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OCR for page 203
4
Implications for Strategy
OCR for page 204
OCR for page 205
Energy: Production, Consumption,
and Consequences. 1990.
Pp. 205-212. Washington, D.C:
National Academy Press.
Energy' Environment' and Development
WILLIAM D. RUCKELSHAUS
We are concerned with the effect of energy production on the envi-
ronment, an effect that has heretofore been seen as a sort of collision. A
good deal has been said about many of these collisions: global warming,
acid rain, the varied impacts of nuclear energy, and so on. It may seem
as though the energy necessary for the sustenance of humanity cannot be
produced without wrecking the environment necessary for human survival,
but this is an illusion based on shortsightedness and on the failure of some
of our political and economic institutions to respond to the wrongheaded.
In fact, responsible environmental policy is the only policy that makes sense
economical) in the long run.
Two kinds of experience have led me to this belief. The first, and more
recent, was my tenure as U.S. representative on the World Commission on
Environment and Development, a panel chartered by the United Nations;
the second was my experience as administrator of the U.S. Environmental
Protection Agency, both in its founding period and again between 1983
and 1985. Although past experience is not always an unerring guide to
the future, it is the only one we have. Whereas the simple extrapolation
of current trends is unwise, it seems clear that if some changes are not
made in both the way energy is produced and the way the environment is
protected, the future will range from unpleasant to awful for most of the
people in the world.
This was, in fact, a major conclusion of the World Commission on
Environment and Development, which met from 1984 to 1987, and whose
- 205
OCR for page 206
206
W7~LIM D. RUCRELSHAUS
deliberations have strongly influenced my own views on environmental pro-
tection. The World Commission's charter was both simple and enormous:
to formulate a global agenda for change and to propose long-term en-
vironmental strategies for achieving sustainable development by the year
2000 and beyond. It proceeded to do this using a remarkable and unique
method, that of holding a series of public hearings in major cities in all
regions of the world, and receiving ideas and testimony from thousands
of people—scientists, scholars, politicians, and large numbers of concerned
citizens.
The report of the World Commission, entitled Our Common Future
(1987), deals with various aspects of development population growth, food
security, resources, energy, industry, urban problems as part of a single
interrelated problem. Its central finding is that the continued prosperity
of the developed world depends on the rapid extension of prosperity to
the less developed nations in an environmentally responsible manner and
that, therefore, economic development and environmental protection are
complementary rather than opposing goals, two sides of the same coin. The
World Commission has proposed the concept of sustainable development as
the new model for economic growth, a model that requires efforts to
increase prosperity without the destruction of the environment on which
all prosperity ultimately depends. This finding, of course, contrasts sharply
with earlier studies recommending limitations on growth as the answer to
global environmental deterioration.
Naturally, energy development must play a critical, and perhaps the
most difficult, role in the realization of this new model. As a matter of
fact, the most contentious of all the commission's deliberations were those
concerned with energy, and the panel almost failed to reach consensus
because of energy-related issues. Perhaps the timing was unfortunate:
When the commission began oil was $25 per barrel; when it ended the
price had dropped to $10. Also, somewhere in the middle, the Chernobyl
accident occurred.
On the other hand, the world may be running out of "good" periods.
It is well known that the quarter of the world's population living in the
industrialized world now uses about three-quarters of the world's output
of energy. This is obviously going to change as dozens of less developed
nations push toward large-scale industrialization. Energy demand is going
to grow accordingly, and the critical question for the environment is, by
how much? Although the answer is essentially unknowable, some reasoned
guesses can be made. The logic used by the World Commission can be
described as follows.
In 1980 the world consumed about 10 billion kilowatts of energy. If
per capita use remained at the same levels as today, the projected world
population by the year 2025~.2 billion people would use 14 billion
OCR for page 207
ENERGY E~RONME~ ID DEVELOPMENT
207
kilowatts. However, if energy consumption became uniform worldwide at
the current level of industrial nations, the same population would require 55
billion kilowatts. Neither of these figures is realistic; they merely establish
the approximate bounds of the range within which energy futures are likely
to fall.
The World Commission examined the environmental effects of energy
futures at the high and low ends of this range, 35 billion and 11.2 billion
kilowatts. The high-end scenario would involve producing more than one
and a half times as much oil, more than three times as much natural gas,
and nearly five times as much coal as in 1980. This increase in fossil fuel use
implies bringing the equivalent of a new Alaska pipeline into production
every two years. Nuclear capacity would have to be increased 30 times over
1980 levels.
The high-energy future would continue to aggravate some disturbing
environmental trends, directly via physical effects and indirectly through
the economies of developing nations. Direct effects include global warming
associated with the carbon dioxide produced by burning fossil fuels, as
well as urban industrial air pollution and acidification of the environment
from the same cause. They also include the various risks accidents, waste
disposal, and proliferation—attendant on the expansion of nuclear energy.
Indirect effects arise from the continuing dependence of less developed
nations on steadily increasing amounts of imported energy and their need
to borrow vast sums to keep up with demand. For example, the high-
energy use scenario just mentioned would require investments of $130
billion per year in the developing counties alone. This dependence creates
a desperate need for foreign exchange, which in developing nations often
translates into overuse and destruction of natural resources. For example,
over 38,000 square miles of tropical forest are destroyed each year, and a
like amount is grossly disrupted. It is impossible to tell how much of this
loss is attributable to the need to procure energy directly or to pay for it,
but that is probably a substantial part and it will continue to grow.
If energy cannot be purchased abroad, it must come from immediately
available sources, and in the undeveloped world this most often means
firewood. If present trends continue, by the year 2000 nearly 2.5 billion
people will be living in areas that are extremely short of fuel wood. In
some cities of the developing world, families may pay one-third to one-half
of their income for firewood. The pressure on remaining forests from this
sort of economics is easy to imagine. Of course, as forests are depleted,
we see not only the familiar damage to habitat and species extinctions, but
also a diminution in the very ability of the planet to handle the carbon
dioxide produced by burning fossil fuels—a vicious cycle indeed.
A future that includes this kind of damage is by no means foreordained,
provided we have the political will and the institutional structure to create
OCR for page 208
208
W7~L4M D. RUCKELSHAUS
sustainable development throughout the world. Foremost among the will
and structures will be the public environmental demands of the developed
world and the agencies created in response to these demands. I would
like to offer my own view of U.S. environmental protection both past and
present—because we must understand its capabilities and deficiencies as a
tool for solving the problems being addressed.
Here I am both hopeful and dismayed hopeful because I know,
first hand, how far we have come in changing the national consensus on
environmental protection. The Environmental Protection Agency has been
in existence for less than 20 years. Virtually all our environmental legislation
is a product of that brief t~me-span. Before that, there was a widespread
belief among business and political leadership that environmentalism was
a fad and that it would, if taken seriously, wreck U.S. industry. That
agreement has been entirely reversed. Most all corporate leadership now
accepts some form of environmental protection as a legitimate cost of doing
business.
Thus, we nearly all have environmental consciousness now, whereas
nearly all of us grew up without it. That is a monumental change and
a hopeful sign, because if we could achieve such change, then the even
greater changes required to establish sustainable development, in energy
and elsewhere, may not be beyond our grasp.
The dismaying part results from the current orientation of our en-
vironmental protection efforts. In fairness, this orientation arises out of
the history of these efforts, a history that might be called "pollute and
cure." That is, environmentalism began in this country, as it did in all the
industrially developed nations, as a response to widespread pollution. A
structure of command and control regulation was established, first for the
most egregious pollution and later for the less obvious types. The theory
was that by establishing very high standards and gradually cracking down
on allowable emissions and effluents, a point would eventually be reached
where virtually no pollution would enter the environment.
Where it was appropriate, this approach worked reasonably well, albeit
at colossal cost. It was appropriate, for example, in controlling a relatively
small number of mass pollutants from easily identifiable fixed and mobile
sources. It was appropriate for repairing badly polluted localities through
targeted investment in items such as tall smokestacks and sewage treatment
plants.
As time went on, new environmental problems emerged, for which this
approach was much less appropriate. Thousands of products were found in
daily use which, even at very low levels of exposure, had some probability
of causing damage to human health or the environment. It was learned
that many of the pollution control systems mandated simply transferred
OCR for page 209
ENERGY E~RONME~ ID DE~LOPME~
2(J9
pollution from one environmental medium to another taking toxic wastes
out of the river, for example, and burying the residue on the land.
The structure of environmental law and regulation had also become
very complex, as the law chased pollution around wherever it seemed
most apparent in any particular year. This complexity has rendered almost
impossible an ordered, multimedia approach to controlling pollution, in
which some finite national investment in pollution control could be aimed
at targets that represented the most significant risks.
Most of the environmental protection resources in this country are now
directed, as our laws demand, toward reducing even further what appear
to be relatively small risks to human health. Very little of that previous
resource is left over for dealing with the immense transboundary and global
environmental issues that concerned the World Commission, and ought to
concern us now.
A slow, legalistic, and extremely expensive system has been created
which is at heart an adversarial system. Environmentalists and their political
allies push for tighter and tighter controls. The industrial community
and its political allies push for lower control costs. Yet, in principle,
neither environmentalists nor industry should have any objection to efficient
pollution control. We can no longer afford to stage these elaborate battles
over incremental pollution, especially when a much wiser goal would be
investment in waste-minimizing productive capacity.
What about the rest of the world? Is there some way for nations to
achieve environmental goals without eventually reproducing this wasteful
and frustrating pattern? The newly industrialized nations have just started
to arrive at the stage where they find pollution intolerable. Once this stage
arrives, progress can be quite rapid. On Taiwan, for example, a complete
reversal of public opinion with regard to pollution control has occurred
over the past two years. Taiwan and South Korea will probably increase
their environmental consciousness in the late 1980s, not unlike the United
States and Japan did in the 1970s. However, these nations will probably
not adopt the legalistic, adversarial pattern found in the United States; the
national consensus model used by Japan is more likely.
In any case, these nations are not the chief concern over the next 20
years. We should be much more worried about the less developed nations,
which are now getting ready for their leap into industrial life. If they must
go through the same "pollute and cure" cycle as both the older and the
more recently industrialized nations have, three~uarters of humankind may
produce pollution at the levels historically produced by the small fraction
of it that was industrialized during the century now coming to an end.
Given the current situation with respect to energy, the question must be
asked: Will these nations be able to afford it? Highly polluting machinery
is often more wasteful of energy and raw materials than its less polluting
OCR for page 210
210
VELLUM D. RUCKELSHAUS
counterpart. Given the situation with respect to the global environment,
another question must be asked: Will the world be able to afford it?
It seems undeniable that somehow, within the next quarter of a century,
the transition must begin to a stable base of minimally polluting energy
sources at levels that will allow the development and prosperity of all the
societies on the planet. It is unlikely that this will be done well unless
the power, prestige, and skill of U.S. environmental institutions, public and
private, are shifted away from efforts to "control" progressively smaller
increments of toxic pollution and toward the long-term problems of the
global environment.
For our purposes, these problems can be posed in the form of a single
question: How can the world develop the energy it requires and sustain the
health of the environment without which it cannot live? Answers must be
sought at three different levels with respect to the future: the immediate,
the midrange, and the ultimate. These will be addressed in turn.
The immediate issue is how to continue progress toward a sustainable
energy future in the current low-price environment. Conventional account-
ing works against conservation measures when energy is cheap, although
paradoxically it is in such periods that more resources are available to
make conservation investments against the inevitable day when the price of
energy goes up again. From the viewpoint of public policy, there should be
no subsidies for fossil fuel use when prices are this low: that means both
the familiar direct subsidies and the more subtle environmental subsidies
paid via health, property, or environmental damage. Also, policies that
discriminate against renewable energy sources should be eliminated. These
include both the fossil fuel subsidies just mentioned and the continuing
discrimination against small-scale sources of energy by large energy distrib-
utors. Overall, these months of low energy costs must be used as a grace
period, in which to marshal our resources and establish the basis through
investment and planning for a sustainable energy future.
In the midrange, ameliorative steps must be taken against the global
and regional energy-related problems. This refers mainly to greenhouse
warming and precipitation acidification, both of which are vast in scale and
subject to considerable scientific uncertain~. In both problems there are a
number of plausible scenarios from which to choose.
Consider the following, however: whatever the scenario, the resources
that can be devoted to any environmental problem are finite and we cannot
afford to launch major programs against every "problem of the week" or
to march off boldly in the wrong direction. On the other hand, windows
of opportunity may be slamming shut with every year of delay. We cannot
afford paralysis by analysis either.
The way out of this quandary seems to be an approach patterned on
the way insurance is bought. We are accustomed to sacrifice some present
OCR for page 211
ENERGY E~RONME~ ID DEVELOPMENT
211
income in order to protect ourselves and our families against the possibility
of disaster. No one now would deny the possibility of disaster from these
global problems. The arguments are about probability and timing.
Therefore, investments must be adjusted according to the likely range
of probability, as with insurance, but in any case at a scale adequate
to make a dent in the problem if a dent can be made. The knowledge
gained by actually operating a program is invaluable and cannot be replaced
by academic research. Moreover, it sends an important message, that the
problem is real, and that we are concerned about it. Consider, for example,
how much more would be known about how to handle acid rain and how
much better off we would be scientifically (not to mention politically) if a
modestly scaled sulfur control program had been launched in 1982.
On the ultimate time scale, the basic thing to keep in mind is that
global problems require global solutions. It is now possible for one nation
to damage another nation inadvertently through environmental pollution at
levels of human suffering and property damage that once were associated
only with acts of war.
It, therefore, seems wise to accept such problems as falling broadly
within the purview of "national defense" and to start paying the kind of
attention such damage would demand if inflicted by hostile troops. The
recommendations of the World Commission outline what kind of attention
is needed.
On the global impacts of fossil fuels, including greenhouse effects
and acidification, the commission recommends a four-part strategy that
combines improved monitoring and assessment of the evolving phenomena,
increased research to improve knowledge about the origins and effects
of these phenomena, development of international agreements on the
reduction of greenhouse gases, and adoption of international strategies for
minimizing damage from the coming changes in climate and sea level.
On the nuclear front, the World Commission recognized that at
present, different nations have different views about the necessity and safety
of nuclear power. Yet because of the potential for transboundary effects,
it is essential that governments cooperate in the development of a com-
prehensive set of international agreements covering the technical, health,
and environmental aspects of nuclear power. These would include such
things as international notification of nuclear accidents or transboundary
movement of nuclear materials, as well as codes and standards for operator
training, compensation and liability, reactor safety, radiation protection,
decontamination, and waste disposal.
Above all, in nearly every one of its recommendations, the World
Commission urges a return to multilateral action global responses to
global problems. Without an acceptance of this, if global issues are seen
only as some legalistic fray between a polluter and a victim, nothing much
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212
W7~L4MD. RUCKELSHAUS
will be accomplished. In the United States, for example, responsible and
wise action on acid rain has been thwarted by, among other things, the
insistence that ratepayers of midwestern utilities bear the entire cost of
remedial action. In fact, acid rain is, at the very least, a national problem
and it requires a national response.
The developed world and its institutions should play a leading role
in formulating the global response, but will they? Global responses are
difficult things to organize in representative democracies. It is hard for
elected officials to spend many chips on efforts that benefit their home
constituency only indirectly, or may have some immediate adverse effects
on that constituency, and relate to events farther off in time than the next
election. On the other hand, as pointed out earlier, no one could have
predicted in 1968 the realization of the environmental agenda 20 years
later. So perhaps this scant grace period will not be wasted. Perhaps there
will be time to plan for the changes attendant on creating the energy future
the environment needs, a future with the necessary energy services, at a
fraction of current primary energy consumption.
We will, eventually, have to change, and the longer change is put off,
the more desperate, painful, and expensive will the remedies be. It remains
to be seen for how long narrow considerations of national sovereignty and
short-term interest will keep us from doing what global environmental and
. . .
economic WlSC om requires.
REFERENCE
World Commission on Environment and Development. 1987. Our Common Future. New
York: Oxford University Press.
OCR for page 213
Energy: Production, Consumption,
and Consequences. 1990.
Pp. 21~237. Washington, D.~:
National Academy Press.
What to Do About CO2
JOHN L. HELM AND STEPHEN H. SCHNEIDER
The energy that people use predominantly comes from burning fuels
containing carbon: coal, oil, gas, and wood. When these fuels are burned,
carbon dioxide (CO2) is released to the atmosphere. CO2 is called a
greenhouse gas because it lets radiant energy into the atmosphere more
freely than it lets it out. The effectiveness of this atmospheric heat retention
increases with CO2 concentration.
Climate is known to fluctuate naturally over all scales in space and
time, yet there is strengthening evidence of a changing, indeed warming,
climate, over the past 100 years. Further, this warming is consistent with the
progressively increasing concentration of greenhouse gases, especially CO2,
in the atmosphere. Although scientists do not yet know how much of the
current climatic change is natural and how much is due to human activity,
there is no question that the burning of fossil fuels is the dominant mode
of human CO2 production. There is also no question that a large, rapid
climatic change is likely to have a substantial impact on the environment
and society.
The subject of this discussion is what can or should be done about the
greenhouse situation in view of the attendant uncertainties? 1b address this
question, first we review briefly the essential climatological context of the
greenhouse effect and the uncertainties in our understanding of it. Next
we review the range of possible climate futures and their potential societal
consequences. This provides a framework in which the spectrum of policy
responses can be introduced. Finally several energy policy and technology
options are presented.
213
OCR for page 268
268
USA
Latin Amen
~ Africa 55:2 r
it. ;. ~ .; :;
~ . A.
2-..'0"'0;1-'
.
FIGURE 1 Proven oil reserves as of 1987 (billions of barrels).
ROBERT MALPAS
Western Europe 22.4
Centrally Planned Economies 79.2
~ Canada 7.7 Id
~ _ ~ ~
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Asia & Australasia 19.5
technology, which will continue on their own momentum (e.g., advances in
miles per gallon driven or flown, lumens per watt, degrees of heat in our
buildings, units of information per unit of energy). Yet, paradoxically the
very success of technology, because it reduces energy consumption, also
reduces the economic incentive to invest further in greater efficiency.
On the supply side, technology has two major effects. It is reducing the
price at which it is economic to discover and develop oil fields previously
considered uneconomic, and it is reducing the price at which alternatives to
crude oil become economic, such as harnessing very heavy oil or converting
natural gas to gasoline. World resources of very heavy crude oil and natural
gas are each as large as reserves of conventional crude oil.
The result of all this is best illustrated by long-term forecasts of the
price of crude oil. Planners have become wiser: they now forecast a
bracket. In 1986 the upper bound was $30 and the lower, $15. The
rationale was that above $30, alternatives to conventional crude would
become economical, and that below $15, demand would quickly revive and
the economic penalties on suppliers would be too hard to bear. Today the
upper bound has already been reduced to $25 in lower valued dollars at
that.
Of course, we applaud these achievements and call for more; but they
do undermine efforts toward higher energy efficiency. The public concludes
that technology will come to its rescue on every issue. People believe that
technology will continue to extend the finiteness of oil, as indeed it has, and
that it will reduce the energy needed per unit of output, without any action
\
OCR for page 269
EFFICIENCY CHILI, ID BUDDER
269
or investment on their part. They also believe that environmental and
ecological concerns will be solved by the cavalry technology riding over
the hill! (Superconductivity seems to be the name of one of its younger
officers!)
Lest anyone derives too much comfort from all this, it should be em-
phasized that even in the most optimistic energy-efficient scenario available,
the United States will, by the year 2000, be importing more than half of its
crude oil requirements.
Under the heading of technology one must recognize the remarkable
increase in the use of electricity in the world. It is unquestionably the
most convenient form of energy. It is intense—much more so than fossil
fuels and very easy to control, measure, and program. Its growth strongly
favors greater energy efficiency.
On an international plane, politics is concerned with ensuring that the
world is not unduly dependent on its supply of energy from a particular
group of governments whoever they may be. At the national level, politics
is concerned with self-sufficiency, if possible, or less dependency if not. It
means ensuring sufficient energy to sustain national growth, supplying the
basic needs of the poor, and raising revenue by taxing energy. It also
means protecting local environments and worrying about emissions from
neighboring countries. It is predominantly concerned with supply issues.
The following are some random examples.
Brazil, South Africa, and New Zealand have invested in expensive
options to seek greater self-sufficiency: Brazil, in ethanol; South Africa in
converting coal to gasoline; and New Zealand, in natural gas conversion
to gasoline. These policies are now heavily subsidized because they were
predicated on the expectation of high crude oil prices.
In France, a few years ago, President Mitterand almost apologized for
the decision to reduce the number of construction starts of nuclear power
stations from three per year to two. It was an issue of jobs, national pride,
and self-sufficiency.
In Great Britain today, politicians are justifying raising electricity prices
to improve the economics of building new power stations that use coal,
at present highly priced, to subsidize the coal mining industry. Also,
Great Britain is about to privatize electricity. The prime considerations are
evidently not about demand energy efficiency.
The United States faces many political challenges on the energy scene.
It consumes for its transportation needs half of the total energy used by all
OECD countries for less than one-third of the people and also consumes
significantly more energy per unit of gross domestic product (GDP) than
any other country in the world, except Canada (Figure 2~. Other than
in the less developed countries, this ratio has fallen consistently since the
early 1970s. The challenge now is to ensure that it continues to fall in the
OCR for page 270
270
0.60
0.55
0.50
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0.40
0.35
0.30
0.25
0.20
0.15
ROBERT MALPAS
-
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.` United States
— _
1965 1970 1975 1980 1985 1990 1995 2000 2005
FIGURE 2 Energy intensity (tons of oil equivalent per thousand dollars).
future. Looked at another way, we need to extract more value, in terms
of economic growth, from each unit of energy we consume; let us turn the
index up the other wa~more or less (Figure 3~. There is much to do in
the way of formulating policies that rekindle the public's incentives to use
energy more efficiently. Then, to reduce increasing U.S. dependence on
crude oil imports, we need to stimulate more indigenous exploration and
development of known reserves.
6.5
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1.5 I I I i I I I 1
1965 1970 1975 1980 1985 1990 1995 2000 2005
FIGURE 3 Productivity intensity (thousands of GDP dollars per ton of oil equivalent),
the reciprocal of energy intensity (compare with Figure 2~. High values of this indicator
result when an economy is producing more with less energy.
OCR for page 271
EFFICIENCY CHILI, ID BUDDED
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Coal
Oil
Gas
Gas
Combined
GENERATION METHOD Cycle
FIGURE 4 Carbon dioxide (C02) emissions for various fuels (million tons per year).
Gas-fired combined cycle generation facilities emit half as much CO2 per gigawatt as
conventional coal-fired facilities.
Environmental fears and the concern for the world ecosystem are
global forces that can be harnessed to encourage energy efficiency. The
most effective way of reducing atmospheric pollution both in power gener-
ation and in transportation the main culprits is to become more efficient
at both. The less consumed the less emitted. This is a simple [act, yet
public resolve has been allowed to weaken.
For electricity generation, ever-greater efficiency and cleaner fuels
must be the objective. Methane is by far the best fossil fuel in this
respect. It emits less carbon dioxide per unit of energy than any other
fuel and generally produces no oxides of sulfur (Figures 4 and 5~. The
only count on which gas may perform less well than other fuels is in NOX
emissions, although these are, at worst, comparable with those of other fuels
(Figure 6~. Gas lends itself more readily to combined cycle generation,
thereby raising the efficiency of generation from just under 40 percent to
near 50 percent. Gas wins twice, resulting in about half the carbon dioxide
emitted per kilowatt than coal. Not much is heard about this in Europe
where gas may be underutilized for power generation.
Finally, in a brief review of global forces, there are the realities of
microeconomics: that is, the criteria by which investment decisions are
judged. Two effects act against greater energy efficiency:
OCR for page 272
272
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GENERATION METHOD
FIGURE 5 Sulfur oxide (SO=) emissions, by fuel, for the configurations shown in
Figure 4 (thousand tons per year).
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Coal
Oil
Gas
Gas
Combined
GENERATION METHOD Cycle
FIGURE 6 Nitrogen oxide (NO=) emissions, by fuel, for the configurations shown in
Figure 4 (thousand tons per year).
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EFFICIENCY HI, AD BUDDED
Trucks
Aviation
High Temperature
Process Heat
Low-Temperature
Space Heating
Lighting
273
Domestic Appliances
Refining
Fossil-Fired
Power Generation 0 10 20 30 40 50 60 70 80 90 100 1 10
PERCENT CHANGE
FIGURE 7 Current and potential improvement in end-use efficiency (percent change from
1973~.
1. Investments in electricity generation, for example, are based on
long lead times, utility rates of return, and payback periods of 15 to 20
years or more. On the other hand, decisions affecting energy demand, taken
daily by millions of individuals and corporations worldwide, are based on
very short payback periods of 3 to 6 years.
2. There is no way, at present, to reflect in these decisions their long-
term consequences for both future supplies and the ecosystem. How can
they be brought home to the public, to a present-day value of some sort,
even if only qualitative, but nevertheless vivid and real?
Cars
Current U.S.
Average
Do not get the impression that nothing is happening with respect
to greater efficiency. New aircraft are typically 20 percent more efficient
than the stock average. The concept of the energy-efficient house is gaining
ground, albeit slowly. In Europe the high-speed 185-mph train is developing
and gaining popular appeal. It is more efficient, comfortable, and trouble-
free than short air flights. The channel tunnel between England and
France will be a further boost. But far more could be done, given the
proper incentives, by harnessing existing technology as we develop future
technologies (Figure 7~.
If the current pace of demand continues and the current rate of
improvement in energy efficiency is assured by the year 2020, more than
twice as much total energy will be required as is used today. The bulk of
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274
12
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ROBERT MALPAS
~0il
— [~1 Gas
Coal
it Nuclear
~ Hydra
:.:.:.:.:.:.: :.: .... . .::.:...
....................................................
_ -.-.-
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+68%
High Tech
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illlillill1lllll1llllfT +58%
+35%
+ 1 00%
_ it.
+34%
1 987
2020
2020
FIGURE 8 Current and possible future energy requirements for the noncommunist world
(billion tons of oil equivalent). without the potential benefits of technology, demand will
be more than twice current levels by the year 2020.
this, it is forecast, can be met only by tripling the consumption of coal the
least elegant source of energy used widely today and even this assumes
that the use of nuclear power will more than triple. Yet, by harnessing the
obvious benefits of technology, the outlook for world energy demand in
2020 could be radically different (Figure 8~.
How can we reach the other, much more acceptable scenario—of
achieving the same world economic growth over the next 30 years for not
much more than current total energy consumption? This will only occur if
greater prominence is given to energy demand issues and policies, and if
engineers provide the lead.
The proposition of using less to produce more, both to conserve
resources and to reduce waste, is at the very heart of all engineering
philosophy. It is an objective that can find universal support. Greater
efficiency, which facilitates greater growth, is a '~virtuous circle" worth
striving for and surely on the side of the angels.
I call on engineers because it is engineers who harness the extraordinary
advances in science. "Science," said Von Karman, "discovers what is;
engineers turn this knowledge into things that have never been." So
engineers and technologists in general are best equipped to know what can
be by using today's science and technology, and what might be by using
tomorrow's.
Engineers who complain about the short-term attitudes of the public,
financiers, accountants, and politicians have somehow allowed themselves
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EFFICIENCY MACHL4VELLI, AND BUDDAH
275
to be painted into a corner, to become a service. They should be out there,
in front, illustrating the opportunities and their benefits, both qualitative
and quantitative. Consider how biotechnologist entrepreneurs have shown
that hard-headed investors will put their money into "expectation." The
price/earnings ratios of biotechnology stocks are about the future not about
quarter-by-quarter results.
The challenge facing demand-driven energy policy options is how to
influence short-term decisions to take into account long-term opportunity
and potential penalties. In this we must seek help from economists. The
challenge is similar to that which engineers and technologists constantly
face in industry. So let me share with you a simple, powerful, equation
imparted several years ago by a colleague; I use it in the task of harnessing
technology for profitable growth.
"Change," said my friend, "is a function of dissatisfaction, vision, and
a practical first step." Dissatisfaction involves the feeling that we can do
better, rather than just complaining about how awful things are. Vision
is, of course, what engineers and technologists can provide by articulating
what might be. The praci!calprst step is what engineers must fashion.
This is true also with energy. There is plenty of dissatisfaction and
fear. The vision needs to be articulated and propagated by engineers,
strongly supported by economists. What specifically should engineers do as
a profession? The following are some suggestions.
First of all, the drive for greater energy efficiency should be at the top
of all our agendas, and should remain there for the next decade. This is not
the case today. Perhaps technical meetings could be used more effectively
toward this end. Led by the National Academy of Engineering, the Council
of Academies of Engineering and Technological Sciences brings together
the academies of six nations, and several others are now eager to join this
group. This mechanism could be used to have a strong voice, which would
be heard worldwide.
Second, the excellent studies on energy conservation being carried out
by many organizations should be actively supported: in the United States
for example, this includes Harvard, Princeton, Berkeley, and the World
Resources Institute. Perhaps a new ratio should be developed to measure
the productivity of energy, such as gross national product (GNP) per unit
of energy. This would heighten public awareness and thus could become a
powerful force toward greater energy efficiency.
Third is for engineers and economists to devise means and measures
to bring home to the public both the quantitative and the qualitative, long-
term consequences, penalties, and benefits of day-to-day energy decisions.
This is not an easy task, but it must be made to capture the imagination
and support of the young, for it is their future we are talking about.
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276
ROBERT MALPAS
Perhaps a concept introduced by Professor Henry Jacobi of the Mas-
sachusetts Institute of Technology might help. He spent some time in
Britain developing economic evaluation techniques for projects with long
lead times, such as oil exploration. The concept is one of "options for
the future," that is, to give a present-day value to the options for the
future created by a decision made today—options which would not exist
but for that decision. It is particularly useful for investments in new areas
of business, new products, and new processes.
Other action might be taken to join with, or initiate, a worldwide
review of public policy measures that have been successful in promoting
greater efficiency through, for example, incentives, penalties, subsidies, and
taxes. This would also deter policymakers, who might otherwise be tempted
to use them, from those measures that have failed.
For example, the CAFE (corporate average fuel economy) legislation
in the United States has been remarkably successful in raising the efficiency
of U.S. automobiles. This was the only such policy in the world—and a
very effective one but the public seems to have turned its back on this.
On the other hand, subsidizing energy to help the poor in less developed
countries has not worked. Over the longer term, it has failed to alleviate
poverty and has been a disincentive to energy efficiency.
Finally, even higher priority should be given to improving the safety
of operation and the waste disposal of nuclear power stations. Nuclear
energy is the cleanest of all fuels and produces no atmospheric waste. It is
the ultimate answer to fears of the greenhouse effect, acid rain, and other
forms of pollution. One is surprised that environmentalists do not promote
it, demanding that it be made safer than it already is.
Such actions as these, plus setting out to understand the ecosystem
more fully, seem the minimum that engineers should be actively promoting.
If the engineering profession can be persuaded to slip into higher gear for
more concerted and international action toward greater energy efflciengy,
and to assume its natural role as an agent of change, perhaps some words
of warning from a wise "business" philosopher are in order. He said:
There is nothing more difficult to carry out, nor more doubtful of success, nor
more dangerous to handle, than to initiate a new order of things. For the
reformer has enemies in all who profit by the old order, and only lukewarm
defenders in all those who would profit by the new order. This lukewarmness
arises partly from fear of their adversaries, who have the law in their favor; and
partly Mom the incredulity of mankind, who do not truly believe in anything
new until they have had actual experience of it.
Who wrote that, you may wonder? Schumpeter? Keynes? Friedman?
Drucker? It was written by Machiavelli in lhe Prince (chapter 6), published
in 1517.
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EFFICIENCY HI, AD BUDDED
NOTE
277
This discussion tacitly assumes world GNP growth of 3 percent per year and world
population growth of 2 percent per year from the present until 2020.
REFERENCE
Goldemberg, J., T. B. Johansson, ~ K N. Reddy, and R. H. Williams. 1987. Energy for a
Sustainable World. Washington, D.C.: World Resources Institute.
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Representative terms from entire chapter:
energy efficiency
