Tuesday, December 9, 2008

Solve the solar riddle

My recent blog on the Ehrlich-Simon wager aimed to raise 'the principle of the indivisibility of economic productivity'. Briefly, this means that when you improve the efficiency use (aka productivity) of one resource through improved technology, you actually improve the productivity of other resources. So for example improved energy efficiency, will also improve the efficiency of use of other resources - minerals for example (due to reduced extraction costs).

The point of this blog is to take an extra step. I may have previously raised the possibility that all consumption is equally environmentally degrading. Spent a dollar on an apple, and that has equal environmental footprint to a dollar spent of motor fuel - somewhat of a shocking thought. But since the economy is infinitely interdependent this is the case. Costanza raised this issue back in 1980. He found that a dollars worth of any commodity has almost equal energy intensity.

Now to the solar riddle. If a dollars worth of any commodity has equal energy intensity, then a dollars worth of a solar panel will require an equal amount of energy to produce as a dollars worth of electricity. If this is the case, a solar panel that costs more than buying the electricity it produces  from another source, than it cannot be said to produce more energy than is required to produce it in the first place. Since the coal fired electricity that it replaces is cheaper over the panel lifetime, traditional grid sourced electricity must be the less energy intensive alternative, taking all the economic interdependencies into consideration.

In the end, although it is a difficult concept for many to accept, your income is the sole determinent of your environmental footprint. You can't just choose to spend that income in a particular way or another. But by reducing your income, and hence reducing your contribution to economic production and its associated externalities, you can make a difference.

In fact that was not the end. Because if you weren't heading off to work each day to earn a crust, someone else might be able to expand their work instead. So there can be no blaming or finger-pointing in the environmental game. We live in a complex system, of which component parts are inseparable. Maybe we should instead attack externalities at their source by enacting effective regulations to prevent them.

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