Thursday, January 25, 2007

Alternative Energy

An interesting article in the NYTimes. Can you think of an economic argument for increasing our expenditures on R&D in the area of alternative fuels?

17 comments:

Jon said...

This is completely random, but I didn't know how else to post it. I ran across an article on the NY Times that discussed how cheap disposible but chic fashion (made popular by stores like H&M or Target) is hurting the environment because people are buying lots of clothing, which takes alot of energy to produce, and only using the items once or a few times. I think it is an example of a habit we wouldnt normally think about that has a larger negative impact on the world.

"Can polyester save the world?" http://www.nytimes.com/2007/01/25/fashion/25pollute.html?ex=1327381200&en=8757dd3fab8b9272&ei=5090&partner=rssuserland&emc=rss

Tom said...

I hope my anwser is not too obvious: if we increase R&D expenditures for alternative energies we could, we would have a better change of developing an alternative to fossil fule energy, and in turn we would decrease our dependence on foreign oil. In terms of economics, the costs of these R&D expenditures could be outweighed by the potential benefits of alternative energy.

Thomas Gift said...
This comment has been removed by the author.
Thomas Gift said...

In terms of R&D, the federal government needs to make sure its committment to curbing excessive reliance on foreign energy is real and not merely rhetorical. As Charles Krauthammer, noted neo-conservative and staff writer for the Washington Post, points out: "[To date], our debates about oil consumption, energy dependence and global warming are not meant to be serious. They are meant for show." The historical record seems to support this argument, Mr. Krauthammer says. Case in point: 24 of the 34 State of the Union addresses since the oil embargo of 1973 have proposed solutions to our energy problem. The consequence? In 1973 we imported 34.8 percent of our oil. Today we import 60.3 percent. Ultimately, increasing R&D - both within the public and private sectors - could have potentially dramatic effects in making the United States more energy independent. Whatever one's ideological bent, this is good public policy from every standpoint - economic, social political, and ENVIRONMENTAL.

http://www.washingtonpost.com/wp-dyn/content/article/2007/01/25/AR2007012501547.html

adamk said...

An increase in the National Renewable Energy Lab's budget would definitely be nice, but I would also like to see their plan. Right now, with their seemingly miniscule budget, they are trying to divide evenly among many different types of alternative energy (i.e. solar, wind, plant matter, fuel cells). I would rather seem them do more of the research part and less of the development first. By that I mean they should try and figure out which alternative energy source would be the most feasible, cost effective, and powerful of the ones to which they are currently giving money to. Right now they have such a small budget, and it becomes even smaller when they split it nine ways. In the article Robert Thresher remarks that we only get .5% of our energy from wind power. If wind is not working then maybe we should focus more of our resources (economically) on solar energy or hydrogen cells. Or if they truly believe that wind power can be a significant source of energy for us, then draw resources from other areas such as plant matter or geothermal. Now while an increase in our expenditures on R&D will obviously help, I also feel that the Lab needs to be more focused as well.

sarah tilbor said...

jon,
I totally saw that article. It reminds me of Americans' food consumption, more than anything. I think that people have devalued good food.
Good food should cost much more than we pay. But people are able to buy large quantities, of the same food, for less. Therefore, much more food is wasted because people are buying food that they actually won't eat. But they think that they will get more utility out of buying a larger quantity. Think of going to Walmart, and paying for a 15 oz. bag instead of a 12 oz. bag because the price is less. But, a person is only able to consume 12oz, anyway. So, the remaining 3 oz. are thrown away. What a waste!

George Birsan said...

It's unclear why we get only .5 percent out of wind energy whereas Denmark gets 23 percent. Maybe they have better conditions (more windy than here).
But I think now wind energy would be a great choice to focus on. More money should be invested so that the majority of houses would have their own wind turbines which don't look bad at all. And each house should be equipped with enegy efficient appliances. This would be an ideal combination that would save a lot of money.
Plus, the government should offer incentives to car companies so that they should increase their production of hybrid cars and at the same time lower their prices.
These are first steps that we should take to lower pollutant emission and improve the quality of the environment.

Lucinda Sardinha said...

In my opinion we need to do everything we can to start pursuing home-grown energy. To transform world-wide the system energy will be an extremely difficult task. This is the sector that more requires capital in the world: a financial, regulating net and institucional protecting interdependent complex and that comes being endorsed and has a century more than.

Juliana da Silva said...

Some countries have been demonstrating increased interest for renewable power plants. Germany is an example for representing 1/3 of all used wind power energy in the world. Brazil is also showing interest in the use of alternative sources of energy, representing currently 70% of world-wide production of alcohol used for energetic purpose. In my opinion all countries that invest in these power plants could only gain in long term.

Hartley said...

Alternative energy is important. Think back when whale oil was the primary source of energy. Because people were concerned with the whales extinction, they found alternative sources. The cost of losing the whale population was greater than the benefit of using the whale oil. Today, we see a similar pressure. If we want to deplete environmental quality all together, we can continue using resources to find more fossil fuels and buying gas. But if we as a society decide that the break down on the environment is greater than the benefit of using gas/fossil fuels, we can use our resources to find alternative sources of energy. I think we are close, if not already reaching, the point where the costs of gasoline are outweighing the benefits. Its time to find another source of energy.

Anonymous said...

I agree with Adam that the lab should define which energy sources will be most efficient to pursue and thus channel their meagre budget to developing it. An increase in the labs budget will be a good idea. However, it could easily be offset by other prevailing factors like subsidies on fossil fuel energy sources which make prices of such oil cheaper. In addition to increasing the labs budget, the government will also have to let consumers pay for the true cost of oil by internalizing the externalities associated with oil if the dream of making the US energy independent is to be realized. In this way, renewable sources can be made competitive with its fossil fuel counterpart giving the lab the right incentive both in terms of a market for their product and a financial backing for the research thereby making them more productive.

Felix

Anonymous said...

After reading ch 8 and this article its pretty clear that the energy problem fall back to a human failure and not a technological one. The technologies are out there, its up to the societies concience, politicians, to make up their minds.
Regarding Denmark's wind program, i think the comparation made in the article is not the best. Denmark energy consumption is by no means comparable with that of the US, thus affecting the percentage results shown in this article. The .5% of the US might be relative the same to the 23% of Denmark.
Adolfo

kirk jones said...

The large proportion energy possibilities are certainly there with solar, wind, and other renewable resources, but America and for the most part the world has become so attached to the "dirtier" and cheaper fossil fuels that it will be more than just a few decades before renewable resources have any widespread impact. I agree with Adolfo in that this delayed impact depends on the ability of societies and their governments to provide the right circumstances for innovation.

Anonymous said...

A interesting comparison: The National Renewable Energy Lab receives $200 million annually, while private investors in the 4th quarter of 2005 alone invested $502 million in various cleaner technologies. While the government seems to be saying all the right things they haven't been backing themselves up. The government should realize when the same venture capitalist that invested early on in Google, Amazon, and Netscape invests $100 million into start up green technology companies something promising is going on. The problem is these investments in green technologies have happened before and failed because the demand for them dried up. It is just so much easier to use the 'dirty' fossil fuels. Also with oil prices falling right now who knows if the investments will keep flowing into the green technology sector. However, as long as cleaner fuels are demanded they have a shot.
-Evan

Drew said...

Increasing expenditures on Research and Development could theoretically shift the supply curve outwards. This in turn would make alternative fuels cheaper. But, the "could" keeps the government from investing. While more government spending would be nice, it doesn't really matter in the long run. As the demand for oil increases and it becomes more expensive people will look for alternatives on the own. And in the most unbelievable places, like pond scum www.renewableenergyaccess.com/rea/news/story?id=47237

Elisangela Rangel said...

In my opinion the economy has a great role in the diversification of the use of fuels, data that the maintenance of the high prices of the energy can result in the weakness of the demand when it has a chance for the alternative fuel use.

Kris Brake said...

I think it is important that we focus on a long-term outlook when dealing with the economics involved with R&D expenses and alternative sources of energy. Obviously it will cost very large amounts of money in the present to research and develop other energy sources. However, down the road, the benefits will outweigh the costs. Therefore, it is in our best interest to begin to invest in these processes now so that we can reap the benefits sooner.