Three Letters to Obama

The Obama administration has recently received three letters or petitions regarding energy policy.  As with any policy position they are shaped by the world views of the men and women who authored them.

Dr. James Hansen is head of the NASA Goddard Institute for Space Studies and a leading global climate change researcher.  It is not surprising that his proposal revolves around a tax policy aimed at decarbonizing the American economy and reducing greenhouse gases.

Edward Mazria is an architect and creator of the 2030 Challenge, a voluntary pledge that all new buildings and major building renovation be constructed to a carbon-neutral (using no fossil fuel GHG emitting energy to operate) standard by 2030. Mazria’s proposal is centered on achieving building energy efficiency goals rewarded with lower mortgage rates in the case of residential construction and by accelerated depreciation in the case of commercial construction.  If enacted, it claims to both create millions of jobs and reduce carbon emissions.

Richard Heinberg is senior fellow at the Post Carbon Institute and the author of The Party’s Over – Oil, War and the Fate of Industrial Societies,  Powerdown – Options and Actions for a Post – Carbon World, and the Oil Depletion Protocol.   Heinberg and the other authors of Post Carbon Institute’s “Real New Deal” marry the imperatives of climate change and the peaking and ultimate depletion of our fossil fuel resources into a comprehensive plan to transition the U.S. to a new energy economy.

All three proposals are valid and merit serious review, but only the Post Carbon Institute’s proposal offers a comprehensive view of the challenges we must face.  As such, the Hansen and Mazria proposals are important subsets of what needs to be a much larger solution.

THE HANSEN PROPOSAL
Hansen sent an open letter to Barack and Michelle Obama.  Here are some relevant excerpts from the letter:

A rising carbon price is essential to “decarbonize” the economy, i.e., to move the nation toward the era beyond fossil fuels. The most effective way to achieve this is a carbon tax (on oil, gas, and coal) at the well-head or port of entry.  The tax will then appropriately affect all products and activities that use fossil fuels.

The public will support the tax if it is returned to them, equal shares on a per capita basis (half shares for children up to a maximum of two child-shares per family), deposited monthly in bank accounts.  No large bureaucracy is needed.  A person reducing his carbon footprint more than average makes money.   A person with large cars and a big house will pay a tax much higher than the dividend.  Not one cent goes to Washington.  No lobbyists will be supported.  Unlike cap-and-trade, no millionaires would be made at the expense of the public.

A carbon tax is honest, clear and effective.  It will increase energy prices, but low and middle income people, especially, will find ways to reduce carbon emissions so as to come out ahead.  The rate of infrastructure replacement, thus economic activity, can be modulated by how fast the carbon tax rate increases.  Effects will permeate society.  Food requiring lots of carbon emissions to produce and transport will become more expensive and vice versa, encouraging support of nearby farms as opposed to imports from half way around the world.

THE 2030 CHALLENGE STIMULUS PLAN
A Two-Year, Nine-Million-Job Investment Proposal

“The road to energy independence, economic recovery and reductions in greenhouse gas emissions runs through the Building Sector.” – Edward Mazria

The 2030 Challenge Stimulus plan is a two year investment commitment to create 9 million jobs overall and 4-million jobs in the construction sector.  It is a jobs growth and carbon reduction plan rolled into one.  In the residential sector it trades low interest rate loans off against investments to increase building energy efficiency.  For an existing home, the interest rate provided would be a function of renovating that home to some level below the existing energy code requirements in exchange for a lower mortgage rate.

Mortgage Interest Rate (subject to market conditions)  2030 Challenge Energy Reduction

4.0%    30% below code
3.5%    50% below code
2.5%    75% below code
2.0%    Carbon neutral

For example, a homeowner with a    current $272,300    mortgage with equity of $12,000, would have a mortgage balance of $260,300. At an interest rate of 6%, the current monthly mortgage payment would be $1633. If this homeowner wants to qualify for the 2.5% interest rate, they will need to renovate their home to use 75% less energy than that required by code, immediately creating jobs and putting construction teams back to work.

The cost of renovation would be approximately $51,250, which includes a solar system, which would qualify for a $7000 tax credit. The cost of the renovation, minus the tax credit, would be added to the mortgage balance, so that the new mortgage is now $304,550.    However, because of the significantly lower 2.5%    interest rate, the new mortgage payment is just $1203, a savings of $430 per month. With the additional monthly savings on energy bills of approximately $145, this homeowner would save a total of $575 per month.

Because building construction historically represents about 10% of GDP, Mazria thinks that the private building sector may be the key to reviving the U.S. economy.  He proposes that $96-billion be invested annually for the next two years in mortgage interest rate buy-downs and accelerated depreciation for commercial buildings.  As a result, Mazria claims that with a participation of only 5.8% of homes and 3.1% of commercial buildings the program would generate 9-million jobs and $1-trillion in private sector spending, and pay for itself in the form of increased tax revenue.

In addition to the economic claims, Mazria calculates that over the five year period, the proposal would reduce CO2 emissions by 504 million metric tons and energy consumption by 6.47 Quadrillion Btu.

Even at a participation of only 5.8% (over 4-million) of homes, Mazria’s proposal may have a scaling problem, as the country finds itself lacking the architectural, engineering, and code verification talent to transform that many homes in the proposed time-frame.  Conceptually however, this is a beautifully conceived plan and deserves serious attention.

POST CARBON INSTITUTE
The Real New Deal
Energy Scarcity and the Path to Energy, Economic, and  Environmental Recovery

“The energy transition cannot be accomplished in four years or eight…  What can and must be accomplished in a single administration is the essential change of direction.”

The Post Carbon Institute [PCI] argues that the current economic crisis provides the opportunity and potentially the political will to make a significant down payment on the transition to a renewable energy economy that would otherwise be inconceivable.  In fact if we don’t act now, the current crisis may just merge with “peak oil” and the effects of climate change to create a decades long global state of emergency.

PCI outlines a comprehensive program comprising five different solution sets.

1. A massive and immediate shift to renewable energy (Hansen’s proposal fits here)
2. The electrification of our transportation system
3. The transformation to a “smart” electrical grid
4. The de-carbonization and localization of our food production and delivery system
5. The retrofit of our building stock for energy efficiency and distributed power generation. (Mazria’s proposal fits here)

Since the cost of such a transition spread over 20 years would be in the order of $4.5-trillion the authors admit that given the current financial meltdown, private capital will not be forthcoming and deficit spending by the government along with significant policy changes will be required to launch the transition.  To direct policy, the authors recommend creating “an Energy Transition Office, tied to no existing agency, specifically tasked with tracking and managing the transition and with helping existing agencies work together toward the common goal”.

The authors do not underestimate the enormous and unprecedented scope of their proposal.  Aside from avoiding or mitigating the devastating impacts of peak oil and climate change the potential  benefits are enormous and would include:

• eliminating the need to police oil exporting areas of the world, saving billions of dollars a year in military expenditures

• saving billions per year by creating a food system that substantially reduces obesity, cancer, and asthma

• helping to create and foster skilled, self-reliant and resilient communities

Although the plan as presented merely serves to outline the possible solutions and the scope of the problems we face, what sets it apart is it all-embracing view of the resource depletion and environmental  perils we must resolve to survive.

Thoughts About a New Energy Economy
Calls for the transition to a new energy economy typically come from three main quarters.  All three are valid, but only one sees the forest for trees.

The national security quarter recognizes that we depend too much on imports from countries and regions that are either unstable and/or hostile to our national interests.  This argument for action plays well with the right, but does not recognize the environmental threat of global warming or greater economic peril of peak oil.  Although it forms the basis of an argument for an energy transition, it can equally be used to justify a more robust military policy.

The climate change quarter is currently dominant in the minds of the public and with policy makers.  It sees great peril and human suffering in the coming decades but doesn’t recognize that the peak oil is imminent and will soon take center stage.  The economic devastation of peak oil will likely be additive to the current debt crisis and put global warming on the back burner.  Ironically, the advent of peak oil will greatly reduce carbon emissions and mitigate the effects of global warming but the decline in oil supply alone will not be sufficient to drive atmospheric CO2 levels back to 350 PPM.

Peak oil is lesser known.  There is a peak oil caucus in congress, but there is little political will to take action in a county where nearly half the population believes in the battle cry of “drill baby drill”.  Unlike the effects of global warming which will be slow and indirect in coming, the effects of peak oil will be as sudden as the collapse of the World Trade Center and Lehman Brothers.  More shock and awe than a slow rising of the tides.  It will touch every corner of our economy with a combination of price shocks and shortages.  It will leave us with one chance and one chance only to transform our energy infrastructure to solar, wind, and geothermal using what remains of our rapidly depleting fossil fuel resources.

As I look to the future, I see three possible courses of action:

Option one is that we recognize the problem of resource depletion and take action well in advance of  the anticipated world wide peak in oil production.  Since peaking is imminent and the transition will take approximately two decades, unfortunately the ship has already sailed on option one. Looking back we will someday wish we had paid much more attention to Jimmy Carter.

With the election of Obama, option two is already in play, and we have begin to take some action based on fears of climate change and for reasons of national security.  However, our current actions are no where near sufficient to avoid extreme hardship.  The ship of state is on a collision course with the iceberg and we have only just given the order to reduce speed.  Our collision with destiny is now unavoidable and the question now is whether there will be a sufficient number of life boats.  In addition, just as we need it the most, we lack sufficient capital to make the transition in the face of the global financial meltdown.  This is not just another severe business cycle, this is the beginning of the  realignment of the the post WWII global financial system and the end of American economic dominance.  It is likely that peak oil will become evident just as the dollar loses its status as the world’s reserve currency and as a nation we may then be unable to fund the energy transition with either public or private funds.  Essentially bankrupt and losing our grip on global influence and power the country may lurch to the right in a desperate attempt to reclaim global dominance.

Option three is to maintain a posture of “drill baby drill denial” in spite of reality.  At this point the country may resort to engaging in “resource wars” to claim the world’s remaining oil reserves and to protect the American “way of life”.   This would be a policy doomed to failure and assured of increasing human misery.  It would also be a policy that will put us at risk of missing our only window to transition away from fossil fuels.  Call this the Mad Max policy.

My hope is that we’ll stick with option two and muddle through to a new and sustainable energy economy.  It promises to be extremely painful and disruptive decade or two of transition, but in the end we will find ourselves in a much healthier relationship with our environment and possibly with each other.

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Obama and Global Warming – Cap & Trade or a Carbon Tax?

Taxes aren’t just too high, they’re too dumb. Whenever we put a tax on something, we get less of it. Yet, incomprehensibly, we continue to tax the things we want more of: income, jobs, and savings. Economists used to like that — they thought taxing good things was “neutral.” But it’s not. In a resource-constrained world, it’s much smarter to cut taxes on what we want — like jobs — and make up the difference by raising taxes on things we want less of: carbon, pollution, and waste. – Bill Shireman, President and CEO of the Future 500

The invisible hand of the market is blind to the effects of inputs and outputs that don’t provide any immediate price signals.  No where is that more true than in the fossil fuel derived energy markets, where the price signals for resource depletion, air and water pollution, and climate change are either non-existent, understated, or so delayed as to render any “natural” free market correction an economic and humanitarian crisis.

In the case of anthropogenic global warming [AGW], market forces may react to new shipping lanes in the Arctic or improved crop yields in certain parts of the world, but they will not react to species loss or rising sea levels until we are well past the tipping point of no return.  So the only way to drive the market to “decarbonize” our atmosphere is for the government to impose a price signal on fossil fuel generated carbon.

We can do this with either a system of Cap & Trade or with a Carbon Tax.  Either method would impose a cost on the release of carbon dioxide from the burning of fossil fuels and adjust the price upward to reflect the environmental costs that the “market” fails to “see”.

In a recent letter to president elect Obama, Jim Hansen, head of the NASA Goddard Institute for Space Studies proposes a carbon tax.  Here are some excerpts from the letter:

A rising carbon price is essential to “decarbonize” the economy, i.e., to move the nation toward the era beyond fossil fuels. The most effective way to achieve this is a carbon tax (on oil, gas, and coal) at the well-head or port of entry.  The tax will then appropriately affect all products and activities that use fossil fuels.

The public will support the tax if it is returned to them, equal shares on a per capita basis (half shares for children up to a maximum of two child-shares per family), deposited monthly in bank accounts.  No large bureaucracy is needed.  A person reducing his carbon footprint more than average makes money.   A person with large cars and a big house will pay a tax much higher than the dividend.  Not one cent goes to Washington.  No lobbyists will be supported.  Unlike cap-and-trade, no millionaires would be made at the expense of the public.

A carbon tax is honest, clear and effective.  It will increase energy prices, but low and middle income people, especially, will find ways to reduce carbon emissions so as to come out ahead.  The rate of infrastructure replacement, thus economic activity, can be modulated by how fast the carbon tax rate increases.  Effects will permeate society.  Food requiring lots of carbon emissions to produce and transport will become more expensive and vice versa, encouraging support of nearby farms as opposed to imports from half way around the world.

As a candidate, Obama supported a Cap & Trade policy that would require all pollution credits to be auctioned.  These credits would then be “traded” creating a new source of commission revenue for the financial markets.  A 100 percent auction policy would ensure that all industries pay for every ton of emissions they release, rather than politically giving emission rights  and credits away to companies on the basis of their past pollution.  Obama proposed that a small portion of the auction receipts (~$15 billion/year) be invested in the development of clean energy sources and that the balance be used for rebates to individuals, families, and communities to off-set the increased cost of fuel, natural gas, and electricity.

Personally, I like the administrative simplicity of Hansen’s plan and it’s relative immunity to political and financial gaming.   Obama has proven he is open to any good idea — let’s hope he is open to Hansen’s proposal.

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The End of Petroleum for Personal Transportation

Every great company in the history of the [silicone] valley started in a technology down cycle. — Shai Agassi

Stories about electric cars usually don’t get me very excited.  They may not generate any emissions on the road, but their batteries must recharged from a national electric grid, which in America is 50% dependent on coal and 20% dependent on natural gas.  Essentially, electric cars always looked like a game of fossil fuel whack-a-mole – trading the limitations and pollution of oil for the limitations and pollution of coal and natural gas.  You could argue that we could power the grid with renewables, but the grid is a 7/24 dance of precisely matching up demand with supply and it can only tolerate a limited amount of intermittent power like wind and PV before the music stops.  Add to that the limited range of electric cars and the whole concept falls apart when you consider that potential buyers must be confined to a tight radius around the umbilical cord of their home’s electric meter.

All of that is about to change as our model of personal transportation built around cheap oil and the internal combustion engine goes the way of the buggy whip.  Imagine a future work day that looks like this:

1. You enter your garage and pull out your electronic key. The logo on the key is blinking blue, indicating your car is fully charged.
2. You unplug your car from the wall, open the garage door, and head for work. Your electric system software analyzes the first few minutes of driving and determines your likely destination based on past history: “Work?” it asks to confirm. You answer the question in the affirmative and the system determines how much energy is needed for the day.
3. During your commute, the GPS enabled system finds and displays three open parking spaces near your office that are equipped with charging pods linked with your electric car’s subscription plan.
4. You pull into one of spaces and an automatic arm extends to plug into the car. The charging pod then communicates with the control center, and based on the your driving history,  picks the lowest rate time slot to recharge your vehicle.
5. Before your recharge is complete an unexpected cross town meeting comes up.  You climb into your car and enter the new destination, and the system software notifies you that there is insufficient charge to make the trip, return to the office, and commute back to your home.    To extend your range you order a battery swap.
6. The system software finds the most convenient battery-exchange location and books a bay. The old battery gets lowered onto a hydraulic plate, and the car moves forward on a car-wash-style track. In no more time than it takes to fill up your old tank with gasoline, a fully charged battery pack is in place, and you are on your way with another 100 miles of driving range.

If all this sounds like an episode from the Jetsons, think again.  Within 15 years, automobile transportation in Israel and Denmark will be carbon neutral, with electric cars powered by wind and solar energy, and the rest of the world may not be that far behind.  This all starts with a business model for the automobile that takes its cues from the mobile phone.

The idea, according to Shai Agassi, the software entrepreneur responsible for this new vision, is to sell electric car transportation on the model of the cellphone. Purchasers get subsidized hardware — the car — and pay a monthly fee for expected mileage, like minutes on a cellphone plan, eliminating concerns about the fluctuating price of gasoline.
As with cellphones the car will become secondary in importance to the network, “You’ll be able to get a nice, high-end car at a price roughly half that of the gasoline model today,”

Agassi’s vision is well on its way to reality.  His company, Project Better Place, has already attracted $200-million in venture capital, a commitment from Renault-Nissan to develop and build the software enabled electric cars, and commitments from Israel and Denmark to be the “beta sites” to prove the concept.  If any of this required some new technical breakthrough, I would find it all interesting in a wait-and-see kind of way.  However, what makes this real is that it all rests on a proven foundation of off-the-shelf technology.  The breakthrough lies in the vision – in the paradigm shifting business model.  The initial selling is done, what comes next is flushing out the partnerships, building he supplier base, creating the system software, and engineering the infrastructure.

The collection of park and charge spots across a country or city, together with software that controls the timing for charging the cars, creates a smart grid—synchronized and extending the country’s existing electric grid, matching excess electricity on the grid with the need to charge batteries flattening the demand curve in the process. When we put together the charge points, the batteries, exchange stations, and the software that controls timing and routing we get a new class of infrastructure—the Electric Recharge Grid (ERG). A new category of companies will emerge in the next few years which will install, operate and service customers across this grid—called Electric Recharge Grid Operators (ERGOs).—Project Better Place white paper distributed at EVS-23

The ifs and the maybes are past tense.  Renault-Nissan has promised to have the cars ready by 2011 and prototype testing has already begun in Israel.  These cars will not be glorified golf carts, but snappy full size sedans and small SUV’s.

The consumer’s contract for the EV must be the same – or better – than the consumer’s current contract for gas-powered cars.  We need to change the way consumers buy an EV so that it fits the current social contract we have with our cars, providing a normal car ownership experience even if the car has an electric drive train. -  Shai Agassi

Israel and Denmark provide ideal consumer markets to test the business model.  Each country enjoys low average miles driven per day that fall within the proposed battery pack range and a high likelihood that the electricity used for transportation will be renewable.  Denmark already generates enough excess wind power to supply all of it’s personal transportation needs and Israel has an obvious strategic need to be independent of Middle East oil.

With any infrastructure project of this magnitude, there will be unforeseen problems.  However, none are likely to be more than temporary engineering challenges.  The end result will be a new electric personal transportation paradigm that is equal to or better than the freedom and convenience provided by the internal combustion engine.  It is a business model that has the potential to greatly mitigate the impact of peak oil, positively impact climate change, and by providing a large storage sink in the form of batteries enable much greater use of  solar and wind power on utility grids.

It also extends the age of the automobile, along with the legacy of traffic jambs, suburban sprawl, and mind numbing commutes.  Better Place estimates the the cost to develop the necessary infrastructure in the U.S. is about $500 per car or about a year’s worth of oil imports.  Over $400 of that number is for investments in renewable energy to avoid the shell game of trading oil off against coal and natural gas, so the actual cost for the charging and battery swap infrastructure is only about $85 per car.  Since the U.S. electrical grid suffers from 30 years of under-investment and is a balkanized maze of 500 owners, the implementation of the Better Place model will mimic the cellphone industry and role out by metro region based on local politics and beliefs that favor an early adopter mindset.  It’s no surprise that the California cities of San Francisco, Oakland, and San Jose will combine to be the first U.S. adopters of the model.

A Utopian Future?

Once you have a system of electric cars – a system that knows where every car is and where they are going – it is not much of leap to imagine the end of traffic jams or even the end of actually having to operate the vehicle.  Phase II?

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The Obama Energy Plan and our Homes

How will Obama’s energy polices affect our homes?  We won’t really know until his proposals are debated and enacted by congress, but we can get a sense of what might happen from his campaign’s position statements.  From his campaign website’s fact sheet his stated position on building energy efficiency is as follows:

“Obama…will establish a goal of making all new buildings carbon neutral, or produce zero emissions, by 2030.  [He] will also establish a national goal of improving new building efficiency by 50 percent and existing building efficiency by 25 percent over the next decade to help us meet the 2030 goal.”

This is straight from the playbook of Ed Mazra’s Architecture 2030 Challenge.  As evidenced by the following quote from the 2030 website, the 2030 Challenge is predicated on climate change and the reduction of green house gas emissions associated with the Building Sector.

“Rapidly accelerating climate change (global warming), which is caused by greenhouse gas (GHG) emissions, is now fueling dangerous regional and global environmental events. Data from the U.S. Energy Information Administration illustrates that buildings are responsible for almost half (48%) of all GHG emissions annually. Seventy-six percent of all electricity generated by US power plants goes to supply the Building Sector. Therefore, immediate action in the Building Sector is essential if we are to avoid hazardous climate change.”

I have two issues with the 2030 Challenge.

One is that the 48% responsibility for GHG emissions attributed to buildings is overstated.  The emissions assigned to the building sector are primarily the indirect result of drawing on electrical power generated from coal and natural gas fired power plants, so the question becomes whether to focus our resources on the building “demand” side, or the power plant “supply” side, or some combination of both.  In that broader context, we may find that it is much easier to deal with a few hundred power plants than to transform 150 million residential and commerical buildings.  From a public policy perspective, both the demand and supply side should be considered as a synergistic whole.

My second issue is more fundamental.  Architecture 2030 asks and answers the wrong question.  The question that Architecture 2030 asks is what actions should we take to mitigate the effect of the building sector on climate change.  However, the greater question is what actions should we take to render the building sector sustainable.  Once sustainability is on the table then we have to consider carrying capacity and carrying capacity overshoot at which point climate change is just another canary in the coal mine.

Carrying capacity is all about the ecological limits (capacity) of our planet’s resources and sinks.  By considering GHG emissions as the primary driver for building energy improvements, policy makers are overlooking the much more immediate and serious resource issues of peak oil and gas.  Since both of these peak events will be evident as early as 2010, all buildings should be built or retrofitted to a net zero energy and carbon standard NOW, not 22 years from now.

However, I digress.  Since it will take the actual emergency of these peaking events to mobilize the political will to enact a national zero energy standard, the question is what can we expect when Obama takes office next year.

The first likely step will be to start the process of improving building efficiency by 50% through our building codes.  A significant improvement is already in the works for the residential sector with the IECC 2009. However, at this time, the 30% improvement authored by the Energy Efficient Codes Coalition, will only be a voluntary appendix to the next release of the code.  In addition, once the new code is released, it has to be reviewed and adopted by hundreds of city, county, and state authorities.  In the process, these authorities often dumb down new energy code provisions in response to local politics.  We can also expect a major push back from a decimated housing sector deeply concerned about adding any new code mandated building costs.

My best guess is that under Obama, the voluntary 30% improvement provision authored by Energy Efficient Codes Coalition will be supported by Obama’s Grant Program for Early Adopters policy proposal.  This proposal creates a competitive grant program for states and localities that “take the first steps in implementing new building codes that prioritize energy efficiency, and provides a federal match for those states with leading-edge public benefits funds that support energy efficiency retrofits of existing buildings.”

The grant proposal creates a policy that respects local politics and helps to support those areas of country that have the political will to move forward with improving building energy efficiency.

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Human Carrying Capacity and the 2008 Financial Meltdown

In 1972, a group of researchers funded by the Volkswagon Foundation published a book titled, The Limits to Growth.  Based on a MIT computer model using system dynamics, the book predicted that unless the current trajectory of population and industrial growth was altered, the world would exceed it’s human carrying capacity resulting in a sudden and uncontrollable decline in population and industrial capacity.

By challenging our beliefs in the inevitable rightness and goodness of technical, industrial, and economic growth, the book evoked great controversy and would eventually sell over 30 million copies in more than 30 languages.  Contrary to much of the criticism that the book received, it was neither anti-growth nor did it predict the running out of any specific resource by a date certain.  Noting that it’s research was “preliminary”, the book offered three simple conclusions.

1. If current growth trends continue we will exceed the earth’s human carrying capacity within 100 years.  This overshoot of carrying capacity will result in a sudden and uncontrollable decline in both population and industrial capacity.
2. These growth trends can be altered to achieve a sustainable, “ecological stability” capable of supporting a given human population far into the future.
3. The longer we wait to begin altering growth trends, the lower the probability of successfully achieving a sustainable future.

The 1972 authors gave us some markers to watch for as warning signs or indicators of our possible overshoot of human carrying capacity.

• Deterioration in renewable resources – surface and ground water, forests, fisheries, agricultural land.

• Rising levels of pollution.

• Growing demands for capital, resources, and labor by military and industry to secure, process, and defend resources.

• Investment in human resources (education, shelter, health care) postponed in order to provide immediate consumption and security demands.

• Rising debt; eroding goals for health and environment.

• Growing instability in natural ecosystems.

• Growing gap between rich and poor – between the powerful and the weak.

I’ll return to these warning signs, but first I think it would be useful to define a few key concepts.

Human Carrying Capacity
In the simplest of terms, human carrying capacity in a closed eco-system like earth is a function of population plus the average rate of consumption of that population.  At a given limit, you have the trade off of a high population and low levels of consumption, or low population and higher levels of consumption.

Human carrying capacity is the maximum rates of resource harvesting and waste generation (the maximum load) that can be sustained indefinitely without progressively impairing the productivity and functional integrity of relevant ecosystems wherever the latter may be located. The size of the corresponding population would be a function of technological sophistication and mean per capita material standards. This definition reminds us that regardless of the state of technology, humankind depends on a variety of ecological goods and services provided by nature and that for sustainability, these must be available in increasing quantities from somewhere on the planet as population and mean per capita resource consumption increase. – William E. Rees

Carrying Capacity Overshoot
To overshoot means to grow rapidly beyond the limits of carrying capacity. When this overshoot occurs, it’s due to a limit or barrier exceeded within the system, and the system (natural and/or economic) corrects and begins to slow, stop, or reverse growth.  In addition, as the limits of our natural systems are exceeded they are degraded, which results in the overall carrying capacity being diminished.   Overshoot leads to a sudden and catastrophe collapse.

As the environment is degraded, carrying capacity actually shrinks, leaving the environment no longer able to support even the number of people who could formerly have lived in the area on a sustainable basis. No population can live beyond the environment’s carrying capacity for very long. – William E. Rees

Humans are hard wired to discount the future, so in the context of carrying capacity, I have often wondered what environmental disaster or resource limit would be the tripwire that would launch us into the kind of collective action required to avoid or mitigate overshoot and catastrophic collapse.  Would our tendency to only react when faced with a crisis, doom us to a fate of too little, too late?  Will we miss our window to achieve a sustainable “ecological stability”?

Perhaps the tripwire won’t be a natural limit like global warming, or peak oil, or fisheries collapse, or soils loss.  Perhaps the tripwire will be a systemic economic collapse.  And if it is, will we see it for what it is, or will we clamor in panic for a return to business as usual?

In the 1992 followup publication, Beyond the Limits, the authors clarified their position relative to growth:

A sustainable society would be interested in qualitative development, not physical expansion. It would use material growth as a considered tool, not a perpetual mandate. It would be neither be for nor against growth. Before this society would decide on any specific growth proposal, it would ask what the growth was for, and who would benefit, and what it would cost, and how long it would last, and whether it would be accommodated by the [natural] sources and sinks of the planet.

In other words, they meant that qualitative growth was still possible, and only quantitative growth was limited….more quality of life, less stuff.  The 1992 authors also remained hopeful and stated that:

The decline [overshoot and collapse] is not inevitable. To avoid it two changes are necessary. The first is a comprehensive revision of policies and practices that perpetuate growth in material consumption and in population. The second is a rapid, drastic increase in the efficiency with which materials and energy are used.

The 2004 follow up publication, Limits to Growth: The Thirty Year Update, would not be so optimistic. Based on thirty years of additional data and refinements in their computer modeling, the authors would be forced to conclude that the world was in a dangerous state of overshoot.  Consider again the list of warning signs from the original 1972 publication.

ECONOMIC SYSTEMS:
Rising debt; eroding goals for health and environment.

• In the last eight years the U.S. National Debt has grown from $5.7-trillion to over ten trillion dollars. However, that only begins to tell the story.  If we use generally accepted accounting procedures (GAAP) to determine the nations financial obligations and include the net present value of the unfunded liabilities in social insurance programs such as Social Security and Medicare, then the total federal obligation exceeds $59-trillion dollars.

• According to David Greenlaw, Morgan Stanley’s chief economist, the 2009 budget deficit could be close to $2 trillion, or 12.5 percent of gross domestic product, more than twice the record of 6 percent set in 1983.

• U.S. household debt as a percentage of GDP has risen from a low of 12% at the beginning of WWII to over 90% in the year 2006.

• U.S. credit card currently exceeds $950-billion, 30% of which is carried by “high risk” borrowers.  Innovest estimates that banks will write off $41- billion in credit card debt in 2008, and $96-billion in 2009.  The American consumer is “tapped out”.

• In 1970, the world’s poorest countries (roughly 60 countries classified as low-income by the World Bank), owed $25 billion in debt.  By 2002, this debt had grown to $523 billion.  Basically, the more the developing countries stay in debt, the more they will feel that they need to milk the earth’s resources for the hard cash they can bring in, and also cut back on social, health, environmental conservation, employment and other important programs.

“Pushing debt has become the easiest and the most profitable business in the U.S. over the past few years. Who wants to take the risks of a producer when financing has become so lucrative? Look at the largest “industrial” corporations in the U.S. over the past decade, or two, and what you see is that they are lot more into financing business than in production business.” – Jas Jain, December 2006

Growing gap between rich and poor – between the powerful and the weak.

• In 1998 more than 45 percent of the globe’s people had to live on incomes averaging $2 a day or less. Meanwhile, the richest one- fifth of the world’s population has 85 percent of the global GNP.  And the gap between rich and poor is widening.

• At the beginning of the 19th century, average incomes in the richest nations were about 4 times greater than those in the poorest nations.  100 years later at the turn of the 20th century, average incomes in the richest nations are 30 times larger.

• An analysis by economists Thomas Piketty and Emmanuel Saez found that despite several periods of healthy growth between 1973 and 2005, the average income of all but the top 10 percent of the income ladder — nine out of ten American families — fell by 11 percent when adjusted for inflation.

• Americans have the highest income inequality in the rich world and over the past 20–30 years Americans have also experienced the greatest increase in income inequality among rich nations.

• The share of income held by the top 1% in America was as large in 2005 as it was in 1928.

• In the U.S., between 1979 and 2005, the mean after-tax income for the top 1% increased by 176%, compared to an increase of 69% for the top quintile overall, 20% for the fourth quintile, 21% for the middle quintile, 17% for the second quintile and 6% for the bottom quintile.

“…income variance is a long-term (multi-year) indicator of economic activity. The more extreme it gets, the worse the economy and the financial markets eventually will become. Looking at two simplified markets with one man making $100,000,000 per year or 1,000 men making $100,000 per year, there will tend to be more speculative financial markets in the first case, but more automobiles will be sold in the second case. The system tends to be self-adjusting when income variance reaches an extreme, with the speculative market bubble eventually bursting and income and economic activity tending to get redistributed.” – John Williams, Shadow Government Statistics

Investment in human resources (education, shelter, health care) postponed in order to provide immediate consumption and security demands.

• More than half a million people, mostly children, died from measles in 2003 even though effective immunization costs just 30¢, and has been available for over 40 years.

• Since 2003, discretionary spending in the U.S. has declined by 9% for education and 17% for health.

Growing demands for capital, resources, and labor by military and industry to secure, process, and defend resources.

• World military expenditures have increased 45% since 1998 to $1.34-trillion in 2007.

• The USA’s military spending accounted for 45 per cent of the world total in 2007, followed by the UK, China, France and Japan, with 4–5 per cent each.

• Defense accounts for over 50% of the U.S. discretionary budget.  This does NOT include the costs of the Afghan and Iraqi wars.

“Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes … known instruments for bringing the many under the domination of the few.… No nation could preserve its freedom in the midst of continual warfare.” - James Madison, 1795

Growing instability in natural ecosystems.

• Sea level has risen 10–20 cm since 1900. Most non-polar glaciers are retreating, and the extent and thickness of Arctic sea ice is decreasing in summer.

• Vertebrate species populations have declined by about one-third in the 33 years from 1970 to 2003

• Global extinction of species occurred in the 20th century at a rate that was a thousand times higher than the average rate during the preceding 65 million years. This is likely to destabilize various ecosystems including agricultural systems.  This will threaten food supplies for hundreds of millions of people.

Deterioration in renewable resources – surface and ground water, forests, fisheries, agricultural land.

• The first global assessment of soil loss, based on studies of hundreds of experts, found that 38 percent, or nearly 1.4 billion acres, of currently used agricultural land has been degraded.

• In 2002, the Food and Agriculture Organization of the UN estimated that 75 percent of the world’s oceanic fisheries were fished at or beyond capacity. The North Atlantic cod fishery, fished sustainably for hundreds of years, has collapsed, and the species may have been pushed to biological extinction.

• The Science journal has warned that commercial fish and seafood species may all crash by 2048.

• Global water consumption rose six-fold between 1900 and 1995 – more than double the rate of population growth – and goes on growing as farming, industry and domestic demand all increase.

Rising levels of pollution.

• 40% of America’s rivers and 46% it’s lakes are too polluted for fishing, swimming, or aquatic life.

• The Mississippi River carries 1.5 million ton of nitrogen (fertilizer) pollution into the Gulf of Mexico each year creating a marine dead zone the size of Massachusetts.

• Pollution of freshwater (drinking water) is a problem for about half of the world’s population. Each year there are about 250 million cases of water-related diseases, with roughly 5 to 10 million deaths.

• China already uses more coal than the United States, the European Union and Japan combined. And it has increased coal consumption 14 percent in each of the past two years in the broadest industrialization ever. Every week to 10 days, another coal-fired power plant opens somewhere in China that is big enough to serve all the households in Dallas or San Diego.

• We can measure CO2 levels in the atmosphere going back over 450,000 years by analyzing polar ice cores.   Prior to the industrial revolution they had never been higher than 300ppm.  They are now in excess of 380ppm.

We were in the beginning of an unprecedented global financial meltdown and when I started writing this post, and I was curious as to whether the current financial crisis is just another economic cycle, or is somehow associated with the overshoot and collapse predicted by the authors.  I cannot say it is or is not with any certainty, but there are too many other warning signs (many more than I have listed) to not be very alarmed.  Just as this financial crisis was sudden and severe, so will be the consequences of overshoot.

I think the greatest contribution of Limits to Growth and the follow-on publications was to bring the concepts of human carrying capacity and overshoot into the public discourse.  The consequences of overshoot are many times more troubling than either global warming or peak oil.  Unfortunately, overshoot, like peak oil, may only be evident to policy makers and the general public by looking back from the context of fear, chaos, and crisis, much like we are doing today with the current financial meltdown.

A  year ago I would have bet that peak oil would be the key triggering event of overshoot.  As I watch the daily spectacle of the financial world imploding, I am no longer so sure.  I’ll leave you with a “some day” vision from one of the original authors of Limits to Growth.

It seems to me a powerful message, worth repeating and repeating, that people want peace, simplicity, beauty, nature, respect, the ability to contribute and create. These things are much cheaper and easier to achieve than war, luxury, ugliness, waste, hate, oppression, manipulation. Some day, when everyone understands that nearly all of us truly want the same kind of world, it will take surprisingly little time or effort to have it. – Donnella Meadows

More about human carrying capacity.

Let’s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.” – Thomas Friedman, March 7, 2009

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Electrial Cooperatives and Distributed Power Generation

“Solar [PV] is slowly going to begin to unwind the existing utility economics, to the point where utilities decide they have to get in or they risk losing their core business – exactly [like] the [PC and telcom] transformations we’ve lived through in the last 20 years.”
Travis Bradford, 2008, author of Solar Revolution

For nearly 100 years utility companies have operated with minimal competition as a regulated monopoly. Imagine having a business that nearly always grew and when costs increased, you could just pass them off to your customers in the form of higher prices.  Utilities, much like the long distance telephone carriers of our recent past, are now facing real competition for the first time.  The primary threat is from PV power installed on the rooftops of American homes and unlike revenue losing energy efficiency measures, such as compact fluorescent lighting, efficient heating and cooling equipment, solar hot water systems, and Energy Star appliances, SOME utilities see homeowner PV and wind power generation as a threat to future revenue loss they can block.

The electrical generation and distribution market in America is divided between Investor Owned Utilities (IOU), Public Owned (Federal or city), and Cooperatives formed under the 1936 Rural Electrification Act.

Investor owned utilities have been the first to adopt net metering due to state laws mandating both net metering and minimum requirements for producing power via renewable energy.  Also, because PV power is generated during the hours of peak demand, providing incentives for residential PV makes good business sense because it offsets the higher operating costs of natural gas peak power plants and defers or avoids the capital costs of additional plants.  However, public utilities and cooperatives are typically not subject to these laws, and aside from the preferential Federal hydroelectric power they get on the cheap, cooperatives in particular have resisted pressure to promote and use renewables.

Cooperatives and the Rural Electrification Administration (REA) launched by President Franklin D. Roosevelt in 1935 are one this country’s greatest success stories.  At the time private and investor owned utilities were not willing to take the risk to extend electrical service to rural areas and millions of  american communities, farms, and ranches were without any source of electricity.

The first rural cooperative organizations were humble main street store-fronts and by 1938 the typical coop had about 800 consumer-members with democratically elected directors to manage the affairs of the organization. These early coops were “first name” neighborly affairs and about as formal as your local grange.  A typical “staff” might consist of a manager, a bookkeeper, a line foreman and a single crew.  Growth would be revolutionary, and by the 1940’s REA cooperatives would deliver power to over 97% of America’s farms and ranches and cooperatives would politically band together under the National Rural Electric Cooperative Association.  As the country grew, the demographics of many cooperatives would change from rural to suburban and the original small farm, grassroots, community character would begin to take on a more corporate feel.  In 1987 and 1993, first president Reagan and then President Clinton would attempt to dismantle the REA structure of federal subsidies, but the cooperative “political footprint” had grown too large and powerful.  Today cooperatives are largely resellers of electricity they buy from investor owned and public utilities at wholesale and resell to their members at retail.  Many are “cooperatives” in name and form only and behave and act with the same self interest as any corporation.  Since, in many cases they are neither base or peak power generators, they don’t have the same incentive as the investor owned utilities to manage peak demand and promote and financially support homeowner PV or wind power systems.

The battle for grid access with cooperatives can best be illustrated with a personal example.

I live in geographical middle of Colorado within the service area of the Intermountain Rural Electrical Association (IREA).  The IREA was formed in 1938 and is the largest of 22 Colorado cooperatives serving a population that is both rural and Denver suburban.  The IREA buys it 93% of its power from investor owned utility XCEL and the balance from DOE’s Western Area Power Administration, a federal hydroelectric power provider.  The members of IREA elect board directors in various districts within the IREA service area every four years.  This sounds democratic enough, but unlike the rural members of the 1930’s who helped dig and plant the original power poles, todays members see themselves more as customers and director elections get about as much mind-share as an election for county coroner.  As a result, directors tend to be elected for “life”, getting what amounts to a proxy rubber stamp every four years.  This cozy relationship changed in 2007 when a member revolt in some of the more liberal suburban districts mobilized to elect a director with greener credentials. The trigger for the revolt was IREA’s position on global warming.  IREA’s website devotes an entire page to debunking global warming and they had spent $100,000 that year to fund anti-global warming “research”.  You have to wonder why a relatively small electrical power reseller would spend so much of its members money tilting a political windmills.

The IREA belongs to both the National Rural Electric Cooperative Association and the Colorado Rural Electric Association(CREA).  These lobbying organizations represent large and conservative political footprints at both the state and national levels.  The Colorado state legislature has been at battle with the CREA over a proposed net metering law for cooperatives.  The CREA and IREA’s position is that residential and other customer’s that take advantage of net metering by installing PV or other renewable power technologies do not pay their fair share of indirect costs and that net metering should be limited to a small percentage of customer’s and that excess power generated should only be reimbursed at “wholesale” rates.  This argument is weak at best, and I could apply the identical logic to a customer that weatherizes his home, or installs Energy Star appliances or compact fluorescent lights.  Add to that the irony that over 90% of the electricity I receive from the IREA comes from XCEL energy which has an aggressive Solar Rewards program to encourage net metered generation of PV power.  To promote the program, XCEL has invested $19.5 million in rebates to over 1,000 customers adding more than 4.3 megawatts of solar energy capacity, and plans on adding another 29 megawatts of capacity by 2015.

The Rural Electrification Administration was renamed the Rural Utilities Service (RUS) in 1994 and continues to subsidize cooperatives through low-rate government loans.  The Washington Post recently reported that the RUS “is using taxpayer money to provide billions of dollars in low-interest loans to build coal plants even as Congress seeks ways to limit greenhouse gas emissions.”  Since only 24% of the counties served by cooperatives are completely rural and 200 of the counties served have populations of more than 1 million, the RUS has lost its original rural focus and now subsidizes many urban areas.  Cooperatives are a “New Deal” legacy program that fulfilled its basic function decades ago and now has taken on a life of its own.  It is ironic that the progressive policies that created the electrical cooperatives and brought power to rural American in the 1930’s and 40’s, would evolve into a regressive and entrenched bureaucracy that will probably be the last barrier to a national  policy of net metering and the distributed generation revolution.

Note: The electrical cooperatives eventually lost the net metering battle in Colorado and must now reimburse net metered customers at retail rates.

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The LEED Narrative – Going Beyond

I received an email this morning from Scot Horst , who chairs the LEED Steering Committee. He describes the behind the scenes narrative that has been going on since work began on LEED 2009.

Person A: “Global warming doesn’t give us much time.”
Person B: “But we can’t address much of anything, let alone global warming, if we’re only dealing with a small fraction of the entire built environment. We need to get everyone involved.”

Person A: “Yes, but why get them involved in a system that doesn’t take them far enough to save us from ourselves? We need our buildings to be restorative.”
Person B: “LEED can’t save us from ourselves. LEED, as a tool, can engage the market in transformation. That transformation is about people. It is not about LEED credits.”

Person A: “You’re missing the point. We have to be tougher. We have to go beyond.”
Person B: “No, you’re missing the point. We have to find ways to engage a market that has never thought about these issues before.”

Persons A and B: “Let’s find a way to do both.

”This is an engaging and very important narrative and perhaps the most important point for me is that LEED is a “tool” that helps to raise consciousness and “engage the market in transformation.” My personal view is that we must “go beyond” and that much of what we currently do in the green building movement, however well intentioned, is nothing more than rearranging the deck chairs on the titanic. The global warming mentioned in Horst’s narrative has provided the catalyst for both LEED and Architecture 2030, but focusing solely on warming misses the point. Warming is a symptom and not a cause. It has prompted us to take some action, but not to “go beyond”. As a premise for action it has been useful, but is easily attacked on it’s “scientific validity”. It is one of the canaries in the coal mine, but there has been is very little discussion of the coal mine. We need to expand the narrative and take a broader view.

Taking a page out of ecological economics, once you picture the built environment as a mere subset of our closed ecosystem, then your conceptual framework regarding sustainable building is forever changed. It means you have to accept that there are limits, and that we are not going to be able to grow forever. It implies the built environment must have some optimal size and level of consumption relative to the larger ecosystem. It means you cannot grow beyond that optimum without threatening man’s survival within that ecosystem. Out of this stream of thought flows a list of very troubling questions?

• How do we stop growing?

• What are the limits? What is optimal?

• Does climate change tell us they have already been exceeded?

• Do we face a kind of built environment armageddon when fossil fuel production peaks and begins to decline?

• Is a zero energy standard imperative now?

• What do we do? How do we do it?

Our very survival depends on how and when these questions are answered. LEED does not provide the answers, but it does help us to prepare.

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State of the Union 2010

“[The President] shall from time to time give to Congress information of the State of the Union and recommend to their Consideration such measures as he shall judge necessary and expedient.”
The United States Constitution, Article II, Section 3

Members of Congress, madame Speaker, distinguished guests, my fellow Americans…as many who have come before me, I stand before you this evening to fulfill a constitutional obligation. The first State of the Union address was delivered in straight forward manner to a newly formed congress by George Washington on January 8th, 1790. However, some two century’s latter, this time honored tradition has in devolved into political theatre with standing ovations predictably limited to one side of the aisle and political points cynically won from guests planted in the gallery. The American people deserve better, so this evening I will depart from my prepared remarks and tell the people of America and of the world what they need to hear rather than what they either want or expect to hear. Many will not like what I have to say, but this union and the world stand at a cross roads and there is no better forum than this to address this critical moment in history.

When George Washington delivered the first address in 1790 the population of the world stood at approximately 1 billion and the population of our new fledgling country was less than 4 million. Our nation’s borders had yet to reach the Pacific and many parts of the earth, including our great western states were still unexplored. Mankind’s footprint on this world was still relatively small. At the beginning of our nation’s life, it was just and reasonable to limit the focus of this address to our new and fragile union. However, today we cannot understand the state of our union without first putting it in both its historical context and in the context of the state of our planet. To do otherwise, would be to put us in grave danger.

In contrast to the time of Washington’s address, the population of the earth today exceeds 6.6 billion and our country’s population stands at nearly 304 million. As a result of that growth, mankind’s footprint on this world has in many ways begun to exceed the limits of the earth’s carrying capacity. We see the effects of these limits manifested in record high natural gas and heating oil prices, $200/barrel oil, $10/gallon gasoline, climate change, a persistent and prolonged state of financial crisis, the ongoing military conflicts in Iraq, Iran, and Afghanistan, and in the continuing food shortages and riots in both our country and around the world. But these issues, as serious and troubling as them may seem, are merely symptoms, not the root cause of the problems we face today.

When America’s space program provided us with the first photos of our planet from the perspective of space, we were awed not only by the beauty of our planet, but by it’s lonely isolation. One small planet providing an island oasis for humanity in an infinite universe. We can easily grasp the limitations of an island, but we have naively thought of the earth as an infinite source of life nurturing resources. The truth however, is that every planet like every island has a limited supply of natural resources and our planet is no different. As the world’s population and economy has grown, our natural resources have been systematically exhausted to the point were we can no longer depend on their increasing supply to fuel our economic growth and standards of living. Our undeniable reality is that we will have to accept and adjust to the limits imposed by the closed system we call Earth.

The challenge these natural limits will impose on our nation and the world will exceed any that we have faced either as a nation or as a community of nations. Our state of the world is that we have outgrown and exceeded the capacity of the earth to sustain the current level of population at current levels of consumption. Every other problem we face today is but a symptom of this one undeniable fact. Our choice is simple, we can either chase after symptoms and descend into a death spiral of conflict over dwindling resources, or we can use what remains of the earth’s resources to create a sustainable world for thousands of future generations. As a community of nations, we will have one chance and one chance only to accomplish this transition and the time is now. This is our moment to fail or succeed. If we fail to use what remains of our fossil fuel and other resources to successfully make this transition, the consequences will be dire and the world will return to a pre-industrial existence capable of sustaining only a fraction of the world’s existing population. Time is not on our side and we have only two, perhaps three decades to complete the task. It is incumbent upon this union, and the people of this nation to lead the world in this transition.

Our union began with a simple declaration penned by Thomas Jefferson.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness

Historically, as we pursued these simple Rights, we have much we can hold with pride and much we must hold with shame. As a country we have been both a shinning beacon of hope, opportunity, freedom, and prosperity; and we have also practiced slavery, committed genocide against our native populations, and covertly and overtly meddled in the affairs of other sovereign nations. We have won wars justly fought in the name of freedom and lost wars with murkier political and moral aims. Today we are no longer the the republic our founding fathers envisioned. We have become the most powerful nation in the history of the world….a virtual empire with over 800 foreign military posts and bases and a military budget exceeding the next 46 countries combined. If you add all of the money spent to maintain and support our worldwide empire by the DOD, the CIA, the Treasury, the FBI the State Department, Homeland Security, the Veterans Administration, and the interest we pay on past military expenditures, it amounts to well over $1-trillion per year and growing. This figure does even include the “supplemental” funds being spent on our current middle east conflicts. These expenditures are not sustainable, and the slow creeping growth of this overreaching empire has turned us into the world’s largest debtor nation and moved us far from the founding principles and ideals of our nation.

The economic success we experienced for the better part of the last century has given us the highest standard of consumption in the world, but by many measures, not the highest quality of life. For many of us, our pursuit of happiness has become a frantic, costly, and unsatisfying pursuit of the trivial and meaningless. In just a few decades we have managed to transform the strongest, most dynamic manufacturing economy in the world into a economy completely dependent on consumerism and debt. In a country with a negative savings rate, record high credit card debt, and declining home values, our consumer led economy is long past sustainable.

Yet it is from this point in our history that we must face our greatest challenge. If we continue to look at symptoms, our situation to many will seem hopeless and out of desperation and fear we will be tempted to blame others for our problems. Demagogues have and will call for pre-emptive military action against those that control what remains of the world’s rapidly depleting natural resources. But there can be no peace in the context of scarcity and no pursuit of happiness without peace. The root cause of our problems will not and cannot be solved by military action.

No other resource defines our current state than the world’s declining reserves of oil. Beginning with the discovery of oil in Pennsylvania in 1865, our country rapidly became the world’s first oil economy and this cheap and abundant energy resource would be the fuel and engine of growth that enabled us to become the world’s greatest economic power. However, U.S. production of oil peaked in 1971 and the petroleum power center quickly moved to middle east. Today it is painfully evident that oil production has peaked world wide and at current rates of consumption and depletion only half of what the world uses today will be available in just two decades. We will face similar “peaks” and painful declines in the production of coal, natural gas, and even uranium in the not so distant future.

Transitioning to a post fossil fuel world will not be easy. It will require sacrifice, high levels of cooperation, leadership, and the personal effort of every citizen of both this nation and of our community of nations. The last time our nation and much of the world was called upon to truly join together for a common cause was during WWII. That generation met it’s challenge and now it is our turn. The stakes have never been higher and the future of humanity literally hangs in the balance.

There will be some that say that “the market” will naturally adjust to the decline in fossil fuel resources and that all we have to do is stand back and trust in the magic of free markets. There is an element of truth is that view and one could point to recent growth in the renewable energy segment as proof of the validity of that position. However, like it or not, government is an integral part of the “market” and decades worth of federal and state laws, tax codes, and zoning and building regulations have been erected in direct or indirect support of our fossil fuel dependent economy. These laws, codes, and regulations will have to be rapidly deconstructed and rewritten to support a new sustainable, steady state economy fueled by renewable energy sources.

I have referenced population size several times in this address, and now I must return to this difficult and sensitive topic. The topics of human life and family size in this country have always been sacred, however as a nation and as a community of nations, we must face the very real limits of our planet to sustain life. The earth has a limited carrying capacity and can only support a reasonable standard of living for a given population size, and this capacity has already been exceeded. The world’s population can now only grow at the expense of our collective living standards and at the risk of increased and severe suffering. The only rational and humane course of action, is to limit and then reverse population growth in both the U.S. and the world.

The political, economic, and technical challenges we are facing are unprecedented and nothing we have faced in the past has prepared us for this moment. For the first time in human history we cannot meet these challenges and expect to succeed merely as individuals, or political parties, or as religious groups, or as nation states or as blocks of nations. To meet this challenge at this time, the entire world of nations must all join together in order to succeed or risk the catastrophic collapse of civilization.

Over the coming days I will be outlining a broad range of programs to meet this challenge. There will be no time for the usual political posturing or distractions, or for the interference of vested interests. Reason and events tell us that we all share the same vested interest and that our very survival is at stake. The american people will expect Congress to act boldly and decisively. The world will be watching.

First, to free up the required capital and additional engineering and R&D talent required to make the transition, I am proposing that we begin to aggressively reduce the expenditures of our military empire. A reduction in our current defense budget by 50% would still leave us spending as much as the next 5 countries combined. We can no longer afford to have our military robbing us of the nation’s industrial capital and technical talent. We must and will create a new manufacturing economy in America based on renewable energy and other sustainable technologies.

This new economy will be powered by electricity derived from solar and wind for our peak power demands, and most importantly by geothermal energy for our base load demand. In order to meet the challenge of making the transition to a post fossil fuel economy, I am proposing a government funded and fast tracked “Manhattan Project” to replace all of our coal fired power plants with geothermal energy by the year 2030.

Since we can only meet our future energy needs by addressing both the demand and supply sides of the equation, we must aggressively revise our tax codes to provide both credits and write-offs for a much broader array of energy conservation technologies and products. For example, we currently provide no incentives for solar hot water heating and rather than leading the world, as we must and should, the U.S. ranks behind both Solvenia and Albania in the the application of this technology.

The challenge of transforming our food supply may be one of our greatest. Food in U.S. travels an average of 1,500 miles from farm to table and we are dangerously dependent on oil and natural gas which supply the feedstocks for the pesticides, herbicides, and fertilizers on which our centralized and mechanized industrial food system depends. As evidenced by our growing food crisis, this system is rapidly becoming unsustainable and to help bridge the transition to a more localized food delivery system we will reinstitute the “victory garden” program of WWII and create millions of citizen farmers to secure our nations food supply.

Our residential, commercial, and industrial buildings consume 73% of our electricity and 20% of our natural gas. Easy and cheap energy has made building designer’s environmentally complacent and for the last 100 years we have relied on brute force heating and cooling solutions to prop up building designs totally inadequate for their environment. That practice must end and I am proposing that all new buildings in this country be designed to a zero energy standard and that tax incentives be put in place to help convert our existing building stock into some semblance of energy efficiency.

The pattern of our homes, cities, and transportation systems was created in a time of cheap and abundant fossil fuels. As oil and natural gas become increasingly scarce we will have to reshape our patterns and style of living. The new plug-in hybrids that are just appearing on the market will help to replace our use of liquid fuels for driving, but this new technology will soon cause us to exceed our electrical generation capacity. Our one car, one person pattern of commuting from isolated suburbs to work and shopping centers will have to be transformed. As a start, I am proposing that all knowledge workers be allowed the right to telecommute and to write off the the use of their home offices on their individual tax returns. We must also divert much of our unproductive defense budget and aggressively invest in light rail transportation systems and in our national rail system. In addition, our residential zoning laws will have to eased so that our pattern of suburban sprawl can naturally evolve new centers and nodes of commerce within walking and bicycling distance of our population.

However difficult, we must begin to face the limited carrying capacity of earth with regard to population. As a beginning, I am proposing that our tax codes be revised to support and reflect a stable and sustainable population, and that the tax credit for dependents be limited to one child. Out of fairness this new policy will not be retroactive nor apply to adopted children.

Lastly, we must change the way we keep score. One of the reasons we are in this mess is that classical economics assumes that natural resources like oil are infinite and makes no accounting of their depletion nor of the negative environmental effects of their use. We can no longer count the clean up of a super fund site as having the same positive impact to our gross national product as the building of a 747. To make matters worse, for decades our government has cooked the books to make things look considerably better than they appear. If we were held to the same accounting standards as our fortune 500 companies our annual deficits would actually be about ten times what is normally reported and we would have had to declare bankruptcy long ago. If we are to successfully transition to a sustainable way of life in the next 20 years then we must be able to accurately and reliably measure our progress and to that end I am proposing that we upgrade our national accounting practices to comply with a more realistic and accurate ecological economics standard.

The next two decades will be extremely disruptive and difficult and it is unlikely that any of us will emerge without great hardship and sacrifice. If there was ever a time for courage, for hard work, for faith, for strength of character, now is that time. I am counting on the people of this nation, on the people of the world, and on our community of nations to meet these challenges for the benefit of our children and grandchildren and for a thousand generations to come.

Thank you all and may God bless our nation and this planet.

This “address” is obviously a fiction and although much of what I say is factual even today, I doubt that any politician would have the courage the be this honest until things were well beyond the point of no return.

The market has begun to respond and it is not by accident that plug-in hybrids will begin to appear just as the general public is becoming aware of “peak oil”. The basic story line will run its course and we may just muddle through and make the transition in time to prevent a significant die-off of the world’s population. My guess is that it will be a messy transition with much political posturing, great suffering, and considerable military mischief.

Whether or not we do manage to muddle through, in the end, the world will no longer resemble the one we know today.

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The Gift of Water

“When the well is dry, we know the worth of water.”
Ben Franklin

Water is a gift. Without water there would be no life as we know it. It is the vital life blood and circulation system of ecosystem earth. It comprises over 60% our bodies, and sustains all of the earth’s flora and fauna.

Water unites us. It knows no national boundaries. It covers two thirds of the globe. It rides the winds of our atmosphere and permeates the ground we walk on and the air we breath. In a very physical way, it declares that we are one, and the water molecule perspired from the Chinese coal miner’s body this week travels the world to become part of the Wall Street hedge fund manager’s body the next. It is a world traveler following unpredictable and unknowable patterns. One day giving the gift of gentle rain, and the next day giving the pain of prolonged droughts or sudden floods.

Water also divides us, or rather the lack of water divides us. Water scarcity turns friends into enemies as fear drives us to compete for its essential essence.

When the majority of americans were farmers and ranchers, water was not an abstraction. It’s worth was part of everyday consciousness, water wars were common, and it was rarely taken for granted. However, for today’s urban and sub-urban population, water is a given, never further away nor more inconvenient than the nearest faucet.

For most of us water “problems” are seen as a third world issue. However, third world water issues are not much different than the issues we confront in the U.S. The specific story line may differ, but not the central theme, and both the developed world and third world face the same hard limits. The world’s water is fixed and only about 2.5% of the world’s water is considered “fresh”. Of the fresh water, nearly 70% is locked away in glaciers, 30% in groundwater and a mere 0.3% can be found in the world’s lakes and river systems.

The shared story line worldwide is that glaciers are rapidly receding and giving up their water to the sea, groundwater is being polluted and/or being drawn down at alarming rates, and our lakes and rivers are increasingly being contaminated by industrial, urban, and agricultural wastes and airborne industrial pollutants.

Taken from a human perspective, global world water supply and quality statistics are grim:

• Every 15 seconds, a child dies from a water-related disease
• For children under age five, water-related diseases are the leading cause of death
• At any given time, half of the world’s hospital beds are occupied by patients suffering from a water-related disease
• Close to half of all people in developing countries are suffering at any given time from a health problem caused by water and sanitation deficits
• Major rivers like the Yangtze and the Ganges don’t reach the sea for much of the year because of upstream withdrawals
• More than 50% of the world’s population gets its water from climate change threatened Himalayan snow melt.
• Freshwater ecosystems have been severely degraded: it is estimated that about half the world’s wetlands have been lost, and more than 20 per cent of the world’s 10,000 known freshwater species have become extinct, threatened or endangered
• Two out of three people in the world will face water shortages by the year 2025 and the CIA predicts that by 2015, drinking-water access could become a major source of world conflict

However, this is not just a third world story. The U.S. story line of crumbling infrastructure, groundwater depletion, and surface water pollution is equally disturbing.

• Over 700,000 miles of pipe deliver water to U.S. homes and businesses. With a lifetime of 50 years and an average age of 43 years an investment of approximately $1 Trillion over the next twenty years will be required just to maintain our current water distribution system. That represents an increase of more than 150% over our current annual spending levels!
• Water mains break 237,600 times a year in the United States
• Over 50% all water breaks occur in pipes built to lower standards in the 20 years immediately after World War II.
• Cities lose as much as 30% of their clean water supply to leaks alone. These same underground leaks cut both ways and draw arsenic, human waste particles, chlorine, and other pollutants into our drinking water.
• Local and state governments issue as many as 900 “boil your water” alerts every year.
• Of the 619 waterborne disease outbreaks the Centers for Disease Control and Prevention tracked between 1971 and 1998, 18% were due to pathogens in our water distribution system.
• Our aging and overburdened sewers are pouring 860 billion gallons of raw and partially treated sewage into our rivers and streams every year and we spend as much as $4 billion every year on medical costs from swimming in sewage-contaminated waters.
• The U.S. Geological Survey has reported that streams nationwide are laced with prescription and over-the-counter drugs.
• The nation’s largest underground aquifer, situated beneath South Dakota, Nebraska, Wyoming, Colorado, Kansas, Oklahoma, New Mexico, and Texas is being drawn down at up to one hundred times the natural replacement rate. Based on the current trend, the Ogallala aquifer could be depleted as early as 2020 putting thousands of farms and ranches out of business.
• A recent report by the Scripps Institute predicts that the Lake Mead reservoir that sustains Phoenix and Las Vegas may become unusable as early as 2021 due to climate change in the Colorado river drainage.

In the words of Benjamin Franklin, “will the well run dry” for American homes? The answer is yes for homes that rely on rapidly depleting aquifers or surface water drainages impacted by global warming. For the rest of us, a crumbling water infrastructure and looming natural gas shortages resulting in blackouts and idled water pumps will cause persistent water quality and supply problems.

In the coming years, water costs will increase dramatically and we will no longer be able to afford the luxury of using clean potable water for flushing toilets and watering blue grass lawns. Residential rainwater harvesting, in-home gray water recycling, and dual plumbed systems will become common as municipal water utilities become strained beyond their limits.

We will come to “know the worth of water”.

“When I was taught economics, I was told that air and water were free goods.
It is intuitively obvious to me [now] that on a planet of 6 or 7 billion people, that [is] no longer the case.”
Richard Sandor, founder of the Chicago Climate Exchange

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Solar Water Heating – An Essential Element of our Sustainable Future

“Solar water heaters are one of the most commercialized renewable energy technologies in the world and yet on a per capita basis, U.S. implementation ranks 28th in the world behind relatively undeveloped countries like Albania and Slovenia.”

Home water heating in American represents a significant portion of our national energy consumption and is split about 50/50 between electric and natural gas. Electric water heating represents about 9.1% of residential electrical consumption, 23.7% of residential natural gas consumption and about 5% of total U.S. gas consumption.

Even with renewed and frenetic drilling, domestic production of natural gas in the lower 48 has plateaued and we now rely on Canada to supply nearly 20% of our needs. However, Canada is nearing their own peak in natural gas production and as they reduce exports to meet Canadian demand, we are in race to delay the inevitable depletion and decline of our natural gas supply. Our hopes now rest on building the Alaskan pipeline to tap into arctic reserves and building several more liquid natural gas [LNG] terminals to allow us to compete for Middle Eastern and Russia gas exports. Whether either of these efforts will come in time to avoid near term shortages is unknown. In any case, as a nation we will soon be in “supply hot water.” Since we rely on natural gas to provide hot water indirectly via electricity from gas fired power plants and directly via gas water heaters, one way to help us out of the looming national gas shortage is with solar heated hot water.

Solar water heaters are one of the most commercialized renewable energy technologies in the world and yet on a per capita basis, U.S. implementation ranks 28th in the world behind relatively undeveloped countries like Albania and Slovenia. China leads the world with an installed base equivalent to 52,500 megawatts of energy, more than 30 times the installed base of the U.S., and other developed countries like Germany, Japan, Switzerland, France, Austria, and Australia all rank far ahead of the U.S. in per capita solar hot water implementation.

Why does the U.S. lag so far behind the rest of world in solar hot water implementation? The answers are many and include consumer concerns about ascetics and cost, a fragmented supplier base of relatively small companies, competing technologies that make make buying decisions confusing and difficult, and the resistance of vested interests. Perhaps the biggest reason for the U.S. lag in implementation are national and state energy policies that are both incoherent and inconsistent.

Since president Nixon signed the Project Independence bill in 1974, followed by Carter’s signing of the Energy Security Act in 1980, there have been dozens of energy bills passed with the intent of leading us toward the goal of energy independence. However, from 1974 to 2006 our oil imports have risen 191% from 1.27 billion barrels per year to 3.69 billion barrels and imports now amount to 65% of our total oil consumption. In addition, we have gone from being self sufficient in natural gas production to importing 19.5%1 of our needs. The 2005 Energy Bill was the latest attempt to cure our addiction to oil, but the bill was more a homage to “business as usual” and was packed with over $27 Billion dollars of subsidies to the oil, gas, coal, electrical generation, and nuclear industries.

The 2005 Energy Bill signed by President Bush includes over $6 Billion in Oil & Gas subsidies and $9 billion in coal subsidies, and $12 Billion in nuclear subsidies including:

• geological and geophysical costs associated with oil exploration can be written off faster than present law, costing taxpayers over $1.266 billion from 2007 to 2015.

• owners of oil refineries can now expense 50% of the costs of equipment used to increase a refinery’s capacity by at least 5%, this will cost taxpayers $842 million from 2006 to 2011

• natural gas companies will save $1.035 billion by being able to depreciate capital expenditures at a faster rate that currently allowed by law

• some royalty payments for drilling for natural gas in the Gulf of Mexico will be waived

• exempts the gas industry from the Safe Drinking Water Act for a coalbed methane gas drilling technique called “hydraulic fracturing,” a likely source of pollution in our underground acquifers

• increases the ability to exclude a broad range of oil and gas exploration and drilling activities from public involvement and impact analysis under the National Environmental Policy Act provides $1.612 billion in tax credits to invest in new coal power plants, $1.147 billion in tax breaks for owners of coal power plants to install pollution control equipment, and authorizes the appropriation of $4.8 billion of taxpayer money to help build a new fleet of coal power plants.

• provides a production tax credit of 1.8-cent for each kilowatt-hour of nuclear-generated electricity from new reactors during the first eight years of operation, costing $5.7 billion in revenue losses to the U.S. Treasury through 2025

In contrast the 2005 Energy Bill provides 30% tax credit for commercial and residential solar hot water or PV (photovoltaic) installations. Unfortunately, for residential applications that credit is capped at $2,000 per homeowner and expires Dec 31, 2007.

Whether you consider the issues of climate change, looming natural gas shortages, or energy security, promoting solar water heating implementation in American homes should be a matter of national strategic importance. Considered from the perspective of dwelling in a post fossil fuel world, solar hot water will soon become a critical alternative energy technology for every homeowner.

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