July 31, 2008
No Clean Tech Breakthroughs Needed? Think Again
The Center for American Progress's Joe Rom, like much of the environmental establishment, believes that a price on carbon dioxide can do much of the heavy lifting for deploying clean energy technologies. But the price carbon dioxide would have to reach for technologies like solar to be cost competitive is far higher than voters, far more concerned about higher energy prices than global warming, will allow.
In "Fast, Clean and Cheap," published in the Harvard Law and Policy Review, we used 2007 U.S. Energy Information Administration numbers to calculate how high a price on carbon dioxide would have to be in order to make existing clean energy technologies cost-competitive with coal.
For solar PV to be cost-competitive, the price per ton of CO2 would have to be $220. For solar thermal to be cost-competitive, the price per ton of CO2 would have to be $92. Wind does better at $13, but neither the costs for wind nor solar count the cost of storage, which is required to compete as base load technologies.
Thus, for an available technology like solar to become something closer to 20 percent of our electricity mix some day, it will require sustained investments in R&D and deployment to achieve the technological breakthroughs required to bring down its price.
It's notable that the recent Scientific American article about solar -- "A Grand Plan for Solar" -- put the price tag for its grand plan at $420 billion. The authors understood that we can't wait for a price on carbon dioxide to reach $220 or $92. Whether or not you agree with the grand plan (I'm undecided whether it's a good investment) what's clear that we can't price carbon dioxide high enough for it to make sense for private firms to solar farms to provide 35 percent of America's energy needs by 2050.
Like past investments in everything from dam building to microchips, any grand plan to scale up solar enough for it to constitute an emissions stabilization "wedge" will require direct federal investment.