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Energy has been and will remain one of the key variables in the interdependent and interactive relationships between society, technology and the environment. Energy technologies are shaped by the society and ubiquitous technologies in turn shape society. Once society is "addicted" to any type of technology (auto, phone, TV, etc.), it is difficult to let go due to cultural and economic variables such as stranded and sunk costs. Sunk costs can be emotional and/or financial. Stranded cost could be financial and redistributive in nature unless the incumbent technology owners engage in what Joseph Schumpeter called creative destruction.1

While many may see the current global economic crisis as the failure of capitalism, Schumpeter would have seen it as capitalism in process. Creative destruction is visionary. For example, Henry Ford creatively destroyed his horse business by building the automobile business. Mr. Ford knew that if he asked his customers, they would have wanted faster horses while what they needed indeed was the automobile. With the contemporary society addiction to fossil and nuclear energy technologies and petroleum-based automobile transportation; a strong and clear visionary leadership is needed for these traditional energy and transportation technologies to give way to emerging cleaner technologies -- "clean" being defined as most economically safe and green; not necessarily the greenest but least expensive when the total life cycle cost is considered.

Since the industrial revolution, no other technology has had more significant potential, perceived and/or practical risk on the environment and society than energy and transportation technologies. From the destruction of forests for firewood and charcoal, to the use of coal, petroleum and nuclear resources to produce energy for transportation, industrialization, commercial and residential usage, global economic activities tended toward environmental depletion and pollution. President Obama and his team seem poised to reverse this global extractive economic approach with conservation and renewable approach in what future pundits may call Eco-Obamanomics when compared to the competing Obamanomics,2 Clintonomics and Reganomics.3

Eco-Obamanomics is where environmental courage meets national security and economic crisis. It gives political teeth to what many of us had studied as sustainable development in the past. 4,5 Sustainable development or sustainability calls for solving contemporary society's problems while not denying future generations the opportunity to have at least an equivalent opportunity as the present generation. Since the planet's economic and ecological resources are fixed and human population is growing, each generation should try to bequeath a better or at least a similar opportunity as they found to future generations -- a demand for efficiency, conservation, cleaning up the environment, and increasing use of renewable resources.

While this article is focused on greener, smarter and cleaner energy technologies, fossil and nuclear energy technologies will remain a significant part of U.S. and global energy technology portfolio for the foreseeable future. Hence, like the industrial revolution, the clean energy revolution will evolve in time and space. For example, it will take some time to convert the existing utility infrastructure into a smart grid. It will take even longer time for new applications that will enhance customer's convenience on the smart grid to become ubiquitous. But now is an appropriate time to begin this journey.

To be sure, there are many who do not think much about sustainability or sustainable development. When seen as sustainable economic growth it is an oxymoron or impossibility, as Herman Daly has shown.6 Since the coinage of the term "sustainable development", it has been much theory and slow practice in bridging the gaps between "the haves" and "have-nots" globally although activities such as Agenda 21, The Commission on Sustainable Development, and a whole United Nations Division has been focused on sustainable development. Perhaps the current global economic crisis presents an opportunity for sustainability to become an equitable global praxis.4 Such praxis requires leadership that only America can provide -- economics of preservation versus exploitation; the movement from an extractive economy to a renewable economy. So when President Obama7 said (emphasis mine):

"The state of the economy calls for action, bold and swift, and we will act -- not only to create new jobs, but to lay a new foundation for growth... We will harness the sun and the winds and the soil to fuel our cars and run our factories... With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet... To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow... And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it"7

Then the automobile industry, for example, should respond by saying like Henry Ford, we will creatively destroy the fossil fuel automobile by making electric vehicles that can be powered by high-quality batteries and serve as distributed storage for solar and wind energy when parked. They can use existing American technologies to ensure those electric vehicles put back the power to the grid when needed. However, the auto industry may need additional stimulus money to manage both sunk and stranded costs at the assembly lines and refinery plants for a smoother transition to electric vehicle plants. In other words, they should be supported to retool towards a clean energy revolution.

The energy industry could respond by accelerating investments in energy efficiency and conservation, renewable technologies such as wind, solar, geothermal, and other distributed resources that can be integrated into the electric grid (the safest, cleanest and most reliable energy carrier) to help minimize the impact of energy on the environment. The utility industry also needs the stimulus money and regulatory mechanisms to transform the system from a one-way power and information flow to a two-way power and information flow -- the smart grid.

Together, the energy and auto industries can help to drive the shift from predominantly fossil and nuclear energy to renewable energy, energy efficiency and conservation-centric economy -- a transformation much more significant than the change from agrarian economy to industrial economy. Unlike the industrial revolution that started in Europe and created the dichotomy of developed and underdeveloped societies, this revolution has to start in America and must close the gap between the haves and have-nots in order to make globalization cleaner and greener. How? This can be done by leveraging the visionary leadership of the current administration with global policy ideas as suggested herein, to help make Eco-Obamanomics a global reality.

A casual observation of the energy and environmental appointees in the Obama administration (from the FERC Chairman, EPA Administrator, Secretary of Energy and the Secretary of State, to the White House Energy and Environmental Advisers); the Speaker of the House and other key legislators show that the environmental ideas and the economic ideas are beginning to converge along with the Smart Power Diplomacy8 to preserve the planet through equitable global sustainability. Across the world and here in the U.S., businesses are voluntarily taking steps towards sustainability by forming and participating in voluntary organizations such as the U.S. Business Council for Sustainable Development (USBCSD) and World Business Council for Sustainable Development (WBCSD).9

Sustainable development capacity of nations can be seen in three dimensions -- social, technological and environmental.4 Sustainability is manifested through governance and infrastructure management at the local and global levels.4 Policy makers at state levels are beginning to explore sustainability approaches through programs such as the Climate Prosperity in Delaware or a movement towards merchant offshore development in New Jersey. However, to address potential sunk and stranded costs issues, a true public-private partnership at the federal, state and local levels must be encouraged. The present U.S. stimulus plan provides a timely opportunity for such partnership. For example, the U.S. federal government's direct involvement in the auto industry may help to accelerate the commercialization of plug-in electric vehicles, which would otherwise have taken decades to accomplish otherwise.

As another example, utilities can partner with the states to create green jobs through the installation of "shovel-ready" solar panels that can be mounted on the utility poles or street light poles and integrated into the low-voltage system at a reasonable cost -- (see Figure 1 below). Also, another innovative American technology covered in the Vehicle-to-Grid (V2G) article10 shows how the regional power system can leverage electric vehicles for system operations. To spur such green innovation, PJM and FERC may need to establish a special rate mechanism. The synergy of electric vehicles and solar panels becoming resources at the distribution level is worth further exploration and can be a significant component of the Obama's clean energy vision.

These types of products can be designed to be the "killer applications" in the envisioned smart grid. They leverage the existing infrastructure to make dispersed generation and cleaner, noiseless transportation a reality. With products like these, power begins to flow in both directions in the distribution system. These types of green innovations represent American technological leadership that will help to minimize oil dependency, create more jobs, minimize pollution, and support global sustainable development.

Figure 1: Picture of Petra Solar's SunWave -- a dispersed generation resource that can be mounted on existing utility poles and/or streetlight poles. These units come with ready-made smart grid applications and are installed by a utility crew in less than one hour. Technically, both the solar panels and electric vehicles can be aggregated along with direct load control for various power system operation applications (e.g., regulation, voltage control, power quality and peak management.)

However, to encourage utilities and automobile manufactures to pursue these new technologies along with energy efficiency and conservation, the following policy tools need to be considered and supported at the local, state, federal, and global levels:

• Decoupling of volume of energy delivered from the utility delivery business revenue. In most jurisdictions, utilities (gas and electric) make their money based on the volume delivered to individual customers. But the pipes and wires used to deliver such energy, once installed for individual customers, do not change. Typically, to accommodate the peak demand, the pipes and wires are designed for more than the average power the customer will require. Therefore, while the volume of delivered energy may vary from time to time, the cost of delivery is fixed (except for customer care and similar growth, reliability and inflation related expenses).

  Decoupling the delivery revenue need not be confused with the total cost that includes generation -- the cost of fossil generation varies with volume and times of use while the volume of solar and wind generation varies with nature once installed. Total cost will vary but the fixed cost associated with delivery does not and should thus be decoupled from the variable volumetric cost of production. When utilities do not lose revenue because of distributed resource, efficiency and conservation, they can become the best advocates for renewable and zero-emission energy policies that support sustainability and clean energy revolution.

• Movement towards zero-emission vehicles. As long as the total cost of oil-based vehicles are not captured, auto manufactures and buyers will continue to have less disincentive to manufacture and purchase gas guzzling vehicles. Public policies that demands significant and growing percentages of all vehicles in a given jurisdiction to be zero-emission will drive economies of scale for the now relatively expensive electric vehicles. Ultimately, such economies of scale will result in less expensive electric vehicles that use wind and solar resources to charge the batteries. With economy of scale, more efficient and effective batteries will be produced to "harness the sun and the winds... to fuel our cars and run our factories".7

  
  

• Merchant wind and solar plants versus mandated purchase. Energy practitioners will never forget the negative impact on utilities coming from PURPA-mandated power purchase agreements. As the big players in town, policy makers required utilities to buy uneconomic power from untested producers. When these PURPA producers failed, the utilities and their customers were stuck with the uneconomic contracts. As a leader in the renewable industry, the state of New Jersey in adopting its Renewable Portfolio Standard (RPS) demanded that a portion of the RPS requirement be set aside for solar. In so doing, it created one of the most attractive solar markets in the nation. Delaware also adopted a similar approach and solar projects are becoming attractive.

  New Jersey is also leading the way in offshore wind. The state is on the path to amend the existing RPS requirement to have offshore wind carve out what they term an offshore wind renewable energy certificate (OREC). Implementing such a policy across the PJM market, for example, will allow the development of renewable merchant plants that sell their ORECs in the market along with energy and capacity. Providing the proper market for the ORECs will result in the generation and transportation of clean energy from the eastern part of PJM to balance the importation of the not so green (coal based) energy from the western part of the system.

• Globalization of clean energy solutions. For equitable global sustainable development to occur, both the rich and poor nations must play a role. The biggest stumbling block on this type of progress has been the symbiotic issue of poverty pollution and affluence pollution. Poverty pollution is caused by poor people (poor nations) who cannot afford green solutions but have to burn firewood for instance just to cook their meals on a daily basis, thus contributing to global air pollution. Affluence pollution, on the other hand, is when the rich people (rich nations) can afford to consume more than they need (like many in the western world, and a few in the developing nations), by driving gas-guzzling SUVs instead of car pooling, for example. If the transition from affluence pollution to green prosperity is accomplished in the U.S., there will be a moral and economic authority to minimize poverty pollution in the developing nations -- an example of Smart Power that can be implemented under Secretary of State Hillary Clinton.

  The policy of cleaning and greening the world will drive American exports around the globe and also increase a positive American presence in countries of the world that are represented here in America. When Indian-Americans, Nigerian-Americans, German-Americans, Brazilian-Americans, Jordanian-Americans, Pakistani-Americans, Iranian-Americans, Korean-Americans, Russian-Americans, etc., identify problems areas in their ancestral countries and make green investments, the local population will not only see America in a different light, but they will also know that they are represented in America.

Yes we can! The ongoing economic downturn presents a unique opportunity for bold action to reposition the global economy from extractive and combative to renewable and cooperative. The American leadership seems to be in place for Eco-Obamanomics to evolve. The right policies must be used to champion clean energy revolution for global sustainability. Yes we should!

* This article is the author's opinion. It does not necessarily represent the position of his employer (PHI or the affiliates).

References

1. Joseph A. Schumpeter, Capitalism, Socialism and Democracy (New York: Harper, 1975) [orig. pub. 1942], pp. 82-85 -- see excerpt at : Link

2. Laura D'Andrea Tyson, In Defense of Obamanomics: History shows that the president's tax plans are consistent with strong economic growth. The Wall Street Journal, Monday, March 9, 2009. Link

3. Richard W. Stevenson, The Battle of the Decades; Reaganomics vs. Clintonomics Is a Central Issue in 2000, New York Times, Published: Tuesday, February 8, 2000. Link

4. Udo, Victor , 'Exploring Patterns of Sustainable Development, Governance and E Infrastructure Capacities of Nations for Global Equity Praxis', Doctoral Dissertation, School of Urban Affairs and Public Policy, University of Delaware, Newark, Delaware, 2002

5. Jansson, Peter and Udo, Victor " The Modern Electric Power Industry and Global Sustainable Development, " The International Journal of Modern Engineering, Vol.6, No. 1, Fall 2005

6. Herman E. Daly and Kenneth N. Townsend, VALUING THE EARTH: Economics, Ecology, Ethics, (1993), ISBN 0-262-54068-1 MIT Press 800-356-0343 or 617-253-2884. Link

7. ABC News, FULL TRANSCRIPT: President Barack Obama's Inaugural Address, January, 20, 2009. Link

8. See their websites: Click Here and Here

9. R. L. Armitage and J. S. Nye, Jr. "IMPLEMENTING SMART POWER: SETTING AN AGENDA FOR NATIONAL SECURITY REFORM" , Senate Hearing Statement, April 24, 2008: Link

10. Udo, Victor , Proven at PJM: Vehicle to Grid (V2G) and Power System/Transportation Synergies, November 2008 Link