Published on March 14th, 2020 | by Barry A.F.0
How Should $10 Billion Be Spent To Defeat Climate Change?
March 14th, 2020 by Barry A.F.
When I first read about the $10 billion from Jeff Bezos to fight climate change, my first thought was, “Where will it be spent?”
Money’s power is in how fungible it is. There are almost infinite ways to spend it, but this can lead to analysis paralysis, in which you have so many choices that figuring out which is the best one is overwhelming. Or worse — that you have so many options, you can’t even determine the best choices, because you can’t calculate all the possible outcomes and hence cannot successfully weigh the options at all.
$10 billion spent directly on renewables — for example, 50:50 wind/solar — would buy 334,821 GWh of renewable electricity (or about 3.5% of 2018 US energy consumption) — a very impressive number. However, this does not mean spending the money this way would do the most possible good. And obviously if this much cash is being allocated, the intention is to achieve the biggest results, and Bezos likely wants to multiply the returns, so a plan is needed.
A bit of background: in order to stay under 1.5°C of climate change, we have about 10 years to drastically cut our emissions. This won’t prevent all the effects of climate change, but hopefully prevents the worse effects. We already have the technology to go carbon neutral. Using today’s panels/turbines/batteries, multiple groups have figured out how we can successfully get off carbon (bearing in mind there is more than one way to skin a cat). So, at this point, the impediment we are actually facing is not technological — it’s public motivation.
A majority of people now accept the reality of climate change, even among those who vote for right-wing ideals over a livable climate. But despite this majority, few have the ability to take world-changing actions on their own. In order to get public sentiment galvanized to defeat climate change, people need to vote for leaders who enact successful policies and we need to make sure the money currently spent on fossil fuels is reallocated to renewables.
Thus, motivation is the first and most important step. At the moment, much of the media is still engaged in bothsiderism and giving airtime to climate deniers. Not to mention how little airtime is actually devoted to climate change, 0.7% according to this analysis. This is absolutely pathetic, we are facing an existential threat and it is virtually ignored by the arbiters of current events [facepalm].
This means many people are apathetic and/or demoralized from doing everything in their power to defeat climate change plus they don’t have the necessary information that’s needed to make smart decisions. They are also bombarded with denial instead of facts. And part of denial’s toxic effects is that it keeps us busy refuting the deniers instead of moving forward to determine and implement successful solutions.
This may in fact be the point of gaslighting the public.
Intrinsic motivation comes from understanding an issue and resolving to solve it despite the obstacles standing in the way. It is influenced by familiarity, exposure, the media, peer groups, cultural influences, having solutions available, and an intrinsic desire (determination) to get the job done.
Media is used to convince us to buy products and services, to influence how we vote, and even how we think. At the moment, most of the money being spent in regards to climate change is to convince us that it’s fake. From conservative “think tanks” to misinformation campaigns to political donations to lobbying, big money is successfully used to manipulate us into going along with the status quo, preserving oil company profits, and appeasing those afraid of progress.
A public awareness campaign that explains what climate change is, how it works, why it’s such a threat, and most importantly how we can easily defeat it is what we need in order to rapidly turn public sentiment and build the motivation towards defeating it on schedule. And the fact that renewables cost less than current fossil fuels and provide more jobs than fossil fuels is icing on the cake that almost nobody knows about and urgently needs to be made part of the conversation. Simultaneously, fear of change needs to be addressed, since renewable electricity changes nothing for the end consumer (except offering lower price) and EVs have loads of benefits, facets that also need to be made part of the global conversation. A singular focus point does not address the big picture and a complex global crisis needs a big picture response.
— Lazard (@Lazard) November 18, 2019
Instead of refuting denial in an endless circle, the public should be grappling with the real question of why we are we paying more money for fossil fuels when we can save the planet and save money at the same time. This is the real issue at hand that almost no one outside CleanTechnica’s readership knows about. And to those who do not believe media has any effect on people, note that fossil fuel companies and Michael Bloomberg have spent a large amount of cash to sway the public for their own benefit. Bloomberg has unintentionally shown us that even though money does not by itself brainwash people (though, it can buy small islands), it is able to sway people who have proclivity in directions that suit the spenders (whether that’s for good or evil).
That said, the undercurrent of the climate emergency and switching to renewables is already here since most accept reality. But the public must be inspired and emboldened to take action. They need reinforcement and encouragement to develop an unstoppable drive to defeat it. Also, how to defeat it is perhaps the most important piece of the puzzle. People coalesce on solutions when they have realistic options. Regular CleanTechnica readers know all about climate change and renewable energy and that the models already exist, but the general public does not. They need to be educated. And since there are many models available, the conversation should also include which one we should go with and what steps are needed to enact it. It would also not hurt to spend a bit of money stress testing the models we have and even developing new ones, to make sure whichever model the world settles on is up to the task.
Once the public pressure for climate mitigation reaches critical mass, then we have to do the work of replacing electricity and vehicles with carbon neutral alternatives. That’s when we need supply.
Nuts and Bolts
At the moment, China is producing the majority of worldwide solar panels, wind turbines come from a few big players, and ditto for batteries. Supply is meeting demand at this time. But if we start accelerating deployment to what we need, we must rapidly develop new supply. This means lots of factories that churn out high-quality panels/turbines/batteries at breakneck speed. These factories need building, need capital, and need smart brains at the helm. This requires seed money, experienced personnel, and time to scale up.
This money can be seeded by the $10 billion, but can also be further seeded by governments and rebated carbon taxes, banks, stock markets and the public through investment opportunities.
As for EVs, they need battery supply (as does grid-level storage) and manufacturing facilities. As we already have the facilities for gasoline/diesel vehicle construction and the main change required is to replace the combustion engine and its accoutrements with motors and batteries, this is again a motivational problem. Tesla pressure has gotten us this far and is continuing to push legacy players towards converting their factories to EV production (profitably). This will also be accelerated by the Osborne effect and the aforementioned public awareness campaign (regarding resale value, for example) which can help accelerate the Osborne effect.
Price parity is important for consumers, and subsidies and internal combustion engine (ICE) retirement programs would be great to get clunkers off the road and help those who cannot afford new vehicles to get into EVs (since the supply of used EVs is still very small at this time). The total lifecycle cost of EVs compared to equivalent ICE vehicles is lower, but the cost is upfront. Novel mechanisms from new types of loans to subsidies (paid for by carbon taxes) would help the transition happen without leaving behind those who can’t afford new vehicles. Also, EV conversion kits should be developed and put into production.
The aforementioned awareness campaign would help educate voters on why and how to fight climate change, and can also be used to pressure politicians to run for office on strong climate change platforms. Democracy ensures we get the government we deserve, if people will only vote for leaders who put forward realistic, costed and comprehensive climate change strategies then we would get rapid results.
As mentioned many voters prioritize other issues over climate change but if it becomes the most important issue in the public consciousness then candidates for office will have to compete on who can better defeat it instead of leaning into lies, easy answers or side issues. And since renewables promise more jobs it can be tied into economic prosperity for all. Creating jobs is always a powerful argument for anyone running for office.
The Bigger Picture
For generations, we have had a grid structure that relies on centralized power generators, a massive grid to distribute the power, and end consumers to use the power (residential, industrial, commercial, military, etc.). And the electricity has to be consumed as soon as it’s produced. Hydropower often offers some storage, and there are some niche uses of other storage technology, but large-scale grid storage is rare in most cases. However, renewables change all of these long-held paradigms and allow for distributed generation and grid-level storage. However, many utilities don’t want to face this change. It upends their conservative and predictable (generations old) mindset. This needs to be addressed at the regulatory and consumer level. Also, funding mechanisms for building legacy power generators are time honored and will need updating for the new renewable paradigm and its higher upfront costs but zero fuel cost.
Interestingly, the uniqueness of renewables allows consumers to personally invest in and profit from defeating climate change. Rooftop solar is the most practical example of this, as is the Tesla Powerwall and other storage batteries at the residential level, but from a cost per kWh perspective, this is not the most cost efficient solution. Community solar/wind/storage would unlock another source of funding for rapid renewable deployment, offering investment opportunities starting from, say, $10 a share, with returns based on performance of the assets. This would allow almost everyone to help fund the rapid transition to renewables and profit from it.
Finally, spending on R&D can help us move forward more quickly by developing better technology. In regards to solar/wind/batteries, we don’t actually need the R&D, but if we find even cheaper or more efficient alternatives, then we are able to supercharge the rate we get off carbon. Also, greener aviation, concrete, refrigerants, and other facets could use the help.
Problems We Need to Face
Since fossil fuels are entrenched into society, getting off of them will lead to backlash, some of it ideological, some of it technological, and some of it employment/money related.
Utilities will have stranded assets and they will need to be discharged. The first thing we should do is stop building new fossil fuel infrastructure that will be stranded in a few short years. We can retire end-of-life (EOL) infrastructure without too much difficulty, as it’s already standard operating procedure for legacy fossil assets. But non-EOL assets will present challenges. Governments often default to paying them to retire, out of a combination of fear of public backlash and corporate cronyism (lobbyists, “too big to fail” propaganda, and histories of subsidies usually mean they have the connections to get bailed out by governments). Bankruptcy is also available and has been used by many corporations, including automakers (while few complained). If you chose to build something that has no value to society, why should society pay you for your lack of foresight? Especially when we all saw it coming?
We should also bear in mind that many fossil fuel assets will have land contamination issues, and the taxpayer should not be on the hook for cleaning them up. Not to mention their denial and misinformation campaigns, they spend huge amounts of money to keep the public from turning on them and in turn are accelerating climate change. They should be held legally accountable for these despicable acts.
Jobs will be lost by those who currently work in fossil fuel industries. Retraining these workers for the new jobs in renewable energy (which will be more plentiful than the losses) will help deal with this problem, as well as making sure the public realizes this is being done — a very important step, since lack of information and misinformation are powerful tools of regressives.
Other mechanisms that should be concurrently used are covered in my article “State Function, Path Function, Path Dependence, & Climate Change.”
The Net Result
In the end, the goal should be to create a worldwide movement wherein the public demands that their chosen leaders successfully fight climate change, get realistic plans put into place, make new asset funding available, get production facilities built/producing at necessary levels, put laws into place that deal with the externalities of fossil fuels, defund fossil subsidies and transfer them to renewables, ban new fossil fuel mining, and finally, consumers should use their dollars to buy vehicles and energy that are carbon free.
I have purposely not attached dollar figures to anything mentioned in this article. There are many possibilities for how much to spend in each area. It would be easy to get bogged down in exactly how many dollars to allocate to each concept, but in the end there is no perfect answer. Of course one should not let perfect be the enemy of good. Some smart number crunching would come up with a number of realistic allocations, and its also a good idea to make plans that are fluid enough to dynamically reallocate money if one area or another turns out to need extra funding to accomplish the ultimate goal of defeating climate change.
So, $10 billion can replace 3.5% of US energy consumption or it can spark a global revolution to defeat climate change on schedule.