Road to Nowhere: Lomborg’s $250 Billion Throw for Renewables a Step Back for the ‘Skeptical Environmentalist’

by Jon Boone November 11, 2010

At a time when energy realists need to take the high ground, corporations are bringing us low. Some of this is old fashioned rent-seeking; some greenwashing; and some just political correctness (as if California was the world).

For weeks, Siemens has been running full-page ads for wind technology. Last week Chevron and Weyerhauser, in full-page ads, agree “IT’S TIME OIL COMPANIES GET BEHIND THE DEVELOPMENT OF RENEWABLE ENERGY.”

The same slush is coming from GE, AES, BP, Shell, NRG, and a legion of corporations whose fundamental commodity is fossil fuel.

Do these multinationals really believe that wind and solar will put a dent in their fossil fuel market share? Or is something else afoot? One should note that nowhere does this renewable ballyhoo from today’s energy goliaths mention a word about saving the world from the devastation of climate change wrought by the consequences of fossil fuel use, although this was the tack Ken Lay took to steer Enron’s aggressive renewables course.

Not to be outdone—and deploying Lay’s wry rhetoric of environmental concern—organizations like The Sierra Club and Greenpeace continue to assert that an immediate switch from fossil fuels to renewables, at any cost and among other actions, is imperative to bring the planet back from the brink of global warming.

Green Timing: Here Comes Lomborg

Now they are joined at some remove by Denmark’s Bjorn Lomborg, the self-styled skeptical environmentalist, who once opined, “We need to stop our obsession with global warming” and instead target problems that can be realistically solved with limited budgets in a reasonable time frame.

Could this convergent push for renewables have anything to do with the effort to adopt national renewable energy standards, which would require the country’s utilities to use approved renewables, overwhelmingly wind, for a certain percentage of the nation’s electricity supply?

The latest RES bill is now lodged in the gizzard of the lame duck Congress. If it becomes law, its provisions would create a bonanza for Al Gore’s various “green” ventures, as well as for Danish wind companies like Vestas, which has for some time been attempting to establish a beachhead in the USA. (1) And don’t forget the multi-national energy companies such as GE and PPL that make money through the front door on fossil fuels and the back door via government-dependent renewables. (2)

The timing of Lomborg’s entry into this fray is curious, although he is promoting a new documentary, Cool It. His first book, The Skeptical Environmentalist, published in English in 2001, challenged climate alarmists by systematically examining a range of major environmental issues—biodiversity, pollution, chemical spills, and the greenhouse effect—and finding that, on the whole, the world had generally improved in these areas.

Some Background

Two years later, the Competitive Enterprise Institute gave him its prestigious Julian Simon award. Simon, a controversial economist, had portentously maintained that most negative environmental indicators were tied to poverty, violence, and corrupt government—rather than overweening consumption and economic activity, the leitmotif of mainline environmentalism. And these were the themes Lomborg has advocated for much of the last decade.

The fact that he was a former member of Greenpeace and that he eponymously associated his inquiry with skepticism gave his ideological environmental critics fits.

The Danish political scientist, who has a doctorate in statistical game theory, followed up with another book (also named Cool It) and hundreds of lectures. He reinforced his theme that climate change was so vastly complicated, so unlikely to result in general harm to the earth and its human population, that spending great sums to do anything about it other than local mitigation efforts was not only foolish; it would also squander revenues that could actually effect solutions to a range of other problems, such as malnutrition and lowering barriers to trade.

He criticized environmental organizations for their zeal in recommending carbon taxes, since such a measure is necessarily regressive and would negatively affect the poor.

Lomborg Questions ‘Green’ Energy

Even in a recent commentary, Lomborg had this to say about the ineffectiveness of “green energy:”

Instead of focusing on climate change, the Climate Commission hyped the benefits that Denmark would experience if it led the shift to green energy. Unfortunately, on inspection these benefits turn out to be illusory. Being a pioneer is hardly a guarantee of riches. Germany led the world in putting up solar panels, funded by €47 billion in subsidies. The lasting legacy is a massive bill, and lots of inefficient solar technology sitting on rooftops throughout a fairly cloudy country, delivering a trivial 0.1% of its total energy supply.

Denmark itself has also already tried being a green-energy innovator – it led the world in embracing wind power. The results are hardly inspiring. Denmark’s wind industry is almost completely dependent on taxpayer subsidies, and Danes pay the highest electricity rates of any industrialized nation. Several studies suggest that claims that one-fifth of Denmark’s electricity demand is met by wind are an exaggeration, in part because much of the power is produced when there is no demand and must be sold to other countries. The sorry state of wind and solar power shows the massive challenge that we face in trying to make today’s technology competitive and efficient.

Lomborg knows that any shift from fossil fuels will not likely happen anytime soon. He says that “trying to force carbon cuts instead of investing first in research puts the cart before the horse,” since the modern world requires modern power—and technologies like wind and solar cannot provide it. These renewables therefore cannot replace high capacity systems like coal and natural gas (nor nuclear or hydro, for that matter), unless the world wants to sabotage its reliable, secure electricity supply.

Even so, if climate change due to the greenhouse effect is not the most pressing matter, why is he pressing so hard today to find a replacement for fossil fuels?

Climate Alarmism

Lomborg has said from the start that the earth is warming because of humanity, and that the warming is cause for concern, since it would likely result in environmental and economic damage.

But he differed from climate alarmists like Joe Romm and James Hansen, who have stridently pushed for draconian measures to eradicate what all three consider to be the cause of the problem, a supersatuation of carbon dioxide emissions caused by economic activity, using mechanisms like the Kyoto Protocol and international cap-and-trade/carbon taxes to reduce CO2 emission levels substantially below 1990 levels.

However, Lomborg, unlike the others, has argued that anything the world could do, even if it achieved its Kyoto goals, would only postpone warming for about six years in 2100. Several years ago, in an exercise for his Copenhagen Consensus Center think tank, he identified 10 major problems facing the world–but assumed there was only $50 billion that could be freed up to tackle them. After assessing the financial cost of solving each problem and comparing this to the cost of doing nothing, he then brought together 30 of the world’s economists to prioritize what should be done in order to get the greatest bang for the buck.

He found that in solving the climate problem using the Kyoto approach, the world would spend $40 trillion a year to prevent what was estimated to be $3 trillion a year in environmental damage. Needless to say, climate change came dead last in this exercise, well behind the others.

The New Lomborg: Going Green for Climate

This is where he stood on the issue until the last several months. Now, though, he evidently believes the cause of climate change “should not continue unchecked. The question is whether we can find a cure that isn’t worse than the disease. I think we can.” Rather than making carbon-based fuels more expensive, he reasons, which may solve nothing, why not be smarter about it? “Why not “devote ourselves to making green energy cheaper?” If we make renewables more efficient, we could make them cheaper than fossil fuels, and then everyone would stop burning oil and coal without being forced.

Today, Lomborg calls for massive research and development in renewables like wind, wave, solar, fuel cells, and biofuels, trusting a breakthrough in cost and performance will occur that will make it possible to replace most fossil fuel use, thereby stabilizing global warming over the course of this century. He also suggests looking into better systems for carbon capture, energy storage, and fourth generation nuclear. To make current renewable technology more functional, “direct-current lines need to be constructed to carry solar and wind energy from sunny, windy areas to where most people live. Storage mechanisms need to be invented so that power is not interrupted whenever there is no sunshine or wind.”

And how to finance all this? Levy a worldwide carbon tax of $7 per metric ton, raising $250 billion annually, of which $100 billion would be targeted for green energy R&D; $50 billion for adaptation measures; $99 billion to inculcate environmentally sensitive development practices for poor nations; and a paltry $1 billion for research on geo-engineering schemes like manmade volcanoes.

For evidence such an approach would succeed with this level of funding, Lomborg points to a McGill University study, An Analysis of a Technology-led Climate Policy as a Response to Climate Change, funded by his think tank, that concluded such “green energy R&D would produce the kind of breakthroughs needed to fuel a carbon-free future.” The study’s principal author, Chris Green, is a professor of economics. On Lomborg’s website, Prof. Green extols the virtues of his ideas next to a photograph of an array of wind turbines.

Edgar Wilson Nye once said, “Wagner’s music is better than it sounds.” But from the perspective of even recent history, annually throwing a quarter of a trillion dollars toward “green technology” would be worse than it seems, given that the perception of R&D research is akin to apple pie warming on a window ledge. Perhaps Lomborg doesn’t know that the United States has little to show for the billions the country has already spent on renewable R&D over the last 35 years (3), not to mention the growing billions spent on renewables from President Obama’s stimulus plan.

It is quite possible the wind industry alone is receiving nearly 70% of its funding from public subsides, either directly in cash outlays or through tax credits. Indeed, perhaps he should do more research on what the more than $90 billion of US stimulus funds originally targeted for renewables are achieving. He might also find the Mafia connection between wind and solar projects of some interest. To say nothing of the projected Cape Wind cost overruns. And the First Wind IPO imbroglio. And the failed Boulder City solar field. And this about hydro storage from Idaho. With $250 billion at stake, the potential for corruption and profligate waste would be enormous.

Try to imagine the onslaught of proposals aimed at getting a share of Lomborg’s annual renewables booty—and the range of likely proposals themselves. Like white to rice, everyone with a new techno-gizmo would be at the trough, with the latest perpetual motion/vacuum energy concepts wrapped up in high tech terminology, many accompanied by the same slick lobbying public relations teams now so prevalent throughout the land.

The National Renewable Energy Lab would likely have to quadruple its staff, accelerating the revolving door practice with the American Wind Energy Association and the Solar Trade Association. Those pushing for funds to install the Smart Grid would celebrate, perhaps taking over the electricity regulatory network. So much for affordable utility rates.

Rathole Economics

In short, what I’ve come to call rathole economics would hold illimitable dominion over all, in the process generating vast lost opportunity costs that might have, if invested with greater wisdom and less politics, yielded more productive results. Unquestionably, basic scientific research and development is important for a better world future. Investments in programs like the Hubble satellite and the large hadron conductor at CERN are examples that illustrate what can be accomplished on behalf of basic energy research.

But in too many instances, the cup of good intentions slips from the lip of effective policy when government attempts to pick winners from the jumble of rent seekers out to improve their corporate bottom lines. Policy by consensus, the very essence of government predisposition, makes government ill-equipped to render knowledgeable decisions, for consensus works to spread the public’s wealth around, transmuting capital into the pork we have come to know so well. Even the National Academy of Sciences today routinely invites representatives of national and regional renewable energy trade organizations to take part in the Academy’s renewable energy reports—as if their interests were scientifically vetted and disinterested. As if the Academy has no obligation to militate against confirmation bias.

As the record shows time and again, government is generally incapable of discerning the difference between technological chafe and wheat, between fact and fiction, made by energy promoters and lobbyists out from the din of the background noise. Imagine the blurry buzz made by those touting wind, solar, pumped hydro, ethanol, switchgrass, electric hybrids, plug-ins, smart grids, AC/DC, transmission highlines—all the armies of light and good (but mostly consisting of snake oil) arrayed against the forces of conventional evil: fossil fuels, nuclear, impounded hydro.

No wonder politicians simply punt, giving something to everyone in the crowd. As Glenn Schleede recently said, “Lobbying prowess is often more important than merit when government officials try to pick ‘winning’ energy technologies.” (4)

Conclusion

Bjorn Lomborg should be careful about what he wishes for. The unintended consequences pursuant to a renewable trough worth $250 billion has the potential to spawn a lot more nonsense, given its potential for increasing the size and direction of government and making energy policy even more political, much less meritorious. It also has the potential to thwart promising technologies by propping up pretenders, as is the case today with public support for wind, solar, and ethanol. Such lost opportunity costs, if Lomborg’s campaign is successful, are likely to be his legacy.

One must ask: Does Lomborg understand energy reality and energy density, as explained by Vaclav Smil in his five part series at MasterResource and popularized by Robert Bryce in his recent book, Power Hungry?

The skeptical environmentalist has become far too credulous.

See more and references here.

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