Technology alone can’t save the world from global warming.
It’s called the Khazzoom-Brookes Postulate, and it’s an economic paradox. But as soon as you hear it, you’ll know instinctively that it’s real, and it’s a serious problem for the climate change movement. It’s also the reason why we need strong governments and bullet-proof legislation to curb greenhouse gas emissions. We simply cannot depend upon industry or individuals to do the right thing, to make the choices that will stop greenhouse gases from crisping our world in 30 years.
We need determined governments in the west to impose graduated carbon taxes, so we can immediately start investing in green technologies. And we need governments to set limits — firm limits. We need them to say to industry that you must abide by this cap, that you can go this far, and no further, and if you don’t listen, your products will be taxed so hard that no one will buy them.
Governments start by defining society’s intentions. We tell car manufacturers, for example, that in three years, we need cars to use 10 per cent less gas. In five years, efficiency needs to improve by 20 per cent. And every year, we increase fuel taxes, step by step. So people have a roadmap, and they can make plans, and buy accordingly.
We challenge industry to get green and get creative, or they’ll be left behind. We don’t step back, we don’t accept failure.
It doesn’t mean that your taxes go through the roof, unless you’re wasteful. If you know what’s coming down the pike, you can choose to buy a fuel-efficient cars and insulate your homes. You can wear sweaters indoors, and invest in (carbon-neutral) Cogeneration units that burn biomass, and operate at 85 percent efficiency — or better.* And with carbon taxes in the treasury, our government starts building the infrastructure that will allow us leave our cars at home, and heat our homes with renewable energy created by wind, sun, and waves.
Heavily polluting industries will pay heavy taxes, but government doesn’t keep that money; it returns it to industry in the form of grants and programs that will help those businesses clean up their act. Our utilities would be required to invest heavily in energy efficiency programs that will help their customers save money, which cuts demand, and obviates the need for more power plants. As a reward, utilities keep some of those savings to protect their bottom line, and their corporate tax rate decreases.
It works. It’s working in many progressive countries, but even the best energy-efficiency programs in the world will come to naught unless we cap our CO2 emissions.
You see, if we start making our world more efficient, the sad truth is that people and businesses will start using more energy. If you have a car that gets 100 mpg in the city, then you might not think twice about zooming to the corner newsstand on a rainy day to pick up a magazine, or going for a 3-hour drive on a lovely Sunday afternoon.
It’s the same with business.
If a corporation starts generating 25 per cent of its energy from renewables, and waste heat further cuts their electrical bill by 10 percent, that company will find that — once its costs are covered — new opportunities come knocking. Product Alpha might have been too expensive to produce under the old regimen, but once corporate energy costs are reduced by 20 per cent, the folks in marketing believe that the world will beat a path to their door. Profits are simply too intoxicating.
In a free market, as efficiencies are introduced into the system, demand for energy will actually increase. We have Daniel Khazzoom and Len Brookes to thank for the theory.
We have human nature to thank for the truth of it.
History provides thousands of examples. In 1712, the first steam engine operated at 0.5 per cent efficiency. Today’s diesels are 100 times better. And yet energy use continues to grow year by year. When the amount of coal required to produce a ton of steel dropped by 66 per cent, it resulted in a ten-fold increase in coal production.
And that’s why a free marketplace — and clean technology — won’t save the world. And that’s why the strong governments we saw during the last world war are needed again.
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* And since a biomass-powered cogeneration unit is carbon-neutral, it would attract no carbon taxes! That just one example of how we can make it work.