The world needs a rapid transition to clean and renewable energy. The International Energy Agency says the implementation of a post-carbon future would require $45 trillion – about 1% of the world's wealth spread over 40 years. At a time when governments and homeowners are experiencing financial problems, how can we achieve this level of investment in a clean energy economy? First, end subsidies of finite fossil fuels and shift the funds to renewable energy and energy efficiency. Second, unleash private capital by creating large and sustained markets for clean energy. Green government procurement is a good place to start. Third, develop new business models. Companies exist today to pay the up-front costs of energy efficiency improvements and solar energy systems for building owners, under an agreement that allows them to share the savings. Some communities loan residents the funds for solar energy and allow them to pay the loans back on their property tax bills. Fourth, choose technologies that minimize infrastructure costs. Building integrated solar or combined heat and power systems, for example, reduce the strain on transmission systems and in some cases – particularly in developing countries that do not have electric grids – help avoid transmission investments altogether. Fifth, spend intellectual rather than financial capital. Smart building design – including passive solar, strategic landscaping and proper building orientation -- can dramatically reduce energy consumption at relatively little additional cost.
How will it improve our quality of life?
Clean energy technologies reduce air pollution and its impacts on public health, including children and the elderly. They also are an important way to begin reducing the greenhouse gas emissions responsible for global climate change, and that can help reduce the type of extreme weather events we are seeing today.
Triple Bottom Line Benefits
Among other things, renewable energy insulates us from volatility and oil prices and supplies. Solar and wind energy often are the least expensive way to provide electricity to the billions of people worldwide who do not have access to reliable power. And they reduce the use of fossil fuels, the principal cause of anthropogenic climate change.
Issues, Barriers and Opportunities?
While many renewable energy designs and technologies already are competitive with fossil energy, others cost more. In those cases, government incentives are necessary to help consumers pay the premium. Some promising technologies need additional research and development -- for example, wind turbines that operate in low wind speeds, systems that produce electricity from ocean currents, and algae that can provide liquid fuels for transportation. A big potential, however, is government procurement. If governments around the world commit to purchasing renewable energy and renewable energy technologies, that new market may be enough to liberate billions of dollars of private capital and private investment in plant and equipment to produce clean energy equipment. The more these technologies are produced, the less they will cost by achieving economies of manufacturing scale. And that will speed the market penetration of these new energy systems.