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Energy Darwinism: The Case for a Level Playing Field

by John Brian Shannon

Energy Darwinism = Leveling the Subsidy Playing Field

By now, we’re all aware of the threat to life on this planet posed by our massive use of fossil fuels and how we might attempt to reduce the rate of CO2 increase in our atmosphere.

Energy Darwinism can solve all our energy-related infrastructure and national security problems while increasing GDP, by lowering the cost of energy to corporations, consumers and governments.

Energy Darwinism - Global Energy Subsidies (2014, in billions USD)Both divestment in fossil fuels and reducing fossil fuel subsidies attempt to lower our total CO2 emissions by reducing fossil fuel industry revenues; While a carbon tax attempts to lower our total CO2 emissions via increased costs to energy producers and consumers.

But a revenue-neutral solution (from the oil industry perspective) would work to lower CO2 emissions by ramping-up renewable energy subsidies on a per-unit-of-energy basis to match existing fossil fuel subsidies.

So far, there are no fossil fuel lobby groups dedicated to preventing renewable energy from receiving the same per unit of energy subsidies as the fossil fuel industry receives, and has been receiving since 1918 in the United States.

Imagine how hypocritical the industry would look if it attempted to block renewable energy subsidies that were exactly matched to fossil fuel subsidies.

Were governments to decide that renewable energy would receive the same annual subsidies as the fossil fuel industry, a number of things would begin to happen;

  • Cleaner air in cities
  • Lower CO2 emissions
  • Less imported foreign oil
  • Lower unemployment rates
  • Dirtiest fossil projects canceled
  • Sharp decline in healthcare costs
  • Democratization of energy through all economic quintiles

Summary

Even forgetting for a moment the externality costs of fossil fuels (up to $2 trillion per year) the annual $548 billion in subsidies for fossil fuels promotes an unfair marketplace advantage.

But instead of punishing the fossil fuel industry for supplying us with reliable energy for decades (by taking away ‘their’ subsidies) or by placing the burden of a huge carbon tax (one that reflects actual fossil fuel externality costs) I suggest that we match the renewable energy subsidy to the fossil subsidy on a per-unit-of-energy basis… and let both compete on a level playing field in the international marketplace.

Assuming a level playing field; May the best competitor win!

By matching renewable energy subsidies to fossil fuel subsidies, ‘Energy Darwinism’ will reward the better energy solution

My opinion is that renewable energy will win hands down and that we will exceed our clean air goals over time — stopping global warming in its tracks.

Not only that, but we will create hundreds of thousands of clean energy jobs in the process and accrue many other benefits during the transition to renewable energy, as per the German experience. We will also lower healthcare spending, agricultural damage, and lower damage to steel and concrete infrastructure from acid rain caused by burning fossil fuels.

In the best-case future: Oil & Gas companies will simply become known as Energy companies

Energy Darwinism will reward investors who migrate from fossil fuel to renewable energy within the same energy company.

At the advent of scheduled airline transportation nearly a century ago, smart railway companies bought existing airlines or created their own airlines and kept their traditional investors and gained new ones.

Likewise, smart oil and gas companies should now buy or create renewable energy companies and keep their traditional investors and gain new ones.

That thinking represents the best energy future for energy producers and energy consumers.


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Our energy comes from many sources, including coal, natural gas, nuclear and renewables.

As nonrenewable sources such as coal diminish due to market forces and consumer preference, the need for renewable energy sources grows.

Some U.S. states satisfy their growing renewable energy needs with wind, solar and hydropower.

Wind: Texas has the capacity to generate 18,500 megawatts hours of electricity through wind, and expects to add another 5,000 megawatts of wind generation capacity from facilities under construction.

Solar: California’s solar farms and small-scale solar power systems have 14,000 megawatts of solar power generating capacity.

Hydroelectric: Washington state hydroelectric power produces two-thirds of its net electricity.

Information courtesy of ChooseEnergy.com

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