Monday, October 06, 2008

The Hinge of Fate

We seem to be accumulating crises at an alarming rate, lately, between the financial crisis, energy crisis, and climate crisis, along with incipient crises about which experts have been warning us, such as the government debt crisis and the looming Social Security and Medicare crises. Combine all of these and factor in the natural tendency for exaggerated predictions of disaster in an election year, and it is a wonder that we don't have more people dropping out of society to join survivalist communities in the hills. Are things really as bad as they appear, or have the aggregated uncertainties merely grown so large that our confidence in a recognizable future has been shaken?

Consider the economic crisis. Not long ago, there was still disagreement about whether the US was in a recession. Now, from media and politicians alike, we hear daily warnings about another Depression, and the tension is between those who view 2008 as 1929 or as 1932. Yet as Robert Samuelson's op-ed in today's Washington Post points out, the current situation has some ways to go before it rivals even the most serious post-war recessions, let alone the Great Depression, nor does it share the same mix of factors that made the Depression so intractable. A year ago, it seemed to many that we were headed for a repeat of 1970s-style stagflation. Given the complexity of interacting trends and events, however, I find it at least as probable that we are moving into a future for which these precedents won't prepare us very well. That could be true for energy, as well.

We've had energy crises before, too, but never one for which our responses faced a constraint such as climate change. If greenhouse gas emissions weren't an issue, we could deploy coal liquefaction on a crash basis and buy ourselves a decade or two of greatly reduced dependence on foreign energy suppliers. But the collision between coal and climate change now looms so large that a former Vice President of the United States has shockingly called for civil disobedience to stop the construction of coal plants that don't capture and sequester CO2--which today includes essentially all of them. Nuclear power, a proven large-scale alternative, faces other hurdles, including permitting problems and disagreements over waste management.

The preferred solution involves a dramatic shift to renewable energy, even though renewables have not yet reached the scale at which they are ready to take up the burden of supplying the economy with enough energy to grow. They are ramping up rapidly, and the tax credits that were extended last week will help. However, the net contribution of even the most advanced of these is still modest. Wind power is expected to grow by 7,500 MW this year, adding the equivalent of only 0.5% of net power generation. The 2.5 billion gallons per year of new ethanol capacity under construction would displace only 0.6% of US oil consumption--before factoring in the oil consumed to produce it. So while the combined energy/climate problem looks enormous, our currently-deployed options offer only incremental, not revolutionary change.

Perhaps our challenges look as big as they do because our faith in the tools available for tackling them is so limited. Every one of these problems is serious, and ignoring them would be a recipe for disaster. But unless we are truly within a few years of a climate change tipping point, they all look manageable over a longer timeframe. The economy will contract and eventually recover, as it has after every recession. Ten years from now, we won't all be driving electric cars recharged by wind and solar power--if anything, a recession will slow that transition--yet the ongoing shifts in our patterns of energy consumption and production will accumulate. Our energy diet will begin to look quite different from today's, and it will emit less CO2, per unit of economic output and in aggregate. The ultimate outcome might be less dramatic than we sense at this pre-election moment that feels like the Hinge of Fate, but we will get there, and I have a hunch that new fortunes will be made along the way.

No comments: