The Dirtier Side to Clean Energy

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“We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature’s inexhaustible sources of energy — sun, wind and tide. … I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.[1]” – Thomas Edison

In that 1931 conversation with Henry Ford and Harvey Firestone, Edison prophetically described the potential of solar energy to be used to supply society’s energy requirements. And with the help of government subsidies and a greater emphasis on the importance of sustainability by the Obama administration, the solar industry is off to a fast start in 2013 as ETF’s Guggenheim Solar and Market Vectors Solar Energy are up 20% this year.[2]

There are many attractive features of solar energy, led primarily by the almost infinite amount of raw energy provided by that thing called the sun. In addition, solar panels are becoming cheaper to manufacture and last around two decades, which creates a tremendous amount of value over the life of the product (not to mention the tax advantages of owning a solar paneled system). Lastly, solar energy panels provide a clean source of energy to power your entire home without the expense to the environment – at least so we thought.

According to a recent yahoo article, the solar industry may have a dirtier side after first glance. Because of government subsidies, solar panel manufactures are incentivized to produce as many units as possible. However, one of the major downsides to this is amount of sludge and contaminated water from the manufacturing process.[3] And because a majority of these companies are startups with huge overhead costs and are heavily invested in research and development, firms are unable to build storage facilities for this waste, which forces them to ship the contaminants across state lines to waste facilities hundreds and sometimes thousands of miles away.[4]  Lastly and most shockingly is the fact that the transport of the waste is not calculated into the products’ carbon footprint, which is the quantitative figure assessing the product’s ecological impact across the timespan of its inception to its destruction. It is a bit hypocritical for companies, which have a green initiative as an alternative energy source, to be so nonchalant about a green calculation with such great significance.

What is also striking is the industry-wide lack of transparency regarding the carbon footprint of the solar companies. “The Silicon Valley Toxics Coalition, a watchdog group created in 1982 in response to severe environmental problems associated with the valley’s electronics industry, is now trying to keep the solar industry from making similar mistakes through a voluntary waste reporting “scorecard.” So far, only 14 of 114 companies contacted have replied.[5]”

That being said, as an alternative energy source, solar energy is still the cleanest and most reliable. Compared to coal and natural gas derived energy, solar produces ten times less pollutants, and as mentioned previously, with a twenty year life expectancy for panels, provides a great source of energy for a significant length of time. The oversight of not including transportation costs may be a harmless and overlooked nuance that has not jeopardized lives. Yet, as a writer for an information sharing blog, the lack of transparency leaves a bad taste in my mouth and changes need to be made to provide consumers with the most up-to-date information. The solar industry as a result of this report cannot hide behind the veil of purity in doing green work, while simultaneously producing inefficient carbon footprint “scorecards”.  Only when the industry makes amends to change its behavior in reporting information can we as consumers feel confident in living green, and being green.

[1] http://en.wikiquote.org/wiki/Thomas_Edison

[2] http://finance.yahoo.com/news/solar-industry-impressing-investors-gains-132000140.html;_ylt=A2KJ2UiI.h9RZ0gAlDbQtDMD

[3] “In many cases, a toxic sludge is created when metals and other toxins are removed from water used in the manufacturing process. If a company doesn’t have its own treatment equipment, then it will send contaminated water to be stored at an approved dump.”

[4] http://news.yahoo.com/solar-industry-grapples-hazardous-wastes-184756813.html;_ylt=A2KJ2UZE9h9RPGoAWB3QtDMD

[5] See id no. 4

The New Green Agenda Taking Shape

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Last night, during his victory speech, President Obama made note that in the coming years we must take notice and attempt to neutralize the threat posed by global warming. Of course, this raises the question of how this will be undertaken and how it will affect the economy. When we looked at this election cycle, we did not see climate change brought up as a campaign point, so to sketch out the next four years, we must look at the past four. With regards to climate change and the economy, we can see some key areas that Mr. Obama has at least focused on, if not attempting to enact policy, namely fuel efficiency, green energy and jobs, high-speed rail, and oil subsidies. Let’s take a quick look at each one of these and see how the President’s policy regarding them could affect the economy.
The Obama administration set new standards in fuel efficiency. These standards will increase fuel economy to the equivalent of 54.5 mpg for cars and light duty trucks by the model year 2025. These standards are projected to save US consumers $1.7 trillion at the pump, while decreasing US oil consumption by 12 million barrels.  The adoption of these measures alone will cut down on one of the most painful costs for American families, allowing them to spend more on more beneficial sources of consumption. Furthermore, these standards increase incentives for hybrid and electric vehicles, as well as charging stations. These incentives could help to reduce costs, and as such, decrease barriers to entry into the market. Government assistance also could help propel the US into the coveted position of world leader in the electric vehicle market. The President has made a point to increase exports and promote electric vehicles, and this certainly could play into this.
Concerning green jobs, the President had in the past secured a tax credit for clean energy jobs, research, and production. Many manufacturers awaited the outcome of the elections with trepidation, as Gov. Romney stated multiple times he would end all subsidies to green energy. We will likely see the President push for a continuation, if not an expansion, of these tax credits over the next four years. Justification for these subsidies would be the infant industry theory, wherein the industry would likely not survive for the time being without the subsidies. Another green sector in the economy would be mass transportation. The Administration has laid plans for national high speed rail lines in the past. The stimulus included funds for the upgrading of creating “high speed railroads” as they are known in the rest of the world. The Administration will likely push for high speed rail for both economic and political reasons. Politically, the promise of jobs and a more centralized connection and access to major population centers could entice blue collar voters to go Democrat in rural and economically depressed counties.
Finally, the President has made a continuous push over the last year to end subsidies for oil and gas companies. While it was not discussed much in the election, the fiscal cliff is still on the horizon. It presents a perfect opportunity for the President to press for an end to oil subsidies. Simultaneously extending and or increasing green energy tax credits, while getting rid of oil subsidies, could give the green energy market more of an advantage and make costs of production and prices more competitive.
Regardless of what’s undertaken, transitioning one’s economy is a difficult task. Climate change is very much real, and it presents a very credible threat to our standard of living and economy. However, it also presents new opportunities for economic success. We can either go down with the sinking ship that is fossil fuels or we can jump ship and transition to a green economy. The US has been the hegemonic power for the past century because of its economic might, which has been driven by an innovative spirit and position as the most competitive player on the world stage in the most important industries. For the 21st century, that is green energy. I believe the Administration sees it this way, yet the realities of the world may replace restrictions on what can be done. The President has made climate change an issue.  now he must convince the people and Congress it really of the same.

Sources for this article are:

http://www.whitehouse.gov/the-press-office/2012/08/28/obama-administration-finalizes-historic-545-mpg-fuel-efficiency-standard

http://www.bloomberg.com/news/2012-11-06/green-jobs-depend-on-obama-win-as-fiscal-cliff-approaches.html

http://content.usatoday.com/communities/theoval/post/2012/03/obamas-day-going-after-oil-subsidies/1#.UJp_BcX7J8E

http://www.cnn.com/2012/03/29/politics/oil-subsidies/index.html

http://www.csmonitor.com/USA/2012/0821/Obama-plan-for-high-speed-rail-after-hitting-a-bump-chugs-forward-again

http://www.politico.com/morningtransportation/1112/morningtransportation9414.html?hp=l6_b7

By Sean McGuire