The right way to deal with solar energy

In the middle 1980s, when I was chairman of the Australian Research Grants Committee (ARGC), the predecessor to the Australian Research Council (ARC), I was drawn into learning about solar energy. A clever man at UNSW, Martin Green, was rapidly developing the efficiency of solar cells, and needed more money to do it faster. This was a few years before James Hansen’s testimony in 1988, and well before the Rio Earth Summit in 1992.

It seemed straightforward to me. The ARGC was in trouble and, though I knew it not, would shortly be terminated, and in its place would come the ARC. It seemed to me essential to be able to show the sceptical souls in Treasury and Finance, not to mention our Minister and the Government generally, that research funds granted to university scientists paid off in something tangible. Here was an opportunity: Australia was blessed with sun, our oil supplies were declining, and we already had roof-top solar water heaters. What if the sun’s power could be harnessed much more powerfully? Martin Green thought he had the answer, and he had runs on the board, too.

So we provided more funds to Dr Green, and he kept on doing well. You can read about the success of his group here. I’ve set out this history because I recently came across, in Judith Curry’s Climate etc website, the testimony of Bjorn Lomborg to the US Senate’s Environment and Public Works Committee. Lomborg’s punchy take-home message went like this: To tackle global warming, it is much more important to dramatically increase funding for R&D of green energy to make future green energy much cheaper. This will make everyone switch when green is cheap enough, instead of focusing on inefficient subsidies and second-best policies that easily end up costing much more.

Lomborg is a well-known speaker and writer on global warming, and I have mentioned him before, here, for example, where he was appropriately sceptical about the virtues of the electric car. His strength is to propose the best way of dealing with an imagined problem, and he uses official figures, the models and authorities that the orthodox like to use, and ordinary arithmetic, most of the time.

In this case he contrasts the relative costs of  ‘climate action’ and inaction — doing nothing about climate change other than adaptation, and concentrating on other important problems, of which there are plainly very many.

You can read his testimony in full here, but perhaps the summary can stand for the rest. It goes like this:

Global warming is real, but a problem, not the end of the world. Claims of  “catastrophic” costs are ill founded. For instance, even assuming increasing hurricane damage from global warming, the relative impact on society will decrease.

Inaction has costs, but so does action. It is likely that climate action will lead to higher total costs in this century.

Climate action through increased energy costs will likely harm the poor the most, both in rich and poor countries.
  

  • The cumulative cost of inaction towards the end of the century is about 1.8% of GDP.
  • While this is not trivial, it by no means supports the often apocalyptic conversation on climate change.
  • The cost of inaction by the end of the century is equivalent to losing one year’s growth, or a moderate, one year recession.
  • The cost of inaction by the end of the century is equivalent to an annual  loss of GDP growth on the order of 0.02%.
  • However, policy action as opposed to inaction, also has costs, and will still  incur a significant part of the climate damage. Thus, with extremely  unrealistically optimistic assumptions, it is possible that the total cost of  climate action will be reduced slightly to 1.5% of GDP by the end of the  century.
  • It is more likely that the cost of climate action will end up costing upwards of twice as much as climate inaction in this century – a  reasonable estimate could be 2.8% of GDP towards the end of the century.
  • Climate action will harm mostly the poor.

The whole paper is a good read but, returning to solar energy, I was struck by this passage:

Green energy is not ready to take over from fossil fuels. It is generally much costlier, its deployment does not in general create new jobs because its  higher,  subsidised costs destroy jobs in the rest of the economy, and because it typically produces electricity, which is not generated with oil, it doesn’t reduce oil dependence. Today, wind supplies 0.7% of global energy and solar about  0.1%, and even with very optimistic assumptions  from the International Energy  Agency, wind will supply only 2.4% in 2035 and solar 0.8%.

Because there is no good, cheap green energy, the almost universal political choices have been expensive policies that do very little.

How true, and we can still see it all round our country. Lomborg warns that there is no guarantee that increasing R&D expenditure on solar energy will actually deliver a great breakthrough, but argues that it is just a much better bet than carbon taxes, RETs and the green subsidies. And I like this bit, from his concluding paragraphs.

We did not obtain better computers by mass-producing them to get cheaper vacuum tubes. We did not provide heavy subsidies so that every Westerner could have one in their home in 1960. Nor did we tax alternatives like typewriters. The breakthroughs were achieved by a dramatic ramping up of R&D, leading to multiple breakthroughs…

 

Join the discussion 8 Comments

  • Mike says:

    As I see it the only viable energy source we have that does not produce a lot of CO2 is nuclear, wind and solar are particularly hopeless because they are intermittent it is simple as that. There are not many in the environmental movement who speak about the imperative of better power storage. They like to pretend that a power grid is a battery it is not it is a balancing act. The power being put into the grid is monitored in order to keep it stable. This means that since wind and solar are mandated to put power into the grid when they have it other power sources are removed from the grid at that time. The other power sources can’t be started and stopped easily so guess what they generate the power anyway and emit CO2. So damn pointless we just pay more and affect the atmosphere pretty much the same as we did before.

    Surely there are many environmental movement who understand this but then again it is not about admissions it’s about saving the planet. And for this any deception is valid. So the right way to deal with solar energy is just stop it.

  • Meresa says:

    Solar and wind energy most certainly have their places.

    The electric power grid is not one of them.

  • David says:

    Don

    The Green movement is opposed to R&D for Green energy. Lomborng’s argument is interesting, however. He cheerily suggests a 10 fold increase in Green R&D.
    How keen do you think Warbuton would be on that idea? The Clean Energy Finance Corporation for example currently has $10 billion foundation from which to fund grants. So I suppose that would require the govt. find another $90 billion to fund Lomborg’s 10-fold increase. We could increase taxes on self-funded retirees for example. (Don’t worry only half-joking).

    I think you would be the first to admit that care would need to be exercised when
    increasing grant funding by that amount. .

  • Gus says:

    The right way to deal with solar energy is… “user pays.” You want solar on your roof? Fine, pay full price for it. No discounts, no subsidies.

    • Mike says:

      I’m with you Gus frankly I have been amazed that know one has raised an equity issue concerning solar panels. Those with some spare money and living in the right premises can avail themselves of discounts on electricity the rest can’t. If your roof faces other than North your solar array will be very inefficient. If you live in a flat you can’t very well set it up on the balcony or you may not have the money. Perhaps we could open a charity for the underprivileged who can’t use solar power.

      In the case of wind power subsidies are only of use to get industry going. How long do we have to wait before they are self-sufficient? I think it is well past time.

    • John Bromhead says:

      It is difficult to know what is or isn’t a subsidy with rooftop solar. In Australia the upfront subsidy comes from a scheme that passes its costs onto everyones electricity bill. At the moment this subsidy reduces the cost of solar to about $2000 per kilowatt. A 3kW system can be installed for $6000 because it receives a subsidy of $2000. The local retailer pays 7.5¢ for each
      kilowatthour fed into the grid, about $350 if none of this electricity was used. The real saving comes when the electricity is used by the householder because the unit cost of the electricity includes most of the distribution costs, more than 50% of the retail price of 19¢/kWh.
      Solar supporters say that this is no different that if the household had reduced its electricity usage by installing energy saving appliances and insulation.
      They also argue that most solar households feed the greater part of the electricity into the grid in the middle of the day and thus pay retail price for the rest. They also argue that because they have reduced the demand, the wholesale price of electricity has fallen.

  • […] since I wrote about Bjorn Lomborg only last week, I can only assume that the authors have never heard of him: While the costs of transforming to a […]

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