I recall well going through Mother Earth News issues in the 1960s as it discussed caring for our environment and preparing to be more energy self-sufficient. The environmental movement was at that time in a nascent stage, having been motivated by Rachel Carson and by the tragedy of the Cuyahoga River on fire in Cleveland, Ohio. 

 

A decade later I was in college studying physics and was both fascinated by advances in solar panels and nuclear fusion, and dismayed by warnings of global warming by atmospheric physicists. This was a century and a half after Jean-Baptiste Fourier defined the term “greenhouse gases” and likened the warming effect of gases in our atmosphere to gases that accumulate and warm a flask. 

 

Now, almost half a century later, most people finally have absorbed what scientists, ecologists, environmentalists, and atmospheric chemists have been saying all along. The earth is warming because of greenhouse gases. It may take another half century for everybody to accept that global warming is human-driven, but, while I accept that bit of science, it matters little. Whatever caused the greater concentration of gases in our atmosphere, there is finally broad recognition that we must do something about it. 

 

Perhaps we have waited half a century too long, and because of that, the cost to stop, and then hopefully eventually reverse global warming. On the other hand, we now have more tools available to us than ever before. Fixing this won’t be easy, but it is within our reach. Here’s the plan. 

 

It begins with cutting back the burning of hydrocarbons by one half within the next twenty five years, as we all the while stimulate our economy. Now, we can wallow for a while and resist change, but the fact is that there is such global recognition of the problem that to be petulant about it will only cost us in mistrust of our international partners. We have to get on the boat of hydrocarbon reduction, and, by doing so early, have the enviable position as a leader in the development of capacity and expertise, rather than as the nation who let the boat sail and must then purchase technologies from others. 

 

Already all the major automakers have committed to go mostly electric by the end of this decade, and that will more than meet the goal of a 50% reduction in carbon dioxide creation in the transportation industry by well before mid-century. 

 

This leaves industry and electricity generation. For various reasons, domestic manufacturing is a small fraction of what it once was, and the remaining processes are becoming more energy efficient and weaning off hydrocarbon utilization as they go. 

 

Electricity will be key, especially if processes and cars increasingly rely on electrons rather than hydrocarbons. 

 

Our lead graph today describes our electricity portfolio. It describes the current cost per kilowatt-hour for our major electricity technologies - solar, wind, hydro and geothermal, nuclear, combined natural gas generation, coal-fired plants, and combustion gas peak plants. Data provided by the U.S. Energy Information Agency shows that our economy remains mostly dependent on hydrocarbon sources for our electricity, but that is changing rapidly. 

 

To motivate the transition, countries around the world have adopted a carbon tax on the emission of carbon dioxide. The consensus estimate of the appropriate tax is $60 per metric tonne of carbon dioxide emissions. Because hydrocarbon-based generation combines natural gas or coal with oxygen in the air upon combustion, it typically generates about three times its weight in carbon dioxide. 

 

A carbon tax imposes a price on those emissions. Economists call such a tax Pigouvian after the early 20th Century economist who noted that processes which create some sort of hazard should be paying for that hazard on an ongoing basis. It matters less what we do with that tax than the imperative to impose the tax to ensure entities  make responsible decisions. In effect, we are giving away for free a necessary factor of production, and then we are left later to remedy the problem that creates. 

 

Humans will invariably do more of something than they ought to if they don’t have to cover all the expenses of their actions. To allow consumers of hydrocarbons to garner the full use of the resource without paying the full price is to implicitly subsidize their enterprise. 

 

The figure of $60 per metric tonne of carbon dioxide emissions is a start. Canada will by the 2030s be raising that tax to closer to $120 U.S. Let’s analyze the effect of a $72 carbon tax on our electricity energy portfolio a decade from now. That rate is shown by the flat lines in the graph, ranked from the least expensive energy sources, because they do not emit greenhouse gases, to the most expensive sources, coal and peak power natural gas plants. 

 

Note from the graph if we can lower our consumption of electricity by one-half, we can rid ourselves of almost all the most environmentally-costly power sources. If we can also increase our non-emitting sources of solar, wind, hydro and geothermal, and new nuclear power by just 25% in the same period, we have met our goal. 

 

It may be hard to reduce energy consumption by a full 50%, despite the goals our president and other world leaders have set. I’m not worried though. But wind and solar power have now emerged as the least expensive energy sources, and their prices continue to decline. In fact, with a trillion dollar or two investment in wind and solar, funded partially through infrastructure spending but also partially by private investors intent on these high fixed cost by incredibly low variable cost technologies that can return profits for decades to come. 

President Biden on Wednesday proposed a solar energy expansion plan that would increase the amount of solar energy produced sixteen-fold by 2030. In this day and age of political hyperbole, I'm not sure if even he understands just how doable that lofty goal is, even without the gentle but firm prodding of a carbon tax. Such a tax is no doubt a third rail inside the beltway, given that fossil fuels lobbyists spends hundreds of millions per year warding off any reduction in the consumption of hydrocarbons. With upwards of a trillion dollars of revenue per year to protect, they have a lot to lose. If only we could invest such sums instead of merely spend them. In only a few years we could be energy self sufficient and freed from fossil fuels. 

 

By expanding the clean technologies on the left size of our horizontal axis, and reducing consumption through a carbon tax and technological innovations, we can actually quite easily meet our goal of a 50% carbon dioxide reduction sometime in the next decade. Then, for decades beyond, we receive the dividends of abundant and inexpensive energy. That will be truly transformational, and finally entirely within our grasp, technologically certainly, but now perhaps even politically.

 

After a few trillion dollars of investment by the public and private sector, and by each of us, we will be left with a new direct current electric grid better able to cope with the way energy will be produced and consumed, perhaps even along our interstate right-of-ways so we can even charge our vehicles wirelessly as we drive. We will have better machines and vehicles that are much more efficient and reliable. Our homes will be better designed, more efficient, and easier to heat and cool. And our air will be much cleaner, which is calculated to save millions of lives in this nation alone. 

 

We must do this as a national effort, though, and strive for every percentage point of increased efficiency. There’s some very low hanging fruit. The Chinese realized that they could reduce around 5% of their electricity usage, and hence perhaps 15% of their coal-powered plants, simply by forcing out cryptocurrency operations. We needn’t ban cryptocurrency, though. All we have to do is adopt other proven ways to mine these coins without the vast and completely unnecessary consumption of 2-3% of the earth’s electricity generation capacity. 

 

We can easily reduce energy waste in our homes and factories by 50% with better insulation and improved designs. Electrification of our vehicle fleet will help a lot, but helps very little if we are charging our cars from the 60% of our electric plants that are still fueled by hydrocarbons. This is where a vast expansion of now affordable wind and solar will really help. 

 

We will also have to think more collectively. Large scale community and regional solar is way cheaper than installations on our roofs. This requires us to band together to build community solar, or have government redirect its numerous hydrocarbon subsidies, and perhaps use transitional revenues from a carbon tax, for this big build-out of solar. I say transitional revenues because it is feasible within a decade or two of investment to consume almost no hydrocarbons. Once that day arrives, a carbon tax becomes irrelevant. 

 

These are hopeful times. This is true infrastructure investment that will pay dividends for decades. All we need is the will of politicians to recognize that addressing global warming sooner rather than later may be an opportunity that arrives once in many lifetimes. Thankfully. 

Now that's everybody's business, and good for business to boot.