Would you be okay with waiting a while before I reply? I need to check a few things here and there.
Edit 1: Renewable energies have lower subsidies globally than fossil fuels. In Germany, a quarter of energy comes from renewables. In fact, only 7% of the renewable sector in Germany was owned by the big traditional power and utility companies. The rest is owned by individuals (40%), energy niche players (14%), farmers (11%), various energy intensive industrial companies (9%), financial companies (11%) and small regional and international utilities owned another 7%. Gerard Mestrallet, CEO of GDF suez (a French utility company) called it a ‘real revolution’
There are communities around the world where, after everyone switching to renewable energy sources, they no longer paid energy bills. That is, their energy was free. Part of the reason why we energy is not at zero marginal costs right now is because the current facilities, which are based on technologies from the second industrial revolution, are too inefficient. The building of an energy internet in the US will likely cost about $1.2 trillion, with a return of about $2 Trillion. This doesn’t even begin to take into account how much more efficient such a system would be than the current one. The savings would be massive.
It requires massive corporations to take advantage of economies of scale in order to get a profit from fossil fuels. The new ‘energy internet’ is far more efficient. In fact, if it is properly installed, it represents a future where energies will be zero marginal cost.
temporary edit: that’s it for today. I need to switch off the computer now.
“Fossil fuel subsidies reached $90 billion in the OECD and over $500 billion globally in 2011.[1] Renewable energy subsidies reached $88 billion in 2011.[2] ”
(This is without even considering that fossil fuel usage imposes external costs such as pollution, that the fossil fuel user does not pay. Some have argued that this amounts to an effective subsidy of the order of a trillion dollars per year).
“Based on REN21′s 2014 report, renewables contributed 19 percent to our energy consumption and 22 percent to our electricity generation in 2012 and 2013, respectively”
So if you believe Wikipedia (and is there a better general source?), fossil fuels attract more subsidies per unit energy as well as in total.
Remember, a lot of renewables get thrown in together without being the same. The renewables that get subsidies are mostly the flashy new ones, like wind, solar, and ethanol. Those are only a few percent of world consumption. Virtually all renewable energy production is either hydroelectric(which is quite profitable, and attracts basically no subsidies) or burning of wood and dung(which almost entirely happens in poor countries that can’t afford to subsidize much of anything). Slightly dated graph, but one that gives a good sense of how things break down: http://en.wikipedia.org/wiki/Renewable_energy#/media/File:Total_World_Energy_Consumption_by_Source_2010.png
Also, over 80% of fossil fuel subsidies are outside the OECD? Seriously? 80% of the money spent on anything being non-OECD is hard to fathom, because the OECD has somewhere around 80% of the world’s money, and a lot more disposable income to blow on subsidizing things.
Remember, a lot of renewables get thrown in together without being the same. The renewables that get subsidies are mostly the flashy new ones...
I have provided a few facts… you are trying to put a certain interpretation on them. To what end? What is it exactly that you are trying to argue?
Seriously? 80% of the money spent on anything being non-OECD is hard to fathom...
And now you are denying the data.
What is subsidised and where, is decided by factors that are not necessarily obvious or “sensible”, and there is a huge element of political electability. In OECD, fuels are a source of taxation revenue, whereas farmers, for example, benefit from subsidies. In the middle east and South-East Asia, fossil fuel is heavily subsidised, eg. in Indonesia gasoline sold for about 90% of crude oil price while I was there (and Indonesia imports their crude). I read that fully half of government revenue was at one point used to pay for the fuel subsidies. Why? Well, as soon as there is a discussion of reducing the subsidies, protests break out, and the politicians supporting the reductions do not get re-elected....
If that non-OECD number is to be believed, 2% of non-OECD GDP goes to fuel subsidies. Or, if you prefer to think of it this way, it’s close to 1⁄3 of the total world oil market to fossil fuel subsidies. And this number comes from a think-tank that’s obviously out to make an anti-subsidy point, with no detail as to where it came from or why we should believe it. Think tanks aren’t to be immediately dismissed, but they frequently exaggerate badly.
And the discussion is about why renewables get used. German use of renewables is very different than Canadian or Congolese, and aggregating them leads to muddy thinking and useless stats. Germans use modern renewables because the government is dumping a bloody lot of money into the industry. Canadians use renewables because we have massive amounts of easily-tapped hydroelectric potential, and hydro dams are the cheapest source of power known. Congolese use renewables because they have no better options than burning wood.
I’ll agree with you that some poor countries spend a lot on subsidizing gasoline, but it’s only a lot by poor-country standards, and it’s hardly all of them. I want a better source than naked statement of a number from a biased group before I’ll believe it adds up to that staggering a sum. And even if it does, that has no impact on the US, where fossil fuel is nearly unsubsidized—if you want me to think that renewables and an “energy internet” are a good choice for the US, then you need to explain how switching from a cheaper source to one that’s more expensive even with bigger subsidies is a net cost savings.
I still do not understand your objective in this discussion. It seems that you are implicitly against subsidising renewable energy. Is this correct?
(I work in the oil and gas industry, by the way, so fossil fuel subsidies sort of help me out...).
For that matter, I do not understand the upvotes in this thread. A citation was asked for—then it was provided—and then there are several posts attempting to invalidate the citation, attracting upvotes. Strange.
I want a better source than naked statement of a number from a biased group
We all do… could you please provide one?
if you want me to think that renewables … are a good choice for the US...
I don’t know when this discussion started to be about the US, and I don’t know if I really care enough about what you think to put in more effort… are you in a position to influence what the US chooses? If yes, then I will explain why this statement:
how switching from a cheaper source [presumably fossil fuels] to one that’s more expensive [presumably renewable energy]
I am explicitly against subsidies, full stop. I am also of the belief that the fashionable sorts of renewables(wind, solar, etc.) get vastly more subsidies than any other form of power, particularly in the developed world, and this belief is borne out by my own experiences with my local government and with stories from elsewhere. And I thought the US was being discussed, because it usually is, but looking upthread it seems I was in error there. If any country was being discussed it was Germany, though their example is hardly different—they’re spending a ton of money for an inferior power source.
Their energy is not free. Even ignoring repayment and maintenance schedules, there is marginal cost because they only have so many renewable generators installed.
There are communities around the world where, after everyone switching to renewable energy sources, they no longer paid energy bills.
Right, but what was the alternative? Suppose I talked about communities where, once everyone bought into the buyer’s cooperative, food was free. (That is, they invested the capital accumulated up-front into a black box that was able to provide food for the community for twenty years.) A few things become apparent:
There must be some sort of limitation. Food could easily be free for me, because I can only eat so many calories a day, but not free for me and my closest million friends in the developing world, unless they also buy in. (For energy use, the relevant user is probably heavy export manufacturing.)
While this sounds great, whether or not it makes numerical sense is another question. How much would you be willing to pay now for free food for the rest of your life? There’s some number where it makes sense for you as a customer, even if that requires taking out a loan now, and there’s some number that makes sense for them as a supplier, but there’s no guarantee that your number will be bigger than their number. (It might cost them a million dollars, and only be worth $100k to you.)
That’s not to say these sorts of arrangements never make sense—they often do. But whether or not they make sense has to include some accounting to be serious. (I will note that Exxon is investing in renewable energy—whether as a PR move or a hedge against a foreseeable change in the future, I don’t know. But my impression is that once it does make sense to switch, they’ll switch. They’re in this business for the money, not because they like oil.)
It requires massive corporations to take advantage of economies of scale in order to get a profit from fossil fuels. The new ‘energy internet’ is far more efficient.
Whoa, hold on a second. Let’s take for granted that the energy internet exists as you describe it: an infrastructure investment that costs $1.2T but returns $2T. This requires even more massive corporations than the ones that we currently have, the largest of which typically make investments in the $B rather than the $T. (The largest publicly held corporation is worth about $0.5T.) The issue at stake isn’t efficiency, but scale.
That is, a company with $1.2T to invest in nuclear, or coal, or oil, or so on, might also be better than the current US energy supply, and this is just a generic statement of the form “if you invest more money into X, X will be better” and “if you make an organization larger, the amount it can invest in multiplicative improvements increases.” (In general, this is one of the reasons why I don’t think antitrust laws are all that useful; having people like Rockefeller or Carnegie sitting on metaphorical gold mines and interested in investing in efficiency to get even more profits seems like a good way to ramp up technological growth.)
Ok, so I’m not advocating a world where there is suddenly no business modal and everyone does whatever the hell they want.
I’m advocating (seriously, the book was really comprehensive and very good) the Commons as a governing scheme, wherein members share their resources and have general rules of self governance. This has happened around the world, and there are many isolated communities which have practised this governance model for centuries.
And in regards to your last point, I didn’t say that companies would fund anything like this. It would in fact be the people themselves. That is, utility companies will pass on the cost to their customers in the form of small hikes, and the rest will be absorbed by the government over about three decades.
Things like this (upgrade of the electricity grid) have happened before, and they were also public ally funded. For example, in America in the early 20th century, many people didn’t have electricity as they were living in rural areas. The then power companies didn’t want to invest in them, as they thought rural homes were too few, too spread out and lacking in purchasing power. As a result, the government attempted to do it themselves. And thus the rural electric administration was born.
Sadly, the government could not do provide power to rural America all be themselves. So what did they do? They encourage rural farmers to form electric co-operatives, and granted them low-interest loans along with technical and legal assistance.
The result? Rural America got electricity for about 40% of the cost of what the utility companies estimated it would cost. Massive economic benefit shortly followed.
Ok, so I’m not advocating a world where there is suddenly no business modal and everyone does whatever the hell they want.
Agreed! But this is why it’s important to keep “free” separate from “cheap.” At some point, someone will want something and not obtain it. The questions are what, why, and who. Capitalism seems like the best scheme for answering those questions, because of the various properties I discussed above (and some that I haven’t brought up yet).
One of the strengths of capitalism is that it allows voluntary organizations to spring in and out of being—and so people can form whatever cooperatives they want, to take advantage of any new ideas or differing economies of scale. When things move from ‘expensive’ to ‘cheap,’ the sorts of organizations that exist around those things change accordingly.
Government is useful primarily for involuntary organizations—which have their benefits, but also their drawbacks, and should be employed with caution. It seems very likely to be proper to enforce nonviolence on the population through violent means, while much less likely to be proper to enforce a particular purchase or behavior on the population through violent means. But there are other purchases or behaviors that it may be proper to enforce, and so on.
That’s why I’m advocating the commons as an alternate to capitalism. I mean, capitalism has done a lot of good, but it has also done a lot of bad. Or more accurately, it has allowed a lot of bad things to happen. I would still prefer a capitalist world to the old hunter gather one, or a Marxist society. But I just think that the Commons represents a good, or maybe even better, alternative.
I’ve added a few links to the main discussion post. I recommend them because they will probably get the idea of the commons across way better than I can.
Would you be okay with waiting a while before I reply? I need to check a few things here and there.
Edit 1: Renewable energies have lower subsidies globally than fossil fuels. In Germany, a quarter of energy comes from renewables. In fact, only 7% of the renewable sector in Germany was owned by the big traditional power and utility companies. The rest is owned by individuals (40%), energy niche players (14%), farmers (11%), various energy intensive industrial companies (9%), financial companies (11%) and small regional and international utilities owned another 7%. Gerard Mestrallet, CEO of GDF suez (a French utility company) called it a ‘real revolution’
There are communities around the world where, after everyone switching to renewable energy sources, they no longer paid energy bills. That is, their energy was free. Part of the reason why we energy is not at zero marginal costs right now is because the current facilities, which are based on technologies from the second industrial revolution, are too inefficient. The building of an energy internet in the US will likely cost about $1.2 trillion, with a return of about $2 Trillion. This doesn’t even begin to take into account how much more efficient such a system would be than the current one. The savings would be massive.
It requires massive corporations to take advantage of economies of scale in order to get a profit from fossil fuels. The new ‘energy internet’ is far more efficient. In fact, if it is properly installed, it represents a future where energies will be zero marginal cost.
temporary edit: that’s it for today. I need to switch off the computer now.
Citation please.
Only, because of German subsidies for renewables.
“Fossil fuel subsidies reached $90 billion in the OECD and over $500 billion globally in 2011.[1] Renewable energy subsidies reached $88 billion in 2011.[2] ”
from http://en.wikipedia.org/wiki/Energy_subsidies
(This is without even considering that fossil fuel usage imposes external costs such as pollution, that the fossil fuel user does not pay. Some have argued that this amounts to an effective subsidy of the order of a trillion dollars per year).
But renewables are vastly smaller than fossil fuels, and the relevant number is subsidy per unit energy.
Not really. From http://en.wikipedia.org/wiki/Renewable_energy :
“Based on REN21′s 2014 report, renewables contributed 19 percent to our energy consumption and 22 percent to our electricity generation in 2012 and 2013, respectively”
So if you believe Wikipedia (and is there a better general source?), fossil fuels attract more subsidies per unit energy as well as in total.
Remember, a lot of renewables get thrown in together without being the same. The renewables that get subsidies are mostly the flashy new ones, like wind, solar, and ethanol. Those are only a few percent of world consumption. Virtually all renewable energy production is either hydroelectric(which is quite profitable, and attracts basically no subsidies) or burning of wood and dung(which almost entirely happens in poor countries that can’t afford to subsidize much of anything). Slightly dated graph, but one that gives a good sense of how things break down: http://en.wikipedia.org/wiki/Renewable_energy#/media/File:Total_World_Energy_Consumption_by_Source_2010.png
Also, over 80% of fossil fuel subsidies are outside the OECD? Seriously? 80% of the money spent on anything being non-OECD is hard to fathom, because the OECD has somewhere around 80% of the world’s money, and a lot more disposable income to blow on subsidizing things.
I have provided a few facts… you are trying to put a certain interpretation on them. To what end? What is it exactly that you are trying to argue?
And now you are denying the data.
What is subsidised and where, is decided by factors that are not necessarily obvious or “sensible”, and there is a huge element of political electability. In OECD, fuels are a source of taxation revenue, whereas farmers, for example, benefit from subsidies. In the middle east and South-East Asia, fossil fuel is heavily subsidised, eg. in Indonesia gasoline sold for about 90% of crude oil price while I was there (and Indonesia imports their crude). I read that fully half of government revenue was at one point used to pay for the fuel subsidies. Why? Well, as soon as there is a discussion of reducing the subsidies, protests break out, and the politicians supporting the reductions do not get re-elected....
If that non-OECD number is to be believed, 2% of non-OECD GDP goes to fuel subsidies. Or, if you prefer to think of it this way, it’s close to 1⁄3 of the total world oil market to fossil fuel subsidies. And this number comes from a think-tank that’s obviously out to make an anti-subsidy point, with no detail as to where it came from or why we should believe it. Think tanks aren’t to be immediately dismissed, but they frequently exaggerate badly.
And the discussion is about why renewables get used. German use of renewables is very different than Canadian or Congolese, and aggregating them leads to muddy thinking and useless stats. Germans use modern renewables because the government is dumping a bloody lot of money into the industry. Canadians use renewables because we have massive amounts of easily-tapped hydroelectric potential, and hydro dams are the cheapest source of power known. Congolese use renewables because they have no better options than burning wood.
I’ll agree with you that some poor countries spend a lot on subsidizing gasoline, but it’s only a lot by poor-country standards, and it’s hardly all of them. I want a better source than naked statement of a number from a biased group before I’ll believe it adds up to that staggering a sum. And even if it does, that has no impact on the US, where fossil fuel is nearly unsubsidized—if you want me to think that renewables and an “energy internet” are a good choice for the US, then you need to explain how switching from a cheaper source to one that’s more expensive even with bigger subsidies is a net cost savings.
I still do not understand your objective in this discussion. It seems that you are implicitly against subsidising renewable energy. Is this correct?
(I work in the oil and gas industry, by the way, so fossil fuel subsidies sort of help me out...).
For that matter, I do not understand the upvotes in this thread. A citation was asked for—then it was provided—and then there are several posts attempting to invalidate the citation, attracting upvotes. Strange.
We all do… could you please provide one?
I don’t know when this discussion started to be about the US, and I don’t know if I really care enough about what you think to put in more effort… are you in a position to influence what the US chooses? If yes, then I will explain why this statement:
is wrong.
I am explicitly against subsidies, full stop. I am also of the belief that the fashionable sorts of renewables(wind, solar, etc.) get vastly more subsidies than any other form of power, particularly in the developed world, and this belief is borne out by my own experiences with my local government and with stories from elsewhere. And I thought the US was being discussed, because it usually is, but looking upthread it seems I was in error there. If any country was being discussed it was Germany, though their example is hardly different—they’re spending a ton of money for an inferior power source.
Their energy is not free. Even ignoring repayment and maintenance schedules, there is marginal cost because they only have so many renewable generators installed.
Right, but what was the alternative? Suppose I talked about communities where, once everyone bought into the buyer’s cooperative, food was free. (That is, they invested the capital accumulated up-front into a black box that was able to provide food for the community for twenty years.) A few things become apparent:
There must be some sort of limitation. Food could easily be free for me, because I can only eat so many calories a day, but not free for me and my closest million friends in the developing world, unless they also buy in. (For energy use, the relevant user is probably heavy export manufacturing.)
While this sounds great, whether or not it makes numerical sense is another question. How much would you be willing to pay now for free food for the rest of your life? There’s some number where it makes sense for you as a customer, even if that requires taking out a loan now, and there’s some number that makes sense for them as a supplier, but there’s no guarantee that your number will be bigger than their number. (It might cost them a million dollars, and only be worth $100k to you.)
That’s not to say these sorts of arrangements never make sense—they often do. But whether or not they make sense has to include some accounting to be serious. (I will note that Exxon is investing in renewable energy—whether as a PR move or a hedge against a foreseeable change in the future, I don’t know. But my impression is that once it does make sense to switch, they’ll switch. They’re in this business for the money, not because they like oil.)
Whoa, hold on a second. Let’s take for granted that the energy internet exists as you describe it: an infrastructure investment that costs $1.2T but returns $2T. This requires even more massive corporations than the ones that we currently have, the largest of which typically make investments in the $B rather than the $T. (The largest publicly held corporation is worth about $0.5T.) The issue at stake isn’t efficiency, but scale.
That is, a company with $1.2T to invest in nuclear, or coal, or oil, or so on, might also be better than the current US energy supply, and this is just a generic statement of the form “if you invest more money into X, X will be better” and “if you make an organization larger, the amount it can invest in multiplicative improvements increases.” (In general, this is one of the reasons why I don’t think antitrust laws are all that useful; having people like Rockefeller or Carnegie sitting on metaphorical gold mines and interested in investing in efficiency to get even more profits seems like a good way to ramp up technological growth.)
Ok, so I’m not advocating a world where there is suddenly no business modal and everyone does whatever the hell they want.
I’m advocating (seriously, the book was really comprehensive and very good) the Commons as a governing scheme, wherein members share their resources and have general rules of self governance. This has happened around the world, and there are many isolated communities which have practised this governance model for centuries.
And in regards to your last point, I didn’t say that companies would fund anything like this. It would in fact be the people themselves. That is, utility companies will pass on the cost to their customers in the form of small hikes, and the rest will be absorbed by the government over about three decades.
Things like this (upgrade of the electricity grid) have happened before, and they were also public ally funded. For example, in America in the early 20th century, many people didn’t have electricity as they were living in rural areas. The then power companies didn’t want to invest in them, as they thought rural homes were too few, too spread out and lacking in purchasing power. As a result, the government attempted to do it themselves. And thus the rural electric administration was born.
Sadly, the government could not do provide power to rural America all be themselves. So what did they do? They encourage rural farmers to form electric co-operatives, and granted them low-interest loans along with technical and legal assistance.
The result? Rural America got electricity for about 40% of the cost of what the utility companies estimated it would cost. Massive economic benefit shortly followed.
Agreed! But this is why it’s important to keep “free” separate from “cheap.” At some point, someone will want something and not obtain it. The questions are what, why, and who. Capitalism seems like the best scheme for answering those questions, because of the various properties I discussed above (and some that I haven’t brought up yet).
One of the strengths of capitalism is that it allows voluntary organizations to spring in and out of being—and so people can form whatever cooperatives they want, to take advantage of any new ideas or differing economies of scale. When things move from ‘expensive’ to ‘cheap,’ the sorts of organizations that exist around those things change accordingly.
Government is useful primarily for involuntary organizations—which have their benefits, but also their drawbacks, and should be employed with caution. It seems very likely to be proper to enforce nonviolence on the population through violent means, while much less likely to be proper to enforce a particular purchase or behavior on the population through violent means. But there are other purchases or behaviors that it may be proper to enforce, and so on.
That’s why I’m advocating the commons as an alternate to capitalism. I mean, capitalism has done a lot of good, but it has also done a lot of bad. Or more accurately, it has allowed a lot of bad things to happen. I would still prefer a capitalist world to the old hunter gather one, or a Marxist society. But I just think that the Commons represents a good, or maybe even better, alternative.
I’ve added a few links to the main discussion post. I recommend them because they will probably get the idea of the commons across way better than I can.