Wednesday, March 27, 2013

Environmental Policy Through Energy Policy: A Perspective on the Use of Smart Grids in the Amelioration of GHG Emissions

Alex Bluestone is a junior undergraduate studying political science and environmental policy at Washington University in St. Louis. Before attending Washington University, Alex was a student of public policy at the Maxwell School of Syracuse University, where he first became interested in environmental policy. Alex also has a diverse work background in addition to his academic foundation, which includes internships at the White House Council on Environmental Quality and, somewhat surprisingly, at the nation’s second largest coal company. In addition, Alex was a delegate to the 2012 UN Climate Change Conference in Doha, Qatar. 

Comprising nearly 40% of all C02 emissions in the United States, the energy sector should be the place to begin in the concerted effort to mitigate climate change and the health effects of GHG emissions. After analyzing several policies that could potentially ameliorate said social problems, one emerged as the obvious best: the implementation of a smart grid strategy. Essentially, a smart electric grid would reduce inefficiency, save money, put consumers more in control of their consumption practices, and would allow for best method of transition to renewable energy. This should be viewed as a critical investment to our nation’s strategy to become more sustainable.

With regard to environmental harm, we must begin to understand the costs of our present actions and practices. To do so, we must zero in on a single topic. This article will examine, for ease of comprehension, the most salient topic in the current debate over climate change and environmental stewardship: greenhouse gas emissions. To kick things off, we will begin by accepting that the costs to social aggregate welfare from burgeoning rates of greenhouse gas (GHG) emissions are too high. So, What should be done?
Emitting 6,931 million metric tons yearly, the U.S. expels the most GHG at one of the highest rates per capita globally. So why should we care? For one, high GHG concentrations have been directly correlated to increases in both global average temperatures and adverse consequences for human health, according to recent studies by scholars at Stanford University and researchers working for the UN’s IPCC. Alarmingly, the American Lung Association (ALA) finds that, as a result of high levels of these emissions, 60% of Americans live in areas where low air quality imperils health. The culprits of such low-quality air include carbon and sulfur dioxides, ozone, nitrogen oxides, and particulates – most of which emanate primarily from fossil fuel combustion (i.e. coal-fired energy or the petrol we pump into our cars). The energy industry, according to the IEEE, comprises nearly 40% of the nation’s C02 emissions. What if I told you that costs are not saddled solely on the environment? What if I told you that simple oversight failures in market efficiency have, over time, thrust burden and unnecessary second-hand costs unto unwilling and unknowing participants in the marketplace?
Known as externalities, these second-hand costs are not internalized into the market equilibrium price due to the complex current structure of the American economy. Therefore, the ‘low’ energy prices touted by the traditional energy sector (i.e. coal, oil, and natural gas) are misleading; in fact, they are kept artificially low through subsidization by the government. As a result, our society unnecessarily bears the brunt of hidden economic costs. New York’s Academy of Science reports that coal alone costs the US $185 billion yearly in ensuing medical conditions. A separate ALA study found that coal combustion emits more GHG than any industry; annually over 386,000 tons of C02 are emitted from 400 plants, which in turn is responsible for the death of some 13,000 Americans.
Moreover, as our electric grid system continues to age, its reliability proportionally decreases. Grid service interruptions, or the colloquial “blackout”, have been observed to cost the U.S. $150 billion annually due to associated effects.
These second-hand costs only begin to paint a picture of the consequences that emanate from current energy practices. For these reasons, it can be argued that such antiquated energy structure and practices – which include location, extraction, production and consumption – should be society’s number one focus in addressing and ameliorating the harm we perpetrate on the environment and ourselves. In other words, by changing the basic structure of contemporary energy practices, our net impact on human health and global climate change could be reduced. What’s more, the potential for job creation, overall economic boom, and increased global competitiveness are an appetizing reward just within reach.
So now that we have explored the question of “What should be done?” we must ask ourselves, with a hefty dose of objectivity, the question of What can be done? One novel and realistic idea is to transition to what is known as a “smart grid”.
A ‘smart grid’ is, in essence, an intelligent, digitized energy network that delivers electricity in optimal way – from source to consumption. Smart grids can allow the introduction of alternative energy at a relatively small cost and without the need to alter the current property rights and regulation systems too drastically. In a way, smart grids are the ‘glue’ that will bind demand and supply in the renewable energy production sector. This is possible through the integration of information, telecommunication, and power technologies. In addition, the integration of renewable energies can be achieved because a smart grid leverages the natural invariability of wind and solar sources through embedded storage. Furthermore, grid security and reliability are increased due to the smart grid’s self-healing capacity. Given the current grid system’s unreliability and inability to meet the 21st century’s complex technological energy demands, smart grids appear to be a viable agenda to pursue.
To be clear, I am not out to put a bounty on the fossil fuel industry; indeed this sector’s presence is necessary—at least in the near future. As understood through modernization theory, traditional energy has incrementally pushed economic and social development. Moreover, it is rather overt that the need for this traditional energy will ostensibly remain for the next half-century, if not more. In other words, the process of integrating and transitioning to a green energy grid will take time, patience, some failures, and ingenuity.

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