Carbon-free electricity in the U.S. in ten years – Al Gore’s Kennedyian challenge requires a different perspective on economics.

Al Gore has challenged his fellow Americans, or rather their future leaders (see footnote), to take on the task of producing 100% of their electricity from renewable and truly clean, carbon-free sources within 10 years. The challenge is deliberately formatted similarly to the one John Kennedy made to put a man on the moon within a decade, but it is also a very political text in the sense that Mr. Gore provides a backdrop describing the failure of the American economy as it looks today.

Tomas Friedman spells out this failure even more clearly in his column in The NY Times, quoting a Texan proverb that he claims is summing up the energy policy of the Bush era: “If all you ever do is all you’ve ever done, then all you’ll ever get is all you ever got.”

“We should tax what we burn, not what we earn”

In all honesty, the Gore speech is more political than practical. It is clear that his vision contains a lot of renewable fuels, but it lacks detail in terms of strategy. Elements of such a strategy could, however, exist, since he refers to what is called “solution summits” that he has held with engineers, scientists and CEOs.

From these summits, he mentions the abundance of solar and wind, and says that these resources should be transformed into electricity (hydrogen is not on the radar). He also refers to the “learning curves”, indirectly, by quoting the development of solar cells. Finally, as seen in the headline about taxation, he refers to the framework of economical incentives. So, it seems quite clear that Mr. Gore is not only considering innovations in technology, but also innovations in organisation and economy.

The landscape of innovations

If we should make an attempt to find out what the changes in economics are, and that might be needed, we could turn to the Worldwatch Institute’s “State of the World 2008”, entitled “Innovations for a Sustainable economy”. The first chapter is entirely about reconsidering economics to seed innovation.

The text reminds us that several of the (dogmatic) economic theories we lean on in everyday life were developed several hundred years ago in a society where the population of the earth was a fraction of what it is today and there were no obvious limits to growth. This does not make the theories of, for example, Adam Smith and David Ricardo, obsolete, but it reminds us to use them with care, and also that they may have to be revised.

The text also shows that several new applications in the modern society are signs of such reconsideration, and names recycling, cap-and-trade systems, car-sharing, microfinancing (Grameen banks), Corporate Social Responsibility (CRS) etc.

It then names seven ideas for a conceptual reform of economics and provided examples for each:

1. Adjust economic scale (there are limits to physical growth as can be easily seen in e.g. the fishing industry)

2. Shift from growth to development (better rather than bigger)

3. Make prices tell the ecological truth

4. Account for nature’s contributions

5. Apply the precautionary principle

6. Revitalise commons management

7. Value women (c.f. the Grameen banks)

Such considerations seem quite essential since nature will not allow many more assaults than it has already taken. The Finnish philosopher Georg Henrik von Wright looked on the way our society deals with natural resources a few decades ago and called it a technosystem that is managed by the "optimism of inability". Mr. Gore may not have thought of exactly these issues, but several of them can be traced in his speech.

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Footnote:

According to "Dot Earth" Mr Gore managed to get the full attention from both the presidential candidates.

Mr. Obama (written statement): “For decades, Al Gore has challenged the skeptics in Washington on climate change and awakened the conscience of a nation to the urgency of this threat. I strongly agree with Vice President Gore that we cannot drill our way to energy independence, but must fast-track investments in renewable sources of energy like solar power, wind power and advanced biofuels, and those are the investments I will make as president.”

Mr. McCain (a spokesman): “John McCain has been a leader in the fight against global climate change, working with Democrats on this issue since 2003, but no one has more successfully recruited Americans into this effort than Al Gore. This is a key issue, and John McCain has put solutions over partisanship to pursue meaningful, market-driven cap and trade legislation aimed at drastically reducing harmful carbon emissions.”