CAMBRIDGE, United States — The current popularity of alternative energy brings to mind similar booms -- and busts -- in the mid-1970s and 2001-2003. But there are plenty of signs that the current surge in interest is different, and long-lasting, writes Jackson W. Robinson.
Robinson who is president of the Winslow Management Company and portfolio manager for the Winslow Green Growth Fund, argues in Turning the Ship, a five-week online dialogue convened by the Harvard University Graduate School of Design and The Clark Group (and hosted by GreenBiz.com here), that with a long-term likelihood of high oil prices and concerns about the climate, there are good reasons to believe that alternative energy will soon no longer be "alternative."
Among the reasons Robinson lists in his essay:
- Oil consumption is rising rapidly and globally, and the primary demand for oil is no longer limited to the industrialized regions of the world. Exxon Mobil estimated in 2004 that the worldwide demand for oil is poised to grow by 60 percent to an aggregate of 335 million oil-equivalent barrels per day by 2030. According to Exxon, the projected growth in the rapidly developing countries of the world such as India and China is massive, estimated at an average of 125 percent, compared to 22 percent for the U.S. and Europe.
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- The cost of finding and delivering a new barrel of oil is rising, and will continue to rise as new reserves are found in inaccessible locations such as deep ocean floors. According to Arnold Kling, a noted economist and professor at George Mason University, the marginal cost of finding a new barrel of oil today can be estimated at approximately $50. If Dr. Kling is right, how can anyone reasonably expect the price of oil to drop much below $50 a barrel on a sustainable basis?
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- At the same time, technologies to help us move away from these vulnerabilities are becoming increasingly attractive, both in terms of capabilities and economics. Light emitting diodes (LEDs) use 90 percent less energy than comparable incandescent lights and are becoming more cost competitive. Residential geothermal heat pump systems can potentially pay for themselves in as quickly as two years, through savings on heating and air conditioning. Hybrid vehicles are available now, and many vehicle fleets are lining up to take advantage of cost savings from reducing their use of diesel fuel. And new wind turbines can produce electricity for as low as 3.5 cents per kilowatt-hour.
Robinson's full essay, "Green Energy 3.0: This Time, It Is Different," is posted on TurningTheShip.
The Turning the Ship dialogue has brought together leaders from a variety of fields to explore market and policy barriers that may be inhibiting adoption of environmentally sustainable practices by U.S. businesses. In addition to Robinson, other participants in the discussion include Dan Esty, Director of the Yale Center for Environmental Law and Policy; Truman Semans, Director for Markets and Business Strategy, Pew Center on Global Climate Change; Ben Packard, Director of Environmental Affairs, Starbucks Coffee Company and Reid Lifset, editor of the Journal of Industrial Ecology.
