The fight to develop renewable energy is a battle of good against evil and the future of humanity hangs in the balance.
No, I’m not talking about climate change (though that is certainly important). I’m talking about the distribution of wealth and power across the whole planet. The question of who will reap the benefits of future growth hinges on whether we discover new, better sources of energy.
The story of our species goes like this: For thousands of years, humanity’s energy budget was basically fixed — we got energy from our own bodies, from animals and from wood. All of those came from land — whoever had the land controlled the energy. Since technological progress was slow, the best way to get rich was to take someone else’s land.
But then technological progress accelerated dramatically and we discovered how to extract energy from fossil fuel. These two processes fed each other, and the result was an increase in human well-being like nothing the world had ever seen. Suddenly, great fortunes were made from inventing new things and organizing people for productive activity, rather than from seizing land from the neighbors. It became a positive-sum world, much more peaceful as well as much richer.
Most of us would like that positive-sum world to continue. There’s just one problem — there is a very limited supply of fossil fuel energy on our planet. In the 2000s, those limits started making themselves apparent; many thought we were on the verge of peak oil, standing on the precipice of a new dark age. Human ingenuity battled back and gave us shale gas and tight oil, which have sent energy prices back down — but not down to where they were before the middle of the last decade. Fracking shale is expensive and it’s going to get more so as time goes on. It’s not a long-term solution.
If we don’t find a better source of energy than oil and gas, Vladimir Putin’s militarized gas station represents the future of our planet. Against this grim future stand the forces of good, human ingenuity and smarts. If we can come up with new energy sources that are better than oil and gas, then we can get back on the positive-sum path. And if those new energy sources are things that don’t run out in a century or two, then the positive-sum world can last basically forever.
There are two potential energy sources that could let us escape the zero-sum world. The first is fusion energy. The second is solar energy.
Fusion, the ultimate energy solution, has long been a pipe dream, but researchers continue to push ahead with new ideas. Lockheed Martin has announced breakthroughs in compact fusion reactors, and startups such as Helion Energy and General Fusion are attracting attention and money.
Solar, meanwhile, has seen stupendous price declines. A new Deutsche Bank report says that even if government subsidies for solar power are slashed from the current 30 percent to only 10 percent, solar electricity will be cheaper than fossil-fuel electricity in 36 states by 2016. Plunging costs are being driven by new technology, by economies of scale and improvements in the solar-panel manufacturing process, and by drops in “balance of system” costs.
Renewable energy is a moral crusade. If human ingenuity wins, we remain in a world where new ideas and productive effort are the main determinants of prosperity. If technology loses, then more and more of the world’s wealth and power will flow into the hands of violent men who seize land with force.
Noah Smith is an assistant professor of finance at Stony Brook University in New York.