After reading Cambridge physicist David MacKay’s much lauded Sustainable Energy (free download available), the FT Economist Tim Harford worries that we are “too complacent about technological fixes for the twin problems of climate change and finite oil and gas reserves”.
Harford suggests that if we contemplate the idea that technological progress may not solve these problems, we must therefore start thinking realistically about behaviour shifting incentivesâ€”specifically, higher carbon ‘taxes’.
Technological progress and economic growth loosen the corset of cost-benefit analysis, but not the laws of physics. No matter how cheap and efficient solar collectors become, there is only so much solar power available per square metre of land. Hydroelectric energy is constrained by the quantity of rainfall and the height of reservoirs above sea level. The most perfectly designed windmill is limited by the energy of the wind. It would barely be possible to make the numbers add up even if renewable energy generators were free.
To power a modern country through renewable energy requires country-scale facilities. [â€¦] Technological progress will be essential but, barring a breakthrough in nuclear fusion, it will not set us on a path to an energy system purged of fossil fuels.
[â€¦] The challenge is to encourage the right behaviour. Centrally mandated efforts will not do the trick, in part because “the right behaviour” is not a universal constant. [â€¦]
Dealing with climate change will need many small decisions to be made differently. The government cannot micromanage these. This is why a carbon price, whether set through taxes or emissions permits, is needed. It is not so much a nudge as a shove in the right direction.
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