RethinkX on Energy: An overview of the Rethinking Energy 2020-2030 Disruption Report

A favorite argument of the detractors of renewable energy-based electricity production is the intermittency of the sources--the fact that the sun does not always shine, and the wind does not always blow. They also point to the impracticality of storage of solar and wind-generated electricity on any significant scale, given sheer cost. And they hold on the basis of these facts that any attempt to meet a significant portion of need from those sources results in there either being a surplus of electricity when it may be unwanted, or a scarcity of electrity when it is needed. The latter problem, more obvious than the former, means that really large-scale use, and certainly the 100 percent reliance the optimists talk about, requires really massive redundancy in generating capacity. That is to say that to produce enough to meet 100 percent of our need, we must produce much more than 100 percent, just to meet our requirement, with the excess going to waste. Driving down efficiency and driving up costs, this makes any such scheme so profligate and so costly that only eco-besotted fools would waste a moment's time on it, the detractors tell us, while also assuring us that this is virtually certain to remain the case throughout the foreseeable future.

Of course, this argument (like just about all the detractors' old standards) has been crumbling for a good, long while. The falling cost of renewable-generated electricity, its becoming competitive with and then increasingly cheaper than such longtime electricity-production mainstays as coal and nuclear, and even natural gas, and all that on a purely "market" basis (which is to say, even without taking into account the subsidies of and externalities caused by them), make the economics look less forbidding than before. Helping, too, is the quite obvious approach of compensating for the intermittency of renewables with strategic combination. (The sun does not always shine, and the wind does not always blow--but not always at the same time, so that having solar and wind working together is at least a partial solution.) And on top of that, battery storage prices have been falling at rates comparable to those of the production of the electricity itself, lowering the cost of storing electricity not immediately used, so that there is less need for redundnacy.

The result has been that at the very least a considerable enlargement of our renewables use looks increasingly practical in the immediate term (as the shift of investment toward it reflects), and the path to the 100 percent renewables-based electricity goal, if not perfectly clear, at least considerably less fantasmic.

The RethinkX think tank, however, has gone not a step, but a giant leap, beyond that, in Adam Dorr and Tony Seba's Rethinking Energy 2020-2030 report, looking at what has for so long been dismissed as a deal-breaking liability--the fact that to meet 100 percent of our electricity needs with renewables we would need a level of capacity generating a great surplus above that level--as instead an epoch-making opportunity. Simply put, in pursuing the 100 percent renewables goal we would not only have the energy we need at far less cost to the physical environment, but in producing the "excess" of energy generate not "waste," but rather an abundance they term "Clean Energy Super Power." In this they see a basis for accomplishing with energy--and clean energy at that--what the digital age has accomplished with information storage and transmission, dropping its marginal cost to nearly zero.

How will this work? The claim warrants some unpacking, the more in as Dorr and Seba spend relatively little of their report discussing it (and in fact relegate their answer to one of what seemed to me the most important possible objections to an endnote rather than treating it in the main text). Simply put, not only is it the case that meeting our energy needs will require the capacity to produce more than a multiple of those energy needs, but that the multiple will grow with the scale of the system. (As they crunch the numbers, a renewables-based system meeting 100 percent of our electricity would generate the equivalent in Super Power, and merely expanding the capacity another twenty percent would double or even triple the quantity of Super Power.) The result is that the margin between the consumption the system is designed to meet, and what it makes available, is always widening, not shrinking.

Of course, more than a difference of perspective is involved in anything like this becoming practical in the next decade. It has to be economically feasible to build all that capacity--and indeed, even when counting in the investment that would produce all the extra, cheaper than the alternatives. By way of a number of case studies subject to deliberately pessimistic assumptions, Dorr and Seba argue precisely that. They specifically consider the feasibility of a 100 percent photovoltaic Solar, onshore Wind and lithium-ion Battery (SWB)-based grid in three diverse localities (sun- and wind-rich Texas, sun-rich but less windy California, and sun- and wind-deprived New England), in a context of no electricity imports, no conventional operating reserves, no distributed generation or storage, no assists from electric vehicles, no peak demand-lowering mechanisms (demand response, load shifting, energy arbitrage and peak shaving), and no financial innovations or government supports (subsidies, carbon taxes). They also assume that there are no breakthroughs in energy production, storage or transmission of any kind other than the mere continuation of the long-observed price drop in the technologies on which they concentrate (SWB) for just a few more years, even allowing for a slowing of progress here (for the lot, a 75 percent price drop over the next decade, versus 85 percent in the past decade). This portion of their argument, comprising about half the length of the report's main text, demonstrates the adequacy of such a system in even the most pessimistic (New England) case, as well as the swiftness with which capacity expansion yields more Supwer Power.

As the think tank's prior report made clear, they anticipate that along with information, and also energy, the resource-intensiveness and price of food, transport and materials will drop by an order of magnitude or more in the coming decade, more produced with less in all these other areas. (The aforementioned footnote, in fact, refers to the way technological advances in other areas will ephemeralize production, preventing any Jevons Paradox-type rebound from soaking up all the extra energy produced, frequently not in spite of but because of the electrification of road transport and industrial processes like metal smelting that they anticipate, and the energy needs of new projects like carbon removal.)

Indeed, with the relevant technologies already almost all the way to the end point they describe (solar's capital costs have dropped 99.9 percent since the 1970s, and the projected drop Dorr and Seba talk about would merely lower the price of this already cheapest source of power to 99.97 percent of the old price), and any really large-scale program launched even now bound to run for years and thus quite easily reap substantial benefits from the projected price drops, the authors argue for the building of 100 percent renewable-based electric capacity not as some theoretical, long-term one, but an endeavor to be mounted immediately. They also hold that there is not only little to be gained from delaying, but much to be lost from doing so, besides the obvious ecological benefits. As noted previously, the cheapening of renewable-produced electricity has already made investment in fossil fuels and nuclear unattractive--and the continuation of the trend they anticipate would mean that not only would building new fossil fuel or nuclear capacity be a money-loser, but that soon merely operating existing plant would be costlier than shutting it down and replacing it with SWB. (Dorr and Seba, in fact, anticipate the oil and gas sectors suffering the same kind of disruption that coal has already suffered by the mid-2020s.) As they also note, any locality that achieves Clean Energy Super Power will have a vast advantage over any locality that does not as a place to do business, given lower production costs that will come quite organically, in contrast with the subsidies states and cities presently hand to big business. (Offering the example of the Volkswagen Golf, the authors point out that building such a car would be $2,000 cheaper per vehicle in an area where Super Power is available.)

I have to admit that after reading all this I found myself left with a good many questions. Where per-kilowatt-hour prices are concerned the authors have been very persuasive, but they say less about other issues, like the required land use. My own readings on the subject have given me the impression that renewables-bashers exaggerate the problem. Still, some address of the issue would have been welcome, the more in as it is one thing to picture vast, sun- and wind-rich Texas meeting its needs on the basis they describe, another to visualize far more densely peopled and less sun- and wind-rich New England doing the same on that purely local basis. (I also saw no case made regarding the availability of the needed material inputs. Again, my experience is that renewables-bashers seize on alleged limitations in order to "debunk" visions of larger-scale renewable energy use, but the report would have been stronger if it addressed this matter, not least because the issue is not simply whether one or another part of the U.S. alone could do this, but whether everyone could do this, given the global market in such materials, and the fact that, were this course as desirable as they say, everyone would be following in it.)

Getting away from the basic issue of the feasibility of 100 percent SWB-based electricity to the still more transformative vision of Clean Energy Super Power, I find myself skeptical of the analogy between electrical power production and the Internet, and the way the logic of its development shifted Internet Service Providers to the current pricing model--such that it seems, at the least, an area for further exploration. Where possible doubts are concerned the strongest that I can verbalize is the question of ephemeralization they raise, which is asserted rather than argued. One may counter that by pointing to RethinkX's prior publications on food and transport (which show how those sectors might achieve a good deal in this respect by themselves), but that, too, shows an important limitation. The hugely important remaining area of materials which supplies our housing, clothing, infrastructure, vehicles and all the machinery enabling all that cheaper information, energy, food and the rest is one about which RethinkX, to my knowledge, has preivously said little, and they make no addition to that here.

Still, if the report falls short of finally settling every last one of its more radical claims, that does not in the slightest detract from those claims it grounds in quite robust, even formidable, fashion. Indeed, its analysis of the history of pricing, local electricity demand, and SWB-based electricity generation potential in a variety of environments lends great credence to the argument that if only on a pure economic cost basis there are ample grounds for a far, far more ambitious effort in this area than has been seriously discussed by any presiding government--up to the "100 percent SWB electricity" goal. Accordingly, anyone concerned with energy markets, and economic developments--to say nothing of climate change and Green New Deals--would do well to attend carefully to the argument Dorr and Seba make. Meanwhile, I will be looking forward eagerly to they and their colleagues' continuation of what is easily one of the most intriguing (and we may yet find, important) lines of thought on the futurological scene today.

THE NEOLIBERAL AGE IN AMERICA: FROM CARTER TO TRUMP

As we enter 2020 it seems as if the country's politics are undergoing nothing less than a tectonic shift—one result of which is that the word "neoliberalism" has passed out of the usage of academics, into general parlance. Those trying to make sense of it all find that the market is flooded with public affairs books—but most are longer on political hacks' rants than substance, or too busy telling colorful stories, to offer answers to such obvious and essential questions as

•Just what is neoliberalism anyway? (And why is there so much confusion about this anyway?)

•What did the Reagan administration actually do, and what were the results?

•What was the policy of the Clinton administration, and did it justify its characterization by critics as neoliberal? (Ditto Obama.)

•What was the country's economic record before and after "the neoliberal turn?"

However, THE NEOLIBERAL AGE IN AMERICA: FROM CARTER systematically examines Federal policy from the 1970s through the Presidencies of Carter, Reagan, the two Bushes, Clinton and Obama, emphasizing specifics and hard data to offer a picture of just what happened in these years as a matter of practical policy, and its consequences—answering these questions and more as we confront this era of crisis, and what may be a historic election this upcoming November.

Available in ebook and paperback formats at Amazon and other retailers.

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Imagining the Twenty-First Century: A Glance Back at the Expectations of the Neoliberal Heyday

In recent years I have devoted more attention to the subject of neoliberalism--defining the concept, examining its practical enactment (particularly in the U.S. and Britain), and considering the resulting economic record from such standpoints as world and national economic growth, and industrialization.

By and large what we see in the world today is profound disappointment in the idea and its application--sufficiently so that any candidate standing for election publicly owns to neoliberal sympathies and intentions at their peril, with the right turning more nationalist, and the center-left taking the other approach of denying it has ever had anything to do with such (even as both right and center-left overwhelmingly remain adherents of neoliberal practice).

In the course of considering the policy record, and the track record with respect to economic growth, I find myself reminded time and again that the late 1990s were the moment when, at least in the Western world and especially in the English-speaking world, neoliberals were most confident in their promises actually coming true, and the societal mainstream most ready to believe them, amid a period of economic boom that at least appeared to be based on a surge of technological innovation consumers experienced in their own lives supposed to be some wonderful new normal.

There were, of course, different ways of thinking about these matters, not all of them totally unfounded. Consider, for instance, the theory of Kondratiev waves, or K- waves for short, which posit a 40 to 60 year cycle of upswing and downswing in the world economy. K-wave theorists commonly see a K-wave beginning some time in the 1940s, with the economy booming for a generation, and clearly slowing down no later than the early 1970s. Afterward, in line with the theory, was a long period of slow growth, quite in evidence amid worldwide recession in the early 1990s, as much of the Third World struggled with post-debt crisis austerity, Japan slipped into a "lost decade," the "reform" of the Soviet bloc actually produced the collapse of the Soviet bloc, and deindustrialization and stagnation characterized the Western performance. With growth proceeding at a faster clip in the later part of the decade, it seemed quite plausible that the downswing was over, that the upswing due by then had arrived. If one took 1995, say, as the start of the next wave, and the next half decade as representative of it, then an adherent of the theory had grounds for expecting twenty to thirty years of rapid growth, boom times continuing, maybe even getting better still, until 2015, 2020, 2025 even.

All this may have seemed more plausible because this was (more or less) what happened in the prior, post-war World War II boom--the 4 percent a year growth clocked in the latter half of the '90s the norm through the '50s and '60s and early '70s. To give one example of what this would have been like, had the U.S. sustained its late '90s-era GDP growth, the country's GDP would be in the vicinity of $33 trillion, or $100,000 per capita (in today's dollars) circa 2020.

Moreover, there was some expectation of fairly wide sharing of such gains with little need for public intervention, not least via the personal asset portfolios that many middle-class people were quitting perfectly good day jobs to manage full-time. Representative of the sensibility was the cover of the July 5, 1999 issue of Newsweek, which featured an old-fashioned comic strip-style drawing of a man with a distressed facial expression alarmed that "Everyone's getting rich but me!"--a thought the cover patronizingly blew off as "the Whine of '99." Inside the magazine Adam Bryant's tauntingly titled article "They're Rich (And You're Not)" proceeded to, at greater length, continue taunting the unfortunates among its readership suffering from what it assured them was the "reality" of "everyone else getting rich."

Of course, contrary to what the idiots who published this mean-spirited garbage would have had their credulous readers believe, the reality was that not everyone was getting rich. Very, very far from it. Still, while the '70s and '80s and early '90s were not great for working people, and even the late '90s were rather less good to them than they were to billionaires, that period saw workers, going by official U.S. Census data on median income, at least, recover the ground they lost in the recessions of those earlier eras. Assuming the growth continued it was quite plausible they would have seen the first real increases in personal income since the end of the post-war boom a generation earlier. And if the gains of the '90s were far from equally distributed round the world, it seemed plausible that other parts of the planet would enjoy similarly accelerated gains, with other industrialized nations following America's lead, and developing nations similarly striving to catch up.

Meanwhile there were those who saw the prospects as even brighter than that, on the basis of the technological possibilities at hand being more fundamentally epochal. Here it seems worth revisiting the prognostications of Ray Kurzweil. In 1999, at the boom's height, he published his book The Age of Spiritual Machines, one chapter in which presents a long list of rather precise technological forecasts, a major theme of which was bullishness about the progress being made with neural networks and the pattern-recognition software based on them, and the pace of improvement in computer hardware, particularly 3-D computer chips. The result was to be a much more rapid advance in areas like artificial intelligence, and new processes and products like virtual reality and (substantially) self-driving cars, with commensurately dazzling macroeconomic consequences--starting with "the ten years leading up to 2009" being a period of "continuous economic expansion and prosperity," the more amazing for its going hand in hand with price deflation as the cost of making things fell. (In contrast with the stagflation of the '70s, this bizarre, unprecedented combination of boom times and falling prices would be, for most, a rather happy perfect opposite.) And things would only go onward and upward from there as technological progress accelerated on the way to a "technological Singularity" that before century's end rendered our old frame of reference meaningless.

It may seem that this outcome would not have been a wholly positive vision. For example, a world where countries have a GDP two-thirds or more higher may seem daunting to the ecologically conscious. However, the increased productivity would, arguably, have not only seen the substitution of "information" for labor, but information replacing natural resource consumption as well. Indeed, many of the technologies Kurzweil specifically discussed, like carbon nanotubes and self-driving cars, could have been powerful contributors to a more sustainable world economy, while higher incomes would have meant more scope for action to save the environment, whether one thinks in terms of the research and development of new energy technologies, or even public action on the more urgent problems as the swift growth translated to budget surpluses and falling debt-to-GDP ratios without painful budget cuts or tax rises. It even seems far from inconceivable that all of this could have translated to a more tolerant society, with social stresses assuaged by an experience of plenty. (It is certainly worth remembering that the civil rights movement won its victories in the boom years of the '60s, that what the right derides as "political correctness" had its heyday in the boom years of the '90s.)

Of course, things did not go as the optimists seem to have hoped. Looking at Kurzweil especially it seems worth noting that much of the technological advance he predicted for 2009 remained unachieved not only in 2009 but in 2019--at which point , and the things Kurzweil talked about once again deferred indefinitely into the future (the neural nets and 3-D chips and virtual reality and self-driving cars and the rest). Indeed, analysts increasingly conceded that the burst of productivity growth improvement evident in the late '90s petered out after a few years, without ever matching the swift gains of the Fordism-dominated mid-century period, and gave way to even slower growth than before.

One can hardly picture much economic growth in a period of feeble technological progress, and indeed, the results that way were all too predictable. The tech boom proved tech bubble mere months after the paperback edition of Kurzweil's book hit the stores, amid an exposure of corporate fraud and accounting scandals, Wall Street's great bull run (1982-2000) clearly over. Price deflation? Quite the contrary, rising energy prices translated to a renewal of inflation, severe enough to cause food riots in the Third World well before oil hit a $150 a barrel. And those surging prices were broken only by another, bigger, financial crisis, the worst since the '30s--from which it seems safe to say, neoliberalism, globalization and the prevailing political culture did not recover, stagnation, unemployment, anger only worsening on the way to the next, still worse, "worst since the '30s" in 2020. Indeed, by the latter date U.S. GDP was about forty percent lower than it would have been had tech boom-style growth continued for those two first decades of the century. (Taken as a drop from where the country would have been in the alternative scenario, a distance in output equivalent to the fall between 1929 and the Depression's rock bottom in 1932.)

Meanwhile the slight gains were concentrated at the top, and the costs went the opposite way, swelling the largest fortunes to heights of which the Gilded Age robber barons could only have dreamed as far, far more people saw themselves fall further and further behind, not least because the public sector was so badly squeezed. Instead of budget surpluses and a falling Federal debt-to-GDP ratio such as might have been hoped for, what the era saw instead was trillion-dollar deficits, and a doubling of the debt-to-GDP ratio, taking it back up to World War II-era levels. The ecological stress we have experienced and its resulting anxiety hardly need enlargement here--while the same goes for the decay of such gains in civility and tolerance as the past two generations had seen.

In short, the neoliberal utopia we were promised was an illusion--in which, it must be admitted, many never believed. To the left, the genuine, economics-minded left, at least, what happened instead was not really a surprise--simply confirmation of what they had been arguing all along. Even many old-style liberals, unconvinced by the neoliberal arguments, and quick to point to its failures from the very beginning, could not be surprised. At the same time the nationalist right was never on board, either, and likewise unsurprised. It might be added that the broader public was, at the very least, less persuaded by the talk than the more genuinely privileged groups. But of course what was mainstream did not include very much input from them, the media, for example, seeming to speak here with only one voice, so long and so loud, and so little perturbed by the lie being given to their promises that they just went on and on with the same line. Naturally the illusions lingered for a long, long while, and looking about even today it seems it has not totally gone away (the way things are these days, wherever one sees techno-hype, there they are apt to find the essentials), the consequences enduring.

Defining Neoliberalism

The recent pseudo-debate over whether "neoliberalism" is a meaningful concept in economics and politics, especially in relation to center-left political parties like the Democratic Party of Bill and Hillary Clinton and Barack Obama, or the "New" Labour Party of Tony Blair, has been every bit as cynically manufactured as the debates over whether or not tobacco is a carcinogen, or whether the climate is changing and the change is due to human action, with the mainstream media displaying every bit of the same ignorance, incompetence, venality and cowardice in facilitating it that it has in those other situations.

Still, I must admit that in considering the claims, and answering them, I had to study the issue more closely than before, examining anew the specifics of the policy record, while working out as rigorous a definition of neoliberalism as possible. It seems to me that

Neoliberalism can be defined as a political reaction against the shift of society away from its approximation of the "classic liberal" (libertarian) model in the nineteenth century, and the associated growth of the state since that time. Liberalism’s response to that trend of state growth is most commonly identified with a variety of specific prescriptions including but not limited to fiscal austerity, deregulation, privatization, deunionization and free trade, especially as ways of redressing the compromises of earlier liberalism on behalf of maximizing industrial development, macroeconomic stability, employment, social welfare and equity. Increasingly important as a political project from the 1970s on, it is particularly identified with the policies of Margaret Thatcher in Britain and Ronald Reagan in the U.S., and associated with an economy which is not simply a more liberalized version of what came before, but unprecedentedly financialized and globally integrated.

A longer, more comprehensive and, I hope, clearer, explanation reads as follows:

Neoliberalism refers to a body of political economic theory; its associated thinkers, political movement and policies; and their application and consequences in actual life. It is, above all, a reaction against the shift of society away from what neoliberals see as its natural and optimal centering on individual, private exchange under a minimalist "night watchman" state devoted to the defense of private property, which neoliberals regard as having been best approximated in the nineteenth century West; in favor of a large and highly interventionist state devoted in particular to industrial development, social welfare and macroeconomic stewardship (in particular the combination of full employment-generating economic growth with low inflation), and disposing of as much as half the national Gross Domestic Product in the process.

While clearly underway with the emergence of the Austrian School of economics in the early twentieth century, this movement came to encompass a loose collection of schools of economic thought broadly sympathetic to this agenda (monetarism, public choice, etc.), and increasingly consolidated into a recognizable intellectual and political movement in the post-World War II period (an important moment in which was the 1947 founding of the Mont Pelerin Society). In developing their theoretical arguments, and promoting their ideas among intellectuals and the general public, neoliberals developed a particular package of prescriptions for dismantling the offending apparatus of the industrial-welfare-macroeconomic state, and recreating, at a higher level, the desired economic order, stressing but not necessarily limited to

Government tax and spending cuts, more stringent and often explicitly legislated fiscal discipline, and "austerity."

A related shift away from progressive taxation, social spending and redistribution of income.

The deregulation of business activity, and particularly the elimination of regulation which imposed costs or limitations on business, as with regulation to protect workers, consumers and the environment; and legislation limiting forms of financial activity which could be disruptive to the larger economy, as with financial speculation.

The privatization of state assets and functions in ways ranging from outright sell-off, to outsourcing, to the shutdown of programs leaving activity to the private sector, with individuals buying the desired good as consumers or not at all.

A deemphasis of full employment as a public goal, especially of fiscal and monetary policy.

The withdrawal of state protection, and even tolerance, for organized labor.

The reduction or elimination of controls on the international flow of goods, capital and investment.

A significant force in practical policymaking by the 1970s, these theories were significantly applied in the critical early "laboratory" of Chile under the dictatorship of President Augusto Pinochet (1973-1990), with the industrialized, Western, world seeing Britain and the United States lead the way, a development most closely identified with the Prime Ministership of Margaret Thatcher (1979-1990) and the Presidency of Ronald Reagan, respectively (1981-1989).

In considering the application of these ideas it is essential to acknowledge that their interaction with a dynamic economic reality has produced a distinctly different economic model from what came before, emphasizing the resourcing and incentivizing of investors over the other goods previously pursued, and their operation in a different manner than was previously the case. Usefully termed "Neoliberal Financialization," it sees an "unleashed" financial sector emphasizing the speculative buying and selling of assets across the worldwide field of activity not only created by the ever-more developed free trade regime, but intensified by loose monetary policy, and the substantially digital technologies enabling whole new productive practices (like "labor cost arbitrage"), and turbo-charged speculation (like the electronic trading of stocks and currencies). Putting it another way, "globalization," "creditism," "digitalism" are all key parts of the package (in contrast with the prior national orientations, gold standard-backed dollar, employment-oriented monetary policy, and treatment of Fordist production methods and goods as the cutting edge of the system).

Key elements of this package were not only unanticipated by the neoliberal vision, but in conflict with it (loose monetary policy and government's "picking winners" with its support for the financial sector contradict the classical liberal principles neoliberals profess). However, proponents of neoliberal thinking, which is today the orthodoxy of academic teaching of economics and predominant in mainstream comment and policy, generally embrace and defend this model in its essentials.

I admit that the second, longer version of the definition is less punchy than the first. But I think that facing it the political hacks who pretend neoliberalism is "not a thing" would have a much harder time playing their inane word games.