the need to reduce carbon emissions as well as all toxic emissions. Pollution taxes have proved popular in polls, whereas it is more difficult to explain the need for a tax only on carbon. In more centrally controlled economies, including China, carbon taxes have been enacted, as well as recalculations of their GDP to account for the costs of pollution.
Ethical Markets has tracked private investments since 2007 worldwide in green technologies and sectors in our Green Transition Scoreboard®, with current totals of $4.1 trillion. Many analysts agree with us that the fossil-industrial transition to the Information Age and what Hazel Henderson calls the Solar Age will usher in a prosperous, profitable economy based on renewable resource use and deeper knowledge, as we cite in our Green Transition Scoreboard®. Japanese hybrid electric cars averaging 50-60 mpg are capturing market share in the US from Detroit, which is now catching up with its own hybrids and electric vehicles. Huge strides are evident in the efficiency of solar panels, wind generators and re-design of buildings. Efficiency retrofits, co-generation and urban transport are redesigning cities, as in the agenda of the cities worldwide which are part of the C40 initiative.