Low-Carbon energy: A Roadmap

chr i s topher f l av i n

WORLDWATCH REPORT 178

Low-Carbon Energy:

A Roadmap

worldwatch in st i tute , wash ington , d c

CHR I STOPHER FLAV IN

l i s a ma st ny, e d i t o r

amanda ch iu , r e s e a r c h e r

Low-Carbon Energy:A Roadmap


©Worldwatch Institute, 2008

ISBN 978-1-878071-87-3

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On the cover: Solar roof in San Francisco, California.Photograph ©NREL

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Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

The Road to Low-Carbon Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Avoiding Catastrophe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

A Convenient Truth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

No-Carbon Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Designing a New Energy System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Jumpstarting a Revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Figures, Tables, and Sidebars

Figure 1. Atmospheric Concentration of Carbon Dioxide, 1744–2007 . . . . . . . . . . . . . . . . . 8

Figure 2. Average Annual Growth Rates by Energy Source, 2002–07 . . . . . . . . . . . . . . . . . 18

Figure 3. Cost of Electricity Generation by Source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Figure 4. Estimates of Available Energy Resources Using Today’s Technology . . . . . . . . . 21

Figure 5. U.S. Electricity Generation by Source, 2007 and Two Scenarios for 2030 . . . . . 27

Figure 6. Annual Investment in New Renewable Energy Capacity, 1995–2007 . . . . . . . . . 30

Figure 7. Electricity Use Per Capita in California and Rest of United States, 1960–2007 . 33

Table 1. Global Energy Use and Carbon Dioxide Emissions, 2007and Two Scenarios for 2050 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Table 2. Energy-Related Carbon Dioxide Emissions, Selected Countries, 1990 and 2007 . 11

Table 3. Estimates of Potential Contribution of Renewable Energy Resources . . . . . . . . . 22

Table 4. Estimated Employment in the Renewable Energy Sector, 2006 . . . . . . . . . . . . . . 34

Sidebar 1. What About Nuclear Power? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Table of Contents

Acknowledgments

The author has consulted with and benefited from many pioneering experts in the field,including Denise Bode, James Dehlsen, Reid Detchon, Mike Eckhardt, Robert Hefner, SuzanneHunt, Daniel Kammen, Li Junfeng, Amory Lovins, Eric Martinot, Aubrey McClendon,WilliamMoomaw, Fred Morse, Richard Munson, Dan Reicher, Joseph Romm, Janet Sawin, HermannScheer, Randy Swisher, and Izaak van Melle.Many thanks to Stanford MAP Fellows Amanda Chiu and James Russell who provided

extensive and skilled research for this report, and to Kimberly Rogovin who provided addi-tional research on green buildings and tracked down the photos that appear throughout. Spe-cial thanks also to Worldwatch Senior Researcher Janet Sawin and toWilliam Moomaw of theFletcher School of Law and Diplomacy for their valuable insights and careful review of thereport and for the material adapted from their chapter, "An Enduring Energy Future," in Stateof the World 2009. Deep thanks as well to Senior Editor Lisa Mastny for her masterful editingof the report and management of the production process.Support for this project came from the American Clean Skies Foundation, Casten Family

Foundation, Richard and Rhoda Goldman Fund, Steven C. Leuthold Family Foundation,Shared Earth Foundation, Shenandoah Foundation, Flora L. Thornton Foundation,WallaceGenetic Foundation, Inc., Johanette Wallerstein Institute, andWinslow Foundation.

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About the Author

Christopher Flavin is president of the Worldwatch Institute, a Washington, D.C.-based inter-national research organization focused on natural resource and environmental issues. Chris isa leading voice on the potential for new energy technologies and strategies to replace fossilfuels, increasing energy security and avoiding dangerous climate change. He is co-author ofthree books on energy, including Power Surge: Guide to the Coming Energy Revolution, whichanticipated many of the changes now under way in world energy markets. Chris is a foundingmember of the Board of Directors of the Business Council for Sustainable Energy and servesas a board member of the Climate Institute. He is on the Advisory Boards of the AmericanCouncil on Renewable Energy and the Environmental and Energy Study Institute.Chris has participated in several historic international conferences, including the Earth

Summit in Rio de Janeiro in 1992 and the Climate Change Conference in Kyoto, Japan, in1997. He speaks frequently to business, university, and policy audiences. He also testifiesbefore national and state legislatures and meets frequently with government and internationalleaders. Chris is a native of Monterey, California, and a cum laude graduate of Williams Col-lege, where he studied economics, biology, and environmental studies.

Summary

echnologies available today, and thoseexpected to become competitive overthe next decade, will permit a rapiddecarbonization of the global energy

economy. New renewable energy technologies,combined with a broad suite of energy-effi-ciency advances, will allow global energy needsto be met without fossil fuels and by addingonly minimally to the cost of energy services.The world is now in the early stages of an

energy revolution that over the next few decadescould be as momentous as the emergence of oil-and electricity-based economies a century ago.Double-digit market growth, annual capitalflows of more than $100 billion, sharp declinesin technology costs, and rapid progress in thesophistication and effectiveness of governmentpolicies all herald a promising new energy era.Advanced automotive, electronics, and

buildings systems will allow a substantialreduction in carbon dioxide (CO2) emissions,at negative costs once the savings in energybills is accounted for. The savings from thesemeasures can effectively pay for a significantportion of the additional cost of advancedrenewable energy technologies to replacefossil fuels, including wind, solar, geothermal,and bioenergy.Resource estimates indicate that renewable

energy is more abundant than all of the fossilfuels combined, and that well before mid-cen-tury it will be possible to run most nationalelectricity systems with minimal fossil fuelsand only 10 percent of the carbon emissionsthey produce today. The development of smartelectricity grids, the integration of plug-inelectric vehicles, and the addition of limitedstorage capacity will allow power to be pro-

vided without the baseload plants that are thefoundation of today’s electricity systems.Recent climate simulations conclude that

CO2 emissions will need to peak within thenext decade and decline by at least 50 to 80percent by 2050. This challenge will be greatlycomplicated by the fact that China, India, andother developing countries are now rapidlydeveloping modern energy systems.The only chance of slowing the buildup of

CO2 concentrations soon enough to avoid cat-astrophic climate change that could take cen-turies to reverse is to transform the energyeconomies of industrial and developing coun-tries almost simultaneously. This would haveseemed nearly impossible a few years ago, butsince then, the energy policies and markets ofChina and India have begun to change rap-idly—more rapidly than those in many indus-trial countries. Renewable and efficiencytechnologies will allow developing countries toincrease their reliance on indigenous resourcesand reduce their dependence on expensive andunstable imported fuels.Around the world, new energy systems

could become a huge engine of industrialdevelopment and job creation, opening vastnew economic opportunities. Developingcountries have the potential to “leapfrog” thecarbon-intensive development path of the 20thcentury and go straight to the advanced energysystems that are possible today.Improved technology and high energy

prices have created an extraordinarily favorablemarket for new energy systems over the pastfew years. But reaching a true economic tip-ping point will require innovative public poli-cies and strong political leadership.

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The Road toLow-Carbon Energy

peaking in Washington on June 23,2008, James Hansen, the top climatescientist at the U.S. National Aero-nautics and Space Administration,

had a sharp warning for policymakers: “If wedon’t begin to reduce greenhouse gas emis-sions in the next several years, and get on avery different course, then we are in trouble....This is the last chance.”1*

After two decades of halting and largelyineffectual efforts to address the world’s cli-mate crisis, humanity has reached a moment oftruth. As scientific alarm about the probabilityand catastrophic consequences of climatechange has grown in recent years, annual fossilfuel emissions of the most important green-house gas, carbon dioxide, have soared 35 per-cent above their 1990 rates.2 And because wehave waited so long and must now cope withskyrocketing emissions in China and otherdeveloping countries, the reduction in emis-sions will need to be steeper, and the challengeto societies and economies that much greater.Stabilizing the climate will require changes

in many sectors of the economy, includingagriculture and forestry. But fossil fuels arethe largest part of the problem, and reducingtheir dominance of the global energy system isthe key to climate stability. Leading scientistshave concluded that carbon dioxide emissionsfrom fossil fuels will have to be cut at least 50to 80 percent below current levels by 2050—and possibly to zero—in order to preventpotentially catastrophic rates of climatechange.3 And they will have to continue fallingbeyond that date.

To call these targets ambitious is to under-state the challenge. Carbon-based fossil fuelsmade the modern economy and all of itsmaterial accomplishments possible. Poweringthe global economy without those fuels willrequire restructuring the energy industrythrough technological, economic, and policyinnovations that are as all-encompassing asthe climate change they must address. Alarge-scale shift to carbon-free sources ofenergy is the essential centerpiece of such atransformation, together with major advancesin energy efficiency.The question of whether such a transition is

possible is one of the most complex and hotlydebated issues of our time. Many experts, par-ticularly those employed by today’s energyindustries, believe that fossil fuels must remaindominant for decades to come, and that theonly viable energy strategy relies on even moremassive use of coal, coupled with developmentof a vast system to capture and store the result-ing carbon dioxide. But since the 1970s, a smallbut growing tribe of energy dissidents hasargued that there is another option: that thesolution to our carbon problem is not at the“end-of-the-pipe” but in an entirely newenergy system. Today, such a transition appearsmore feasible—and more imminent—thanever before.The technologies that are available today, or

are projected to become available over the nexttwo decades, will allow a rapid shift in the mixof energy sources on which the worlddepends—and equally dramatic changes in thesystems for transporting, storing, and usingthat energy. Solar, wind, geothermal, and bio-logical resources each have the potential to

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*Endnotes are grouped by section and begin on page 37.

supply vast quantities of energy that can beconverted to electricity and liquid and gaseousfuels, as well as used to supply heat directly tobuildings and industry. But new technologieswill need to be complemented by majorchanges in the world’s energy infrastructureand by far more efficient use of energy thanever before.At a time when genes can be engineered and

spacecraft sent to Mars, shifting to a newenergy system is hardly an impossible task. Butit will require mobilizing substantial resources,which in turn will depend on major policychanges that overcome the decades of subsidiesand structural impediments that prop up thecurrent energy system. Nor will it be inexpen-sive, likely costing several trillion dollars by thetime the transition is complete.4* While mostof that investment will come from funds thatotherwise would have gone to additional devel-opment of fossil fuels, upfront costs will begreater and the price of energy may be some-what higher in the short term. But if a newcommitment to renewable sources of energy isaccompanied by a matching commitment toimproved efficiency, energy needs will besmaller and the bills paid by individuals andbusinesses could well be lower than they wouldbe if we remained addicted to fossil fuels.To many people, such a transformation

remains unimaginable. For nearly a century—since the times of Thomas Edison and HenryFord—energy has been a relatively static busi-ness, characterized by slow, incrementalchange, limited competition, and some of thelowest rates of research and development ofany major industry. But that is now changing.Concern about climate change and risingenergy prices have sparked a nascent transfor-mation of the energy business, with engineers,entrepreneurs, and investors who would have

been focused on the Internet and biotechnol-ogy a decade ago now focused on energy. Theirskills, energy, and commitment to solving oneof the world’s greatest problems is likely toprove as revolutionary as their great-grandpar-ents’ work to build a carbon-based economy acentury ago.Rebuilding the global energy system will be

expensive, but it can also be transformative.And its sheer scale would create thousands ofnew businesses and millions of jobs fordecades to come. At a time of serious eco-nomic troubles, volatile oil prices, and instabil-ity in many fossil fuel producing regions,

building an efficient, low-carbon energy sys-tem can become an engine of economic recov-ery, job creation, and internationalcooperation. Climate change, energy security,and economic development should be viewed,in the words of Common Cause founder JohnGardner, as “breathtaking opportunities dis-guised as insoluble problems.”5


The Road to Low-Carbon Energy

*All dollar amounts are expressed in U.S. dollars unlessindicated otherwise.

Darling NationalWind Farm in CapeTown, South Africa.© Warrensk (Flickr CreativeCommons)

Avoiding Catastrophe

ver the past half-million years,the world’s climate has seen fourice ages and four warm periodsseparating them. Over that vast

sweep of time, extensive glaciers have engulfedlarge swaths of North America, Europe, andAsia and then retreated; thousands of specieswere displaced, and the shapes of coastlineswere rearranged as sea levels rose and fell. Yetthroughout these hundreds of thousands ofyears, the atmospheric concentration of car-bon dioxide (CO2), which plays a key role inregulating the climate, has never risen above300 parts per million.1

In 2007, the atmospheric concentration ofCO2 passed 384 parts per million (see Figure1), and it is already at the equivalent of 430parts per million if the effect of other green-house gases is included.2 Humanity is at risk of

creating a climate unlike any it has seen before,unfolding at an unnatural, accelerated pace—more dramatic than any changes in the climatesince Earth was last struck by a large asteroidnearly a million years ago. Unless greenhousegas emissions begin to decline within the nextdecade, we risk triggering a runaway disrup-tion of the world’s climate—one that could lastcenturies and that our descendants would bepowerless to stop.Only recently have scientists understood

that changes in the concentration of CO2,methane, and other less common greenhousegases could trigger an ecological catastrophe ofstaggering proportions. The climate, it turnsout, is not the vast, implacable system itappears to be.Past climate changes have been caused by

tiny alterations in the Earth’s orbit and orien-tation to the sun—providing, for example, justenough added energy to warm the planet overthousands of years, increasing the concentra-tion of CO2 in the atmosphere, and in turntriggering even larger changes in the tempera-ture, which scientists call a positive feedback.Today’s massive release of CO2 and othergreenhouse gases is leading to far greaterchanges to the atmosphere in a period ofdecades.3 According to scientist James Hansen,“More warming is already in the pipeline,delayed only by the great inertia of the world’soceans. And the climate is nearing dangeroustipping points. Elements of a perfect storm, aglobal cataclysm, are now assembled.”4

Scientists project that in the decades imme-diately ahead, the capacity of the Earth and itsoceans to absorb carbon emissions will decline,while vast changes in the world’s ecosystems


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Figure 1. Atmospheric Concentration of Carbon Dioxide,1744–2007

may further accelerate warming. Recent studiesshow that frozen soils in the Arctic contain vastquantities of carbon—60 percent more thanwas previously estimated and equivalent toone-sixth of the carbon now in the atmos-phere.5 Melting tundra could release millionsof tons of carbon dioxide as well as methane—a greenhouse gas 25 times more powerful thanCO2—causing additional warming.6*Another tipping point may lie in the Arctic

Ocean, where the year-round ice cap has beenshrinking dramatically and unexpectedly inrecent years, and may disappear entirely in thesummer months within the next decade. Thiswill cause an enormous change in the Earth’senergy balance, with more of the sun’s lightand heat being absorbed, raising temperaturesfurther in the northern hemisphere.7 Thiscould mean the end of the million-year-oldGreenland ice sheet, which by itself containsenough water to raise worldwide sea levels bymore than seven meters.8

Exactly when the world will reach such atipping point—or whether it already has—is

not known. But it is clear that ecologicalchange of this magnitude would lead tounprecedented disruptions to the world’seconomies. A groundbreaking 2006 study ledby former World Bank chief economistNicholas Stern concluded that climate changecould cut global economic output by between5 and 20 percent.9 And in his 2007 book, TheAge of Turbulence, Alan Greenspan, the leadingfree-market economist of the day, included cli-mate change as one of five forces that couldderail the U.S. economy in the 21st century.10

The uneven and disruptive nature of thesechanges could set off additional crises as con-flict both within and between societies under-mines their stability.In 2007, the combustion of fossil fuels

released nearly 30 billion tons of carbon diox-ide to the atmosphere—more than a milliontons every hour—with coal and oil contribut-ing roughly 40 percent each and natural gasaccounting for the rest.11 The manufacture ofcement released nearly another 350 milliontons, while deforestation and agriculture com-bined contributed roughly 1.6 billion tons.12

Annual fossil-fuel carbon emissions haveincreased fivefold since 1950 and the rate of



*Units of measure throughout this report are metricunless common usage dictates otherwise.

Sea ice clogs the gapbetween iceberg B-15A, right, and B-15J,left, on October 21,2003. B15 was theworld’s largestrecorded iceberguntil it broke upafter calving fromAntarctica's Ross IceShelf in March 2000.Brien Barnett, National ScienceFoundation

increase has actually accelerated since 2002.13

Today, fossil fuels provide four-fifths of theenergy that powers the global economy.14

Burning fossil fuels on this scale is a vastand risky experiment with the Earth’s bios-phere. The United Nations Framework Con-vention on Climate Change, adopted in 1992,commits nations around the globe to prevent-ing dangerous climate change. Precisely identi-fying that point is difficult, but the 2007 reportof the Intergovernmental Panel on ClimateChange (IPCC) as well as more recent assess-ments by James Hansen andW.L. Hare of thePotsdam Institute suggest that the increase inthe global temperature must not exceed 1.5 to2 degrees Celsius above pre-industrial levels.15

(The increase so far is just under 0.8 degreesCelsius, with some additional increase lockedin as the greenhouse gases already in theatmosphere have their full impact.16) Thisrequires preventing the atmospheric concen-tration of CO2 from exceeding 450 parts permillion and a long-run goal of returning theconcentration to 350 ppm—below the currentlevel.17

The bottom line is clear: to keep the world’sclimate within the range it has occupied for at

least a million years, recent emission trendswill need to be quickly reversed. The currentemissions trajectory would take the atmos-pheric concentration to 650 ppm or beyondby the end of the century. The scenarios pub-lished in the 2007 IPCC report indicate that inorder to stabilize the climate, global green-house gas emissions must peak before 2020and be reduced by 40–70 percent by 2050,

eventually falling to zero.18 The goal of reduc-ing global emissions by half by 2050 has beenadopted by the European Union and wasendorsed by industrial country leaders at theG8 Economic Summit in Japan, giving it polit-ical as well as economic significance.19 Howrapidly carbon dioxide emissions need to fallduring this period depends on how quicklyemissions of the other key gases are reduced;recent estimates range from a 50-percentreduction to eliminating CO2 emissionsentirely by mid-century.20

The magnitude of the challenge is obviouswhen the emissions path needed to avoid cata-strophic climate change is compared with thecurrent trajectory.21 (See Table 1.) The U.S.Department of Energy forecasts that bothworld energy use and carbon emissions willgrow nearly 50 percent by 2030—an averagerate of 1.7 percent per year.22 This would takeemissions to more than 40 billion tons in 2030and, assuming continued growth at that rate,to 62 billion tons in 2050—nearly four timesthe annual emissions that would be needed tokeep the peak CO2 concentration below 450parts per million.23

The challenge is made particularly difficultby the fact that the energy needs of developingcountries such as India and China have accel-erated in recent years as they have entered themost energy-intensive stages of their develop-ment, building industries and infrastructure atan astonishing pace. In 2006, industrial coun-tries, with less than 20 percent of the world’spopulation, contributed roughly 40 percent ofglobal emissions, and they are responsible formore than 60 percent of the total CO2 that fos-sil fuel combustion has added to the atmos-phere since the Industrial Revolution began inthe early 19th century.24 But this picture ischanging rapidly, particularly in China, wheresince 2002, emissions growth has accelerated toa remarkable 10 percent annual rate.25

As recently as 2004, China was not expectedto pass the United States in CO2 emissionsuntil 2030; however, data now indicate that thisthreshold was crossed in 2007 if cement-related emissions are included.26 China barelytrailed the United States in emissions from fos-



Table 1. Global Energy Use and Carbon Dioxide Emissions, 2007and Two Scenarios for 2050

2050 2050Business Stabilization

Indicator 2007 as Usual Scenario

CO2 concentration (parts per million) 384 ~550 <450Population (billion) 6.7 9.2 9.2Energy use (billion tons oil equivalent) 12.0 23 16Energy-related CO2 emissions (billion tons) 29.9 62 15

Source: See Endnote 21 for this section.

sil fuels in 2007, and the two together accountfor fully 40 percent of global emissions.27 (SeeTable 2.) Emissions are also growing quickly inother parts of the developing world, particu-larly elsewhere in Asia and in the Middle East,where rapid population growth, rising oilwealth, and low, subsidized energy prices haveled to skyrocketing energy demand.28

Providing energy services for the muchlarger global economy of 2050 while reducingCO2 emissions to 15 billion tons will requirean energy system that is very different fromtoday’s.29 For the world as a whole to reduce itsemissions by at least half by 2050, today’sindustrial countries will need to cut theirs bymore than 80 percent.30 According to mostofficial assessments, including that of theIPCC, getting there depends on some combi-nation of a three-pronged strategy: reducingenergy consumption through new technologiesand lifestyles, shifting to carbon-free energytechnologies, and capturing and storing theCO2 released when fossil fuels are combusted.A variety of combinations of these threeoptions can in theory do the job.31 It is nowtime to develop a coherent strategy—and toshape policy and investment accordingly.Emissions from oil will be limited by supply

constraints. Production of conventional crudeoil is expected to peak and begin decliningwithin the next decade or two.32 By 2050, out-put could be a third or more below the currentlevel.33 This will require that transportationfleets shift rapidly to other energy options, themost promising of which are electricity (pro-duced from renewable energy), advanced bio-fuels, and compressed natural gas. Reliance onnatural gas, which has not been as heavilyexploited as oil and which releases half asmuch carbon per unit of energy as coal, islikely to grow. But its potential to be used effi-ciently for cogeneration of heat and power willlimit its contribution to emissions.Unfortunately, the slowdown in the rate of

discovery of oil and gas is pushing worldenergy markets toward dirtier, more carbon-intensive fossil fuels. The greatest problem forthe world’s climate is coal, which is both moreabundant and more carbon-intensive than oil,

and the “unconventional” fossil fuels such astar sands and oil shale, which at recent oilprices have become economically viable.Unless the development of these dirty fossil

fuels is deliberately curtailed in favor of renew-able alternatives, it will be imposible to reachthe declining emission trajectories that scien-tists say are needed.Coal-fired power plants currently supply

more than 40 percent of the world’s electricity,and their large contribution to CO2 emissionshas led policymakers and industrialists to focuson carbon capture and storage (CCS) so thatthose plants can be compatible with a low-car-bon economy.34 Such plants would beequipped with devices that capture carboneither before or after the combustion of fossilfuels, and then pipe the CO2 into undergroundgeological reservoirs or into the deep ocean,where it could in principle remain for millionsof years.Coal can either be gasified (as it already is in

some advanced power plants), with the carbondioxide then separated from the other gases, orit can be burned directly in a super-criticalpulverized plant that also allows the capture ofas much as 90 percent of the CO2. Four CCSprojects are in operation in Algeria, Canada,



Table 2. Energy-Related Carbon Dioxide Emissions, SelectedCountries, 1990 and 2007

CO2 Emissions, CO2 Emissions,CO2 Emissions Per Capita Per $ GDP

Country or Region 1990 2007 1990 2007 1990 2007

(kilograms per(billion tons) (tons) $1,000 GDP (PPP))

United States 4.8 6.1 18.7 19.2 823 437China 2.3 5.9 2.0 4.4 2,523 844European Union-27 3.6 3.8 7.6 7.6 514 258India 0.6 1.5 0.8 1.2 898 503Japan 1.0 1.2 8.3 9.7 446 290Africa 0.6 1.2 1.0 1.2 864 595Others 9.0 10.2 – – – –World 22.0 29.9 4.2 4.3 863 460

* Does not include emissions resulting from gas flaring, cement making, or land usechange.


Germany, and Norway.35 The facilities in Alge-ria and Norway simply capture carbon dioxidethat is extracted together with natural gas. Thesmall project in Weyburn, Canada, on theother hand, gasifies coal, extracting CO2 andinjecting it underground.While these tech-nologies are advancing, together with advancesin modeling and monitoring of geologicalsites, full-scale commercial CCS systems arestill a long way off. And a vast physical infra-structure will be needed to capture, move, andstore the emissions from even a fraction oftoday's fossil fuel combustion.The United States, European Union, Japan,

and China have all launched government-funded CCS programs in the last few years, butthe pace of these efforts is surprisingly lethar-gic given the urgency of the climate problemand the fact that much of the power industry iscounting on CCS to allow them to continueburning massive amounts of coal. A 2007 studyby the Massachusetts Institute of Technologyconcluded that the U.S. Department of

Energy’s main program to demonstrate thefeasibility of large-scale CCS is not on track toachieve rapid commercialization of key tech-nologies.37 Locating, testing, and licensinglarge-scale reservoirs where CO2 can be storedis a particularly urgent task. Also problematicis the fact that CCS will be water- and energy-intensive, which will limit its attractiveness inmany regions.It will take at least a decade to develop and

test large-scale CCS technology, which meansthat it will be the 2020s or 2030s at the earliestbefore significant numbers of low-carbon coalplants can begin to be built. How large a roleCCS ultimately plays in a low-carbon economywill depend on how rapidly the technologydevelops, how much it costs, and whether gov-ernments and industries are able to success-fully mobilize the massive infrastructureinvestment that will be required. In the mean-time, James Hansen and Al Gore have bothcalled for a moratorium on building new coal-fired power plants until CCS can be included.



A Convenient Truth

n 2001, as U.S. Vice President DickCheney was assembling the Bush Admin-istration’s energy policy proposals, hedescribed saving energy as a “moral virtue”

not worthy of serious consideration alongsidemore robust energy options such as offshoreoil drilling and nuclear power.1 Cheney’s quickdismissal of the demand-side approach tomeeting energy needs reflects a widespreadneglect of efficiency by policymakers andinvestors since energy prices fell dramaticallyin the 1980s.But as energy prices recently reached all-

time highs, the consensus of expert opinionhas shifted decisively. Reducing the amount ofenergy wasted and increasing the amount ofeconomic output that can be produced with agiven amount of energy is now considered themost economical way of reducing dependenceon fossil fuels. The monetary savings associ-ated with boosting energy productivity areoften sufficient to justify the investment even ifthe world were not facing a climate crisis.Given the urgency of the climate problem, thatis indeed a convenient truth.Energy productivity measures an economy’s

ability to extract useful services from theenergy that is harnessed. From the earlieststages of the Industrial Revolution, energy pro-ductivity has advanced steadily, a trend thataccelerated dramatically when energy pricessoared in the 1970s. In the United States, theeconomy has grown 165 percent since 1973,while energy use rose just 34 percent, allowingthe nation’s energy productivity to double dur-ing the period.2 Germany and Japan, startingwith higher productivity levels, have achievedcomparable increases.3 But even today, well

over half of the energy harnessed worldwide isconverted to waste heat rather than being usedto meet energy needs.4

This suggests enormous potential toimprove energy productivity in the decadesahead, and broader trends will boost thateffort. Many technologies are becoming moreand more efficient—from steelmaking to auto-mobiles—and inrecent decades, theeconomies of mostindustrial countrieshave centered the bulkof their economicgrowth on lightindustry and the serv-ice sector, withenergy-intensiveindustries such assmelting metals andmanufacturing petro-chemicals falling as ashare of the totaleconomy. Even largeropportunities arefound in developingnations, where energyproductivity tends tobe lower and much ofthe basic infrastruc-ture is still being built.However, this poten-tial will be offset in some countries in the shortterm by the fact that they are entering an infra-structure- and energy-intensive stage of eco-nomic development.In China, for example, energy growth sud-

denly accelerated in 2002—with the bulk of


I

Smart Car, manufac-tured by Daimler AG.© Chris P. Walsh (Flickr CreativeCommons)

the growth coming from energy-intensiveindustries needed to build the factories, roads,buildings, and other pillars of an industrialeconomy.5 This abruptly ended two decades ofimpressive energy productivity gains in whichChina’s energy use and emissions had grownmuch slower than the economy as a whole. Asa result, China’s CO2 emissions nearly doubledbetween 2002 and 2007, passing the UnitedStates (if cement emissions are included) twodecades before the International EnergyAgency had projected this would occur.6

The dramatic acceleration of energy growthin China has alarmed the country’s leaders,who are concerned about the economic, secu-rity, and environmental implications of soar-ing energy demand. The country’s 11thFive-Year Plan, adopted in 2006, calls for a 4percent annual increase in the country’s energyproductivity; new efficiency standards havebeen adopted and energy subsidies reduced.7

With the right policies in place, rapid eco-nomic growth can speed the introduction of anew generation of efficient electric motors, airconditioners, automobiles, power plants, com-puters, aircraft, and buildings.Light bulbs are a case in point. Compact

fluorescent lamps (CFLs), first developed inthe early 1980s, have been catching on as analternative to the incandescent bulb introducedto the mass market by Thomas Edison in thelate 19th century. CFLs represent a remarkable

advance in energy efficiency—producingnearly four times as much light for each wattof power consumed.8 Until recently, CFLs wereexpensive and did not meet the needs of manylighting applications, but two decades ofminiaturization of components, improvementsin the quality of light produced, and reduc-tions in manufacturing costs have largelyclosed the gap with incandescents, and salesare soaring.9

Although CFL technology was developed inthe United States and has been dominated byEuropean and U.S. firms, most of the bulbs arenow manufactured in China where they havebecome nearly ubiquitous. Chinese productionof CFLs tripled from 750 million units in 2001to 2.4 billion in 2006.10 In the United States,sales rose from 21 million units in 2000 to 397million in 2007.11 The CFL share of the light-ing market varies widely, from 80 percent inJapan, to 50 percent in Germany, to 20 percentin the United States.12 Around the world, theuse of CFLs will continue to rise as govern-ments implement lighting efficiency standardsthat promote their use and in some cases virtu-ally prohibit the sale of incandescent bulbs.In the meantime, several other new lighting

technologies are under development, includinga semi-conductor device known as a light-emitting diode (LED) that is as much as 90percent more efficient than an incandescent.Currently deployed for a range of specializedforms of lighting, including stoplights andelectronic devices, LEDs are still too expensivefor widespread use. However, costs are falling,and engineers are developing a range of newLEDs that will have much wider application.The greatest potential for energy savings lies

in the most basic element of the energy econ-omy—buildings—which consume about 40percent of global energy and emit a compara-ble share of CO2 emissions.13 About half ofthis energy use is for space and water heating,and the rest is associated with the productionof electricity for lighting, space cooling, andpowering appliances and office equipment.14

With technologies available today, such as bet-ter insulation, more-efficient lighting andappliances, improved doors and windows, and


A Convenient Truth

Compact fluorescentlamp (CFL).© AZAdam (Flickr CreativeCommons)

heat recovery ventilators, the fossil energyneeds of buildings can be reduced by 70 per-cent or more, with the additional investmentpaid for via lower energy bills.15 Further gainscan be achieved by designing and orientingbuildings so that they can benefit from naturalheating, cooling, and daylighting.The advent of cheap energy enabled mod-

ern buildings to work in spite of nature ratherthan with it. But it is possible to reducedemand in existing buildings by insulatingthem appropriately, controlling unwanted airinfiltration, and improving performance forspace and water heating, lighting, ventilation,and air conditioning. There is a substantial gapbetween economic potential and commercialreality in the buildings sector, and since the1970s, national, state, and local governmentshave imposed energy building codes to closethat gap. But in recent years, those codes havethemselves fallen short of driving the kind ofadvances that are possible.Studies show that for new construction, the

integration of design with multiple energy-efficiency measures can reduce energy use tohalf or less that of a comparable conventionalbuilding, as new offices from New York City toLondon to Berlin have demonstrated.16 Poten-tial savings in India, China, and elsewherecould be even greater. India, for example, hasno mandatory efficiency codes for commercialbuildings, and most building contractors havenot been trained to install insulation.17 Butgreener buildings are on the way in India aswell. One of the largest green commercialdevelopments in the world is under construc-tion outside of Delhi; it is expected to exceedinternational energy performance standards.18

“Green buildings” that minimize the use ofenergy as well as other environmental impactshave attracted growing attention around theglobe in recent years. In the United States,green certification is now highly sought bybuilders of new commercial buildings, settingoff a wave of advances by architects, engineers,and builders. The U.S. Green Building Council,which developed a popular set of voluntarystandards, now includes more than 15,000member organizations.19 Efforts are under way

to strengthen the energy efficiency require-ments within these standards. Canada, India,and other nations are meanwhile developingtheir own standards.European countries are moving particularly

rapidly and with greater government support,sparking a green building boom. The Pas-sivhaus Institute in Germany, which begandeveloping criteria for highly efficient housesin 1990, has built more than 6,000 living and

commercial units that consume about one-tenth the energy of standard German homes.20

In China, the Ministry of Housing and Urban-Rural Development has established a goal ofmaking new city buildings 65 percent moreefficient than existing buildings are, and theState Council has established a tax and feebatesystem for energy hookups that encouragesbetter efficiency.21

As peak energy loads for lighting, heating,and cooling decline, so does the required sizeof fans, boilers, and other equipment, provid-ing additional savings. The modest remainingenergy needs can be met with renewableenergy. In 2008, the European Parliamentcalled for “all new buildings needing to beheated and/or cooled be constructed to passivehouse or equivalent non-residential standardsfrom 2011 onwards, and a requirement to usepassive heating and cooling solutions from


A Convenient Truth

Green buildings inBerlin, Germany.© Al Hallajo (Flickr CreativeCommons)

2008.”22 This goal is awaiting implementinglaws in member states.As energy efficiency improves, each unit of

energy is cheaper, so consumers may choose touse more energy or to spend this savings onadditional goods that require energy. Theresulting rebound effect is measured by the dif-ference between projected and actual energysavings that result from an increase in effi-ciency.23 This can be countered with progres-sively stronger efficiency standards or withtechnology advances that offer the potential tobreak the mold. Case studies in the UnitedStates have concluded that energy savings inenergy-efficient commercial buildings—fromschools to office towers—have frequently beengreater than projected.24

Even greater savings can come from “zero-energy” or “zero-carbon” buildings that pro-duce all of their energy on site with renewableenergy, emitting no CO2. (Most buildings willneed to have an energy supply from outside tomeet peak demands at particular times of theday and year, but are considered zero netenergy if they produce as much energy as they

consume over the course of a year.) The UnitedKingdom has mandated that all new homesbuilt after 2016 and all commercial buildingsbuilt after 2019 be zero-carbon.25

In developing countries, energy use inbuildings is growing particularly rapidly aspeople move into improved homes and acquireamenities such as heating, cooling, and refrig-eration. In China, buildings already accountfor 23 percent of energy use, and with 300million people—equivalent to the entire U.S.population—expected to move to cities in thenext decade, the largest construction boom inhistory will unfold in the coming years.26

How these buildings are constructed will pro-foundly shape CO2 emissions in China fordecades to come.Another large opportunity for advancing

energy productivity can be found in the exten-sive use of combined heat and power (CHP),also known as cogeneration. In most powerplants today, two-thirds of the energy con-tained in the plant’s fuel is converted intowaste heat or lost in the transmissionprocess.27 In the United States, the waste heat


A Convenient Truth

Energy-efficientwindows atLawrence BerkeleyNational Laboratory,California.© Lawrence Berkeley NationalLaboratory (Flickr CreativeCommons)

from power plants is equivalent to all of theenergy consumed in Japan.28 By integratingpower generation with factories and buildings,high-temperature waste heat can be used toproduce electricity, or, in another configura-tion, the waste heat from power generation canbe used for industrial and building heat,increasing total energy efficiency from 33 per-cent to as high as 80–90 percent.29

Some of the world’s first power plantsemployed CHP, and while it has since fallenout of favor in most nations, some have pur-sued it aggressively since the early 1980s. Fin-land and Denmark obtain 40 and 50 percentrespectively of their electricity from CHP, farabove the levels found in countries such as theUnited States (8 percent) and Germany andChina (12 percent each).30

It is estimated that CHP in Europe reducedannual CO2 emissions by 57 million tonsbetween 1990 and 2005, accounting for 15 per-cent of European emissions reductions.31 Ifmost industrial countries were to aggressivelypursue CHP, it would eliminate the need fornew coal plants and allow many older plants tobe gradually shut down. At today’s energyprices, much of the investment can be justifiedin energy savings alone. The United Statescould get 150 gigawatts, or 15 percent of itspower, from the unused waste heat from heavyindustry as well as from manure, food industry

waste, landfill gas, wastewater, steam, gaspipeline pressure differentials, fuel pipelineleakages, and flaring. This is as much power asthe entire U.S. nuclear industry produces.32

A global assessment by the McKinsey GlobalInstitute of the potential to improve energyproductivity concluded that the rate of annualimprovement between now and 2020 could beincreased from 1 percent to 2 percent, whichwould slow the rate of global energy demandgrowth to just 1 percent a year.33 If these gainsare extended to 2050, the growth in worldenergy use could be held to roughly 50 percentabove current levels, rather than the doublingthat is projected under most business-as-usualscenarios. This large difference is equivalent tothe combined current energy consumption ofthe European Union, Japan, and North Amer-ica.34 By fully exploiting all of the opportuni-ties described above, the world could likely doeven better than that.Future increases in energy productivity

will not only reduce consumption of fossilfuels, they will make it easier and more afford-able to rapidly increase the use of carbon-freeenergy. And additional gains can be made byaltering the design of cities—for example, byincreasing the role of public transport, walk-ing, and cycling while reducing dependenceon automobiles.


A Convenient Truth

No-Carbon Energy

o matter how efficiently energyis used, substantial reductions incarbon dioxide emissions willrequire the simultaneous and

rapid introduction of carbon-free sources ofenergy. One option that is gaining increasedattention these days is nuclear power, whichalready plays a major role in some countriesbut faces considerable obstacles to its expan-sion in the decades ahead.1 (See Sidebar 1.)The more robust carbon-free energy option isrenewable energy, including solar, wind, bio-mass, and geothermal energy. In the longerrun, ocean energy—from tides, waves, cur-rents, and thermal convection—is anotherstrong possibility.Assessments of the potential of renewable

energy to replace fossil fuels over the next fewdecades vary widely, with skepticism running

high among many energy executives. TheWorld Energy Council, which represents thelarge energy companies that dominate today’senergy economy, declared in 2007 that renew-able energy has “enormous practical challenges.It is unlikely to deliver a significant decarboni-sation of electricity quickly enough to meet theclimate challenge.”2 That view is outdated andinaccurate: rapidly advancing technologies aremaking a growing number of renewable energyoptions economically competitive in today’smarkets, and the pace of progress continues toaccelerate. This, combined with the vast scaleof the renewable energy resource base, holdsthe potential for what can only be described asan energy revolution.Modern renewable energy technologies have

been advancing steadily since the late 1970s,with modest government support and indus-tries that were concentrated in a handful ofcountries. But in the past five years, renewableenergy has entered a super-charged stage ofgrowth. Soaring energy prices combined withnew government policies and concern aboutclimate change have spurred a growing army ofsmall and mid-sized companies and a widerange of investors who are pouring tens of bil-lions of dollars into an array of promisingrenewables technologies.3

Coal-fired power plants generate 40 percentof the world’s electricity and account for athird of global CO2 emissions.4 Replacingexisting plants—and those being planned—with renewable power would make a big dentin the world’s climate problem.5 Renewableenergy sources already supply nearly one-fifthof the world’s electricity. While most of thiscomes from large hydropower, which is grow-


N

0

12.5

25.0

37.5

50.0

Solar PV Wind Biofuels Coal Hydro Natural Gas Oil Nuclear

0.41.8

3.13.15.9

19.8

24.1

40.6

Gro

wth

Rat

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erce

nt)

Sources: See Endnote 7 for this section.

Figure 2. Average Annual Growth Rates by Energy Source,2002–07

ing very slowly, wind capacity is expanding at24 percent per year and solar at over 40 per-cent, rivaling the computer and mobile phoneindustries.7 (See Figure 2.)Since 2000, wind power has gone from a

tiny niche electricity supplier to become a sig-nificant force in the global power business.Deploying giant multi-megawatt wind tur-bines made by companies such as GeneralElectric, Siemens, Vestas, and Gamesa, thewind industry is now booming.8 Total generat-

ing capacity is estimated to have passed 100gigawatts in early 2008, double the amount in2004.9 An industry that was dominated by Cal-ifornia and Denmark in the 1980s, and by Ger-many and Spain in the 1990s, is nowflourishing in the world’s largest power mar-kets, including China, India, the United States,and the European Union.In 2007, wind power represented 40 percent

of new generating capacity installations inEurope and 35 percent in the United States.10


No-Carbon Energy

Sidebar 1. What About Nuclear Power?

Nuclear power is a largely carbon-free energy source that could in theory help phase out fossil fuels. At the beginning of 2008,there were 372 gigawatts (GW) of nuclear generating capacity, providing roughly 15 percent of the world’s electricity. But nuclearpower has been plagued by a range of problems, from safety concerns, to radioactive waste disposal, to the diversion of tech-nologies and fuel for the manufacture of nuclear weapons.

Nuclear construction starts peaked in the 1970s with an average of 25 GW annually, falling to an average of less than 5 GW inthe last five years. Over the past decade, global nuclear capacity has expanded at a rate of less than 1 percent a year. In 2006 and2007, the world added 3 GW of nuclear capacity, compared with 35 GW of wind capacity over the same two-year period. By theend of 2007, some 34 reactors were being built worldwide, but 12 of these units have been “under construction” for 20 years ormore. In Western Europe, only Finland and France are building nuclear plants. In the United States, one problem-plagued plantis being built; it has now been under construction for more than a quarter century.

The combination of concern about climate change, high natural gas prices, and a large dose of new government subsidies hasrecently revived interest in nuclear power. Several companies are developing modestly revamped plant designs that are intendedto make nuclear plants easier to control, less prone to accidents, and cheaper to build. The most important innovations are tostandardize designs and streamline regulatory procedures. So far, two of the newer nuclear plants are being built in Europe, andseveral are under construction in China. In the United States, 23 applications have been filed for construction and operatinglicenses since 2004; however, only four of these include actual plant designs, and all are dependent on federal loan guarantees.The $18.5 billion that Congress has so far made available for loan guarantees is only enough to support two plants.

The largest hurdle facing the nuclear industry is the one that crushed it in the 1980s: economics. In the United States, it isnow estimated that nuclear plants cost twice as much as a coal plant to build and five times what a natural gas plant costs. Astudy by a Keystone Center panel composed of academics, energy analysts, and industry representatives estimated the full costof new nuclear power at 8–11 cents per kilowatt-hour, which is more than coal, natural gas, biomass, and wind-powered genera-tors. For nuclear power to be economical, the industry will need to build large numbers of standardized plants, but new ordersare coming sporadically, and utilities are pursuing an array of new designs, which is likely to keep costs stubbornly high. Andbecause of the large capital requirements and long lead times, nuclear plants face a risk premium that other generators do not—a risk that will be exacerbated by tight financial conditions in the years ahead. In Finland, ground was broken in 2005 on the firstnew European reactor in a decade; three years later, it is two years behind schedule and $2 billion over budget.

Energy planners will also have to reckon with the scale and pace of construction that would be needed to make a serious dentin the world’s climate problem. MIT researchers estimate that 1,000–1,500 new reactors would be needed by 2050 for nuclear toplay a meaningful role in reducing global emissions—a construction pace 20 times that of the past decade and five times thepeak level in the 1980s. Speed, however, is not one of nuclear power’s virtues. Planning, licensing, and constructing a singlenuclear plant typically takes 10–15 years, and completion deadlines are frequently missed. Due to the dearth of orders in recentdecades, the world currently has limited capacity to manufacture many critical nuclear components. Rebuilding that capacity willtake a decade or more. In the United States, it is estimated that it will be 2012 at the earliest before a construction license isapproved, and that the first plant will not begin operating until 2020 or beyond. By the time a significant number of plants comeon line in the late 2020s or early 2030s, they will largely be replacing today’s plants, which will by then be ready for retirement.


Further growth will come from offshore windfarms, which are expected to expand rapidly inthe coming decade. And this torrid growthappears likely to continue as more and moregovernments follow the leaders and implementwind-friendly electricity laws. As the industrygrows, it invests in ever more efficient windtechnologies, driving costs down. In the UnitedStates, wind power now costs just under sixcents per kilowatt-hour on average—less thannatural gas and roughly even with coal.11 (SeeFigure 3.)The solar industry is starting from a smaller

base but is growing even more rapidly thanwind power. Annual production of solar cells(semiconductors that turn sunlight into elec-tricity) rose 41 percent in 2006 and 51 percentin 2007.12 Cumulative installations of solarcells have grown more than fivefold over thepast five years, spurred by strong incentive pro-grams in Germany, Japan, and Spain.13 This

growth has fueled a powerful wave of innova-tion in a technology that was invented only inthe 1950s. From Silicon Valley, California, toMunich, Germany, and Shenzen, China, scoresof companies are pursuing an extraordinaryarray of approaches to improving solar celldesign and lowering costs.Solar power still requires significant subsi-

dies, but the Prometheus Institute projected in

2007 that as the industry scales up, installedsystem prices for large projects will fall 50 per-cent by 2010, to $4 per watt (without incen-tives) in the best locations.14 Solar cells aredeployed mainly on rooftops where they pro-vide power for homes, businesses, and publicinstitutions, with excess power fed into thelocal grid. In regions such as California andItaly that combine high electricity prices andample sunshine, solar power is expected to fallto less than 25 cents per kilowatt-hour, becom-ing cost-competitive with the retail price ofelectricity within the next three years.15

Even as solar cells enter the mainstream,attention has focused on using solar thermalenergy through large concentrating solarpower (CSP) plants. Built mainly in deserts,these plants provide wholesale electricity that istransmitted to cities and industries via high-voltage power grids, in the same way mostpower is today. A wide range of CSP plantdesigns are being pursued; most rely on mir-rored parabolic troughs or dishes to concen-trate the sun’s heat, which is then transferred towater or another fluid, with the resulting steamused to spin a turbine and produce electricity.These plants produce power in much the waythat conventional coal or nuclear plants do, butthey operate at lower temperatures and pres-sures, which permits cost reduction.The world’s first modern CSP plant was

built in California’s Mojave Desert in the late1980s, but it was not until the past few yearsthat the technology experienced a dramaticrenaissance.16 More than a dozen projects witha combined capacity of over 4 GW are undercontract in the southwestern United Statesalone, and another 3 GW in other countriesincluding Spain, China, Egypt, and Israel.17

Costs are still relatively high at 10 cents ormore per kilowatt-hour, but because the indus-try is in the early part of a very steep learningcurve, costs are expected to fall rapidly in thenext 5–10 years. New plant designs continue toemerge, including a Pacific Gas and Electricproject that will use 800 megawatts of solarcells rather than thermal systems.18

Geothermal energy—heat from deep in theEarth’s crust—is another large potential source


No-Carbon Energy

0

10

15

Coal Natural Gas Nuclear Wind Solar CSP

Cen

tspe

rK

ilow

att-

hour

(20

07

Dol

lars

)

Source: Black & Veatch, EIA, Keystone Center, IEER, E3

FuelOperations & ManagementConstruction

55.36

7.07

9.55

5.85

10.08

Figure 3. Cost of Electricity Generation by Source

of electricity. Geothermal power currently pro-vides just 10 GW of power worldwide, withmuch of it in the United States, the Philip-pines, and Mexico.19 But a new generation ofenhanced geothermal technologies is nowbeing developed that makes it possible to tap amuch larger geothermal resource base.Advanced geological sensing and drilling tech-niques developed by the oil industry are beingcombined with new heat exchanger materialsand systems. By piping water into porous geo-logical structures 1 to 10 kilometers beneaththe Earth’s surface and then bringing theheated water back to a plant at the surface,electricity can be generated. The MassachusettsInstitute of Technology has estimated that theUnited States alone has at least 100 GW ofgeothermal potential, mainly in the westernstates, and similar potential undoubtedly existsin many other countries.20

As renewable energy technologies haveadvanced, attention has turned to the adequacyof the resource base available to meet the largeand growing demands of the global economy.Many are skeptical that these relatively dis-persed and often variable energy sources canmeet such vast energy needs. They need not beworried. The sunlight alone that strikes theEarth’s land surface in two hours is equivalentto total human energy use in a year.21 Whilemuch of that sunlight becomes heat, solarenergy is also responsible for the energyembodied in wind, hydro, wave, and biomass,each with the potential to be harnessed forhuman use. Only a small portion of that enor-mous daily flux of energy will ever be neededby humanity.With improved technologies,greater efficiency, and lower costs, renewableenergy could one day replace all the carbon-based fuels that are so vital to today’seconomy.22 (See Figure 4.)Several studies have assessed the scale of the

major renewable resources and what theirpractical contribution to the energy economymight one day be.23 (See Table 3.) In the caseof wind power, the Pacific Northwest Labora-tory found that the land-based wind resourcesof the U.S. states of Kansas, North Dakota, andTexas could meet all of the nation’s electricity

needs, even with large areas excluded for envi-ronmental reasons.24 The U.S. wind resourcebase is not limited to those states, however, andbeyond the land-based resource, offshore windoffers enormous potential—enough in the caseof northern European countries such as the

Netherlands and the United Kingdom to inprinciple provide all of their electricity.25

China’s wind resources alone are sufficient toprovide more electricity than the country cur-rently consumes.26

Solar energy represents an even largerresource. A study by the National RenewableEnergy Laboratory in the United States identi-fied 159,000 square kilometers of land in sevensouthwest states that are suitable for CSPplants—representing nearly 7,000 GW of gen-erating capacity, or nearly seven times thenation’s existing capacity from all sources.27

One-fifth of U.S. electricity could be producedon a 1,500 square-kilometer plot of landslightly larger than the city of Phoenix.28 Whilesome regions such as northern Europe do nothave sufficient solar resources to meet morethan a fraction of their energy needs, otherareas could become major exporters of solarenergy. North Africa, for example, has a vastsolar resource, and plans are being laid to


No-Carbon Energy

WorldEnergy Use

Solar Wind Geo-thermal

Biomass Hydro-power

Ocean

Ener

gyFl

ow(e

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ules

per

year

)

600500

>250

50 <1

>1600

Source: UNDP, Johansson et al., IEA

0

500

1000

1500

2000

477

Figure 4. Estimates of Available Energy Resources UsingToday’s Technology

build solar power plants that would transmitelectricity to Europe.29 An area covering lessthan 4 percent of the Sahara Desert could pro-duce enough solar power to equal global elec-tricity demand.30

On average, wind and solar power requireless land to provide a given amount of powerthan hydropower or coal do. And sometimes,renewable energy requires no land at all.Mounting solar electric generators on just halfof the United States’ suitable rooftop areacould provide 25 percent of the nation’s elec-tricity, according to one estimate.31 Solar cellscould also be deployed atop outdoor parkinglots, the median strips along highways, andother currently unused spaces. Renewableenergy also has a big advantage when it comes

to a resource that is more limited than land is:most forms of renewable energy have minimalwater requirements compared with fossil fuelsand nuclear power, and as water scarcity grows,the significance of that advantage will increase.In contrast with fossil fuels, almost every

country has large-scale domestic sources ofrenewable energy—including many developingcountries that have no oil resources. Africa,Australia, China, India, the Middle East, andthe United States all have vast amounts ofsolar energy.32 Iceland, Indonesia, and thePhilippines are rich in geothermal energy.33

And scores of countries are rich in biomasswaste materials that flow from their farm andforest industries.


No-Carbon Energy

Table 3. Estimates of Potential Contribution of Renewable Energy Resources

Energy Source Potential Contribution

Concentrating solar power (CSP) Seven states in the U.S. Southwest could provide more than7,000 GW of solar generating capacity—nearly seven times U.S.electric capacity from all sources.

Solar water heaters Could easily provide half the world’s hot water.Rooftop solar cells Could provide 10 percent of grid electricity in the United States

by 2030.Wind power Could easily provide 20 percent of world’s electricity; offshore

wind farms could meet all of the European Union’s electricityneeds.

Geothermal heat Could provide 100 GW of generating capacity in the UnitedStates alone.

Wave and ocean thermal energy Contribution could be on same order of magnitude as currentworld energy use.


Designing aNew Energy System

or all of their abundance, integratingrenewable energy resources into anenergy system that was designedaround fossil fuels presents challenges.

Fossil fuels have the advantage of being con-centrated and easily stored, and the energyindustry has spent decades building up anenergy delivery system—including massivepipelines, high-voltage transmission systems,and local distribution networks—that ismatched to those fuels. Renewable energysources are more dispersed, many are availableonly part of the time, and the best resourcesare often a long distance from where energy isconsumed. These characteristics have not beena significant impediment to providing as muchas a fifth of the power from wind in some areasof Europe, but in order to de-carbonize theenergy economy, additional innovation willbe needed.Electricity is the single most important ele-

ment of today’s energy system, essential forlighting, cooling, electronics, and many indus-trial processes. Its role will only grow as airconditioning and electronics proliferate and asnew technologies allow electricity to be used topower motor vehicles and to heat and coolhomes efficiently using ground-source heatpumps. Electricity also happens to be the out-put of the largest and most easily replaced con-tributor to carbon dioxide emissions:coal-fired power plants. It is therefore fortu-itous that solar, wind, geothermal, and biomassare all able to produce electricity.From the generator’s viewpoint, the main

disadvantage of most of these electricitysources is their variability—wind and solar, forexample, produce on average only 25–40 per-

cent of their rated capacity, depending on thetechnology and site.1 Variability turns out,however, to be not as big a problem for renew-able electricity as utility engineers once antici-pated. Power companies are alreadyaccustomed to dealing with fluctuatingdemand, and even the supply of electricityvaries when conventional power plants areshut down unexpectedly. So variability is not anew concept, though dealing with it does takeplanning and a willingness to strengthen weakelectricity grids and to make adjustments ingrid operation as penetration levels rise.As reliance on coal is reduced in the decades

ahead, it is likely that many regions will needto move well beyond the 20-percent thresholdfor wind, solar, and other variable powersources. To do this, they can pursue some com-bination of four strategies: 1) add local gener-ating capacity using combined heat andpower (CHP) systems, including advancedtechnologies such as microturbines and fuelcells that can be turned on and off as needed;2) integrate variable sources with digital smartgrids that are more flexible in their ability tobalance demand and supply; 3) develop thecapacity to store energy economically so thatit is available when needed—with optionssuch as pumped hydro, compressed air, andadvanced chemical batteries and fuel cells;and 4) selectively add a new generation of effi-cient, low-cost gas turbines to provide sparebackup power.Power companies in some regions have

already gained experience in operating gridsthat obtain a sizable share of their electricityfrom wind energy. Denmark generates about20 percent of its electricity with the wind, and


F

occasionally wind energy meets more than 100percent of peak demand on the country’s westcoast.2 Four German states produced morethan 30 percent of their electricity with windpower in 2007.3 And in the U.S. state of Cali-fornia, renewables make up more than 30 per-cent of the portfolios of some large utilities.4

Utilities in these regions have balanced supplyand demand through interconnection of gridsystems over large regions, using hydro reser-voirs as temporary storage, increasing the useof gas turbines to meet peak demand.5

These tools help utilities regulate the elec-tricity supply, but there is more they can do onthe demand side as well. New technologieshave made it possible to predict and even con-trol the level of power demand, saving moneyfor consumers while better matching supply

and demand.6 But unleashing the full potentialof efficiency and renewable energy will requireupgrading the early 20th century electricitygrids that provide no feedback between con-sumer and producer and require a physicalvisit just to read the meter. Kurt Yeager, whodirects the Galvin Electricity Initiative, aneffort dedicated to promoting digital grids,compares today’s electromechanical powergrids to a railroad on which it takes 10 days toopen or close a switch.7 New digital gridsinclude electronic controls that smoothly inte-grate electricity consumers with all types of

power plants—large, small, and variable—andwith electricity storage facilities.Digital grids allow the electricity system to

operate much the way the Internet does—as anelectronically controlled network that respondsinstantly to decisions made by users, providingthe same kind of efficiency, interconnectivity,and precision as the digital devices that it pow-ers. One advantage of such a system is that theelectricity meter can be transformed into aconsumer gateway that transmits price signalsinstantaneously and allows unneeded devicesto be turned off when prices are high orrenewable resources are not available. Con-sumers can monitor their power use with elec-tronic meters and choose to have theirappliances turned off at times of day whenprices are high.The Pacific Gas and Electric utility in Cali-

fornia is in the process of installing 9 millionsmart meters for its customers, while Europe isprojected to have 80 million smart metersinstalled by 2013.8 When starting from scratch,smart grids are cheaper than conventional sys-tems, and they are already being deployed inregions of sub-Saharan Africa that are beingelectrified for the first time.9 And digital gridswill allow higher levels of reliance on variablegenerators.10

Some utilities are already making the transi-tion to greater reliance on renewable energy.Danish power company DONG, which hashundreds of wind turbines connected to itssystem, is making conventional power plantsmore flexible so they can be turned down, oreven off, when the wind is blowing. “In the oldtimes,” explains Chief Executive AndersEldrup, “wind power was just something welayered on top of our regular production. Inthe future, wind will provide a big chunk ofour baseload production.”11

In order to qualify for capacity creditsearned when power is generated during peakperiods, some wind farm operators have begunexploring the use of compressed air storage inunderground steel pipes or geological forma-tions. One company plans to mount a com-pressor under the structure that houses thegenerating components, and to send the com-


Designing a New Energy System

Wind farm near SanJacinto Peak, south-ern California.© Wayfinder_73 (Flickr CreativeCommons)

pressed air down the tower, where it will bestored underground.12 When electricity isneeded, the compressor is reversed, generatingelectricity. TXU, a large electric power com-pany in Texas, recently canceled eight coal-fired power plants and is planning instead tobuild a 3,000 megawatt wind farm—largerthan any now in operation—that may includecompressed air storage.13

The development of less-expensive, longer-lived batteries will further ease the way togreater reliance on renewable energy. Portableelectronic devices and hybrid electric cars arerapidly increasing demand for advanced batter-ies made of nickel metal hydride and lithium.As they become less expensive and more widelyused, these will allow power companies andconsumers to complement distributed micro-solar generation with distributed storage.Electricity grids can be made even more

robust and reliable by adding more micro-power generators that are connected to thelocal grid and reduce dependence on distantpower plants. Small-scale gas turbines, Stirlingengines, and fuel cells can provide large

amounts of electricity, with the waste heatavailable for use in the buildings in which theyare located.14 And unlike the large powerplants that dominate today’s power system,micro-generators will be able to respondquickly to shifts in demand.Tapping the full potential of renewable

energy will also require expanding the high-voltage transmission system in many parts ofthe world. This is particularly true in sun-richNorth Africa, which is not far from Europe indistance but currently lacks sufficient electricalconnections. In the United States, electric utili-ties have underinvested in transmission fordecades, and the existing grid is not wellmatched to the onshore renewable resourcebase, which lies mainly in the Great Plains andDesert Southwest, distant from the nation’spopulation and industrial centers. Plans havebeen laid to build a new National ElectricalSuperhighway using high-voltage, direct cur-rent lines costing $100 billion or more.15 Theconcept is being promoted by everyone fromformer vice president Al Gore to energy tycoonT. Boone Pickens, but will require national leg-



Solar energy tow-ers in Seville, Spain.© Abengoa Solar

islation to cut through the thicket of federaland state jurisdictions now in place.16

Over time, stronger, smarter grids and anew wave of generators will gradually reducethe need for the baseload coal and nuclearplants that typically provide one-third to one-half or more of the generating capacity ontoday’s power systems.17 The Combined PowerPlant, a project that links 36 wind, solar, bio-mass, and hydropower installations through-out Germany, has already demonstrated that acombination of renewable sources and more-effective control can balance out short-termfluctuations and provide reliable electricitywithout any traditional baseload powerplants.18 In a recent interview, S. David Free-man, former general manager of the Los Ange-les Department of Water and Power, said, “I’ma utility executive that ran major utilities, andI can tell you there is no reason why the elec-tric-power industry can’t be all renewable.”19

A report by the German Aerospace Center(DLR) concluded that renewable energysources could generate at least 40 percent ofthe electricity in most of the world’s 20 largesteconomies by 2030.20

The U.S. Department of Energy (DOE) pro-duced a detailed study in 2008 showing that

wind power alone could supply 20 percent ofU.S. electricity by 2030.21 The DOE scenariorelies on 305 gigawatts (GW) of wind farms—up from roughly 25 GW at the end of 2008—that would be spread widely across thecountry, including 54 GW of offshore windgenerators. To make this possible, extensivenew transmission lines will need to be built,and the industry’s manufacturing capacity willneed to expand, but the DOE analysts con-cluded that both of those are readily achievablewith sufficient private and public support.As of late 2008, the U.S. wind industry was

well ahead of the DOE study’s projected devel-opment pace, and will only need to double thecurrent rate of annual installations to reach the16 GW that would need to be added in 2022under the DOE scenario.22 The benefits ofachieving this goal would include 250,000 newjobs and reducing CO2 emissions by 825 mil-lion tons in 2030—virtually stopping thegrowth in emissions from the power sector.23

To illustrate what a low-carbon power sys-tem might look like, we have sketched out ascenario for the United States in 2030.24 (SeeFigure 5.) We assume that improved energyefficiency will cut the rate of electricity demandgrowth to 0.5 percent per year, compared with



Wind turbinemechanic at workin Germany.© Vestas Wind Systems A/S

the U.S. Energy Information Administration’s(EIA's) forecast of a 1 percent growth rate, andactual growth in the 1990s of 2.4 percent peryear. However, we also assume that by 2030,half of the energy needs of cars and light truckswill be met by the grid, increasing the demandfor power by 10 percent. Based on technologiesthat are already available or soon will be, ourscenario includes a diverse mix of solar, bio-mass, geothermal, wind energy, and cogenera-tion (small, efficient generators located inindustries and buildings), with hydropowerand nuclear retaining a modest role. The EIA,on the other hand, projects that coal will stillprovide over half the country’s electricity in2030—causing CO2 emissions from the powersector to continue rising.25

In the Worldwatch scenario, emissions fromthe U.S. power sector would be 90 percentlower than they are today. Notably, no singlerenewable resource would need to providemore than 20 percent of the country’s electric-ity. A stronger grid, extensive cogeneration,and modest storage would allow such a systemto operate reliably with only a fraction of theinflexible baseload plants that dominatetoday’s power industry. And if this scenario isfeasible for the United States—which has theworld’s largest electricity system—then some-thing similar is possible in most countries,with some achieving a low-carbon power sys-tem somewhat earlier and others a bit later.Low-carbon electricity is central to a low-

carbon energy economy, but by itself, it is notenough. Reducing motor vehicles’ heavydependence on oil is another key step, and themost promising near-term strategy is shiftingto a new generation of electric and hybridvehicles. Because of the efficiency of electricmotors, it is estimated that half of motor vehi-cle energy needs in 2030 could be met with justa 10-percent increase in the power supply.26

Electricity planners believe that plug-in vehi-cles would also increase the stability of thegrid: they could be recharged during off-peakperiods and produce power for the grid attimes when demand is high and otherresources are not available—replacing some ofthe expensive natural gas-fired “peaking



Coal 50%

Nuclear 20%

Natural gas 17%

Hydro 6%

Cogeneration 4%Other renewables 2%

Oil 1%

2007

2030(Worldwatch Scenario)

2030(EIA Scenario)

Cogeneration 32%

Wind 20% Solar PV 12%

Solar CSP 10%

Hydro 7%

Nuclear 7%

Biomass 7%

Geothermal 5%

Coal 56%

Nuclear 19%

Naturalgas 10%

Hydro 6%Other renewables 5%

Cogeneration 3%Oil 1%

Total = 4,013 TWh

Total = 4,951 TWh

Total = 4,923 TWh

Source: EIA, Worldwatch

Note: “Other renewables” includes wind, biomass,geothermal, municipal solid waste, solar CSP, and solar.

Figure 5. U.S. Electricity Generation bySource, 2007 and Two Scenarios for2030

plants” that utilities now have to rely on. Asmart grid would, of course, be needed for thisto work most efficiently. The timetable for thistransition has accelerated dramatically in thepast few years as General Motors, Nissan, andToyota have all announced plans to quicklybring plug-in cars to the market.27

Natural gas will also play an important rolein the transition to low-carbon energy. Naturalgas produces half the carbon dioxide per unitof energy that coal does, and because it can beused far more efficiently, natural gas permits asmuch as a 75 percent reduction in CO2 emis-sions compared with coal. Ironically, then, theroad to low-carbon energy actually involvesincreased use of natural gas over the next fewdecades—providing a less carbon-intensivetransition fuel in applications where affordablerenewable alternatives are not yet available.Natural gas resources have not been as heavilydepleted as oil has, and analysts believe thatsubstantial production increases are possible inthe coming decades.28 In the United States,which has moved much further down thedepletion curve, production is now increasingsharply as the industry uses new technology toexploit extensive gas reserves found in shalerock in several parts of the country.Natural gas should be viewed as a premium

fuel with an economic value that matches orexceeds oil and with an environmental profilethat gives it a solid advantage over other fossilfuels. But much of the natural gas used today iseffectively wasted—burned to produce low-temperature heat to warm buildings and heatwater, or consumed in an inefficient single-cycle power plant. In order to reduce CO2emissions, both of those applications can bereduced substantially—as buildings are made

more efficient; as solar energy, ground-sourceheat pumps, and biomass provide much ofthe energy for space and water heating; and asthe least efficient natural gas-fired powerplants are closed. This would free up largeamounts of natural gas to fuel a new genera-tion of high-efficiency CHP plants, particularlythe distributed micro-power systems thatcould become ubiquitous in commercial andresidential buildings.The ability to integrate new low-carbon

energy sources into the existing energy infra-structure will speed the transition and reduceits cost. Already, wind power is being blendedinto many electric grids, while in the transportsector, ethanol is being added to gasoline inmany countries. Brazil has made a particularlysignificant step toward flexibility by widelyadopting cars that can be run on any mixtureof ethanol and gasoline; drivers can makeinstant purchasing decisions based on the rela-tive prices of the two fuels.29 And natural gascan be gradually supplemented with methanebiogas collected from landfills, livestock feed-lots, and sewage treatment plants, which wouldhave otherwise been released into the atmos-phere. In Germany, methane biogas is alreadybeing added to the country’s natural gaspipelines.30

In the longer run, the natural gas that cur-rently courses through the world’s gaspipelines may be replaced by hydrogen that isproduced from a broad range of renewableresources—some of it coming from wind andsolar electricity produced in off-peak hours.During the transition, hydrogen can be mixedwith natural gas—a blend known as hythane—in the world’s gas pipelines.31



Jumpstarting a Revolution

f a low-carbon energy economy is possi-ble, the next question is how we get therefrom here. The road ahead will be longand expensive, but it has become a bit

clearer thanks to the trailblazing initiatives ofpioneering governments and companies overthe past few years. A successful transition willnonetheless require a powerful combinationof government policy changes, steady techno-logical progress, and the rechanneling of pri-vate investment.It is instructive to remember that when oil

was first discovered in western Pennsylvania inthe 1860s, it was virtually useless—far moreexpensive than coal and, prior to the develop-ment of the refinery or internal combustionengine, useless for transportation. Even ascrude oil became widely used for lighting in thelate 19th century, the idea that it would becomea dominant energy source—let alone reshapethe global economy—was inconceivable.In 1907, only 8 percent of U.S. homes had

electricity, Henry Ford had produced about3,000 vehicles in his four-year-old factory, andthe mass-produced Model T wasn’t yet intro-duced.1 Similarly, when Thomas Edison intro-duced his improved lightbulb, skepticsdismissed it: “Everyone acquainted with thesubject will recognize it as a conspicuous fail-ure,” said the president of the StevensInstitute.2 Few would have imagined that bythe mid-20th century, virtually every Americanhome—and billions of others around theworld—would have electricity and lighting,and that the automobile would redefinelifestyles and the economy.Most economic transitions begin as almost

imperceptible ripples that build into transfor-

mative waves. Dominant technologies andbusinesses are protected by a network of insti-tutional and political support that effectivelyresists change. As a result, developers of newtechnologies and businesses must start by find-ing a niche market to exploit, meeting special-ized needs at a higher cost. But over time, thenew competitor becomes more economicaland widens its share of the market, eventuallyundercutting the cost of the dominant playerand gradually remolding the institutionalinfrastructure to meet its own needs. Thetransition from one generation of technologyto another speeds up as the economic advan-tage flips.According to conventional wisdom, the

energy sector is far from such a transforma-tion. New renewable energy sources, includingsolar, wind, geothermal, and biomass, repre-sent less than 4 percent of the total energysupply, and in 2008 total U.S. government sup-port of renewable energy research and devel-opment (R&D) came to little more than $650million—about the amount the governmentspent in Iraq in a single day.3 What these fig-ures fail to capture is the recent infusion ofprivate-sector capital and technology and thefact that today’s renewable energy pioneers arenot limited to “energy technology” but ratherdraw on fields as diverse as semiconductorphysics, biotechnology, aerodynamics, andcomputer engineering.Rapid growth has turned the new energy

industries into lucrative businesses, withdemand outrunning supply and profits soar-ing. An estimated $71 billion was invested innew renewable electric and heating capacity in2007, up from just $20 billion in 2002.4 (See


I

Figure 6.) Some of the world’s leading corpo-rations have made major investments inrenewable energy, including Applied Materials(solar PV), BP (wind and solar PV), GeneralElectric (wind), DuPont (biofuels), GoldmanSachs (wind and concentrating solar), Mit-

subishi (wind), Royal Dutch Shell (wind,hydrogen, and solar PV), Sharp (solar PV), andSiemens (wind).5

Corporate R&D on clean energy technolo-gies reached $9.8 billion in 2007.6 This is 15times U.S. government spending on renewableenergy R&D in 2008.7 A single company,Vestas Wind Systems, spent $169 million onR&D in 2007, while the U.S. government spentjust over $50 million on wind R&D.8 Eventhese comparisons understate private R&D,which is often embedded in commercial proj-ects, and they exclude R&D investments byprivately held companies, many of themfunded with venture capital and other formsof equity investment. Venture capital and pri-vate equity investment in clean energy totaled$13.2 billion in 2007, 42 percent above the2006 level and 13 times the 2001 level.9 Byearly 2007, these investments had helped create253 clean energy start-up companies withnames such as Nanosolar, Celunol, SunPower,E3 Biofuels, and Miasole, most of them work-

ing to develop and commercialize new energytechnologies.10

These tiny firms may be the real gamechangers, following in the footsteps of compa-nies like Microsoft and Google, which quicklycame to dominate their more established com-petitors, bringing a level of innovation thatlarger firms are rarely capable of. In SiliconValley, clean energy has become the hottestnew sector for entrepreneurs and investors.Venture capitalists typically make money byinvesting in technologies with small marketshares but high growth potential. They like theenergy sector because of its vast size—farlarger than the I.T. sector—and the fact thatthere is a huge gap between the sluggish waysof the incumbent energy companies and thegame-changing innovations being pursued byhundreds of upstart challengers.11 Although itis regrettable that serious investment in renew-able energy did not begin earlier, the scienceand technology available today will allow theindustry to achieve performance and cost goalsthat would not have been possible in the past.The best example is solar photovoltaics,

where producers are pursuing a host of strate-gies for reducing materials requirements, rais-ing efficiency, and lowering manufacturingcosts of the crystalline cells that dominate themarket. Other companies are developing newthin-film photovoltaic materials that hold thepromise of dramatic cost reductions.Withdemand outrunning supplies of PV materialsin the past few years, price trends temporarilyreversed their usual downward course.12 Butthe industry is planning to increase its manu-facturing capacity as much as eightfold overthe next three years, and dramatic pricedeclines are expected, spurring the industry todevelop new applications and markets thatwould not be feasible today.13

Beyond the advance in technology, the eco-nomics of renewable energy will furtherimprove as the scale of production grows—thesame phenomenon that has successively turnedtelevisions, personal computers, and mobilephones from specialty products for high-income technology pioneers into mass-marketconsumer devices. An analysis of production



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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

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lars

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Other

Solar PV

Wind Power

Note: Excludes large hydropower.

Figure 6. Annual Investment in New Renewable EnergyCapacity, 1995–2007

costs in several manufacturing industries bythe Boston Consulting Group found that eachtime cumulative production of a manufactureddevice doubles, production costs fall by 20–30percent.14 This is good news for clean energyindustries: the manufacture of wind turbineshas doubled in just the past three years, whilethe manufacture of solar cells has doubled inthe last two.15

The combination of falling technology costsand rising fossil fuel prices has taken renewableenergy to the threshold of economic competi-tiveness. Wind power is already less expensivethan natural gas-fired power in the UnitedStates and nearly even with coal—even with-out accounting for the cost of CO2 emissions.16

Solar power is on track to be economical bothin wholesale grid and local retail marketswithin the next five years.17 As these thresholdsare crossed, they will fuel additional growth,expanding markets, reducing the need for gov-ernment subsidies, and driving additionaltechnology development and job creation.Advancing technology and rising energy

prices have created an extraordinarily favorablemarket for new energy systems. But reaching atrue economic tipping point will require newpublic policies and strong political leadership.Energy markets virtually everywhere are regu-lated, heavily subsidized, inefficient, and rarelypredictable.What happens to the energy econ-omy, and to the world’s climate, in the yearsahead will be heavily influenced by hundredsof policy decisions made at international,national, and local levels—and whether thesenew policies can be sustained.Many energy economists argue that the rea-

son fossil fuels dominate today is their inher-ently lower cost compared with thealternatives. This suggests that internalizingenvironmental costs by putting a price on car-bon—likely through a carbon dioxide tax or aregulatory cap on emissions such as the one inEurope—would solve the climate problem.Getting the price signals right is an essentialstep, but its limits are demonstrated by themodest impact that the increase in average oilprices from $30 in 2003 to nearly $100 in 2008has had on petroleum consumption.18 That

increase is equivalent to a CO2 price of $170per ton; by comparison, the October 2008price of an emission allowance in Europe was €€23.5 ($32) per ton.19 This suggests that anycarbon pricing system likely to be politicallyfeasible in the next decade or so would have arelatively minor impact on energy investmentdecisions. To be effective, climate policy willneed to address not just the price of emissionsbut the failures of energy markets that limit theability of prices to send a clear signal.The neoclassical economic model assumes

an economically frictionless world in whichbuyers and sellers have all the information andcapital they need, and there are no serious bar-riers to the introduction of new technologies.Economic research beginning in the 1920s hasshown that the costs of transactions can greatlylimit the effectiveness of markets, while otherresearch suggests that economic behavior oftenfails to follow neoclassical rules. Nobel laureateeconomist Douglass North has shown thatlaws, customs, and social priorities greatlyinfluence the working of the economy.20 With-out them, most markets would work ineffi-ciently if at all.Because energy markets have been shaped

more than most others by government policy,institutional constraints, and the power oflarge industrial enterprises, simple economictheory provides minimal insight about how tospur change. The electric power industry isparticularly far from the neoclassical model,governed as it is by extensive government regu-lation that is intended to facilitate develop-ment of large, reliable electric systems, withone company dominating most local grids andin some cases owning the transmission linesand power plants as well. Although this eco-nomic model has been broadly successful indelivering affordable electricity to billions ofpeople, it has done so mainly by making it easyto add energy supply—but providing muchless incentive or opportunity to improveenergy efficiency. Regulations have also favoredlarge fuel-intensive generators at the expenseof smaller, capital-intensive units. The result isan electricity system that is far from the eco-nomic ideal—and one that will require major



reforms if it is to maximize economic effi-ciency, let alone account for the massive envi-ronmental externalities represented by globalclimate change.In a traditionally regulated system, where a

utility produces and distributes electricity at afixed rate of return, profits are determined inpart by the amount of power sold. This natu-rally makes such utilities proponents ofdemand growth—the more electricity con-sumers buy, the more profitable the utility is.And as long as the regulator approves, there isno risk in building a power plant since thereare no competitors, and costs are borne by theconsumer. The utility also bears little risk if theplant burns a fuel whose price is volatile—fueladjustment clauses allow price increases also tobe passed to the customer. Although con-sumers should in theory be interested in mak-ing investments in energy efficiency wheneverit is economical, they face many obstacles,including a lack of capital to invest in conser-vation and a lack of information about whichinvestments make sense. Perceiving the lack ofdemand, potential manufacturers andinstallers of energy-efficient equipment havelittle incentive to scale up production or buildbusinesses that would facilitate efficiencyimprovements.One of the easiest ways to overcome these

kinds of market barriers is via simple govern-ment mandates. Since the 1970s, many govern-ments have required that home appliances,motor vehicles, and buildings meet minimumefficiency standards in order to be sold, andthese standards have been gradually ratchetedup over time. Additional tightening is now inorder, and governments are moving quickly inthat direction. Average auto efficiency stan-dards, for example, have recently beenincreased to 47 miles per gallon in Japan and49 mpg in Europe.21 Meanwhile, the U.S. Con-gress tightened its standard to 35.7 miles pergallon by 2015, up from the 27.5 mpg standardthat has been in place for the past twodecades.22

Another approach to requiring efficiencycan be seen in the law passed in Australia in2007 to phase out the use of most incandescent

light bulbs, which would be replaced by com-pact fluorescent bulbs that are four times asefficient.23 Since then, several other countrieshave also committed to phasing out incandes-cent bulbs.24

Government mandates are also being usedto compel the construction of more energy-efficient buildings and to require the introduc-tion of renewable energy into electricity gridsas well as the markets for liquid fuels. Severalnational governments and 26 states in theUnited States now have binding “renewableportfolio standards” requiring that specifiedamounts of renewable electricity be added totheir grids.25 In Spain, a 2006 update of build-ing codes requires all new buildings to incor-porate solar water heaters.26 As of April 2008,the state government of Baden-Wurttemberg,Germany, requires that 20 percent of newbuildings’ heating requirements be met withrenewable energy.27 And Brazil, the UnitedStates, and the European Union are among thejurisdictions that require that a minimum pro-portion of biofuels be blended with gasolineand diesel fuel, spurring growth in their use.28

Such mandates are essential for patchingsome of the holes in a market economy, butthey are at best blunt instruments that cannotby themselves harness the full power of themarket to effect change.While they ensure thatminimum standards are met, they give noincentive for achieving the best possible effi-ciencies and the lowest possible emissions. Oneway to provide that kind of incentive is to de-couple electric utilities’ profits from theamount of power they sell by introducing aregulatory formula that instead rewards utili-ties for providing the best service at the leastcost. California regulators have already madethis change; as a result of this and other poli-cies, Californians use less than half as muchelectricity per person as other Americans do.29

(See Figure 7.)Spurred by the recent rise in fuel costs—and

consequently in power prices—electric utilitieshave taken a fresh look at energy efficiency as astrategic investment, something that was last infavor in the 1980s. This time, the utilities andtheir regulators are working together, looking



for ways to align the utilities’ profit motiveswith what is needed to reduce customers’power bills and reduce power plant emissions.Duke Energy has estimated that utility effi-ciency programs will be 10 percent less expen-sive than any new source of supply, and hasrequested that the North Carolina UtilityCommission allow it to earn a return on 90percent of the costs avoided via its efficiencyinvestments.30 The California Public UtilitiesCommission has made similar recent adjust-ments, and Pacific Gas and Electric plans toinvest $1 billion in improved energyefficiency.31

John Hoffman, an energy efficiency expertand former U.S. Environmental ProtectionAgency official, has proposed an additionalstrategy for spurring efficiency investments: a“transaction bridge” that allows manufacturersand installers to share in the savings derivedfrom installing more-efficient equipment inbuildings.32 This would motivate them to con-tinually develop better technologies, to workwith utilities to accelerate the development ofnew markets, and to scale up both productionand installation in order to lower cost. Thismechanism could also be used to spur intro-duction of micro-power technologies such asphotovoltaics, as well as ground-source heatpumps. And Hoffman has proposed a similarsystem for motivating the production and salesof efficient vehicles.European governments have developed

another economic tool to spur investment inrenewable energy. In 1979, the Danish govern-ment ordered utilities to give small wind tur-bines access to the electric grid and to pay ahigher price for the renewable electricity theypurchased. This law and successive regulationsthat established set purchase prices for renew-able power stopped utilities from thwartingpotential competitors, and over two decadesthey reduced Denmark’s dependence on fossilfuels and made the country a leading generatorof wind and biopower.33

Germany and Spain adopted similar mar-ket-access laws (called feed-in tariffs, or renew-able energy payments) in the 1990s, and theytoo moved quickly into the leading ranks of

renewable energy development.34 Over time,the prices governments set have been adjusteddownward as the cost of renewable technolo-gies has fallen. As a result of this law, Germany,which by international standards has amediocre endowment of renewable resources,

has increased the renewable share of its elec-tricity supply from just under 5 percent in 1998to over 14 percent today.35 This reduced CO2emissions from the nation’s power sector by 79million tons in 2007—enough to cut emissionsfrom the power sector by 18 percent and totalnational emissions by nearly 10 percent.36

Other countries with a larger renewableresource base are entering the market at a timewhen renewable energy technologies are moremature. They should, with the right policies, beable to move even faster. China’s renewableenergy markets have grown far more rapidly inthe past few years than European markets didat their peak growth rates in the 1990s. In theUnited States, the market for wind turbines hastripled in the past three years, and the marketfor solar power is right behind.37

The economic opportunities presented bythe booming market for new energy technolo-gies have dramatically increased political sup-port for these alternatives, which in turn isdriving further growth. This dynamic can be



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Source: CEC, DOE, Census Bureau

Figure 7. Electricity Use Per Capita in California and Restof United States, 1960–2007

seen clearly in the United States, where gover-nors in states such as Iowa, Michigan, Ohio,and Pennsylvania are working to revive theireconomies by attracting the solar, wind, bioen-ergy, and electric car industries. By 2006, theU.S. renewables industry had created 386,000jobs, compared with 82,000 jobs in the coalindustry.38 Worldwide, the renewables indus-tries had created 2.3 million jobs by 2006.39

(See Table 4.)

Growing political support for green energyprovides further evidence that the world maybe on the verge of a major transformation ofenergy markets. The powerful interaction ofadvancing technology, private investment, andpolicy reform has led to a pace of changeunseen since men like Thomas Edison andHenry Ford created the last great energy revo-lution a century ago. But is it enough? Will thecoming years bring the accelerated change andtrillions of dollars of investment that NicholasStern, the International Energy Agency, andothers estimate is needed to reverse the tide ofclimate change?40

The answer to that question will likely befound not in the messy world of economicsbut in the even messier world of politics. Canthe enormous power of today’s industries beset aside in favor of the common good? Asnegotiations continue on the international cli-mate agreement that will follow the first com-mitment period of the Kyoto Protocol, whichends in 2012, the world’s political will to tackleclimate change will be put to an early test. Thepolitics of climate change are advancing morerapidly than could have been imagined a fewyears ago. But time is growing short.The world has not yet reached the political

tipping point that would ensure the kind ofeconomic transformation that is required. Butthere are growing indications that it is near. Inthe summer of 2008, T. Boone Pickens, aprominent Texas oil tycoon, proposed deploy-ing massive wind farms in the Great Plains toprovide at least a fifth of U.S. electricity.41 Acouple of weeks later, former vice president AlGore proposed shutting down all uncontrolledU.S. coal-fired power plants within a decadeand replacing them mainly with renewables.42

Then, in early October, Google proposed end-ing coal-fired generation in the United Statesby 2030, spending $4 trillion to replace it withefficiency and renewables, with the goal ofmaking renewables cheaper than coal.43 In aspeech announcing the plan, Google CEO EricSchmidt said, “I’m a computer scientist, andcomputer scientists love scale problems.”44

A week later, the International EnergyAgency, which has for decades dismissed



Table 4. Estimated Employment in the Renewable Energy Sector,2006

Renewable Energy Source World* Selected Countries

Biomass 1,174,000 Brazil 500,000United States 312,200China 266,000Germany 95,400Spain 10,349

Solar Thermal 624,000-plus China 600,000Germany 13,300Spain 9,142United States 1,900

Wind 300,000 Germany 82,100United States 36,800Spain 35,000China 22,200Denmark 21,000India 10,000

Solar PV 170,000** China 55,000Germany 35,000Spain 26,449United States 15,700

Hydropower 39,000-plus Europe 20,000United States 19,000

Geothermal 25,000 United States 21,000Germany 4,200

*Countries for which information is available.**Under the assumption that Japan’s PV industry employs roughly as many people asGermany’s PV industry.Source: See Endnote 39 for this section.

renewables as niche sources of energy, calledfor these sources to supply half of global elec-tricity by 2050. “Governments need to domore,” said Executive Director Nobuo Tanaka.“Setting a carbon price is not enough. To fostera smooth and efficient transition of renewablestowards mass market integration, renewableenergy policies should be designed around aset of fundamental principles, inserted intopredictable, transparent, and stable policyframeworks [in order to] make the energytechnology revolution happen.”45

The biggest question for the world’s climateis whether the energy revolution in industrialnations will take hold in developing countriesas well. China has already passed the UnitedStates in annual CO2 emissions, and the devel-oping world as a whole is on course to producethe majority of global emissions within thenext decade. Conventional wisdom holds thatdeveloping countries are too poor and lack thetechnical sophistication to adopt state-of-the-art energy systems.While superficially con-vincing, this argument misses the fact thatalthough the new energy systems are differ-ent—and will require adaptation by both gov-ernments and the private sector—they are inthe end better matched to the indigenous

resources and capabilities that most developingcountries possess. Renewable technologies andefficiency will allow developing countries toincrease their reliance on indigenous resourcesand reduce their dependence on expensive andunstable imported fuels. Around the world,new energy systems could become a hugeengine of economic development and job cre-ation, opening vast economic opportunities fordeveloping countries. And the total cost in thelong term will likely be less than following thecurrent, carbon-laden path.China is beginning to show the way for-

ward. Even as it continues to build coal-firedpower plants at the fastest pace in human his-tory—roughly two per week—the country hassuddenly emerged as a clean energy leader.46

New laws enacted since 2004 have jumpstartedthe energy-efficiency and renewable energyindustries in China, in some cases creating newindustries from scratch. China now leads theworld in solar water heating, small hydro-power, and the manufacture of efficient CFLlight bulbs.47 It was among the top producersof solar cells and the third largest installer ofwind turbines in 2007, and is on track to leadboth sectors by 2010.48 China is meanwhilemaking great strides in its efforts to be a leader



World's largest solarenergy plant, inCalifornia’s MojaveDesert.NREL

in green buildings and green cars—persuadingU.S. billionaire Warren Buffett in 2008 toinvest $230 million in BYD, a Chinese batterymanufacturer that plans to mass market ahybrid electric car.49

Other developing countries lack many ofthe extraordinary capabilities that China hasdemonstrated. But if China shifts away fromits coal-based energy path to one that favorsefficiency and renewables, it will have an enor-mous impact on the global economy, andwill inevitably pull other countries into itsorbit. Developing countries that pay littleattention to what happens in Europe or theUnited States may be more influenced by thepolicy choices made in Beijing. And the dra-matic cost reductions in renewable energytechnologies that China is likely to spur willmake it much easier for developing nations toadopt those technologies.

Tipping points are easier to decipher in ret-rospect than in advance. No one can say for surewhether the substantial shifts in energy marketsand energy policies over the past few years arethe precursors to a revolution. Just as the eventsof the past few years have surprised us, so willthose ahead. And the financial crisis now break-ing over the global economy will likely haveprofound impacts on energy markets.Even with those substantial caveats, the evi-

dence presented in this report suggests thatwhen historians look back on 2008, they willconclude that a 21st-century energy revolutionwas well under way.Whether they will also beable to say that the world was able to avert cat-astrophic climate change will be determined bythe decisions we make in the decade ahead.Urgency and vision are the twin pillars onwhich humanity’s hope now hangs.



Endnotes

The Road to Low-Carbon Energy

1. James Hansen, presentation at “Global Warming 20Years Later,”Worldwatch Institute event, Washington, DC,23 June 2008.

2. Worldwatch estimate based on G. Marland, T.A.Boden, and R.J. Andres, “Global, Regional, and NationalFossil Fuel CO2 Emissions,” in Carbon DioxideInformation Analysis Center, Trends: A Compendium ofData on Global Change (Oak Ridge, TN: Oak RidgeNational Laboratory, U.S. Department of Energy, 2007)

3. James Hansen et al.,“Dangerous Human-madeInterference with Climate: A GISS ModelE Study,”Atmospheric Chemistry and Physics, vol. 7, no. 9 (2007);W.L. Hare, “A Safe Landing for the Climate,” inWorldwatch Institute, State of the World 2009 (New York:W.W. Norton & Company, forthcoming).

4. Author’s estimate.

5. Public Broadcasting Service, “John Gardner–Engineerof the Great Society,”www.pbs.org/johngardner/chapters/4.html, viewed 10October 2008.


1. “Summary for Policymakers,” in IntergovernmentalPanel on Climate Change (IPCC), Climate Change 2007:The Physical Science Basis (New York: CambridgeUniversity Press, 2007), p. 2.

2. Figure 1 from the following: K. W. Thoning et al.,Atmospheric Carbon Dioxide Dry Air Mole Fractions fromQuasi-continuous Measurements at Barrow, Alaska; MaunaLoa, Hawaii; American Samoa; and South Pole, 1973–2006(Boulder, CO: Earth System Research Laboratory, U.S.National Oceanic and Atmospheric Administration,October 2007); C. D. Keeling and T. P. Whorf,“Atmospheric CO2 Records from Sites in the SIO AirSampling Network,” and A. Neftel et al., “Historical CO2Record from the Siple Station Ice Core,” both in CarbonDioxide Information Analysis Center (CDIAC), Trends: ACompendium of Data on Global Change (Oak Ridge, TN:Oak Ridge National Laboratory, U.S. Department ofEnergy (U.S. DOE), 2007). Estimate of 430 ppm fromNicholas Stern, The Economics of Climate Change: TheStern Review (Cambridge, U.K.: Cambridge UniversityPress, 2007), p. 2.

3. E. Jansen et al., “Palaeoclimate,” in IPCC, op. cit. note

1, p. 449.

4. James Hansen, presentation at “Global Warming 20Years Later,”Worldwatch Institute event, Washington, DC,23 June 2008.

5. M. Serreze et al., “Perspectives on the Arctic’sShrinking Sea-Ice Cover,” Science, 16 March 2007, pp.1533–36.

6. IPCC, op. cit. note 1, pp. 212, 543–44.

7. Ibid., pp. 350–52.

8. Ibid., pp. 342, 537.

9. Stern, op. cit. note 2, p. 285.

10. Alan Greenspan, The Age of Turbulence: Adventures ina New World (New York: Penguin Press, 2007).

11. Worldwatch estimate based on G. Marland, T.A.Boden, and R.J. Andres, “Global, Regional, and NationalFossil Fuel CO2 Emissions,” in CDIAC, op. cit. note 2;shares of coal, oil, and natural gas from BP, StatisticalReview of World Energy (London: 2007).

12. IPCC, op. cit. note 1.

13. Marland, Boden, and Andres, op. cit. note 11.

14. International Energy Agency (IEA), Key World EnergyStatistics (Paris: 2008), p. 6.

15. T. Barker et al., “Technical Summary,” in IPCC,Climate Change 2007: Mitigation (New York: CambridgeUniversity Press, 2007), p. 39; James Hansen et al.,“Dangerous Human-made Interference with Climate: AGISS ModelE Study,” Atmospheric Chemistry and Physics,vol. 7, no. 9 (2007); W.L. Hare, “A Safe Landing for theClimate,” in Worldwatch Institute, State of the World 2009(New York: W.W. Norton & Company, forthcoming).

16. Figure of 0.8 degrees Celsius is the midpoint of esti-mates of warming, as reported in IPCC, op. cit. note 1, p.5.

17. Hansen et al., op. cit. note 15; Hansen, op. cit. note 4.

18. Ibid.

19. Commission of the European Communities,"Communication from the Commission to the Council,the European Parliament, the European Economic andSocial Committee and the Committee of the Regions:Limiting Global Climate Change to 2 Degrees Celsius:The Way Ahead for 2020 and Beyond (Brussels: 10January 2007); Group of Eight,Hokkaido Toyako Summit


Leaders Declaration (Hokkaido Toyako, Japan: 8 July2008), para 23.

20. James Hansen et al., “Target Atmospheric CO2:Where Should Humanity Aim?” unpublished paper forthe U.S. National Aeronautics and Space Administration,June 2008; Hare, op. cit. note 15.

21. Table 1 derived from the following sources: “business-as-usual” case described in IEA, Energy TechnologyPerspectives—Scenarios and Strategies to 2050 (Paris:2008), pp. 64, 113; “stabilization” scenario based onCategory II emission mitigation scenarios described inBarker et al., op. cit. note 15, on G. A. Meehl, “GlobalClimate Projections,” in IPCC, op. cit. note 1, and onWorldwatch calculations using world GDP fromInternational Monetary Fund (IMF), World EconomicOutlook Database, April 2008. Annual energy growthfrom F. Bressand et al., Curbing Global Energy DemandGrowth: The Energy Productivity Opportunity (SanFrancisco: McKinsey Global Institute, May 2007), p. 13.

22. U.S. DOE, International Energy Outlook 2008(Washington, DC: 2008), pp. 7, 93.

23. Barker et al., op. cit. note 15, pp. 39, 42.

24. Carbon emissions derived from BP, op. cit. note 11,and from Marland, Boden, and Andres, op. cit. note 11.

25. Marland, Boden, and Andres, op. cit. note 11.

26. Joanna Lewis, Georgetown University, “China: EnergyUse, Emissions Trends, and Forecasts,” presentation to theU.S.-China Climate Dialogue, sponsored by the Centerfor American Progress, the Heinrich Boell Foundation,and the Worldwatch Institute, Washington, DC, 16September 2008.

27. Table 2 calculated by Worldwatch from the followingsources: BP, op. cit. note 11; Marland, Boden, and Andres,op. cit. note 11; United Nations Population Division,World Population Prospects: The 2006 Revision and WorldUrbanization Prospects: The 2005 Revision, athttp://esa.un.org/unpp, viewed 7 July 2008; IMF,WorldEconomic Outlook (Washington, DC: April 2008).

28. Bressand et al., op. cit. note 21.

29. Figure of 15 billion tons based on the goal to reduceemissions by at least 50 percent by 2050, per Group ofEight, op. cit. note 19, and on 2007 world carbon dioxideemissions from Table 2, op. cit. note 27.

30. Worldwatch Institute estimate.

31. S. Pacala and R. Socolow, “Stabilization Wedges:Solving the Climate Problem for the Next 50 Years withCurrent Technologies,” Science, 13 August 2004, pp.968–72.

32. National Petroleum Council, Facing the Hard TruthsAbout Energy (Washington, DC: July 2007), pp. 127, 135.

33. Ibid., p. 127.

34. IEA, “Electricity/Heat in World in 2005,” atwww.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=29&Submit=Submit, viewed 3 October 2008.

35. IPCC Working Group III, IPCC Special Report onCarbon Dioxide Capture and Storage (New York:

Cambridge University Press, 2005), pp. 201–04; MITEnergy Initiative, The Future of Coal: Options for aCarbon-Constrained World (Cambridge, MA:Massachusetts Institute of Technology, 2007), p. 42.

36. MIT Energy Initiative, op. cit. note 35, pp. 52–54.

37. Ibid., pp. xi–xii.

A Convenient Truth

1. U.S. Vice President Dick Cheney, remarks at theAnnual Meeting of the Associated Press (Toronto,Canada: 30 April 2001).

2. U.S. Department of Energy (U.S. DOE),MonthlyEnergy Review (Washington, DC: October 2008), p. 16.

3. International Energy Agency (IEA), EnergyTechnology Perspectives – Scenarios and Strategies to 2050,(Paris: 2008), pp. 68–82; U.S. DOE, Table E.1 inInternational Energy Annual 2004 (Washington, DC:2006); BP, Statistical Review of World Energy (London:2007).

4. G. Kaiper, US Energy Flow Trends—2002 (Livermore,CA: Lawrence Livermore National Laboratory, 2004).

5. Daniel H. Rosen and Trevor Houser, China Energy: AGuide for the Perplexed (Washington, DC: Center forStrategic and International Studies and the PetersonInstitute for International Economics, May 2007).

6. G. Marland, T.A. Boden, and R. J. Andres, “Global,Regional, and National Fossil Fuel CO2 Emissions,” inTrends: A Compendium of Data on Global Change. CarbonDioxide Information Analysis Center (Oak Ridge, TN: OakRidge National Laboratory, U.S. DOE, 2007); BP,Statistical Review of World Energy, (London: 2008);European Communities, EU Energy and transport in fig-ures, Statistical Pocketbook 2007/2008 (Brussels: 2008);International Monetary Fund, World Economic OutlookDatabase, April 2008; United Nations PopulationDivision,World Population Prospects: The 2006 Revisionand World Urbanization Prospects: The 2005 Revision, athttp://esa.un.org/unpp, viewed 7 July 2008.

7. Ma Kai, Minister of National Development andReform Commission, “The 11th Five-Year Plan: Targets,Paths and Policy Orientation,” March 2006, athttp://english.gov.cn/2006-03/23/content_234832.htm.

8. Energy Star, “Compact Fluorescent Light Bulbs,”www.energystar.gov/index.cfm?c=cfls.pr_cfls, viewed 6October 2008.

9. L. J. Sandahl et al., Compact Fluorescent Lighting inAmerica: Lessons Learned on the Way to Market (Richland,WA: Pacific Northwest National Laboratory, June 2006).

10. Peter Du Pont, “Asian Energy Trends and Prospectsfor Energy Efficiency,” USAID ECO-Asia presentation atTBLI Asia Conference, Bangkok, Thailand, 29 May 2008.

11. David Ryan, Energy Star, U.S. EnvironmentalProtection Agency (EPA), e-mail to Nathan Swire,Worldwatch Institute, 25 August 2008. Data based ontrade information from the U.S. International TradeCommission.

12. Japan and Germany from Sandahl et al., op. cit. note


Endnotes

9, p. 1.3; United States from EPA, “EPA and DOE Spreada Bright Idea: Energy Star Light Bulbs Are Helping toChange the World,” press release (Washington, DC: 15January 2008).

13. United Nations Environment Programme (UNEP),International Environmental Technology Centre, Energyand Cities: Sustainable Building and Construction (Osaka,Japan: 2003), p. 1.

14. Ibid.

15. F. Bressand et al., Curbing Global Energy DemandGrowth: The Energy Productivity Opportunity (SanFrancisco: McKinsey Global Institute, May 2007).

16. Half or less from U.S. DOE, Energy Efficiency andRenewable Energy, “Technology Fact Sheet: Resources forWhole Building Design,” GHG Management Workshop,25–26 February 2003, p. 11.

17. Satish Kumar, Chief of Party, U.S. Agency forInternational Development, ECO-III Project in India,presentation for panel “Harnessing the Power of thePublic Purse,” at Energy Efficiency Global Forum,Washington, DC, 14 November 2007.

18. William Moomaw and Charles Bralber, ScalingAlternative Energy: The Role of Emerging Markets,Dialogue Synthesis Report (Medford, MA: The FletcherSchool, Tufts University, 2008).

19. U.S. Green Building Council, “About USGBC,”www.usgbc.org/DisplayPage.aspx?CMSPageID=124,viewed 26 September 2008.

20. “Information on Passive Houses,”www.passivhaustagung.de/Passive_House_E/passivehouse.html, viewed 30 July 2008.

21. Ministry of Housing and Urban-Rural Developmentof the People’s Republic of China, “Notice on StrictExecution of the Design Standard of EnergyConservation in New Residential Buildings,” 15 April2005, available at www.cin.gov.cn; State Council of thePeople’s Republic of China, “Regulations on EnergyConservation for Civil Buildings,” 1 August 2008, avail-able at www.cin.gov.cn.

22. European Parliament, “Action Plan for EnergyEfficiency: Realising the Potential” (Brussels: 31 January2008).

23. Chris Goodall, “The Rebound Effect,” CarbonCommentary, 11 November 2007; Steve Sorrell, UKEnergy Research Centre, University of Strathclyde,Glasgow, Scotland, “The Rebound Effect: Overview ofExisting Research,” PowerPoint presentation, 28 February2008; Frank Gottron, Energy Efficiency and the ReboundEffect: Does Increasing Efficiency Decrease Demand?(Washington, DC: Congressional Research Service, 30July 2001).

24. B. Griffith et al., Assessment of the Technical Potentialfor Achieving Zero-Energy Commercial Buildings (Golden,CO: National Renewable Energy Laboratory, 2006);Bressand et al., op. cit. note 15, p. 13; Rocky MountainInstitute, “Beating the Energy Efficiency Paradox (Part I),”Treehugger.com, May 2008.

25. U.K. Department of Communities and LocalGovernment, Building A Greener Future: Towards ZeroCarbon Development (London: December 2006).

26. David G. Fridley, Nina Zheng, and Nan Zhou,Estimating Total Energy Consumption and Emissions ofChina’s Commercial and Office Buildings (Berkeley, CA:Lawrence Berkeley National Laboratory, March 2008), p.1.

27. Thomas Casten, “Recycling Energy to Reduce Costsand Mitigate Climate Change,” in Michael MacCracken,Frances Moore, and John C. Topping, Jr., eds., Sudden andDisruptive Climate Change (Sterling, VA: Earthscan,2008), pp. 247–48; IEA, Combined Heat and Power:Evaluating the Benefits of Greater Global Investment (Paris:2008), p. 10.

28. IEA, “Electricity/Heat in Japan in 2005,”www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=JP, and IEA, “Electricity/Heat in United States in2005,”www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=US, both viewed 29 September 2008.

29. IEA, op. cit. note 27, p. 10.

30. Ibid.

31. Ibid.

32. Ibid; Bruce Hedman, Energy and EnvironmentalAnalysis, Inc., “The Role of CHP in the Nation’s EnergySystem,” presentation at U.S. Clean Heat and PowerAssociation annual meeting, 3 October 2007.

33. Bressand et al., op. cit. note 15, pp. 9–10.

34. Ibid.

No-Carbon Energy

1. Sidebar 1 from the following sources: S. Mufson,“U.S. Nuclear Power Revival Grows,”Washington Post,September 2007; Worldwatch Institute nuclear energydatabase compiled from statistics from the InternationalAtomic Energy Agency, press reports, and Web sites;“Nuclear Dawn,” The Economist, 6 September 2007;“Atomic Renaissance,” The Economist, 6 September 2007;Satu Hassi, European Parliament member, e-mail toauthor, 19 February 2007; The Keystone Center, NuclearPower Joint Fact-Finding (Keystone, CO: 2007), p. 30;MIT Energy Initiative, The Future of Nuclear Power(Cambridge, MA: Massachusetts Institute of Technology,2003), p. 25; U.S. Nuclear Regulatory Commission, “NewReactor Licensing Applications,” available at www.nrc.gov,updated 22 October 2008.

2. World Energy Council, Energy and Climate ChangeExecutive Summary (London: May 2007), p. 5.

3. New Energy Finance, Global Trends in SustainableEnergy Investment 2008 (London: 2008).

4. International Energy Agency (IEA), “Electricity/Heatin World in 2005,”www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=29&Submit=Submit), viewed 30 September2008.

5. Ibid.


Endnotes

6. Renewables share is 18.4 percent per REN21,Renewables 2007 Global Status Report (Paris: REN21Secretariat and Washington, DC: Worldwatch Institute,2008), p. 6.

7. Figure 2 from the following sources: BP, StatisticalReview of World Energy (London: 2008); nuclear fromWorldwatch Institute database, International AtomicEnergy Agency, press reports; biofuels from RodrigoPinto and Suzanne C. Hunt, “Biofuel Flows Surge,” inWorldwatch Institute, Vital Signs 2007–2008 (New York:W.W. Norton & Company, 2007), pp. 40–41, and fromREN21, op. cit. note 6, Table R6 and p. 8; wind from BTMConsult, European Wind Energy Association (EWEA),American Wind Energy Association (AWEA),WindpowerMonthly, and New Energy, from Global Wind EnergyCouncil (GWEC), “Global Wind Energy MarketsContinue to Boom—2006 Another Record Year,” pressrelease (Brussels: 2 February 2007), and from GWEC,“Global Installed Wind Power Capacity (MW) – RegionalDistribution,” available at www.gwec.net, viewed 4 April2008; solar from Paul Maycock and Prometheus Institute,PV News, various issues, and from Travis Bradford,Prometheus Institute, communication with Janet Sawin,Worldwatch Institute, 29 April 2008.

8. BTM Consult, EWEA, AWEA,Windpower Monthly,and New Energy; GWEC, “Global Wind Energy MarketsContinue to Boom—2006 Another Record Year,” and“Global Installed Wind Power Capacity (MW) – RegionalDistribution,” both op. cit. note 7.

9. Worldwatch estimate based on ibid.

10. EWEA, “Wind Energy Leads EU Power Installationsin 2007, But National Growth is Inconsistent,” pressrelease (Brussels: 4 February 2008); Ryan Wiser and MarkBolinger, “Annual Report on U.S. Wind PowerInstallation, Cost, and Performance Trends: 2007,” pre-pared for U.S. Department of Energy (U.S. DOE), EnergyEfficiency and Renewable Energy (Washington, DC: May2008), p. 4.

11. Figure 3 based on the following sources: coal and nat-ural gas from Black & Veatch, 20 Percent Wind EnergyPenetration in the United States, prepared for AWEA(Walnut Creek, CA: October 2007), p. 5–15, and fromU.S. Energy Information Administration (EIA), “FuelPrices to Electricity Generators, 1995–2030,” in AnnualEnergy Outlook 2008 with Projections to 2030(Washington, DC: June 2008); nuclear from The KeystoneCenter, Nuclear Power Joint Fact-Finding (Keystone, CO:June 2007), p. 42, and from Arjun Makhijani, AssessingNuclear Plant Capital Costs for the Two Proposed NRGReactors at the South Texas Project Site (Takoma Park,MD: Institute for Energy and Environmental Research, 24March 2008), p. 8; wind from Black & Veatch, op. cit. thisnote, p. 5–4; solar from Energy and EnvironmentalEconomics, Inc., New Concentrating Solar Power (CSP)Generation Resource, Cost, and Performance Assumptions,Part of California Public Utility Commission GHGModeling project (San Francisco: 25 October 2007), pp.3–4. Inflation conversion factor from Robert C. Sahr,Inflation Conversion Factors for Dollars 1774 to Estimated2018, updated 5 February 2008. Calculations are based ona 100 megawatt generating capacity, 20-year loan with 8

percent interest, a discount rate of 10 percent, and a costof escalation of 1.02 percent for these technologies(supercritical pulverized coal, gas combined-cycle,nuclear, class five onshore wind, and solar trough concen-trating solar power).

12. Prometheus Institute and Greentech Media, PV News,April 2008, p. 6.

13. Worldwatch calculation based on data from PaulMaycock and Prometheus Institute, PV News, variousissues, and from Bradford, op. cit. note 7.

14. Travis Bradford, Prometheus Institute, e-mails toJanet Sawin, Worldwatch Institute, 5 April, 7 April, and 8April 2007.

15. U.S. DOE expects solar PV to be cost-competitivewith baseload power in the United States by 2015, accord-ing to David Rodgers, Deputy Assistant Secretary forEnergy Efficiency, U.S. DOE, presentation on panel “NewApproaches to Environmentally Conscious BuildingEnvelope Design and Technologies,” at Energy EfficiencyGlobal Forum & Exposition 2007, 11–14 November 2007;PV cost also from Ashley Seager, “Solar Future Brightensas Oil Soars,” The Guardian, 16 June 2008, and from RonPernick and Clint Wilder, “Utility Solar Assessment(USA) Study: Reaching Ten Percent by 2025,”(Washington, DC: Clean Edge, Inc. and Co-op AmericaFoundation, June 2008).

16. Susan Moran and J. Thomas McKinnon, “Hot Timesfor Solar Energy,”World Watch, March/April 2008, pp.26–31.

17. “Concentrating Solar Power Activity” (Washington,DC: Morse Associates, Inc., July 2008).

18. California from Rainer Aringhoff, President, SolarMillennium LLC, presentation for “Concentrating SolarPower: What Can Solar Thermal Electricity Deliver, andat What Price?”Webcast, 26 June 2008, atwww.renewableenergyworld.com/rea/events/view?id=45492; China and India from David R. Mills and Robert G.Morgan, “A Solar-Powered Economy: How Solar ThermalCan Replace Coal, Gas and Oil,” Renewable Energy World,3 July 2008.

19. International Geothermal Association, “InstalledGenerating Capacity,” at http://iga.igg.cnr.it/geoworld/geoworld.php?sub=elgen, updated 2 October 2008.

20. Massachusetts Institute of Technology, The Future ofGeothermal Energy (Cambridge, MA: 2007).

21. Worldwatch estimate based on World EnergyCouncil, “Solar Radiation Resources,”www.worldenergy.org/publications/survey_of_energy_resources_2007/solar/720.asp, viewed 5 October 2008, andon IEA, Key World Energy Statistics 2008 (Paris: 2008), p.35.

22. Figure 4 based on data from United NationsDevelopment Programme,World Energy Assessment:Energy and the Challenge of Sustainability (New York:2000), and from T. B. Johansson et al., “The Potentials ofRenewable Energy; Thematic Background Paper,”International Conference for Renewable Energies, Bonn,Germany, January 2004; global energy use is 2005 data


Endnotes

from IEA,World Energy Outlook 2007 (Paris: 2007), p. 4.

23. Table 3 from the following sources: Mark S. Mehosand Brandon Owens, An Analysis of Siting Opportunitiesfor Concentrating Solar Power Plants in the SouthwesternUnited States (Golden, CO, and Boulder, CO: NationalRenewable Energy Laboratory and Platts Research andConsulting, 2004); IEA, Photovoltaic Power SystemsProgramme, Potential for Building Integrated Photovoltaics,2002 Summary (Paris: 2002), p. 8; Richard Perez,Atmospheric Sciences Research Center, State University ofNew York at Albany, e-mail to Janet Sawin, WorldwatchInstitute, 11 July 2006; Battelle/Pacific NorthwestLaboratory, An Assessment of Available Windy Land Areaand Wind Energy Potential in the Contiguous United States(Richland, WA: August 1991), based on 2004 U.S. end-usedemand from EIA, “Annual Electric Power IndustryReport,” Table 7.2, in Electric Power Annual 2005(Washington, DC: 2005); Massachusetts Institute ofTechnology, The Future of Geothermal Energy(Cambridge, MA: 2006), p. 1-1; John D. Isaacs and WalterR. Schmitt, “Ocean Energy: Forms and Prospects,”Science, 18 January 1980, pp. 265–73.

24. Battelle/Pacific Northwest Laboratory, op. cit. note 23.

25. Worldwatch Institute and Center for AmericanProgress, American Energy: The Renewable Path to EnergySecurity (Washington, DC: September 2006); Netherlandsfrom IEA, “Electricity/Heat in Netherlands in 2005,”www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=NL, viewed 3 October 2008; United Kingdomfrom IEA, “Electricity/Heat in United Kingdom in 2005,”www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=GB, viewed 3 October 2008, andfrom British Wind Energy Association, “The Potential ofOffshore Wind,” www.bwea.com/offshore/overview.html,viewed 9 October 2008; H.J.T. Kooijman et al., “Cost andPotential of Offshore Wind Energy on the Dutch part ofthe North Sea,” presentation at European Wind EnergyConference and Exhibition, Copenhagen, 2–6 July 2001,p. 3.

26. China’s wind is a Worldwatch calculation based on3,200 gigawatts (GW) of potential from ChinaMeteorological Administration, cited in Zijun Li, “China’sWind Energy Potential Appears Vast,” Eye on Earth(Worldwatch Institute), 2 November 2005, and on 713GW installed at end of 2007, from “Installed ElectricCapacity Reaches 713m Kilowatts,” China Daily, 14January 2008.

27. M. Mehos and B. Owens, Siting Utility-ScaleConcentrating Solar Power Projects (Golden, CO: January2005), p. 2; EIA, Table 2.1 in Energy Power Annual 2006(Washington, DC: 22 October 2007).

28. Ibid.

29. Trans-Mediterranean Renewable EnergyCooperation, “The DESERTEC Concept and the Studies,”(Hamburg: 5 August 2008).

30. Sahara from Schott Solarthermie GmbH, cited inRyan O’Keefe, Vice President, Solar Development, FPLEnergy, LLC, presentation at Texas Solar Forum, StateCapitol, Austin, Texas, 25 April 2008, available atwww.texassolarforum.com/powerpoint/okeffe.ppt.

31. EIA, Annual Energy Review 2007 (Washington, DC:June 2008); IEA, Photovoltaic Power Systems Programme,Potential for Building Integrated Photovoltaics, 2002Summary (Paris: 2002), p. 8.

32. Fred Morse, Senior Advisor, U.S. Operations,Abengoa Solar, presentation for “Concentrating SolarPower: What Can Solar Thermal Electricity Deliver, andat What Price?”Webcast, 26 June 2008, atwww.renewableenergyworld.com/rea/events/view?id=45492.

33. International Geothermal Association, op. cit. note19.


1. Wind from Black & Veatch, 20 Percent Wind EnergyPenetration in the United States, prepared for AmericanWind Energy Agency (AWEA) (Walnut Creek, CA:October 2007), p. 5–15; solar from Energy andEnvironmental Economics, Inc., “New ConcentratingSolar Power (CSP) Generation Resource, Cost, andPerformance Assumptions,” Part of California PublicUtilities Commission GHG Modeling project (SanFrancisco: 25 October 2007), pp. 3–4.

2. Denmark from Lise Backer, Vestas GovernmentalRelations, “Innovating World-Wide in Wind Energy,”Session I: Environmentally-related Innovation in GlobalMarkets: Opportunities and Challenges for Companies,Workshop on Environmental Innovation and GlobalMarkets, Berlin, 20–12 September 2007, atwww.oecd.org/dataoecd/4/1/39370312.pdf, and fromHans Abildgaard, “Wind Power and Its Impact on thePower System,” presentation for Cross Cutting Session #5:Grid Integration: Integrating Renewables into PowerSystems Operations, Washington International RenewableEnergy Conference, Washington, DC, March 2008 , avail-able at www.Energinet.dk, cited in Roger Peters withLinda O’Malley, “Storing Renewable Power” (Alberta,Canada: The Pembina Institute, June 2008), p. 13.

3. German Wind Energy Institute (DEWI),“Windenergie in Deutschland—Aufstellungszahlen furdas Jahr 2007,” available at www.dewi.de, viewed 16August 2008.

4. See, for example, Pacific Gas and Electric, “2008Renewables,” www.pge.com/renewableRFO, viewed 17August 2008.

5. Tools used to balance demand and supply from EdgarA. DeMeo et al., “Accommodating Wind’s NaturalBehavior: Advances in Insights and Methods for WindPlant Integration,” IEEE Power & Energy Magazine,November/December 2007, p. 67, from Abildgaard, op.cit. note 2, and from J. Charles Smith and Brian Parsons,“What Does 20% Look Like? Developments in WindTechnology and Systems,” IEEE Power & EnergyMagazine, November/December 2007, p. 24; B. Parsons etal., Grid Impacts of Wind Power Variability: RecentAssessments from a Variety of Utilities in the United States(Golden, CO: National Renewable Energy Laboratory,2006); P. B. Eriksen et al., “System Operation with HighWind Penetration,” IEEE Power & Energy Magazine,November/December 2005, pp. 65–74; C. Archer and M.


Endnotes

Jacobson, “Supplying Baseload Power and ReducingTransmission Requirements by Interconnecting WindFarms” (Palo Alto, CA: Stanford University, February2007).

6. Sheryl Carter, Devra Wang, and Audrey Chang, TheRosenfeld Effect in California: The Art of Energy Efficiency(San Francisco: Natural Resources Defense Council,2006).

7. Kurt Yeager, Executive Director, Galvin ElectricityInitiative, “Facilitating the Transition to a Smart ElectricGrid,” testimony to House Subcommittee on Energy andAir Quality, 3 May 2007, e-mailed to Janet Sawin,Worldwatch Institute, 25 May 2007.

8. Pacific Gas and Electric, “Pacific Gas and ElectricCompany’s SmartMeter Proposal Approved by CaliforniaPublic Utilities Commission,” press release (SanFrancisco: 20 July 2006); Europe from Erik Olsen, “SmartMeters Open Market for Smart Apps,”New York Times, 7October 2008, and from Michael Setters, “Focus onEuropean Smart Grids,” RenewableEnergyWorld.com, 9April 2008.

9. BPL Global, “BPL Global Expands in Africa,” pressrelease (Pittsburgh, PA: 29 May 2008).

10. Yeager, op. cit. note 7.

11. Leila Abboud, “Thar She Blows: DONG’s WindWoes,” blogs.wsj.com, 11 March 2008.

12. D. Marcus, “Moving Wind to the Mainstream:Leveraging Compressed Air Energy Storage,” RenewableEnergy Access, October 2007.

13. TXU, “TXU Halts Efforts to Obtain Permits for EightCoal-Fueled Units,” press release (Dallas, TX: 1 March2007); TXU, “Luminant and Shell Join Forces to Developa Texas-Sized Wind Farm,” press release (Dallas, TX: 27July 2007).

14. Seth Dunn,Micropower: the Next Electrical Era,Worldwatch Paper 151 (Washington, DC: WorldwatchInstitute, 2000)

15. American Electric Power, “Interstate TransmissionVision for Wind Integration” (Columbus, OH: 2007).

16. Al Gore, Hearing on Perspectives on Climate Change,House Committee on Energy and Commerce and HouseCommittee on Science and Technology, Washington, DC,21 March 2007; Pickens Plan,www.pickensplan.com/theplan, viewed 30 September2008.

17. Coal and nuclear from International Energy Agency(IEA), “Electricity/Heat in World in 2005,”www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=29, viewed 3 October 2008.

18. Enercon GmbH, SolarWorld AG, and Schmack BiogasAG, “The Combined Power Plant – The First Stage inProviding 100% Power from Renewable Energy,” pressrelease (Berlin: 9 October 2007); background paper andother information available at www.kombikraftwerk.de.

19. Dave Gilson (interviewer), “Power Q&A: S. DavidFreeman,”Mother Jones, 21 April 2008.

20. Wolfram Krewitt, Sonja Simon, and Thomas Preggerwith contributions from Paul Suding, “Renewable EnergyDeployment Potentials in Large Economies,” prepared forREN21, German Aerospace Center (DLR), and Instituteof Technical Thermodynamics (Stuttgart, Germany: April2008), pp. 8, 18–37.

21. U.S. Department of Energy (U.S. DOE), 20% WindEnergy by 2030: Increasing Wind Energy’s Contribution toU.S. Electricity Supply (Washington, DC: May 2008).

22. AWEA, “U.S. Wind Energy Installations Surpass20,000 Megawatts,” press release (Washington, DC: 3September 2008).

23. U.S. DOE, op. cit. note 21, pp. 107–08, 204–05.

24. Figure 5 derived from the following sources: 2007data from U.S. Energy Information Administration (EIA),“Table 8.2b Electricity Net Generation: Electric PowerSector, 1949–2007,” in Annual Energy Review(Washington, DC: 23 June 2008); 2030 non-renewablegeneration from EIA, “Table 8. Electricity Supply,Disposition, Prices, and Emissions,” in Annual EnergyOutlook with Projections to 2030 (Washington, DC: June2008); 2030 renewable generation from EIA, “Table 16.Renewable Energy Generating Capacity and Generation,”in idem.

25. EIA, “Table 8. Electricity Supply, Disposition, Prices,and Emissions,” op. cit. note 24.

26. Worldwatch estimate based on Electric PowerResearch Institute, Environmental Assessment of Plug-InHybrid Electric Vehicles Volume 1: Nationwide GreenhouseGas Emissions (Palo Alto, CA: July 2007).

27. Willett Kempton and Jasna Tomiç “Vehicle-to-GridPower Implementation: From Stabilizing the Grid toSupporting Large-scale Renewable Energy,” Journal ofPower Sources, 1 June 2005, pp. 280–94.

28. Robert A. Hefner III, The Great Energy Transition,unpublished book manuscript, August 2008; NavigantConsulting, The New North American Ocean of NaturalGas, brochure, June 2008.

29. U.S. DOE, “Brazil,” in Country Analysis Briefs(Washington, DC: September 2007).

30. Martin Bensmann, “Green Gas on Tap,”New Energy,April 2007, pp. 66–69

31. Hythane Company, LLC., “The Hythane System,”www.hythane.com/system.html, viewed 21 October 2008.


1. Eight percent of U.S. homes from “RemarkableProgress in Electrical Development: Notable Features inthe Increase of the Use of Electricity in Small Plants andHouseholds,”New York Times, 8 January 1905, and fromEdison Electric Institute, “Historical Statistics of theElectric Utility Industry Through 1970,” atwww.eia.doe.gov/cneaf/electricity/page/electric_kid/append_a.html; 14 vehicles from Ritz Site, “Early FordModels,” at www.ritzsite.net/FORD_1/02_eford.htm.

2. Skeptical comments from “Famous AuthoritativePronouncements,” www.av8n.com/physics/ex-cathe-


Endnotes

dra.htm, viewed 9 October 2008.

3. Environmental and Energy Study Institute (EESI),“FY 08 Appropriations for Renewable Energy and EnergyEfficiency: Full House and Senate Committee Vote forIncrease in EE/RE Funding,” Issue Update (Washington,DC: 18 July 2007).

4. Figure 6 from REN21, Renewables Global StatusReport 2007 (Paris, REN 21 and Washington, DC,Worldwatch Institute: May 2007). The figure consists ofcapacity data for electricity (wind, solar PV, biomass,geothermal, small hydro, and solar thermal) and heating(solar hot water, biomass, and geothermal). Valuesapproximate real 2007 dollars and are adjusted for histor-ical capacity costs but do not take into account exchange-rate fluctuations.

5. Applied Materials Energy and Environment Web site,www.appliedmaterials.com; BP Alternative Energy Website, www.bp.com; GE Web site, www.gepower.com;DuPont Web site, www.dupont.com; Goldman Sachs Website, www.goldmansachs.com; Mitsubishi Web site,www.mpshq.com; Royal Dutch Shell Web site,www.shell.com; Sharp Web site,http://solar.sharpusa.com; Siemens Web site,www.powergeneration.siemens.com.

6. New Energy Finance, Global Trends in SustainableEnergy Investment (London: 2008), p. 27.

7. U.S. Department of Energy (U.S. DOE), FY 2009Congressional Budget Request: Budget Highlights(Washington, DC: 2008), p. 24.

8. Vestas WindSystems, AS, Vestas Annual Report 2006(Randers, Denmark: 2007), p. 18; U.S. DOE, op. cit. note7, p. 5.

9. New Energy Finance, op. cit. note 6, p. 23.

10. Ibid.

11. REN 21, op. cit. note 4.

12. Travis Bradford, Prometheus Institute, discussionswith Janet Sawin, Worldwatch Institute, 2 and 6 April2007; Travis Bradford, Prometheus Institute, e-mails toJanet Sawin, Worldwatch Institute, 5 April, 7 April, and 8April 2007.

13. Sasha Rentzing, “Sun Aplenty,”New Energy, June2007.

14. Boston Consulting Group, The Experience CurveReviewed (Boston: reprint, 1972).

15. Worldwatch Institute calculation of 2004–06 renew-able energy growth rates based on data from AmericanWind Energy Association (AWEA), “Wind PowerCapacity in U.S. Increased 27% in 2006 and Is Expectedto Grow an Additional 26% in 2007,” press release(Washington DC: 23 January 2007), from Birger Madsen,BTM Consult, e-mail to Janet Sawin, WorldwatchInstitute, 8 March 2007, from European Wind EnergyAssociation, “European Market for Wind Turbines Grows23% in 2006,” press release (Brussels: 1 February 2007),from Christoph Berg, F.O. Licht, e-mails to Rodrigo G.Pinto, Worldwatch Institute, 20–22 March 2007, fromGlobal Wind Energy Council, “Global Wind Energy

Markets Continue to Boom—2006 Another Record Year,”press release (Brussels: 2 February 2007), and fromPrometheus Institute, PV News, April 2007, p. 8.

16. Black & Veatch, 20 Percent Wind Energy Penetration inthe United States, prepared for AWEA (Walnut Creek, CA:October 2007) pp. 5–4, 5–15; U.S. Energy InformationAdministration (EIA), “Fuel Prices to ElectricityGenerators, 1995–2030,” in Annual Energy Outlook 2008with Projections to 2030 (Washington, DC: June 2008).

17. Photovoltaic cost forecast based on Bradford, e-mailsto Janet Sawin, op. cit. note 12.

18. EIA, International Energy Outlook 2008 (Washington,DC: 2008), pp. 23–35.

19. Equivalent carbon price calculated using crude oilprice for September 2007 and September 2002 from U.S.DOE, “World Crude Oil Prices” (Washington DC: updat-ed 11 October 2007); approximate crude oil carbon con-tent from U.S. DOE, Table B4 in Emissions of GreenhouseGases in the United States 1998 (Washington, DC:November 1999); Senator Jeff Bingaman, “Low CarbonEconomy Act of 2007,” proposed legislation (Washington,DC: July 2007); EU ETS emission allowance price fromPoint Carbon, www.pointcarbon.com, viewed 3 October2008.

20. Douglass C. North, Institutions, Institutional Change,and Economic Performance (Cambridge, U.K.: CambridgeUniversity Press, 1990).

21. The Automobile Evaluation Standard Subcommittee,Energy Efficiency Standards Subcommittee of theAdvisory Committee for Natural Resources and Energyand The Automobile Fuel Efficiency StandardsSubcommittee, Automobile Transport Section, LandTransport Division of the Council for Transport Policy,Final Report of Joint Meeting (Tokyo: February 2007), pp.4–5; Feng An et al., Passenger Vehicle Greenhouse Gas andFuel Economy Standards: A Global Update (Washington,DC: International Council for Clean Transportation,2007), pp. 18, 24, 32.

22. Honorable Mary Peters, Secretary of Transportation,CAFE Standards Announcement, 22 April 2008; AssemblyMember L. Levine, Assembly Bill 722, Sacramento, CA,introduced February 2007.

23. Department of the Environment and WaterResources, “World First! Australia Slashes GreenhouseGases from Inefficient Lighting,” press release (Canberra:20 February 2007).

24. “Britain to Start Phasing Out High EnergyLightbulbs,” Reuters, 27 September 2007; “Chinese Agreeto Nix Incandescents,” Greenbiz.com, 3 October 2007;“New Zealand to Turn Off Old Light Bulbs,” Reuters, 17June 2008.

25. U.S. DOE, Energy Efficiency and Renewable Energy,“States with Renewable Portfolio Standards,” athttp://apps1.eere.energy.gov/states/maps/renewable_portfolio_states.cfm#chart, updated 2 May 2008.

26. Environmental Technologies Action Plan, “Spain’sNew Building Energy Standards Place the CountryAmong the Leaders in Solar Energy in Europe” (Brussels:


Endnotes

European Commission, September 2006).

27. “First Heating Law for Renewable Energy inGermany,” Energy Server (Newsletter for RenewableEnergy and Energy Efficiency), 2 August 2007.

28. Tripartite Task Force – Brazil, European Union, andUnited States of America, “White Paper onInternationally Compatible Biofuel Standards,” 31December 2007, at www.nist.gov/public_affairs/biofuels_report.pdf.

29. Figure 7 is a Worldwatch calculation based onCalifornia Energy Commission (CEC), CaliforniaElectricity Consumption by Sector (Sacramento: 2006), onU.S. DOE, State Energy Consumption, Price, andExpenditure Estimates (SEDS) (Washington, DC: 2007),on U.S. DOE, Annual Energy Review 2006 (Washington,DC: 2007), on T. Dang, CEC, conversation with AmandaChiu, Worldwatch Institute, 22 September 2008, and onU.S. Census Bureau estimates.

30. Duke Energy Carolinas, LLC., “Application of DukeEnergy Carolinas, LLC for Approval of Save-a-WattApproach, Energy Efficiency Rider and Portfolio ofEnergy Efficiency Programs,” filed to North CarolinaUtility Commission, 7 May 2007.

31. California Public Utilities Commission, CaliforniaLong Term Energy Efficiency Strategic Plan: AchievingMaximum Energy Savings in California for 2009 andBeyond (San Francisco: September 2008); Pacific Gas andElectric, “PG&E Unveils California’s First ComprehensiveInvestment Strategy in Electric Infrastructure SinceEnergy Crisis,” press release (San Francisco: 4 April 2006).

32. John S. Hoffman, “Limiting Global Warming: Makingit Easy by Creating Social Infrastructure that SupportsDemand Reductions Through More-Effective Markets,”unpublished paper, 2007.

33. Janet Sawin, “The Role of Government in theDevelopment and Diffusion of Renewable EnergyTechnologies: Wind Power in the United States,California, Denmark and Germany, 1970–2000,” DoctoralThesis, The Fletcher School of Law and Diplomacy, TuftsUniversity, September 2001.

34. M. Ragwitz and C. Huber, Feed-In Systems inGermany and Spain and a Comparison (Karlsruhe,Germany: Fraunhofer Institut für Systemtechnik undInnovationsforschung, 2005); ranking based on Bradford,op. cit. note 12.

35. German Federal Ministry for the Environment,Nature Conservation and Nuclear Safety (BMU),Development of Renewable Energies in 2006 in Germany(Bonn: 21 February 2007) p. 10; BMU, “RenewableEnergy Sources in Figures” (Bonn: June 2008), p. 8.

36. BMU, “Renewable Energy Sources in Figures,” ibid.,pp. 23–26.

37. Worldwatch Institute calculation, op. cit. note 15.

38. Michael Renner, Sean Sweeney, and Jill Kubit, GreenJobs: Working for People and the Environment, WorldwatchReport 177 (Washington, DC: Worldwatch Institute,October 2008).

39. Table 4 from ibid.

40. Nicholas Stern, The Economics of Climate Change: TheStern Review (Cambridge, U.K.: Cambridge UniversityPress, 2007), pp. 233–34; International Energy Agency(IEA), Energy Technology Perspectives 2008: Scenarios andStrategies to 2050 (Paris: 2008), p. 39.

41. See Pickens Plan, www.pickensplan.com.

42. Al Gore, “A Generational Challenge to RepowerAmerica,” presented in Washington, DC, 17 July 2008.

43. Jeffery Greenblatt, “Clean Energy 2030: Google’sProposal for Reducing U.S. Dependence on Fossil Fuels,”available at http://knol.google.com.

44. Schmidt cited in Braden Reddall, “Google Uses BrandPower to Lobby for Changes in Energy Policy,”International Herald Tribune, 2 October 2008.

45. IEA, “IEA Urges Governments to Adopt EffectivePolicies Based on Key Design Principles to Accelerate theExploitation of the Large Potential for RenewableEnergy,” press release (Berlin: 29 September 2008).

46. EIA, “Country Analysis Briefs: China” (Washington,DC: August 2006); Eric Martinot and Junfeng Li,Powering China’s Development: The Role of RenewableEnergy, Worldwatch Paper 175 (Washington, DC:Worldwatch Institute, 2007).

47. Solar water heating and small hydro from Martinotand Li, op. cit. note. 46, pp. 16, 25–27; CFLs from PeterDu Pont, “Asian Energy Trends and Prospects for EnergyEfficiency,” U.S. Agency for International DevelopmentECO-Asia presentation at TBLI Asia Conference,Bangkok, Thailand, 29 May 2008.

48. Solar from Du Pont, ibid.; wind from Shi Pengfei,“Wind Power in China,” presentation in Guangzhou,China, 23 March 2007, and from Shi Pengfei, “2006 WindInstallations in China” (Beijing: China GeneralCertification Center, 2007), both cited in Martinot and Li,op. cit. note 46.

49. Keith Bradsher, “Warren Buffett to Buy a 10 PercentStake in Chinese Battery Maker,” International HeraldTribune, 29 September 2008.


Endnotes

Index

AAfrica

carbon dioxide emissions, 11electrical transmission systems, 25smart electric grids, 24solar energy potential, 21–22

Age of Turbulence, The (Greenspan), 9Algeria, 11Antarctica, 9Applied Materials, 30Arctic Ocean, 9Australia, 32automobile efficiency standards, 32

Bbatteries, 23, 25, 36biofuels, 32biomass, 21, 34Boston Consulting Group, 31BP (British Petroleum), 30Brazil, 28, 32Buffet, Warren, 36buildings

cogeneration, 25, 27energy productivity of, 14–17, 32micro-power systems, 28

Bush administration, 13BYD, 36

CCalifornia

electricity, 20, 32, 33percentage renewable energy, 24solar electricity, 20, 35wind power, 24

Canada, 11, 15carbon capture and storage (CCS), 11–12carbon dioxide concentrations, 8, 10carbon dioxide emissions

climate change, 6coal burning, 23sources and rates, 9–11, 14, 28tax/cap, 31

Celunol, 30

cement manufacture, 9Cheney, Dick, 13China

buildings, 15, 16carbon capture and storage, 12carbon dioxide emissions, 10–11, 13–14, 35combined heat and power, 12, 17concentrating solar plants, 20government policies, 35renewable energy market growth, 33wind power resources, 21

climate change acceleration, 8–10coal burningcarbon dioxide contribution, 9, 11, 18, 27, 28power plants, 11–12, 19, 22, 31, 34coal gasification, 12cogeneration, 11, 16, 27. see also combined heat and

power (CHP)combined heat and power (CHP), 16–17, 23, 28. see

also cogenerationCombined Power Plant, 26compact fluorescent lamps (CFLs), 14compressed air, 23, 24–25concentrating solar power (CSP), 20, 21, 22, 25, 30, 35cost internalization, 31

DDarling National Wind Farm, 7Denmark, 17, 23–24, 33developing countries, 10, 13, 35. see also specific coun-

triesdigital smart grids, 23, 24DONG, 24Duke Energy, 33DuPont, 30

EEarth orbit and orientation, 8E3 Biofuels, 30Edison, Thomas, 29Egypt, 20Eldrup, Anders, 24electricity. see also specific sources

economics, 20, 31–32supply scenarios, 26–27


transmission grids, 22, 23, 24, 25–26, 28, 31use trends, 33

employment, 34energy efficiency, 13–17, 32–33energy markets, 30–34energy sources. see also specific sources

available resources, 21growth rates, 18output variability, 23

energy system design, 23–28ethanol, 28European Union

carbon dioxide emissions, 11combined heat and power, 17energy efficiency standards, 15–16, 32greenhouse gas emissions goal, 10renewable energy investment incentives, 33

FFinland, 17, 19Ford, Henry, 29fossil fuels. see also specific fuels

carbon dioxide releases, 9–12economics, 13, 31necessity for, 6water scarcity, 22

France, 19Freeman, S. David, 26fuel cells, 23, 25

GGalvin Electricity Initiative, 24Gamesa, 19Gardner, John, 7gas turbines, 23G8 Economic Summit, 10, 11General Electric, 19, 30General Motors, 28geothermal energy, 20, 21, 22, 34German Aerospace Center (DLR), 26Germany

building standards, 15, 32carbon capture and storage, 12combined heat and power, 17Combined Power Plant, 26compact fluorescent lamps, 14energy productivity, 13market-access laws, 33methane biogas, 28solar cell incentives, 20wind power, 24

Goldman Sachs, 30Google, 34Gore, Al, 12, 26, 34government policies, 29, 30, 31–36. see also specific

countriesgreen certification, 15Greenland ice sheet, 9

Greenspan, Alan, 9ground-source heat pumps, 28, 33

HHansen, James, 6, 8, 10, 12Hare, W. L., 10heating, 14, 15heat recovery ventilators, 15Hoffman, John, 33hydroelectric power, 21, 22, 34hydrogen, 28

IIndia, 10, 11, 15, 22, 34Intergovernmental Panel on Climate Change (IPCC),

10International Energy Agency (IEA), 34–35Iowa, 34Israel, 20Italy, 20

JJapan

automobile efficiency standards, 32carbon capture and storage, 12carbon dioxide emissions, 11compact fluorescent lamps, 14energy productivity, 13solar cell incentives, 20

KKyoto Protocol, 34

LLawrence Berkeley National Laboratory, 16lighting/light bulbs, 14, 15, 32, 35

MMcKinsey Global Institute, 17McMurdo Station, 9methane, 8, 9, 28Miasole, 30microturbines, 23, 25Middle East, 11Mitsubishi, 30

NNanosolar, 30NASA (National Aeronautics and Space

Administration), 6National Electrical Superhighway, 25National Renewable Energy Laboratory, 21natural gas

carbon dioxide contribution, 9electricity generation costs, 20growth rate as energy source, 18as transition fuel, 28transportation, 11


Index

Netherlands, 21Nissan, 28no-carbon energy, 18–22North, Douglass, 31North Carolina Utility Commission, 33Norway, 12nuclear power, 17, 18, 19

Oocean energy, 18, 21, 22Ohio, 34oil, 9, 11, 29oil shale, 11

PPacific Gas and Electric, 20, 24, 33Pacific Northwest Laboratory, 21Pasivhaus Institute, 15Pennsylvania, 34Pickens, T. Boone, 26, 34plug-in vehicles, 27positive feedback, 8Potsdam Institute, 10power plants. see specific typesPrometheus Institute, 20pumped hydro, 23

Rrenewable energy. see also specific types and aspects of

economics, 29–31government policies, 32–36job creation, 34land and water requirements, 22sunlight energy content, 21vs. fossil fuels, 18“zero-carbon” buildings, 16

research and development rates, 7, 29–30Royal Dutch Shell, 30

SSchmidt, Eric, 34sea level rise, 9Seville (Spain), 25Sharp, 30Siemens, 19, 30Smart Car, 13solar cells, 20, 22, 30, 31, 35solar energy

concentrating solar power, 20, 21, 22, 25, 30, 35employment, 34output variability, 23resource potential, 19, 20, 21–22

South Africa, 7Spain, 19, 25, 32, 33, 34Stern, Nicholas, 9, 34Stevens Institute, 29sunlight energy content, 21SunPower, 30

TTanaka, Nobuo, 35tar sands, 11Toyota, 28transmission systems, 23, 25transportation, 11, 17, 27, 32tundra melting, 9TXU, 25

UUnited Kingdom, 16, 21United Nations Framework Convention on Climate

Change, 10United States

carbon capture and storage, 12carbon dioxide emissions, 9, 10–11combined heat and power, 16–17compact fluorescent lamps, 14concentrating solar power, 20electrical transmission systems, 25–26energy efficiency, 13, 32energy scenario, 26, 27geothermal energy, 21green certification, 15natural gas, 28nuclear power plants, 19renewable energy employment, 34renewable energy mandates, 32wind power, 21, 33

U.S. Department of Energy (DOE), 10, 12, 26U.S. Energy Information Administration (EIA), 26, 27U.S. Green Building Council, 15

VVestas Wind Systems, 19, 30

Wwaste heat, 13water requirements, 22Weyburn (Canada), 12wind power

economics, 31, 33, 34energy potential, 21, 22, 26growth rate, 19–20output variability, 23–25

World Energy Council, 18Worldwatch Institute, 26, 27

YYeager, Kurt, 24


Index


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