A recent Economist article reminded us that energy efficiency, according to the McKinsey Global Institute, could get us halfway to the goal of keeping the concentration of greenhouse gases below 550 ppm. Considering that energy efficiency lowers fuel bills in addition to energy needs, the quest for “negawatts” is a valid one.
Moreover, even though a lot of investment would need to be made to increase energy efficiency to the levels that are possible, on the order of 170B annually until 2020, this is only 1.6% of today’s global annual investment in fixed capital. A bargain when you consider that the measures, which only require existing, proven, technology, would earn an average return of 17%, and a minimum of 10%. Considering the performance of most traditional investments, including the stock market, as of late – that’s very attractive!
A recent Wired article noted that embracing nuclear power as a clean power source is not necessarily the right solution. The argument assumes that clean alternatives will not improve in efficiency or affordability during the 10 years it would take to implement an effective nuclear program. Given the current cost of oil and recent improvements in solar, hydro, and wind power, these sustainable alternatives, which don’t produce hazardous radioactive waste as a byproduct, when combined with energy efficiency investments, could deliver a clean-energy future much cheaper and much sooner — without security or health risks.
A new study from the Argonne National Laboratory has confirmed that greenhouse gas benefit from most corn ethanol is modest at best, and that if coal is used as the process fuel, it can actually increase greenhouse gas emissions by 3%! This correlates well to a recent study from UC Berkeley’s Energy and Resources Group (ERG) that found that there is no climate benefit from corn ethanol. The only ethanol with a promising potential is cellulosic ethanol, which can reduce total greenhouse gasses by a whopping 86% compared to gasoline. If it can be efficiently and effectively generated from switchgrass, and if switchgrass can be grown across much of North America, it may have a future. Otherwise, ethanol will be a dead end.
So what’s the verdict? We have the means to solve the energy crisis, or at least curtail our energy needs to the point where the crisis will be deferred to the future where we will likely have more innovations to draw from, but we have to be smart about it. Renewable energy sources and increased energy efficiency will help significantly in the short term, and cellulosic ethanol presents a viable alternative to gasoline if production processes can be improved and raw materials grown in abundance (without affecting the food supply). However, if we could reduce our dependence on oil to transportation only (which accounts for less than 10% of our total energy consumption and produces less greenhouse gasses than our farm animals on a global basis), we’d have quite a bit of time to perfect the process.
For more insights into energy efficiency and going green, see the Introduction to Green Purchasing on the e-Sourcing Wiki as well as the green and sustainability posts on Sourcing Innovation.
