Wednesday, September 05, 2007

Scarcity of Renewable Energy

Renewable energy is considered part of the solution for climate change, pollution and dependency on fossil fuels. Many jurisdictions are legislating the use of renewable energy in electricity generation and offer significant tax incentives through rebates or accelerated depreciation rates. China has announced a massive $265 billion expansion in renewable energy, with half slated for dam projects. China is facing a pollution problem from coal plants combined with rapid economic growth fueling even more demand for energy. A vicious cycle from an energy policy perspective and one that could eventually curtail the economic growth. The premise that more renewable energy projects will make them all cheaper and eventually they will be competitive with traditional forms of energy.

Unfortunately, current energy production is either subsidized or so heavily regulated that it makes any alternative uncompetitive and breeds inefficiency. Many countries are alos pursuing nuclear power as a way to combat climate change and spend billions of dollars. Terence Corcoran of Canada's National Post gets it right, again, with his editorial Power Crazy.

All of this leads to scarcity of resources. As every energy policy leads to renewable and alternatives there will be a scarcity of materials needed to produce these alternatives. Eventually the use of alternatives will not be feasible and a return to fossil fuels will be necessary. Barring some major technological advances, energy scarcity will be the defining point of our future.

Who knows what the answer is? I think many signs are pointing to less consumption of energy and, goods in general, to alleviate many of our environmental problems.

No comments: