Energy Innovation Can Once Again Show The Way Forward
Forty years ago this week the U.S. and much of Europe learned tough lessons about our addiction to fossil fuels. Our dependence on their dirty energy made us vulnerable, so that when OPEC’s Arab nations announced an oil embargo and a worldwide spike in the price of oil, we felt near powerless to do anything about it, even as we reeled from the sudden shutoff of our energy pipeline.
We weren’t exactly powerless, of course. While consumers waited—and fought—in long lines for gas for their cars, government leaders set about the difficult but necessary work of innovation, primarily via new policies. In particular, the creation of the U.S. Department of Energy, increases in fuel economy standards for autos, and new standards for appliances such as refrigerators in the years that followed progressed energy efficiency in a way we hadn’t seen in the previous half century, when we assumed our fossil-fueled energy supplies to be forever abundant and cheap.
Thanks to such progress in efficiency, between 1973 and 1985 U.S. energy consumption per dollar of GDP fell by 28 percent, five times faster than it had over the course of the previous quarter century, according to the U.S. Department of Energy. Such efficiency gains and the corresponding decrease in demand for oil had a secondary effect, however. The per-barrel price of oil plummeted in 1986, ushering in a new era of cheap fossil-fueled energy.
But while that fuel may have been superficially inexpensive before and again after the oil crisis, our continued burning of those fuels has not come without cost. Even beyond the wars fought and lives lost defending fossil fuel interests, the world’s continued burning of fossil fuels has in fact come at an even greater price. As the IPCC pointed out in its new report just last month, we now face the sobering specter of global climate change… real, human-caused, and with consequence.
Climate change demands urgent action if we are to avert the kind of negative scenarios IPCC scientists tell us will be the result of ongoing greenhouse gas emissions. And though this crisis on such a grand global scale potentially leaves us once again feeling powerless to prevail against it, just as in the 1970s, we can—and must—replicate the scaling of innovation and solutions to meet the challenge.
Unlike 40 years ago, however, we shouldn’t expect governments to lead. If anything, they have largely shown us their failure to embrace, to the necessary degree, the kind of bold policy and regulatory actions that could truly address climate change. Since the failure to achieve a global climate change agreement in Copenhagen in 2009, and the focus on economic recovery after the financial crisis of the late 2000s, governments have taken their eye off the ball of climate policy. As a result, solutions increasingly come from beyond our national governments. Recent Washington gridlock only strengthens that perspective. While many of us would welcome those top-down solutions, we can’t hold out hope that they’ll come to fruition in the near future.
Fortunately, we have another way. Business-led innovation and market-based solutions can make our buildings significantly more efficient, our autos use dramatically less or even no oil, and our electricity system largely powered by clean renewables. Rocky Mountain Institute’s Reinventing Fire analysis shows this future is possible; shows that we can embrace a global transformation in energy use from fossil fuels to energy efficiency and renewable energy. And if we act swiftly and with determination, that shift is possible in the foreseeable future, creating a very different and much more positive outcome by 2050 than the significantly hotter and less pleasant world the recent IPCC climate change report forewarns.
Our economy, our quality of life, and our children’s and grandchildren’s future are not to be held hostage, whether explicitly by OPEC or implicitly through inaction on climate change. We have weathered crisis before, both endured its immediate economic impact and then leveraged the potential of the innovation that sprang from it. It is time now for even bolder action to create a clean, prosperous, and secure energy future, pursuing market-based solutions to defuse the ticking bomb of climate change.