Energy Myth Eight - Worldwide Power Systems are Economically and Environmentally Optimal

Casten, T.R. & Ayres, R.U. (2007). Energy Myth Eight - Worldwide Power Systems are Economically and Environmentally Optimal. In: Energy and American Society - Thrirteen Myths. Eds. Sovacool, B.K. & Brown, M.A., Dordrecht: Springer. ISBN 978-1-4020-5563-8 10.1007/1-4020-5564-1_9.

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Abstract

Debates on energy policy, environmental regulation, and global warming start with the largely unquestioned assumption that the present heat and power system is economically optimal. It then follows that any actions to change the energy system to achieve other goals, such as lowering pollution, will raise the cost of energy services and damage the economy. It then further follows that the only way to have affordable, clean energy is to invent and develop new technology. This view is widespread. President George W. Bush, in a major speech on climate change said, "Technology is the ticket" (2005). But the energy system is not optimal, and society does not need to play off income against cleaner energy.

We question this near-universal belief that new technology is the most important requirement to mitigate climate change. Although the energy system is the world's largest single industry, energy entrepreneurs are not free to innovate in the manner of other industries. Our conventional wisdom that markets are efficient has to take into account that there is not truly functioning market in the electric sector, at least not to the degree we would like to believe. In fact, it is virtually the only remaining mega industry that is centrally planned (by Public Utility Commissions) and works on 5-year plans (called rate cases).

These regulations and monopoly protections create significant barriers to energy system innovation and largely prevent the deployment of proven technologies that could reduce net energy costs 'and' reduce emissions. Eliminating barriers to energy innovation is job one of anyone concerned with energy costs, fossil emissions, national security implications of fossil fuel use, or retention of manufacturing jobs.

Item Type:	Book Section
Research Programs:	Transitions to New Technologies (TNT)
Bibliographic Reference:	In: B.K. Sovacool, M.A. Brown (eds); Energy and American Society - Thrirteen Myths; Springer, Dordrecht, Netherlands pp.201-237
Depositing User:	IIASA Import
Date Deposited:	15 Jan 2016 08:39
Last Modified:	27 Aug 2021 17:38
URI:	https://pure.iiasa.ac.at/8227

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