Executive Summary Sustainability and Liberation
“We cannot solve problems by using the same kind of thinking we used when we created them.”
For information contact;
Roy Morrison email@example.com
Published by: RockItScience Productions, LLC, P.O.Box 201 Warner, NH 03278, ISBN978-0-9853046-0-7
Roy Morrison is available for talks, presentations, seminars relating to sustainability and liberation and the use of Competitive Feed-in-Tariffs for an efficient global energy transformation.
Building the Efficient Renewable Energy System and An Ecological Transformation PlanTable of Contents
Executive Summary …............................................................................... 5
- From Industrial to Ecological Civilization ….......................................... 11
3. Low Hanging Fruit …............................................................................... 32
Efficiency Programs to Create Ten Million Jobs
4. An Ecological Way and New Market Rules …....................................... 34
5. ETP System in Twenty Years …............................................................. 37
6. Summary Framework:Efficient Renewable Energy, ….......................... 40
Ecological Production and Ecological Taxation
Overview: Conclusion …................................................................................... 43
Notes …................................................................................................................... 45
Sustainability and Liberation Overview
Sustainability and Liberation will present detailed plans to:
• Build an efficient renewable energy system without raising taxes, without cap and trade schemes, and without raising utility bills by using market based finance catalyzed by government leadership. This will put millions back to work, slash carbon emissions, fossil fuel and nuclear use, pollution, ecological damage, and energy waste while building an efficient renewable resource based economy. It will build dynamic high employment community-based economies.
• Use Competitively bid Feed-in-Tariffs (C-FIT) as the mean for the efficient renewable energy transformation. The Competitive Fit can also be called Advanced Energy Performance Contracting (AEPC) .We follow the model we developed at the Office for Sustainability at Southern New Hampshire University and being implemented by SNHU. This model uses the higher savings of energy efficiency to make market based finance of a combination of efficiency and renewables possible. Three parts efficiency to one part renewables gets the job done.
[C-FIT or AEPC details see below starting on Page 20]
• Transfer financial resources and technology from high energy users, to low energy users as the basis for the global pursuit of a highest net present value (NPV) strategy for all. This transfers assets from rich to poor, both nationally and globally based on purchase of efficient clean energy entitlements leading eventually to a global convergence on sustainable energy use per capita. We will demonstrate how purchase of such entitlements deals fairly and justly with the responsibility of already industrialized for past pollution, the present imperative to constrain pollution by making economic growth mean ecological improvement, not ecological destruction.
• Use the market system to systematically send price signals for sustainability through ecological consumption taxes to replace income based taxes. Under ecological consumption taxes, for example, an ecological value added tax (EVAT) levied on all purchases of goods and services throughout the economy. Under an EVAT, the less polluting,depleting, or ecologically damaging, the lower the EVAT. Under an ecological tax regime, sustainable goods and services will become relatively cheaper and gain market share and increase profits. More polluting items will become relatively more costly, lose profit share and profits. As ecological consumption taxes are phased in, income based taxes are phased out.
• Use a negative income tax to remedy the regressive nature of consumption based taxes, ecological ones or not. A negative income tax that will reduce the tax burden on poor and middle class.
Key Elements of Change from Industrial to Ecological Civilization
• Building an ecological civilization from industrial reality using democracy and the market to make economic growth mean ecological improvement. Making sustainable economic growth not an oxymoron, but center of 21st century politics and economics.
• We address in detail : What needs to be done? How can we do it? How can we finance and pay for it? Fundamentally, how can we use the world that is to help build the world we want it to become? New market rules through revitalized democracy, not market fundamentalism or central planning is the way forward.
• An ecological civilization will reflect an ongoing decrease of pollution, depletion, and ecological damage, and the convergence upon sustainable conduct and norms within the economic, political, philosophical spheres of human existence. Humanity lives as an increasingly harmonious part of the ecosphere, not apart from the ecosphere.
• Sustainability is a co-evolutionary response of life to all phenomena to maintain conditions maximally favorable for all life. Sustainability does not favor any particular species, including ours. Sustainability is an expression of life's ability to survive periodic mass extinctions and then thrive. Sustainability as a human social practice is one expression of the ecosphere in response to the self- destructive excesses of industrial civilization. An ecological civilization represents a semi-stable new equilibrium for the ecosphere.
• Three key elements in an ecological transformation:
1. A global efficient renewable energy system;
2. An ecological production system for industry, agriculture, and forestry;
3. A market system that sends price signals for sustainability.
• Together, the practice of these three elements represents an Ecological Transformation Plan (ETP) and will constitute the foundation for building a democratic ecological civilization
• This book features examination of a Competitively Bid Feed-in-Tariff (C- FIT) to build an efficient renewable energy system without tax increases, cap and trade plans, or utility rate hikes financed by market means, catalyzed by government leadership, and creating many millions of sustainable jobs.
• The C-FIT or AEPC can be a key tool for for building an efficient renewable resource energy system globally. We will explore how we can leave the oil, coal and natural gas in the ground instead of burning it to release mega-pollution, and at the same time build sustainable communities.
• Competitively bid feed-in-tariff innovation is to combine highly cost effective efficiency and renewable energy projects in a ratio of about 3 parts efficiency to one part renewables to make the combination financeable with private finance at market rates. Finance repaid from income by utility rate payers whose bills and consumption should decrease.
• Using the price system and ecological consumption taxation to make sustainable goods and services relatively cheaper, more profitable, and gain market share, and polluting goods and services relatively more expensive, less profitable, and loose market share.
• This book will outline how in twenty years following the Ecological Transformation Plan we have the potential to:
- Build an efficient renewable energy system to replace fossil fuels and nuclear energy without instituting any new taxes;
- Meet through renewables and efficiency all our energy needs for all the 8,760 hours a year proving energy for our homes,our factories, our vehicles;
-Employ the enormous efficiency opportunities combined with renewables to achieve net zero energy, producing as much or more energy from renewables than total energy use, starting from home to localities and ultimately to net zero global scale;
- Provide an operational model for a substantially self-regulating gird based on ability to respond to changes in voltage and frequency and create island areas of operation using local generation and storage in event of system failure;
- Finance the efficient renewable energy system primarily through use of market means such as market in efficiency nega-watts and nega-therms, renewable energy hedges that facilitate long-term finance by providing renewable developers with a reasonable long- term cash flow, energy users affordable long-term energy budget, and self- limiting means such as feed-in-tariffs;
- Operate the efficient renewable grid system using revenue models that provide proper incentives for operating and optimizing the functioning of the efficient renewable system;
- Make democratic choices to structure, own, and control, the efficient renewable energy system in ways that maximizes community-based jobs, strengthens dynamic communities, and returns the proper balance between people and the technostructure where we are no longer slaves to the machine;
- Make the pursuit of efficiency the basis for a global convergence upon a fair sustainable per capita energy allowance. The purchase of entitlements by rich energy users is the basis for income and technology transfer from rich to poor and from rich nations to poor nations to help finance the renewable energy transformation;
Ecological Taxation and Economic Development
- Institute an ecological consumption tax plan, an ecological value added tax (EVAT), on all goods and serves to replace income taxes that includes externalities in price and sends clear price signals for sustainability throughout economies;
- Maximizes global relationships and the global pursuit of sustainable economic growth through trade in information and dematerialized goods and services, and zero waste-zero pollution ecological production;
- Conduct expanded free trade and development for the poor within the context of fairness, equity, and sustainability where true costs are paid and distributed as severance payments both for non-renewable resources in the interest of sustainable growth and development and escaping the resource curse, and for agricultural and renewable resources at a price adjusted for direct and indirect subsidies and tariff barriers raised by the rich.
- Eliminate pillage as the traditional mid-wife for the path from poverty to sustainable wealth. The the poor cannot be kept in misery and thirst to maintain the privileges of the rich who have drained well, neither can rich nor poor create sustainable wealth through self-destructive means;
- Develop community based and democratically controlled financial institutions to help finance building the efficient renewable energy system and the ecological transformation;
- Build democratic institutions, such as continental unions, the EU, for example,capable of crafting necessary global agreements, rules and practices to help facilitate and guide in general terms the ecological transformation, to replace the 20th century nation state and its high pollution and war system.
1. From Industrial to Ecological Civilization
There are many challenges to our common future. This book is about practical solutions and the democratic choices needed to help build a prosperous and sustainable reality. This book is about positive transformation, why it needs to be done, and how it can be accomplished. This book will explore the way forward. It will present the elements of an Ecological Transformation Plan (ETP).
It will present cost effective plans to put millions back to work quickly without raising taxes, without cap and trade schemes, and without raising utility bills. This book will present market based plans on a national scale to slash carbon emissions, fossil fuel and nuclear use, pollution, ecological damage, and energy waste while building an efficient renewable resource based economy. Sustainability and Liberationwill present ecological consumption tax plans, an Ecological Value Added Tax, to let the market send price signals for sustainability.
This book's particular focus is building an efficient renewable energy system in twenty to forty years to replace fossil fuels and nuclear energy.i This focus is a reflection both of my understanding of the crucial importance of energy to ecological transformation, and my involvement in energy issues since the mid-1970s as activist, energy consultant, energy co-op organizer, renewable energy hedge designer, and renewable energy developer.
We explain in detail the nature and dynamics of a Competitively Bid Feed-in-Tariff (C-FIT), also called Advanced Energy Performance Contracting (AEPC), and how the C-FIT or AEPC can be a key tool for for building an efficient renewable resource energy system globally. We will explore how we can leave the oil, coal and natural gas in the ground instead of burning it to release mega-pollution, and at the same time build sustainable communities.
We will consider how in this process of efficient renewable energy transformation we can converge globally on a sustainable per capita energy-budget and use fair and workable tools to transfer technology and resources from rich to poor.
We address in detail : What needs to be done? How can we do it? How can we finance and pay for it?
Fundamentally, how can we use the world that is to help build the world we want it to become?
To answer these questions, this book is written in two dictions, one for those familiar with the recondite world of energy and tax policy, the other for the reader who cares little about policy details, but much about their jobs, their bills, their family's future.
To be clear from the start: The good news is that markets and democracy, if properly and creatively applied, can move us rapidly from industrial business as usual and the path to self-destruction and ecocide toward an ecological civilization and long-term sustainability, prosperity , and peace.
We do not need to abolish markets, or private property, or democracy to build an ecological civilization. Indeed, democracy and markets are the best and most readily available tools at our command to move rapidly for healing change.
As a practical matter, we can build a full employment economy based on efficient renewable resources with a large community based business sector using the power of competitive markets catalyzed by government leadership to overcome market and regulatory failure and establish new market rules and regulatory mechanisms.
We explain in detail the nature of a Competitively Bid Feed-in-Tariff (C-FIT or AEPC)
We can move in a generation from the self-destructive trajectory of industrial business and pollution as usual, to building ecological democracies that will represent the global model for a sustainable 21stcentury and beyond. The promise of an ecological transformation will include an enormous increase in real wealth and net present value, of sustainable middle class jobs, the growth of healthy communities, and of natural capital.
Building ecological democracies is all about meeting the core challenge of insuring sustainable well being for our children and their children for generations to come. This second great transformation, from industrial to ecological civilization, as consequential as the transformation from an agricultural to an industrial civilization, will not come easily. It may be catalyzed by enlightened leadership and the pursuit of long-term benefit as opposed to short term profit.
The great axis of conflict is no longer between capitalism and communism, of private and state control of industrial development. Instead, it is between endless maximization of industrial production and consumption without regard to consequences, and embracing the imperative to make economic growth mean ecological improvement.
An ecological transformation may also require a great non-violent democratic rising from below to overcome the sclerotic institutions that have fallen under the thrall of inveterate polluters and poisoners clinging to their profits like grim death despite the clear and present dangers to us all of ecological self-destruction. This great non-violent global rising would be in the grand tradition of the 18th century American revolutionaries struggle for freedom and prosperity, and informed by hard learned lessons of the power of non-violence in the 20th and 21st centuries acting in response to abusive power and illegitimate authority.
Economic Growth in the 21st Century Must Mean Ecological Improvement
The book's standpoint is that economic growth in the 21st century must mean ecological improvement, not ecological destruction. To accomplish this fundamental global imperative we must use our democracy and our markets to nurture, develop and manifest three basic aspects of an ecological transformation:
• A global efficient renewable energy system;
• An ecological production system for industry, agriculture, and forestry;
• A market system that sends price signals for sustainability.
Together,the practice of these three elements represents an Ecological Transformation Plan (ETP) and will constitute the foundation for building a democratic ecological civilization . We can, through market based means catalyzed by government leadership, transform the material basis of our civilization and build a sustainable prosperity that can last many generations.
The Ecological Transformation Plan is not presented to be dismissed as a high minded expression of what should be done someday if we had the money, but as a practical and affordable plan for jobs, profits, a strong community business sector, and ecological improvement right now. Investment in energy efficiency and renewable energy generates enormous cash flows from waste and fossil fuels saved. At the same time will we create many millions of jobs and make economic growth mean ecological improvement, not ecological destruction.
We can use private capital, not tax money, to finance building the efficient renewable energy grid. We can revitalize a world class industrial base. We can have some of the world's largest technology corporations, like General Electric, Schneider Electric, and United Technologies on our side as well as strengthen small business and cooperative economic sector of our economy.
This isn't pie in the sky. This is reality. That's what we're doing, on a small scale today at Southern New Hampshire University. Right now, we're working with Schneider Electric Corp and with United Technologies on energy efficiency and renewable energy projects on 20 of our buildings. And we can use the stream of savings from efficiency improvements to finance zero university capital-- positive cash flow projects.
An efficient renewable resource economy will not have to fight wars for oil, deal with BP oil spills in the Gulf, nuclear meltdowns ay Fukushima, coal mining mountain top removal in West Virginia , or suffer the catastrophic effects of global climate change that will overwhelm us everywhere if we do not change our ways. It will establish the material basis for the transformation of a war system to a peace system, and of a military focused on defense, not resource wars.
An efficient renewable resource economy will encourage the global growth of sustainable fair trade and of ecological democracy, and undermine existing resource kleptocracies and tyrannies. An efficient renewable resource economy and ecological democracy will benefit all but the small group of inveterate polluters who refuse to respond to clear market and tax signals for sustainability and steadfastly ignore opportunities for profitable transformation.
A Wake Up Call?
Both the global financial crisis that began with the near collapse of 2008, and the deepening dangers to the health of the global ecosphere in the 21st century from the consequences of industrial economic growth is a reflection of profound market failure.
In the financial sector, the exercise of prudent self-interest, and self-regulation by the best, brightest, and richest failed in the most spectacular fashion. What were designed as risk reduction mechanisms, credit default swaps, became, in the words of Warren Buffet, speculative instruments of self-destruction that required government rescue packages through provision of trillions of dollars in tax payer funds to save the global financial system from itself. This was the most spectacular example of socializing losses and preserving private profits and preserving the power and privilege of the financial sector at the expense of both the so-called real economy and the general welfare.
The price system has not prevented the devastating impact of industrial activity and industrial poisons upon the global ecosphere. Indeed, some ecological economists have viewed capitalism as a method to create and maximize externalities--shifting costs and consequences to those downwind, downstream and to future generations while minimizing expense for producers. This is not merely an accident, or the conduct of unethical or criminal polluters. What's stunning, is that much pollution is within legal limits, unregulated, or EPA approved.
Past As Prologue to Healing Change
The past can be and has often been the catalyst for a countervailing response to excess and the generative force for healing change. It is certainly in our individual and collective self-interest not to destroy ourselves and our civilization.
Market systems can be governed by market rules that encourage sustainable conduct through the operation of the price signals. Market systems need not function on the basis of the maximization of production and consumption and profit with scant regard for externalities. An ecological consumption tax system can function, for example, to make sustainable goods and services less expensive, more profitable and gain market share while at the same time polluting goods and services become more expensive, less profitable, and loose market share. Sustainable market rules can make economic growth mean ecological improvement , not ecological destruction. The price system and the invisible hand can be enlisted on the side of sustainability.
In fact, the best news is that this book will demonstrate how even under current market conditions and rules, an efficient renewable energy system on a global scale can be built using private capital and competitive bidding system combining renewables and efficiency measures.
This is not to deny the enormous power and resistance to change posed by the existing high polluting industry, zealously protective on return of their invested capital in polluting plant, and of the future profits expected from oil, coal, natural gas still in the ground.
It will not be easy. But meeting the challenge of sustainability and liberation is a task that must be accomplished. The alternative is to consign future generations, our children's children to suffer horrendous stringencies as a consequence of our collective misconduct.
Today, I watched a family of manatees swimming in their winter homes in the warm waters of Blue Springs that feeds into the St.John'sRiver in central Florida. The baby clinging to the back of its mother. The spring water is a year round 70 degrees. The winter water temperature in the River falls into the fifties, low enough to kill the manatees. They need conditions, not too cold, not too hot. There numbers have been progressively decreasing, victims of propeller strikes and habit destruction.We are approaching the point where the impact of human activity threatens to change the climate in ways that will impact life on earth for eons, fraying the fabric of relationships within the ecosphere for catastrophic consequence for multitude of species including our own.
The options of most species whose habitat is disrupted is very limited. If they are fortunate that can move to hospitable locations. The same is true for humanity. While a remnant of humanity might survive a global disruption of agriculture, for most of us, we will not be more secure than the families of manatees I saw swimming in that narrow sliver off the too cold river.
The Global Energy Market has Already Turned the Energy Corner
Transforming the global energy system is essential for our future. The good news, amidst the gloom, is that the global market has already turned the corner. According to Bloomberg Finance, global investment in renewable power generation (wind, sun, ocean and biomass) was $187 billion in 2010 compared with $157 billion for natural gas, oil and coal.ii In 2010, approximately 17,500 megawatts (MW) of PV were installed globally, up from about 7,500 MW in 2009. Brazil, for instance, plans to make wind the second largest source of power by 2015. The government intends to increase wind power generation capacity to 11.5 Gigawatts1 by 2020 from 1.5 GW now.iii
Prices for renewable generation are falling rapidly. Photovoltaic (PV) solar electricity system installed cost in the U.S., for example, have dropped sharply from 1998, and continued to decline in 2010 and 2011. Over this thirteen-year period, capacity-weighted average installed costs for behind the meter systems declined by $4.8/Watt (43%) in real 2010 dollars.iv Exciting new efficiency and storage technologies appear almost daily.v
Rapidly expanding renewable generation construction is already a reality .We need to accelerate this process and may prevent global catastrophe just-in-time.
A model and simulation, 24 hours a day -- 365 days a year, of a currently economic continental European--North African grid is detailed in the work of German scientist Gregor Czisch.vi Modeling for a North American gird has been done by Prof Daniel Kammen of the Berkeley energy Laboratory, now Director of Renewable Resources for the World Bank
Our major problems, are political, not technical. We need political solutions to overcome market failure and regulatory obstacles and the self-interested political obstruction of the polluting fossil fuel and nuclear industries in defense of business as usual and by the politicians under their control.
Physics is On Our Side But That's Not Enough
Physics is on our side. We can improve the efficiency our our energy system by a factor of four or five. or more, using existing technologies and designs,reducing substantially the amount of renewable generation required in an integrated renewable energy system.
Enormous energy savings are available by paying attention to Second law of thermodynamic savings through co-generation and district heating and cooling as well as the use of the Carnot cycle for heating and cooling through the use of heat pumps employing natural heat sinks and sources such as geothermal resources, lakes, rivers, and oceans. Natural refrigerants such as water vapor, carbon dioxide, and ammonia can replace ozone layer damaging chlorofluorocarbons (CFCs) in heat pumps. While, the theoretical of heating pumping processes is more than twenty units of energy or work out for each unit of energy used to power the device, practical applications of a four or five fold increase in efficiency, with enormous cost savings are attainable. We can dramatically improve lighting efficiency by use of new technologies like LED lamps to replace incandescents and old fluorescents. There are stacks of studies and books several feet high, some of which I wrote, that detail the manifest efficiency and renewable opportunities. As books such as Factor Fivevii and organizations such as Germany's Wuppertal Institute and FactorTen.orgviii make clear, there are abundant prospects for to transform the full range of industrial production practices in accord with ecological norms. Amory Lovins and the The Rocky Mountain Institute is a source for both comprehensive efficiency and renewable plans and a wealth of specific efficiency measures strategies.ix
This several fold increase is also true for making steel with the latest electric arc furnaces, for growing food using, for example, using the Land Institute perennial polyculture methods without tillage, without agrochemicalsx while minimizing erosion, energy use and ecological damage. A sustainable agriculture can be serve not only as a source of nourishing food, but as an enormous sink for natural carbon capture and sequestration. The combination of high efficiency with renewable and sustainable resources and means can move us by the middle of the 21st century to a civilization well on the way toward an ecological transformation. We have the knowledge; we have the tools; we have the ability to profitably finance the transformation. But will we make the choices to do so.
In 1941, before Pearl Harbor, for example, the United States produced millions of personal automobiles. By the end of 1942, the same factories were mass producing bombers, jeeps and tanks in amazing quantities to fight fascism. It is that kind of transformation that we need undertake to help us transform self-destructive industrial business as usual and make economic growth mean ecological improvement, not ecological destruction.
The major question is do we have the democratic political will to embark on a great global transformation from a self-destructive industrialism to a sustainable and prosperous ecological future?
Each of us, whether writing this book on a lap-stop computer in the United States, or working in a factory 7 days a week for an Apple Computer sub-contractor, or risking your life as an activist in Damascus using social media fighting for freedom, or toiling as a farmer in Kenya employing the web for cash transactions to sell product and buy seed at fair prices is entitled to live a life of dignity, of fair wages, of healthy working and living conditions, clean water, healthy food, a safe and adequate place to live, health care and education for our families.
An ecological civilization must mean a global convergence upon sustainable means for all, or it will mean nothing. The factory worker cannot continue to toil endlessly in the dark satanic mills of the 21stcentury so those who can afford it can employ magic technological devices bequeathed to us by Steve Jobs. The rich cannot continue to live in luxury while the boot remains on the neck of the unfortunates around the world and the industrial poisons flow into air, water and food threatening ecocide and self-destruction for all.
Apple Computer in January 2012 become the corporation with the highest global market capitalization exceeding Exxon in paper wealth reflecting the rise of information as key profit center of the 21stcentury. While Apple was ascending to financial nirvana, a large group of Chinese workers were on the roof of the giant Foxx Conn Assembly plant that mass produces Apple and other electronic devices, threatening mass suicide if working conditions did not improve. Now we know.
The potential for information technology to assist and help catalyze an ecological transformation is not, by itself, sufficient. The computer and a dematerialized cyberspace can become synonymous, in retrospect, with sustainability and an ecological civilization. It can also be a tool for the maintenance of business as usual and an efficient totalitarianism. What happens is up to us and our democratic choices.
A sustainable future will not be handed to us. The exploiters of people and planet, the polluters and the poisoners will not easily or willingly surrender their power and privilege in the interest of the common good. An ecological civilization is something that we must take risks, struggle and strive for and build day by day. Further, what must be done and what can be done is not entirely clear. This book suggests directions and provisional answers, but it is certainly not the last word. Indeed, as the Mondragon cooperators say, “We build the road as we travel.”
Democracy, by crafting new ecological market rules, can refocus the enormous energy and enterprise of our civilization toward sustainable paths. The essential challenge of the 21st century is making economic growth mean ecological improvement, not ecological destruction.
We can move in a generation from the self-destructive trajectory of industrial business and pollution as usual, to building ecological democracies that will represent the global model for a sustainable 21stcentury and beyond. The promise of an ecological transformation will include an enormous increase in real wealth and net present value, of sustainable middle class jobs, the growth of healthy communities, and of natural capital and the global convergence upon sustainable norms.
An ecological transformation will be the work of generations. It must become the conscious task for us all in our own fashion, and a guide for our democracy in making the necessary and hard choices.
2. Competitively Bid Feed-in-Tariff and Basic Principles for the Efficient Renewable Energy Transformation:
- In twenty years, phase in of an efficient renewable energy system
- Massive private job creating investment in renewables and efficiency
- Phase out of fossil fuels and nuclear power
- Government leadership to catalyze change and overcome market and regulatory failure
- Competitively bid Feed-in-Tariff (FIT), also known as Advanced Energy Performance Contracting (AEPC), for a combination of efficiency, renewables, and storage as key tool for market based action using private capital
Competitively Bid Feed-in-Tariff or AEPC is Key Tool for Transformation :
- Competitively bid Feed-in-Tariff (C-FIT or AEPC) or AEPC for a combination of efficiency, renewables, and storage as key tool for market based action using private capital
- Key, is competitively bid C-FIT or AEPC (every three or six months).
- C-FIT or AEPC solicitations starting with a mixture of efficiency (75% -80%) and renewables (20-25%). Savings stream from efficiency plus renewables make the combination able to financed today from capital markets without subsidy, without tax increases, and without utility rate hikes
- Combined efficiency--renewable C-FIT or AEPC works economically since saving a kilowatt hour costs about a third per kWh than generating a renewable kWh. We can combine efficiency and renewables in a ratio of roughly three parts cheaper efficiency measures, and one part more costly renewables and obtain financing and lower user bills without rate hikes. Thus, a typical FIT solicitation might be awarded to a low bidder for installation 80 megawatts of efficiency measures and 15 megawatts wind and 5 megawatts solar.
- Competitive FIT or AEPC solicits bids periodically by small and large businesses, cooperatives, and non-profits.
- Prices progressively driven down by competitive forces, economies of scale and innovation that slashes costs.
- Competitive bid FIT or AEPC model combining efficiency, renewables, storage applicable to both distributed and large scale systems resources such as solar and wind farms and major storage resources
- Storage can combine electric and hybrid vehicle batteries, flywheels, compressed air storage, water storage from large scale pumped hydro to small scale local water storage for heating and cooling, to ice banks, ground storage, thermal mass storage.
- Balance of efficiency—renewables –storage and distributed versus large scale installations shaped by competitive bids and falling prices
- The fully realized efficiency renewable energy system will almost certainly obtain a much smaller fraction of total energy supplied from generation, especially if we consider the contribution of nega-watts and nega-therms and storage.
- Efficiency standards reset on basis of best commercially available tech following Japanese example
- Domestic content requirements,as in Ontario FIT, even if factories are foreign owned, the a percentage of the work will be done here.
Energy-Users Benefits of Competitively Bid Efficiency-Renewable FIT or AEPC
- Zero Energy User Capital Required
- Lower energy bills for all energy users
- Investment painlessly repaid from monthly savings from lower utility bills
- Markets in nega-watts and nega-therms to monetize efficiency. Users pay for nega-watts efficiency savings and kilowatts from renewable generation on their lower monthly power bills compared
- Cash stream from efficiency negawatts and renewable kilowatts collected by utilities and paid to FIT competitive bid winners to pay for installation, maintenance, finance costs, overhead and profit without subsidy.
Utilities and the Competitively Bid Efficiency-Renewable FIT
- Integrated Efficiency and Renewable Portfolio Standards (E&RPS) guide solicitations and planning
- Transform regulated utility financial models to reward efficiency and distributed renewables in a system where electricity and efficiency replaces fossil fuels
- Transform distribution utilities into facilitators of efficient renewable grid
- Establish, if needed, efficiency & distributed renewables utilities
- Establish, if needed, public -private partnerships for efficiency & distributed renewables
- Renewable and efficiency hedge agreements between users and developers
- Renewable hedge agreements provide users with long-term affordable energy prices, and energy developers with reasonable long-term income streams. These are applicable to efficiency, storage, transmission, co-generation and renewable generation. Versions of hedges as a revenue right for a portion of capacity can be sold as investment vehicles and are applicable to all income groups with repayment for loans from the income stream produced from efficiency, storage, or renewable development.
Efficient Renewable Energy System Shape:
- Dynamic balance among efficiency, storage, generation for optimization
- Dynamic balance between distributed and system energy generation
- Efficiency and renewable technologies ranging from low to high tech
- High Voltage Direct Current (HVDC)Transmission as Needed
- Several fold increase in efficiency through 2nd law of thermodynamics means
- Renewable electricity largely replaces liquid fossil fuels for cars
- Great expansion in heat pumps, district heating & cooling, co-generation
- Batteries of electric and hybrid vehicles major smart grid storage resource
- Broad range of distributed and system storage resources
- Secure energy grid through smart distributed generation and end use control
- Distributed generation and distributed control builds self-balancing grid
Planning, Oversight and Billing for the Efficient Renewable energy Transformation
- DOE Renewable Energy and Efficiency labs establish Efficiency and Renewable Portfolio goals and phase in plans in conjunction with State Energy Offices
- Making all building structures, transport means and all energy related processes subject to comprehensive efficiency and renewable resource goals
- Mandates incumbent distribution utility and efficiency –distributed renewable utility and public private partnership share monthly billing data to calculate savings and billing from efficiency and renewable generation.
- The incumbent utility issue the bill and distribute the cash as they do now for competitive suppliers based on a single bill for rate payers, or the new efficiency and renewable utility or public private partnership could send a separate bill.
- DOE and State energy Offices establish plug and play standards for efficiency and distributed renewables
New Efficiency and Distributed Renewables Utility
- Conducts competitive FIT or AEPC bids for efficiency and renewables and storage
- Helps coordinate installation, monitors compliance with contract, and with codes
- Monthly billing and cash disbursement to FIT winners for kWh generated and kWh and therms saved (negawatts and negatherms)
Global Issues and Climate Justice
- Global convergence on per capita energy budget
- Sale of energy budget entitlements from poor to rich to facilitate transformation
- An ecological consumption tax plan on all goods and service phased in to replace taxes on income that will both send market signals for sustainability throughout supply chains and as a means to tax imports from nations that have not adopted similar standards
In twenty years, we can economically build integrated efficient renewable grids to replace all existing fossil fuel and nuclear power plants, as well as replace liquid fossil fuels with renewable electricity and bio-fuels. Grids can be constructed on a continental scale, if needed, linked by high voltage direct current power lines (HVDC) that optimizes efficiency renewable generation, and energy storage and balances large scale system generation and distributed generation, efficiency, and storage. The efficient renewable grid will improve energy efficiency several fold, include adequate dynamic storage and have largely self-equilibrating system control in response to changing load, by sensing system voltage and frequency fluctuations.
Improved security and durability will be provided by large numbers of decentralized generation and storage points, including the millions of plug-in hybrid and electric vehicles, and by making all end use and generation devices using existing technologies to detect grid voltage and frequency and respond in appropriate fashion by slowing down or speeding up or shedding load, or resetting control points, or disconnecting that will allow large islands of renewable grid to continue to function in response to system failure.
Employing voltage and frequency control combined with real time price signals will allow the gird to be substantially self-equilibrating by being capable of responding to the system physical and economic state on close to real time state currently provided by specialized throttling fossil fuel power plants providing automatic generation control (AGC). The smart efficient renewable grid will allow users to optimize their needs at the same time in the aggregate assisting in maintaining optimal system state on the basis of local voltage, frequency and fully loaded near real time prices without command signals from utility central such a system is inherently resistant to mal-ware and viruses since devices since it directly reads local voltage and frequency and can be programmed easily ignore improper signals that run counter to its sensing of the condition and stability of the grid. xi
Much higher efficiency, adequate storage, and self-equilibrating cybernetic control will allow us to meet expanded electrical load for electric vehicles, heat pumps, and industrial process without being forced to duplicate the current installed capacity and output of fossil fuel and nuclear power. We will be able to do more with less. Natural gas with vigilant attention to water pollution and fugitive methane releases, a most powerful green house gas, will serve as a transition fuel with a mandate of using natural gas to close or convert existing coal plants as soon as possible. At the moment, natural gas is a cheaper fuel than coal.
Crucial to the efficiency and renewable transformation is reform of current distribution utility incentives where efficiency represents simply a loss of revenue which is based on power throughput. De-coupling distribution utility income from kWh throughput is an essential step that must be accomplished promptly. Instead of increasing income from sale of more kilowatts, distribution utilities should be rewarded with an enhanced return on invested capital by efficient grid operation.
The efficient renewable grid will provide major and potentially lucrative business challenges and opportunities for distribution utilities in an efficient renewable electric system that is expanding the scope of electric use by replacing fossil fuels with electricity for powering vehicles, by running heat pumps, and providing industrial process heat, the expanded use of distributed renewable generation and storage resources, using extensive smart grid control devices, erecting new HVDC transmission lines, as well a market for a plethora of revenue producing negawatts and negatherms, This new efficient renewable energy world should be able to provide attractive revenue and business models for incumbent distribution utilities.
Existing utilities should be approached as willing partners in the efficient renewable transformation. Will operational plans be developed quickly and in good faith? Or will distribution utilities behave as foot dragging opponents in the regulatory arena in support of business as usual and obsolete revenue models based on sale of power from central generation plants to customers? We don't have five years to wait until a regulatory process is played out before we can change a single light bulb.
We may find that the regulated utility model is not particularly suited for the kind of mass installation of efficiency, distributed renewables,and distributed storage devices by companies that win Competitive FIT or AEPC solicitations.
It may be necessary to cut the Gordian knot, if distribution utilities are unable to perform, or uninterested in change, efficiency and distributed renewables can be installed by newly established efficiency, distributed renewable and distributed storage utilities. An alternative or complementary organizational form is public-private partnerships who will install the efficiency, renewable, and storage devices and sell renewable kilowatts and efficiency negawatts and nega-therms to end users.
These efficiency-renewable utilities or public private partnerships will work by issuing competitively bid feed-in-tariffs (FIT) for the installation of a combination of efficiency and renewables by private companies who finance and own the systems under the C-FIT or AEPC model. The C-FIT or AEPC would function in the same manner as if undertaken by the distribution utility. It may be that these new models for delivery of efficiency and renewables are preferable in that they are not bound by the traditional utility culture and shoe entrepreneurial vigor.
An Example: Efficiency and Renewables The Market Way
Current average cost of electricity is $.105 per kilowatt. I can save a kilowatt at the average cost of under $.03 per kilowattxii. That's more than a $.075 savings per kilowatt hour. Solar photovoltaic power now costs $.25 per kilowatt hour.
If my monthly electricity consumption was 500 kilowatt hours, I'd pay $52.50 for conventional power at $.105 per kilowatt hour, a month.
Now, let's save 25%, or 125 kilowatts of energy use through efficiency improvements and supply 6% or 30 kilowatt hours by solar power, with the remaining 345 kilowatts from conventional sources.
On my monthly bill I would pay three charges for electricity.
First, I'd be be charged $36.23 for 345 kilowatts of conventional power .
Second,I would be charged $7.50 for my 30 kilowatts of solar power. The $7.50 per month pays for the full cost of the panel including capital costs.
Third,I would be charged $3.75 for the 125 kilowatts saved (“negawatts'). The $3.75/month pays for the cost of the measures including material,installation and capital expenses.
My total bill, with 25% efficiency reductions and 6% solar contribution, is now $47.48 2. This is a 10% monthly savings compared to my original bill of $52.50. I have more money in my picket each month, solar panels on my roof and efficiency systems that I did not have to buy.
But there's more. Besides money, I have also saved 155 polluting kilowatt from the 500 that I have replaced with solar power (30 kWh) and efficiency (125 kWh).
I've cut my polluting power 31%, by saving money and without putting up any capital.
This is the power of the combination of efficiency combined with renewables.
In this case, combining a mixture of 75 per cent efficiency and 25 per cent PV we have used a business based means to finance, install and pay for job creating and ecologically beneficial energy improvements without tax increases, with cap and trade plan, without rate hikes. In fact we have cut monthly bills while creating jobs and helping the environment. Such plans should become job one for our job creation, ecological improvement and energy independence strategy. What's not to like?
We are facing an economic, energy, and ecological emergency. If we approach the challenge with the same gravity and urgency as World War II, our millions and millions of homes and businesses will be the source for economic, energy, and ecological revitalization
Energy Transformation in Mid-Course: A User's Perspective
From the standpoint of Ed, a typical residential energy user and small businessperson, what will the experience of an efficient renewable energy transformation look like and feel like?
What does Ed say?
My bills are lower. Many more of us work at green collar jobs manufacturing, installing, servicing efficiency and renewable energy systems. Myself, I work at Sundance Solar designing customized renewable and efficiency solutions for homeowners. Business is doing pretty well, but it's still a struggle to make sure I stay ahead of the competition.
Not only are my energy bills lower, I get a payment every month from my investment in Warner Efficiency and Renewables Cooperative. They loaned me the money, $1,000. I bought a revenue right for the income from a basket of negawatt producing energy savings devices. They save 20,000 kilowatt hours a year of electricity that ratepayers are charged $.03 a kilowatt hour for on their bills. The income stream from the negawatt sales totals $600 a year, and I get a yearly payment for $450 for my $1000 investment. The other $150 goes to pay off the loan. It's a real asset that I can sell. The $450 a year net income is vacation money for us. And it's tax free under the new ecological tax law.
All of us have smarter energy sipping devices whose controls respond to our needs and lifestyles. My plug in all electric vehicle runs fine and earns us money from power supplied to the grid at peak hours when I am at work. And you can't beat the cost. Less than a dollar a gallon equivalent for the electricity. Yesterday's gas stations are today's charging and bio-fuels stations. The car is streamlined and zippy. It's also safe, made from hard and durable thermoplastics that used sugar beets that the Courser's grew on their farm as a source for ethane as plastic feed stock produced in a factory on the site of the old coal plant.
Almost all of us have some kind of renewable generation on our roofs, in our yards, serving our block, neighborhood or city. But I don't think too much about it. When I turn the switch on the lights go on. And they also go off if no one is in the room or they dim just enough as light streams in the windows. What I do think about is that since they shut down the big coal plant in Bow, my kid's asthma is much better.
Ubiquitous photovoltaic (PV) panels are now being supplanted by PV building materials and now even PV paint. I have a kilowatt watt array in the back yard. It runs our electric heat pump that takes heat out of the air in the winter and cools the house in the summer. Solar domestic hot water systems are everywhere. We have one on the roof and we get a hot water boost if needed from a small water to water electric heat pump next to the storage tank in the basement. Sometimes we sell power back to the grid from our PV array that provides power when we need it.
Our new high efficiency heat pumps now provide 9 kilowatts of heat or cool out for each kilowatt energy in. During the day it's mostly powered by the PV array supplemented by grid supplied power, now 50% renewable.
Wind turbines are now appearing off the coast, as they have been doing almost everywhere. The state of the art is now a floating 6 megawatt machines. They're huge but the rotors move slowly and pose little hazard to sea birds. And they are barely visible from shore. We're back building ships and barges to install and service the wind machines. There has been a rebirth to our local metal industry machine tool sector. And of course, our computer control and information businesses are booming. Construction workers, plumbers, electricians, carpenters, operating engineers have never been busier. There's a labor shortage. Union apprenticeship programs and community colleges are working flat out. These days it's easier to make a six figure income as an electrician than as a stock broker. Working people haven't seen such good times, high wages, and low unemployment since the 1950s and 1960s. We've also closed some prisons. Not enough crime.
Small and attractive vertical axis wind machines that can adjust to wind speed are common. Downtown is served by the Town district heating and cooling system that uses geothermal energy supplemented by wood gas co-generation as a heat and power source.
My next door neighbor has a small co-generation unit in their basement that runs to produce electric power whenever the thermostat calls for heat. It runs on wood pyrolysis oil and generates 2 kilowatts of power that can meet most of his needs and puts any excess into the grid that we get paid for.
One of the best things is that blackouts seem to be a thing of the past. Every winter when there was an ice storm or high winds, power would go out sometimes for weeks around here. But now, with all the local renewables and the smart controls both my house and the neighborhood automatically becomes an island where the power stays on even if the grid goes down. Sometimes I don't even know anything is happening. At the worst, the sensors on the renewable generation and our electrical system detects the voltage drop and disconnect the house from the grid, and then bring up our generation to run the neighborhood in islanded mode with the electric car batteries providing some help.
Having some hybrids in the neighborhood helps a lot here. The all electrics have only modest storage resources and will automatically disconnect to maintain enough power to drive 3 miles. But with the hybrids plugged into the garage circuit, the small bio-diesel engine can be run in emergency mode for quite a while. We built the garage with a standard hybrid exhaust house connection and roof vent as well as a fast charge circuit for batteries.
The efficient renewable transformation has given me a job, lower bills, reliable investment income and security. Not a bad deal.
Prospects for Profitable Transformation
We can finance the job of building, in one generation, an efficient renewable energy system and take an enormous step toward an ecological future by using enormous cash flows from a river of easy to dam energy waste. Capturing this waste means we can use private capital, not tax dollars. Efficient renewable energy transformation is not all that must be done, but it a crucial and economic place to start.
The potential savings to be captured are staggering. It's a way to hit the ground running and create at a minimum one million jobs, and as many as ten million, by plucking the low hanging energy efficiency fruit financed through private investment. What's needed is for government to respond with necessary urgency to the State of Economic and Ecological emergency, as we did in World War II to the clear and present danger to our nation and our lives.
What's needed is not new technologies, but just a bit of effective government action to overcome regulatory barriers and institutional problems that have led to market failures. There are effective ways, for example, to deal with credit issues and obtain payments for efficiency investments on a large scale through savings deducted from monthly utility bills in a large scale fashion..
We can go far beyond low hanging fruit and cost-effectively can Increase efficiency by a factor of four (or more) by pursuing cost effective means would mean an annual savings potential per person of $1,085. For 311 million Americans this means savings potential of over $300 billion dollars for electricity alone. That's real money.
For entrepreneurs of all stripes and sizes the competitive FIT means using the stream of efficiency savings as the means to drive cost-effective investment and job creation on a massive scale. It means redeployment of Wall Street capital from speculative excesses and investment in self-destructive poison power, to socially useful purposes. What's necessary is not for Wall Street to abandon greed, but for government to help establish the imperatives for sustainable investment in efficiency and renewables. It's government's job to establish the structure of oversight, rules, regulation, taxation, and spending that focuses business attention on socially useful and sustainable ends.
We can scale up and modify slightly existing financial models for paying for the capital cost for energy efficiency and renewable energy systems from the stream of energy savings that can be easily deducted from monthly utility and fuel bills.
There is nothing in this program that is at odds with American democracy and American enterprise and the operation of markets, unless we accept the fact that the entitlement to continue to pollute without limit or restraint has somehow become a constitutional right and that we are unable and unwilling to stop participating in our self-destruction. Shall billions perish because it's profitable for a little while longer to be able to pollute without restraint? It was, after all, under the Presidency of Richard Nixon that we established the EPA, and passed the Clean Air and Clean Water Acts.
The genius of American democracy has always been to balance in time the desire for expansion with need need for countervailing limitation of excess .Somehow in the last generation, the conservative Republican has become a supporter of the most radical ecological pillage and not, in the tradition of Teddy Roosevelt, as force to standup to the limitless desires of polluters and poisoners in the interest of the nation.
- Low Hanging Fruit: Efficiency Programs to Create Ten Million Jobs
There are spectacularly good investment opportunities at hand. A modest 25% increase in net electricity efficiency could save $100 billion. This would easily support cost effective investment of more than $500 billion and create, conservatively, one million jobs, and if focused on labor intensive efficiency work as many as ten million jobs.
According to the World Bank, U.S. electricity end use per capita in 2008 was 13,654 kWh.xiii Increasing net efficiency by only 25% would mean a savings of 3,414 kWh per capita. For 311 million Americans this means an annual savings potential for electricity alone of $100 billion based on an an Energy Information Agency average price of $.1059 per kWh in August 2011. xiv.
This 25% net savings represents what we in the energy efficiency business call the low hanging fruit and no-brainers. It's screwing in more efficient light bulbs, adding occupancy sensors to light switches to turn off the lights when no one is in the room. And it can be all done at no up front cost to energy users, financed by private capital, show a positive cash flow from month one, and be paid for by painless deductions of a share of the monthly savings from utility bills. Who would not want to create millions of jobs and save money and be required to put up none of your own money?
Using efficiency for generating jobs, while saving energy and money without having to put up your own cash should emerge as one of the basic habits of modern living.
We have the companies that are already doing this on a large scale, we have many working examples. What we need is government leadership to help establish the mechanisms across the country that will rest on competitively bid energy efficiency and renewable projects to be financed by private capital with repaid by automatic deductions from energy user utility bills.
We can start with the low hanging fruit and go from there. We can systematically proceed to build an efficient renewable resource economy without raising taxes, without cap and trade, without increasing utility bills. The more efficiency and renewables we install on the basis of competitive bidding, the faster the prices will decline. Efficiency is already far cheaper per kWh than existing generation. The cost of renewables is rapidly decreasing and will continue to plunge.
But by combining a mixture of efficiency with renewables the savings stream from efficiency makes the combination of efficiency and renewables cost effective today even with the enormous existing subsidies paid out to fossil fuel and nuclear industries, and the enormous hidden subsidies of fossil fuels and nuclear power not having to pay for the true costs of pollution, depletion, ecological damage, and resource war.
The numbers are clear. A 25% increase in efficiency represents the low hanging fruit. By combining a mixture of efficiency and renewables in the ratio of about 3 parts efficiency savings in kilowatt hours and one renewable generation in kilowatts we can use the savings from efficiency to make renewables cost competitive right now and put many millions to work in the process.
Jobs From Efficiency Savings and Private Investments
It's typically estimated that a million of dollars of efficiency investment will create over 20 jobs, a billion dollars 2,000 jobs. But in certain labor intensive weatherization and insulation areas job creation will be much higher. For example, it's estimated by the Energy Corp, that each million dollars invested in low income energy efficiency will produce 216 jobs, or 216,000 jobs per billionxv. A conservative estimate of the multiplier effect is $2.5 million of economic activity for each $1 million of efficiency investment.xvi
4. An Ecological Way and New Market Rules
The consequences of allowing financial speculation and pollution to run rampant are all too clear. Market rules and regulation in a democracy must focus the enormous power of business in the 21stcentury onto the achievement of socially beneficial ends. It was clear to no less than Adam Smith that left to their own ends that business people would conspire at the expense of the public. There must be a clear imperative through adoption of an ecological consumption tax system that sends clear market price signals that makes sustainable goods and services more profitable and gain market share while polluting, depleting, and ecologically damaging goods and services become less profitable and loose market share.
Government action is crucial to help catalyze the efficiency revolution and to adopt an ecological consumption tax system that sends clear market price signals for sustainability throughout the economy. The potential efficiency and renewable market is astounding. Almost every house, every business, every school, every vehicle can improve overall efficiency several fold while at the same time installing renewables. We can put millions to work. We can slash oil imports and bring the troops home. We can heat and cool and light our homes and offices, power our industry and our vehicles with efficient renewable energy. Who wouldn't want to drive a renewable electric powered car at the equivalent cost of around a buck a gallon for gas? We can replace within a generation fossil fuels and nuclear power with efficient renewables.
The assertion is that an ecological transformation is not only necessary, but can be accomplished in a way that creates enormous net present value (NPV) while at the same protecting and increasing our natural capital. This will be the consequence of sustainable economic growth. The ETP will mean the creation of many millions of sustainable jobs, and the reduction of pollution and greenhouse gases
The three elements of the ETP are, of course, interrelated and are about more than more solar panels and wind farms. A global ecological transformation must ultimately be comprehensive and constitute an ecological way that is reflected in all aspects of our civilization to accomplish a constructive change from a self-destructive industrial present to a sustainable and prosperous ecological future.
An ecological way reflects both technology and behavior, the nature of our myriad devices and how we choose to use them. An ecological transformation must be a social as well as a material transformation. It is a summary expression of the adaptive and protean nature of human society adapting to pursue sustainability as essential to future survival.
The alternative to a constructive sustainable growth driven path to an ecological transformation is collapse. The choice to continue the self-destructive path of industrial business as usual with escalating pollution, depletion and ecological damage is to invite ecological catastrophe that will put an end in the most painful fashion to industrial business as usual. Industrial business as usual is on a pathway toward global ecological catastrophe manifest through polluted air, water, and soil, climate change, failing agricultural production, collapsing fisheries, poisoned and drained aquifers, resource wars, epidemics, famine, mass migration of the desperate, failed states and collapsing nations.
The world of familiar and common comforts for the fortunate and mass poverty for the majority in the context of high pollution, high waste and destruction of natural capital simply cannot continue without horrendous consequences. If, for example, we begin to melt sufficient quantities of permafrost and start to release gigatons of methane from the melting Arctic we will have unleashed a self-perpetuating and runaway climate change on a geophysical scale with catastrophic results.
Sustainable Economic Growth and Ecological Price Signals
Building a sustainable ecological order will mean an ongoing decrease of pollution, depletion, and ecological damage through sustainable economic growth that leads to ecological improvement, not ecological destruction. To conflate sustainable economic growth with ecological destruction is a philosophical category error. Economic growth under industrial business as usual is certainly unsustainable. But, for example, economic growth through trade in information of all sorts through the world wide web powered by an efficient renewable electric grid is entirely another matter. Sustainable economic growth is not and cannot be limited to dematerialized information and must extend to the abundant opportunities in industry, agriculture and forestry.
We must condition the conduct of markets by new ecological market rules and by comprehensive ecological consumption taxation adopted through democratic processes. Ecological consumption taxes will replace income taxation on a dollar by dollar basis, and These economic signals will be manifest in the general conduct of a an industrial ecology that includes the development of an efficient global renewable energy system.
What's needed is the mandate to follow such sustainable, efficient and profitable paths that can be catalyzed and driven by ecological consumption taxation that sends clear economic signals for sustainability through supply chains.
The more sustainable, the less polluting, depleting, and ecologically damaging, goods and practices, the lower the tax rate. Sustainable goods and practices will gain market share, be more profitable, and attract capital investment. The price system through ecological consumption taxation such as an ecological value added tax on all goods and services can send clear monetary signals throughout the economy for sustainability. The more polluting, depleting, and ecologically damaging a good or service, the higher the tax rate. Profitable business must be sustainable business. Ecological consumption taxation should replace income taxation on a dollar for dollar basis. As ecological consumption taxes are phased in, income taxes are phased out. A negative income tax can hold poor and working people harmless from regressive effects of consumption taxation since poor and moderate income people spend almost all their funds, while the rich do not.
5. ETP System in Twenty Years
This book will outline how in twenty years following the Ecological Transformation Plan we have the potential to:
• Build an efficient renewable energy system to replace fossil fuels and nuclear energy without instituting any new taxes;
• Meet through renewables and efficiency all our energy needs for all the 8,760 hours a year proving energy for our homes,our factories, our vehicles;
• Employ the enormous efficiency opportunities combined with renewables to achieve net zero energy, producing as much or more energy from renewables than total energy use, starting from home to localities and ultimately to net zero global scale;
• Provide an operational model for a substantially self-regulating gird based on ability to respond to changes in voltage and frequency and create island areas of operation using local generation and storage in event of system failure;
• Maintain the balance within the system among distributed generation, distributed storage, distributed efficiency and system resources and high voltage direct current (HVDC) transmission.
• Finance the efficient renewable energy system primarily through use of market means such as market in efficiency nega-watts and nega-therms, renewable energy hedges that facilitate long-term finance by providing renewable developers with a reasonable long-term cash flow, energy users affordable long-term energy budget, and self-limiting means such as feed-in-tariffs;
• Operate the efficient renewable grid system using revenue models that provide proper incentives for operating and optimizing the functioning of the efficient renewable system;
• Make the pursuit of efficiency the basis for a global convergence upon a fair sustainable per capita energy allowance. The purchase of entitlements by rich energy users is the basis for income and technology transfer from rich to poor and from rich nations to poor nations to help finance the renewable energy transformation;
• Make democratic choices to structure, own, and control, the efficient renewable energy system in ways that maximizes community-based jobs, strengthens dynamic communities, and returns the proper balance between people and the technostructure where we are no longer slaves to the machine;
• Institute an ecological consumption tax plan, an ecological value added tax (EVAT), on all goods and serves to replace income taxes that includes externalities in price and sends clear price signals for sustainability throughout economies;
• Maximizes global relationships and the global pursuit of sustainable economic growth through trade in information and dematerialized goods and services, and zero waste-zero pollution ecological production;
• Conduct expanded free trade and development for the poor within the context of fairness, equity, and sustainability where true costs are paid and distributed as severance payments both for non-renewable resources in the interest of sustainable growth and development and escaping the resource curse, and for agricultural and renewable resources at a price adjusted for direct and indirect subsidies and tariff barriers raised by the rich.
• Eliminate pillage as the traditional mid-wife for the path from poverty to sustainable wealth. The the poor cannot be kept in misery and thirst to maintain the privileges of the rich who have drained well, neither can rich nor poor create sustainable wealth through self-destructive means;
• Develop community based and democratically controlled financial institutions to help finance building the efficient renewable energy system and the ecological transformation;• Build democratic institutions, such as continental unions, the EU, for example,capable of crafting necessary global agreements, rules and practices to help facilitate and guide in general terms the ecological transformation, to replace the 20th century nation state and its high pollution and war system.
The ETP system makes much use of high technology, but this is technology conditioned on an ongoing basis for achieving ecological improvement and ecological ends which include protection of habitat, species and wild lands and seas. What is maximized is not production and consumption but maintenance of ecological balance in context of human well being that is not merely defined in per capita income, but in broader measures of well being and pleasure which include ecological sustainability.
An global efficient renewable resource system and the practice of a industrial ecology where the output of one process becomes the input for another in a zero pollution – zero waste production system will be embraced sooner or later. And if it is later, it may be too late to prevent the rapidly unfolding consequences of industrial business as usual.
This book considers what needs be done, what can be done, not as a last resort, but as a healing democratic response to industrial business as usual that can mean the transformation of industrialism to a global ecological civilization. We begin with energy as a natural and essential point of entry for the pursuit of survival, for sustainability, for prosperity.
But the context of the transformation from a self-destructive industrial civilization to a sustainable ecological future is not simply the substitution of one machine for another machine, or the substitution of a new boss same as the old boss. Rather, much as the embrace of an efficient renewable future is a necessity, the practices of an efficient renewable energy system are also those that are completely consonant with the pursuit of democracy, justice, fairness, freedom and community, self-management, cooperation, individual and community initiative, enterprise, and entrepreneurship.
Industrial business as usual is the path of collapse, not wealth. Industrial business as usual means an end to economic growth and an end to freedom, it means democracy radically reduced to the practice of a lifeboat ethics of choosing who is the next to die. We will explore starting from the building of an efficient renewable energy system as the path of future economic growth that when combines with the practice of an industrial ecology, and an ecological consumption tax system that sends proper market price signals that makes sustainable goods cheaper and more profitable and gain market share, while sustainable goods become more expensive, less profitable, and lose market share.
6. Summary Framework:
Efficient Renewable Energy, Ecological Production and Ecological Taxation
The basic characteristics of the Ecological Transformation Plan (ETP) rests upon elements supporting Renewable Efficient Energy, Ecological Production, Ecological taxation: Following is a summary framework for sustainability and liberation and the transformation from an industrial to an ecological civilization in regard to Ecological Production and Ecological taxation, and Efficient Renewable Energy.
• Ecological Production
- Practices an industrial ecology where the output of one process becomes the input of another. All materials formally waste or pollutants are reused or become valuable inputs to other processes;
- Governed by principles of zero pollution and zero waste through systematic capture and reuse of all outputs, remanufacturing, reuse, recycling, composting, gasification and digestion. Sewage sludge free of industrial pollutants, for example, becomes major input for urban and rural agriculture including organic urban hydroponics;
- Send economic signals by ecological taxes that make sustainable ecological production economic and pollution, depletion, and ecological damage uneconomic;
- Uses to sustainable extent a carbohydrate economy of grown organic materials as inputs such as sugar beets and sugar cane for ethane as plastic feedstock using thermodynamically efficient production processes; algae;
- Ends deforestation, and increases on a net basis forest and wild habitat;
- Practices sustainable agriculture and aquaculture including large scale urban farming through organic and hydroponic means that maximizes output while minimizing pollution and ecological degradation;
- Employs material science using chemical engineering and genetic engineering for sustainable inputs;
- Uses nanotechnology for sustainable purposes increasing efficiency and reducing energy requirements and ecological consequences.
• Ecological Taxation
- Uses ecological consumption taxation to replace income taxation to send clear price signals to both producers and consumers throughout economies;
- Can be phased in as a zero no new revenue tax to replace over time all taxes on income;
- Decreases the tax and therefore the price on sustainable goods
- Increases the tax and therefore the price of polluting, depleting and ecologically gods;
- Uses the price system to send market signals for sustainability for all goods and services that will affect not only all sources of materials and all potential sinks of pollution and waste, but all production methods in interest of sustainability;
- Allows sustainable goods to be more profitable and gain market share, and unsustainable goods to become less profitable and lose market share, and therefore sending systematic market signals for sustainability;
- Use if desired self-enforcing and simple to understand tax measures such as an Ecological Value Added Tax (EVAT) where businesses who collect the tax get credit for invoices they paid for inputs and pay tax only on the value added;
- Increases tax rates on more polluting, depleting and ecologically damaging goods and services;
- Able to send price signals to consumers through color coded labels, for example, from bright green for sustainable products to black for most polluting, depleting, and ecologically damaging
- Serves as a long-term feed back mechanism that will tend to make all goods will long- term market presence sustainable and heavily tax non-sustainable outliers. As high polluting high tax items loose market share, to maintain revenue tax is adjusted upward on moderately polluting items that are now peak polluters. Eventually there will be a convergence on a flat tax for sustainable items.
- Is consistent with existing international trade rules and can be levied on imports without a similar but not on domestic exports.
• Efficient Renewable Energy
- Improves thermodynamic energy efficiency enormously, as much as several fold. An 80 per cent improvement in efficiency is a reasonable and achievable goal.
- This can be pursued through measures that include:
- Comprehensive retrofits of all existing buildings for efficiency and renewables financed on a zero capital basis for end users from revolving loan funds and repaid from utility bill savings,
- Standard setting for systems and devices on basis of most efficient system marketed already practiced by the Japanese; development of net zero building for both news construction and retrofits;
- Such retrofit programs will create many millions of new jobs and many billions of new tax revenues;
- Meets substantially all energy demands through renewable electric grids combining optimized distributed and system renewable generation, storage, and efficiency resources;
- Pursues a global converge on net zero energy patterns where renewable resources equal or exceed total energy consumed;
- Serves as means for achieving global per capita energy entitlement and a means for resource transfer from rich to poor and from rich nations to poor nations through purchase of energy entitlements;
- Serves as basis for transforming our relationship with the machine and a new understanding of social efficiency.
Conclusion: Ecological Transformation
We cannot continue industrial business as usual. This does not mean that we must abolish markets or freedom or the application high technology. Indeed, this book focuses on using markets, freedom, and technology as the instrument for ecological transformation.
The comprehensive practice of an Ecological transformation Plan (EPT) that includes an efficient renewable energy system in the context of clear economic signals sent by comprehensive ecological consumption tax norms and regulation broadly mandating sustainable conduct can lead to:
- Economic growth that means ecological improvement, not ecological destruction;
- The convergence upon sustainable global norms for sustainable energy and material use;
- The purchase of energy and material entitlements by large users from small users as a means for both local and global transfer of capital and knowledge from inefficient to efficient users and from rich to poor;
- Global practices that reflect the reduction of entropy, the healing of ecosystems on all levels, the protection and restoration of wild lands, and the long-term sustainable conduct of humanity as earth keeper and steward.
Much as we successfully responded to the war against fascism in the 1940s, we must meet the challenges posed by a gathering global ecological catastrophe by determined and resolute action. This book intends to outline how we can proceed, and act as if our lives, and the lives our children and grand children and generations unborn depend upon the pursuit of healing ecological change. This is the basic fact of life that must condition our behavior in the 21st century. To act otherwise, and to continue business and ecological pollution and pillage as usual is to court self-destruction.
We cannot successfully maintain islands of sustainability in a world suffering from climate change and ecological collapse. As Franklin cautioned the American revolutionaries, we will hang together or we will hang separately. The purchase of efficient renewable energy use entitlements by the rich from the poor is a recognition that we are all in the same boat and must practice enlightened self-interest and eco-justice in the interest of common survival and well-being.
We do not have the luxury to wait until the polluters and poisoners and the political systems they influence and often control consent to saving changes. The time for ecological action and the practice of enlightened self-interest is now. This fact is fundamental to the politics and our futures of the 21st century.
The body of this book will be forthcoming, published electronically in sections
11 Gigawatt = 1,000 Megawatts = 1 million Kilowatts = 1 billion watts of installed) capacity., A large nuclear plant has a capacity of 1 Gigawatt or 1,000 megawatts.
2New Monthly bill = $36.23 for 345 kWh conventional power, $7.50 for 30 kWh solar power, $3.75 for 125 negawatts of efficiency. Total = $47.48, a ten percent savings from my original bill of 500 kWh of $52.50.
i Global Renewable Prospects: Intergovernmental Panel on Climate Change Working Group III Mitigation of climate Change (2011). SSREN (Special Report on Renewable energy Sources and Climate Change Mitigation).Intergovernmental Panel on Climate Change. Online:http://srren.ipcc-wg3.de/report/IPCC_SRREN_Full_Report. Viewed July 16, 2011.
iiBloomberg New Energy Finance (2011). Gl o b a l tr e n d s in su t a i n a b l e en e r g y in v e s t m e n t, 2010.United Nations Environment Program (UNEP) and Bloomberg New Energy Finance. On line:.
Viewed Nov. 3, 2011.
ivGalen Barbose, Naïm Darghouth, Ryan Wiser,Joachim Seel (2011). Tracking the Sun IV: An Historical Summary of the Installed Cost of Photovoltaics in the United States from to 2010.Lawrence Berkeley National Laboratory.
On line: http://eetd.lbl.gov/ea/emp/reports/lbnl-5047e.pdf Viewed Dec. 4, 2011.
v An example of emerging new storage technologies: “Air Products is developing a versatile, large-scale, location independent energy storage system that can improve the grid’s capacity utilization, reliability, and provide the flexibility to reliably integrate an increasing amount of variable wind and solar power generation.
The Air Products LAES (liquid air energy storage) system employs proven cryogenic processes that use liquid air as the energy storage medium. Storing energy in the form of liquid air increases the energy density up to five times as compared with similar compressed air energy storage (CAES) technologies greatly increasing the siting flexibility of our systems. Air Products’ LAES (liquid air energy storage) can store up to 100MW for up to 12 hours in a single system and more in a modular configuration. Further by using waste heat (e.g., from the exhaust of a new or existing simple cycle gas turbine), the system can achieve high energy storage efficiencies (75% to 85%).
Given the flexibility in location and high efficiency, our energy storage system can provide cost-effective services that power generators, T&D companies and grid operators can readily use.”
Viewed: Dec, 3, 2011.
viGregor Czisch (2011). Scenarios for a Future Electricity Supply: Cost-optimized variations on supplying Europe and its neighbors with electricity from renewable energies. London: The Institution of Engineering and Technology.
viiErnst von Weisacker,Karlson Hargroves, Michel Smith, Cheryl Desha, Peter Stasionopoulos (2009). Factor Five: Transforming the Global Economy through 89% improvements in Resource Productivity.Sterling Virginia:Earth Scan.S
viii F. Schmidt-Bleek (2007)." Future Beyond Climate Change".Factor 10 Institute.Online: Viewed Oct. 5, 2011. http://www.factor10-institute.org/files/FUTURE_2008.pdf ViewedOct. 5, 2011.
"Since 1989 I worked on this basically simple idea: First, we must create our wealth and wellbeing with far less natural resources than hitherto the case, on the average we must dematerialize our western economy by at least a factor 10. Second, technically this is achievable through systems innovation without losing end use satisfaction. Third we must organize a cost-neutral shift of overheads, charges and taxes from income to natural resources, in order to ( 1 ) Internalize the costs of using nature, (2) Stimulate eco-innovation (3) Give incentives to producers for dematerializing goods and services, (4) Create a price structure on the market that rewards purchasing and using eco-efficient goods and services, and (5) make labor less costly and thus create new jobs.”
ix See Rocky Mountain Institute http://www.rmi.org/Home . Particular see work on Path to A New Energy Era and Reinventing Fire programs, as well as specific industry recommendations
xThe Land Institute in Salina Kansas,led by Wes Jackson, is conducting path breaking work on the use of perennial grains as a good example of designing with nature. .http://www.landinstitute.org/
xiMy associate Pentti Aalto at SNHU has developed and tested a system that sends 5 minute electric price signals to programmable controllers to manage multiple end uses.The device also meters energy use and accumulates and returns automatically use data and prices for the power.
xiiCost of efficency in 2009 $$.025 per kilowattt according to American Council for An Energy Efficienct Economy. On line:
xiii The World Bank (2011). Electric Power Consumption per Capita. On line: http://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC Viewed Dec. 1, 2011.
xiv U.S. Energy Information Agency (2011) . Eletricity Monthly. On Line: http://www.eia.gov/electricity/monthly/index.cfm . Viewed Dec. 1, 2011.
xvJerrold Oppenheim and Theo MacGregor(2008). Energy Efficiency Equals Economic Development. Energy Corp.
xviWill Hewes (2008). Creating Jobs and Stimulating the Economy through Investment in Green Water Infrastructure. American Rivers Inc. On line:http://www.americanrivers.org/assets/pdfs/green-infrastructure-docs/green_infrastructure_stimulus_white_paper_final.pdf. Viewed Oct.5,2011.