A Promethean tragedy: the ultimate green economy

The decision to abandon nuclear power will increase Germany’s short-term dependency upon fossil fuel as it engages with long-term aspirations for politically correct (PC) alternatives. In announcing that decision, Angela Merkel expressed the belief that Germany ‘can be a pioneer for a new age of renewable energy sources’. ‘Renewable’ is but one of many PC categories, including ‘alternative’, ‘low-carbon’, ‘green’, ‘non-polluting’ and ‘sustainable’. For ease, ‘green’ is taken as the inclusive term.

Green is good, but so expensive that few consumers opt for green. Subsidy is the key issue and most obviously a matter for economics. Yet, cost-benefit calculations, ‘no free lunch’ presentations and job evaluations are as meat and drink to those with a passion for green. Their argument is that green energy costs are dwarfed by the high costs in failing to save the planet. The minor tragedy is that so much personal energy is squandered in seemingly endless debate. Forget the economics: a resolution can be found in the fundamentals of physics.

Energy can neither be created nor destroyed: power companies transform energy into (more) useful forms. Coal converts water into steam and steam is converted into motion; but not all of the energy in coal goes to steam, and not all of the energy in steam goes to motion. In the processes of transformation, energy is ‘lost’ because part of the conversion is into non-usable forms. Technical efficiency is measured by those percentage losses. The PC argument is that non-green conversions lose too much energy by conversions that are harmful: carbon emissions, environmental pollution, nuclear waste and so on. (The economic argument is for such costs - ‘externalities’ - to be factored into prices charged to consumers. That argument is not disputed but, given the complexity of those evaluations, those issues are left for others to pursue; but see below.)

The efficiency of green processes is presently too low to compete with non-green alternatives. Green requires subsidies, wherein lies the rub: with a subsidy, green changes hue.

Nothing exists, other than as the embodiment of energy. Where that embodiment has an economic value, some part may be expropriated (taxation) and re-allocated (subsidies). Thereby it becomes possible for the unsustainable to be sustained. Yet, while there are individuals capable of lifting you from the ground, by the laws of physics you could never lift yourself. By those same laws, green cannot subsidise itself; and so it must follow that green plus non-green becomes pseudo-green.

The potential for R & D to raise the efficiency of green technology is not denied, which might justify small-scale experimentation. Without that research breakthrough, the diversion of non-green energy to subsidise the production of pseudo-green energy constitutes a drain on the planet’s resources.  There lies the potential for a major tragedy.

The ultimate outcome in pushing green subsidies to the limit would be for pseudo-green energy to have expanded, by taking a rising proportion of non-green energy as input, against a background of rising supply costs and falling energy demand. Beyond that interim would have emerged the PC utopia: non-green suppliers would have been driven to extinction (along with their subsidies) with a diminished population supported entirely by high-cost green suppliers. (A moot issue is whether the incorporation of externalities within the price charged to consumers would have directly achieved that same outcome.)

This is a very unclear post! I'd note that nuclear power is also heavily subsidised and the whole energy industry vastly distorted by state intervention at all levels. What is needed is actually simple - a free market where consumers can choose for themselves. Shocking I know!! If a 'green' intervention is required it seems to me all that is needed is a simple carbon tax which would attempt to compensate for the externality cost of the carbon production (rather than to discriminate against whichever form of energy use government believes people 'ought' to use). Unfortunately, we seem to move ever further from such a set of conditions.

@Whig - I would accept that a simple carbon tax would be better than the current mish mash of measures, but there are immense difficulties in setting an appropriate rate - given the subjectivity of environmental costs, policymakers' knowledge limitations, uncertain science and so on.

@Richard - I agree! Don't worry, I'm not really advocating a carbon tax. But that seems to me the least bad option if we have to have some measure - but I'm willing to hear better ones, or an argument for no intervention at all, believe me.
I think from a simple view of economics, the distribution of scarce resources, probably using renewables wont work, as they are too scarce. Wind - How many hilltops will be covered by windmills. - How many windy days are there? - How many birds are bats will die? - How many humans will complain about the noise? - How much pollution is caused by mining rare metals used in wind power in china? Water - how many rivers can be dammed? - How many esturies can be dammed? - How many hectares of wetlands would be lost? Solar - how many hectares of land should be covered in solar panals? - How many hot and sunny days are there each year? - Is there any pollution created producing solar panels? Biofuels - How many acres of land should be used for growing biofuels, and taken away from nature / food - How many people will die as a result of biofuel? - How many extinctions might there be? Burning rubbish - Who would like to live next to a rubbish burner? - How many cancers would it cause? A simple nuclear power plant, takes up a small amount of space, and produces alot of energy. It produces a little waste, which can easily be stored in a deep storage pool or cave. The earth we live on is a giant nuclear reactor.

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