This excellent diary is interesting because it addresses the central issue of sustainable energy policies and show which are the socio-economic obstacles to the development of new approaches, but also because it illustrates a broader field of issues which I think should be discussed on ET, namely the limitations of market as an efficient coordination mechanism.
I think many of us agree on the fact that market can be an efficient mechanism for certain categories of goods and services, but is inefficient for other categories (like energy).
It would be interesting to develop a debate on the different categories of goods and services and on which are the relevant (market or non-market) coordination mechanisms for these categories. "Ne te courbe que pour aimer..." René Char
Corporations like to have central choke points where they can squat and imbed their fangs, and governments, which are owned by the corporate sector, follow suit.
This makes even more sense when you accept that 'free markets' really means 'Wall Street, the City, and the money markets' and not the more usual abstract textbook idea.
So truly efficient schemes, which combine micro- with macro-generation with off-grid living, are difficult for 'the markets' to accept, because they can't vampirise off them in the usual ways.
Don't forget that Wall Street is the only socialist paradize on earth - i.e. the only industry where the workers (erm, the managing directors, at least) grab most of the value added of the deals they make instead of their employers... In the long run, we're all dead. John Maynard Keynes
The baseline stops being profitability and starts being growth.
In the real world it should be nonsensical to sell the stock of a company that produces millions in clear profit. According to the Street it's not enough, unless profits increase steadily. And if you have a bad year when they don't - watch out for the knives.
I don't suppose there's any reason why it wouldn't be possible to earn a billion by licensing hundreds of millions of small-scale microgeneration projects, instead of concentrating only on large ones.
In practical terms local, distributed generation, backed by a solid grid, will always be more reliable than a handful of big-ticket mega-deal projects.
If I can run off-grid I don't much care if Russia won't sell me gas because it doesn't matter to me. Multiply that by the millions in the EU and you have huge earnings potential, with decent follow-up potential in on-going maintenance and spares sales.
Actually Wall Street is now in a second derivative game. It's not earnings, or earnings increase, but how the earnings compare with "expectations". Since the experts decide what to expect they set the goal posts. Then when earnings figures are released the price varies because of the "surprise".
There have already been some indications that the predictions are being used by insiders to trade before the news comes out. If the experts were really experts and they were consistently "surprised" wouldn't they either lose their job or at least their credibility?
By the way many firms now issue monthly (or in the case of retail, sometimes weekly) figures. This provides so much more opportunity for gambling. The US lotteries have been increasing their frequency as well. I think the Keno game in New York starts every five minutes. Policies not Politics ---- Daily Landscape
No, it just plain wouldn't. The behaviour of dynamic systems is complicated and nearly impossible to predict, let alone control. Try to design an electronic circuit with just a few components and a feedback mechanism if you don't believe me. After that experience you'll never again talk about circuits with millions of components as being reliable.
Our understanding of economics, specifically classical liberal economics, is predicated on an environment where the perpetual increase in consumption of resources is possible.
Within such an environment (which did exist in many ways until roughly the present, in my opinion), the growth-based structure of capitalism and the free-market created world where overall wealth could continually increase. There are arguments to be made about inequity in distribution, but the fundamental notion of 'increasing the size of the pie' worked.
However, it's my opinion that we are now entering (or are about to enter) an economic environment where we can no longer continually increase our consumption of resources without incurring costs that outweigh the value of the additional resources consumed.
In this second type of environment, I think that many of the fundamental assumptions underlying classical economics no longer hold...
That is not even true. The early "classical liberal" writers starting with Adam Smith all the way through Malthus and Ricardo to John Stuart Mill worried a great deal about "the end state of capitalism" in which the rate of profit decayed, rents increased, and the wages of labour were reduced to subsistence level. The only way out that classical economics could imagine was the creation of new economic sectors. So it's not that classical economics is predicated on that environment: the creators of classical economics did not believe they lived in such an environment, since they saw a problem. "It's the statue, man, The Statue."
you are the media you consume.
In fact, as a rule, the greats knew perfectly well the limits of what they were doing. It's the second class idiots that followed on that extrapolated beyond the limits of the theory to get nonsensical results. The originators were often addressing a particular problem: zero-sum thinking being a key one.
Think also of an analogy with the "heat death of the universe". That was a late 19th-century obsession that I don't think necessarily follows from modern understanding. But that is not to say that the thermodynamics of Boltzmann was wrong: it's the rest of his physics and cosmology that was incomplete. Similarly, I don't think a lot of what the classical economists were saying about the way an economy works was wrong. They just imagined a limited number of possible social/political/economic organisations consistent with liberalism, and except for J S Mill I think none of them saw much hope. In addition, their writings (especially those of Smith and Ricardo) were descriptive, not prescriptive. J S Mill was concerned with ethics and so he read completely differently. "It's the statue, man, The Statue."
