Green New Deal: How to manage the disruptive innovation

Getting from the initial conception of a disruptive innovation to making it mainstream is tough and people who have not studied this progression might think it’s magic but it’s not. It’s just the way a marketplace gets established and flourishes. We’re seeing the process just beginning with the Green New Deal and this piece is intended to help you identify the milestones that will inevitably come along over the next few years.

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Rep Alexandria Ocasio-Cortez (D-NY) and Sen. Ed Markey (D-MA) introducing the Green New Deal

he Green New Deal is a good idea that’s being handled badly. Its leaders are treating the issue as just a continuation of business and politics as usual though it’s really a disruption. That’s why there’s opposition. Even the name harkens back to a continuation of Franklin Roosevelt’s Depression era approach to get people working again.

Putting people to work was key to economic recovery because working people spend money whereas wealthier people keep some or even a lot in reserve. To boost economic activity, Roosevelt’s government became the buyer of last resort. When no one else would by what America could make, the government went on a buying spree paying for hydroelectric dams, schools, bridges, rural electrification projects, environment and conservation and even projects in the arts. The programs became known as alphabet soup because of names like WPA (Works Progress Administration) and CCC (Civilian Conservation Corps). At its peak, for example, the CCC employed 2 million men to plant trees as buffers against drought and floods and maintain and improve national parks among other things.

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An example of WPA art.

If you look around even today you can see vestiges of the New Deal in large and small places. If you’ve stayed at a national park you might have seen or stayed in places that were built by the CCC. And a series of post offices like the Rincon in San Francisco which until recently, had walls adorned with murals by famous artists of the era. The murals have been consolidated and moved to another location. And there are other buildings and bridges (like San Francisco’s Golden Gate Bridge) that were built by New Deal programs that we still use every day.

But fast forward 80 years and you see a changed world, one that might not be amenable to a Depression era stimulus plan. Today’s unemployment rate is less than 4 percent nationally and at 3 percent or lower in the best performing areas. We don’t need the same stimulus and jobs programs of the 1930s though we certainly need a plan to fight pollution and save the environment before climate change makes areas inhospitable, dries up farmland and causes mass migrations of the kinds we’ve already begun seeing from places like Syria and Central America.

Environmentalist’s dilemma

It’s not unusual for something like the Green New Deal to begin as a disorganized but not chaotic process coming from the grass roots. Very often the process centers around a disruptive technology that a few people begin experimenting with but with few commercial opportunities.

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An example of a disruptive innovation that’s fresh in many minds.

The silicon chip was one such disruption. It was independently invented by two people, Bob Noyce of Fairchild Semiconductor 9and later Intel) and Jack Kilby of Texas Instruments and each applied for a patent in 1959. But while some of the applications of silicon chips are obvious, the patent applications vaguely referenced the fact that very different electrical components could be etched into the same slab of silicon because of the element’s semi-conductor property. It was still a bit of a leap to super computers from there.

The point is that the free market sees the potential in an innovation and multiple independent experimenters and entrepreneurs try their luck at making something useful from the core invention. Sometimes an invention languishes because other inventions that end up supporting big innovations also take time to be invented. Sometimes, those inventions never materialize and the basic innovation ends up not being very disruptive at all.

The Green New Deal is playing against type. Instead of a grass roots surge, people in government are trying to take a top-down approach to stimulating uptake. This is the big reason to be wary of the Green New Deal–many of the elements of the GND are good ideas but they need free market support if they’re going to go anywhere.

Consider this: no one told Tesla founder Elon Musk to build an electric car. He saw an opportunity and initially backed it with his own money and recruited investors. Tesla is well on its disruptive way but for it to be a game changer other inventions and developments will need to come on stream too, like building networks of charging stations.

What’s needed today

There is little doubt that the environment needs help and we need a plan. It’s also true that the US needs an infrastructure makeover. But we also need an approach that can wind down some aspects of the economy such as the fossil fuel industry, while spinning up others like more renewable power generation, so as to cause minimal dislocation in people’s lives and livelihoods. It also needs financing but that’s less important than you might think because the free market specializes in that and government should be cautious about stepping into those waters.

So rather than starting with the conclusion already in mind, let’s explore our needs first. This will enable us to can play what-if scenarios and see trade-offs.

There are multiple dimensions to be considered that more or less have to be solved at once or at least together to achieve the results that a Green New Deal asks for and they are:

· A new energy paradigm

· New transportation solutions

· Water and other resource management

· Removing carbon from the environment and safely storing it away for millions of years

This article will necessarily be a brief overview but check back for more in-depth analysis.

A new energy paradigm

It needs to be said right from the start that we’re running out of fossil fuels because it sets a sense of urgency that climate change does not. People have a hard time imagining a different climate in the distant future but they can empathize with an empty gas tank today.

US DOE and most other sourcessay we have about 50 years of oil and 100 years of coal supply left worldwide. This translates to 1.687 trillion barrels of oil left in the ground and 477 billionshort tons of coal. Despite the obvious pollution problem posed by fossil fuels, they are primarily what we have at the moment to run our modern world. We’re lucky to have them too because we all couldn’t live here on planet earth if fossil fuels were suddenly unavailable.

The human population of earth reached 1 billion in the early 1800s and today is climbing through 7.7 billion people. Until the middle of the 1800s earth ran on muscle power, most energy came from the sun and was packaged as food or burnable biomass like wood.

Estimates of earth’s ability to support human life, it’s carrying capacity, range from 4 billion to 16 billion with a median of 10 billion, according to a 2001 UN report. Demographers expect humanity to reach 10 billion souls by mid-century. But all of this is predicated on the availability to cheap and abundant energy to grow, irrigate, fertilize and bring food to market. For housing and everyday life, things like heating and cooling and cooking all depend on fossil fuels. Without a modern energy supply all bets are off and the carrying capacity of the planet plummets back to 1 to 2 billion last seen in the early Victorian era.

That’s why, as bad as the pollution problem is, the first priority in an age of sustainability is nailing our future energy paradigm before it runs out.

Good news

Nearly everything we need to convert the energy paradigm from fossil fuels to renewable electricity is available today. We’ve made solar and wind energy price competitive with fossil fuels and these solutions, along with geothermal power generation, can scale without a hiccup.

Our approach should be increasing generating capacity from renewables and that should be a private enterprise endeavor. Private enterprise will make considerable profits from renewables but will need to make some strategic investments in new infrastructure while winding down power plants that burn things like coal, oil and gas–better add nukes to the list too. We’re already seeing moves in that direction though those efforts could be faster and the current regime in Washington does the transition no favors by promoting “clean coal,” whatever that is.

Don’t look to government support for constructing new power supplies. That would simply amount to government doing private industry’s job. Instead, government money would best be spent stimulating demand.

For example, electric car buyers have received generous tax incentives to buy EVs and that practice should be maintained or expanded. But one issue electric car drivers still wrestle with is range anxiety, the worry that when their batteries get low there won’t be sufficient charging stations. This could be fixed easily enough through programs that help construct charging stations in parking lots around the country. Government loans to entrepreneurs willing to take on the work would be a good investment but by no means should government get into the charging business which, once implemented, would be hugely profitable for private industry. Let the market work through private investment.

Last thought on energy

About 70 percent of petroleum used in the world is burned in cars, power plants, airplanes, furnaces for heat and other devices. The remainder is used as a raw material that goes into production of synthetics like rubber, pharmaceuticals and myriad other products. Since we’re running out of fossil fuels, we should save as much as we can for those other essential purposes.

Transportation

Thinking about energy has already given us a glimpse into transportation. We’re still going to need cars but we might not need to own them as the ride sharing trend shows. Cars will likely forever be the devices that get us the last mile to a destination, but rail or at least mass transit solutions will also have an expanded role.

When many people think of mass transit, they imagine a conveyance like the New York or Tokyo subways–hot, steamy, packed cattle cars that affront our dignity. No thanks.

That’s why we need to reimagine mass transit as something that runs frequently, has a seat for everyone, offers good Wi-Fi and generally rewards people for making that choice. The great thing about mass transit is that it can run easily on electricity, especially power that comes from renewable sources.

Transportation and geography

Trains can run pretty fast say, 150 mph, but that’s nothing compared to aircraft. A typical coast to coast flight travels between 400 and 600 mph. But if jet fuel gets scarce and expensive long distance flying (heck even short distance flying) will be curtailed. So high-speed rail to the middle of the continent might offer an intriguing solution.

This leads to an amazing realization. The area between the coasts in America is about to become a coast of its own. Call it the Mississippi corridor. Draw a line between Chicago and New Orleans on a map and other lines 250 miles to the left and right and you have a zone where east and west will routinely meet by mid-century. Look for a realignment with high demand industries like communications, technology, and finance establishing important outposts in the middle of the country to better accommodate a travel paradigm more focused on rail than air.

Reduced availability of fossil fuels doesn’t mean we have to abandon travel. We just have to be smarter about it. So look for more mass transit redesigned and rethought for the new era and save the jet fuel for crossing oceans.

Government’s role

Constructing mass transit is a heavy financial lift but so was stringing wires and cables for telephone, electricity, and cable or building the Transcontinental Railroad for that matter. While there were notable public investments in big projects such as the Rural Electrification Act of 1936 which paid to bring electricity to small towns and farms, much if not most of the infrastructure for electricity was paid for by stockholders.

The model for a new American mass transit program should be the Pacific Railroad Act of 1862 which set up funding guaranteed by the government to build the rail link between Council Bluffs Iowa and Sacramento, California.

Bankers wouldn’t finance the whole rail project because it was too risky but building the railroad was undertaken by private interests, after Congress passed legislation to help finance the work. Congress authorizedhalf of the funding through 30-year bonds (at 6 percent) and stock investors supplied the other half. Building out a new rail system for both inter- and intra-city transport could be financed the same way.

Provisioning water and other resources

What we don’t know about fresh water can hurt us. According to Wikipedia,

“Saline water in oceans, seas and saline groundwater make up about 97% of all the water on Earth. Only 2.5–2.75% is fresh water, including 1.75–2% frozen in glaciers, ice and snow. Just 0.5–0.75% exists as fresh groundwater and soil moisture, and less than 0.01% of it as surface water in lakes, swamps and rivers.”

Ground water buried in natural underground reservoirs, or aquifers. When you dig a well, you’re tapping into an aquifer. Farmers do this routinely to irrigate crops. But just like petroleum, our aquifers are running out. They can be replenished by rain but in drying conditions they have higher demand and less chance to recharge. As the effects of climate change take hold it will be important to keep our aquifers topped off. So while most people don’t see water as a fundamental need on the horizon, we’ll likely need a construction program that establishes a water grid to deliver water to the places where it’s most needed during the growing season.

There’s a lot more to say about water but it will need to wait for another article. Let’s also add other resources like phosphorous to the inventory too. Phosphorus is an element that’s essential to life because it forms part of DNA. That makes it a fertilizer because without it in the soil, a green plant might grow but it won’t flower and produce fruit, nuts or seeds.

Phosphorous comes from mines and modern agriculture and consumption send it through the food chain and into river deltas. Perhaps as soon as mid-century we’ll need to be mining river deltas for phosphorous.

Removing carbon from the environment

I’ve written about this here and here so I’ll be brief. There’s too much carbon in the environment right now, that’s why our weather is changing. More than limiting emissions, we need a plan and approaches to remove some of that carbon and sequester it permanently. It’s not a hard thing to do but it won’t happen by accident. Check out those articles.

Jobs

There’s some amount of consternation right now about how a Green New Deal might affect people who’ve worked in areas like energy and construction all their lives. It’s a fair point but one we shouldn’t obsess over beyond providing abundant examples of how new industries such as renewable energy, carbon abatement, and water and resource management will generate the jobs of the future that workers in adjacent industries can transition to.

Demand for the products of sustainable industries is already high and considering the looming end of the petroleum era it is clear that corporations, with a little government help, will invest heavily in new infrastructure resulting in hiring.

But we still need to grapple with the sunk costs of the fossil fuel industry. It’s to everyone’s benefit that a transition from fossil fuels to a sustainable paradigm be done with deliberate speed both the safeguard our way of life and ensure adequate energy supplies. However, there is insufficient motivation in today’s economic climate to get energy suppliers to transition to different approaches. This will likely remain true as long as they can sell what they have and disregard the environmental impacts.

Summation

We’re on the cusp of the most dynamic wealth and jobs creating eras in human history as we change paradigms and erect a sustainable economic model. There’s a role for government in encouraging strategic transitions but the role is very different from the one government played almost a century ago when the economy needed stimulation. If we understand both the economic and technical needs of this new era, we’ll weather the challenges that disruption inevitably brings. Humanity has faced similar challenges before with creative solutions like the agricultural revolution that happened nearly ten thousand years ago. That’s why we’re here and why there’s good reason for optimism about the future.

Researcher, author of multiple books including “The Age of Sustainability” about solutions for climate change. Technology, business, economics.

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