"There is scarcely anything in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man's lawful prey."--John Ruskin, Romantic, Critic, smart guy
I attended the 2010 Tuck Business and Society Conference (VLS is a contributing sponsor) this week. This year's BSC was built around a theme of "resource scarcity." A great conference with excellent panelists, including a panel moderated by the Institute for Energy and the Environment's Director, Michael Dworkin. Dan Reicher, the director of climate change and energy initiatives at Google (and a candidate for Obama's cabinet in a few years), was terrific. So was Bob Metcalfe (below), one of the original internet entrepreneurs (among other things, he co-invented the ethernet), who sought to present an admittedly "right-wing" perspective on how the successful development of the internet could serve as a blueprint for future energy development.
Metcalfe was especially interesting because 1- he was saying new things and 2- he was ignoring large chunks of reality to have it fit his paradigm. One of Metcalfe's comments deserves special mention: he criticized the Department of energy for having a $25 billion dollar budget and not doing enough to solve the energy crisis; in the next breath, he emphasized that the government should direct energy funding towards research universities. Of course, the DOE spend the vast majority of its budget safeguarding the nuclear armory and monitoring nuclear facilities (would he like to make budget cuts there?) and the DOE doles out much of its budget to research, including in significant part, research universities.
Anyway, back to substance. Reicher, among other points, noted he was fond of offshore wind development (a research interest of mine). Metcalfe focused on nuclear and coal. As the last speaker wound down, a Tuck student suggested that Reicher was all "wrong" to favor wind farm development because it will never beat coal on price. And for the foreseeable future, that Tuck student is correct: the capital building a coal plant is vastly cheaper than constructing an equivalent wind farm off the Atlantic. But the operating costs are close and favor wind farms. And wind has none of the external costs, like the costs of pollution (such as coal ash or toxic particles) or greenhouse gas emissions. And if there is a price put on carbon, such as through cap-and-trade or a carbon tax, well, wind becomes an especially attractive option.The costs are not as far apart as the Tuck student might suggest. And just because coal is cheap today doesn't mean it is what a government should want for its people, or what we want utilities to pursue. Wind has drawbacks, but outright dismissal ignores the environmental and long-term economic and security stakes in play.
[Photos from Tuck BSC and Wikipedia]
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