Macroeconomic Perspectives on a Renewable Energy Transition Jonathan M. Harris Copyright © 2014 Jonathan M. Harris

Can Renewable Energy Provide a Solution to Climate Change?  Long-term link between economic grwoth and carbon emissions  Need to “decouple” economic activity from carbon emissions  An end to growth, or a new kind of energy economy? Or both?

Growth in Population, Agricultural Production, and Energy Use, Sources: Population and Agriculture,FAO, 2012; GWP, IMF ww.imf.org; Energy, EIA

Source: Maddison, Historical Statistics for the World Economy, 2008.

Source: Carbon Dioxide Information Analysis Center (CDIAC), Carbon Dioxide Emissions from Fossil Fuel Consumption,

World Carbon Dioxide Emissions, Historical and Projected Source: U.S. Department of Energy, 2012.

Source: U.S. Energy Information Administration, ww.eia.gov, accessed Per Capita Emissions of CO 2 by Country

Global Energy Consumption by Source, 2012 Source: International Energy Agency (IEA 2013)

Availability of Global Renewable Energy Source: Jacobson and Delucchi (2011); U.S. Energy Information Administration; Stanford Engineering News, Energy Source Total Global Availability (trillion watts) Availability in Likely- Developable Locations (trillion watts) Wind – 85 Wave> Geothermal – 0.14 Hydroelectric Tidal Solar photovoltaic Concentrated solar power Total global energy use in 2006: 15.8 Trillion Watts

Infrastructure Requirements for Supplying All Global Energy in 2030 from Renewable Sources Source: Jacobson and Delucchi (2011). Energy Source Percent of 2030 Global Power Supply Number of Plants/Devices Needed Worldwide Wind turbines503,800,000 Wave power plants1720,000 Geothermal plants45,350 Hydroelectric plants4900 Tidal turbines1490,000 Rooftop solar PV systems61.7 billion Solar PV power plants1440,000 Concentrated solar power plants 2049,000 TOTAL100 Land requirement: about 2% of total global land area. (Can be combined with agricultural uses)

Global Potential for Energy Efficiency Source: Blok et al. (2008)

Source: International Energy Agency, 2011 Projected 2035 Global Energy Demand, by Source

Growth of Solar PV and Wind Installations ( ) Source: Worldwatch Institute (2014).

Declining Energy Intensity in Industrial Economies

Declining Energy Intensity in Industrial Economies, Source: US Energy Information Administration (EIA), Energy Intensity- Btu per Year 2005 U.S. Dollars (1991 base year) Year

Source: EIA 2013.

Source: Energy Information Administration, International Energy Annual 2004

Energy Intensity, PPP GDP Source: Energy Information Administration, 2011

World average energy intensity, 2011: 9885 BTU/GDP$

Economic Growth Energy Intensity Rate of Change (BAU) Energy Intensity Rate of Change (HI-EFF) Population 1% Shift to Services -1% Shift to Services -2% Per capita GDP 2% Increased Efficiency -1% Increased Efficiency -2% Total 3% Total -2% Total -4% Net Change in Energy Use 1% Net Change in Energy Use -1% Growth and Efficiency

90 units carbon-based 100 units carbon-based Renewables 10 units Renewables 20 units 100 units total 120 units total ~1% p.a. growth in energy demand Copyright © 2011 Jonathan M. Harris Business as Usual Scenario

90 units carbon-based 60 units carbon-based units Renewables 20 units 100 units total 80 units total ~1% p.a. decline in energy demand Copyright © 2011 Jonathan M. Harris Based on modest investment in services, efficiency, renewables, with no loss in employment (probably a gain) Services, Efficiency, & Renewables Scenario

Examples of “Green” Macro Policy: U.S. $787 billion dollar stimulus package included about $71 billion for specifically “green” investments, plus $20 billion in “green” tax incentives. Energy efficiency in Federal buildings and DoD facilities -- $8.7 billion Smart-grid infrastructure investment -- $11 billion Energy and conservation grants to state and local governments -- $6.3 billion Weatherization assistance -- $5 billion Energy efficiency and renewable energy research billion Advanced battery manufacturing -- $2 billion Loan guarantees for wind and solar projects -- $6 billion Public transit and high-speed rail billion Environmental cleanup -- $14.6 billion Environmental research -- $6.6 billion Aggressive Federal policy action including “green” investments “probably averted what could have been called Great Depression without the government’s response, GDP in 2010 would be about 11.5% lower, payroll employment would be less by some 8 ½ million jobs, and the nation would now be experiencing deflation.” (Blinder and Zandi, “How the Great Recession was Brought to an End”, 2010).

Examples of “Green” Macro Policy: Portugal Portugal government-led transition from fossil fuels towards renewable power, with the percentage of renewable supply in Portugal’s grid up from 17 percent in 2005 to 45 percent in $22 billion investment in modernizing electrical grid and developing wind and hydropower facilities. Portugal will recoup some of its investment through European Union carbon credits, and will save about $2.3 billion a year on avoided natural gas imports. “Portugal Gives Itself a Clean-Energy Makeover,” New York Times August 10, 2010.

Source: US Department of Energy, 2013 ACCESSED AT: Decline since 2007: 12%