Saturday, November 9, 2013

a suggestion to prevent economic disaster in EU and also great progress for all of humanity


When this position paper was approved, 7-2, by the National Space Society, different people had different reasons for supporting it. For myself - I wrote it because I view this as a concrete action that would help with THREE important subgoals important to the larger goal of preventing human extinction, which I worry about a lot.

In the World Space Forum, I posted:

What are some good strategies to really help space? Liddell-Hart told us that the best strategy is one which tries to "kill two or three birds with one stone." Von Neumann told us to seek win-win or Pareto
optimal solutions. And so, at, you will see a new position paper aimed at three goals -- to seriously reduce the risk of the EU falling into a depression, to accelerate low-cost forms of solar farms on earth, and to set the wheels in motion for serious market-oriented investment in space solar power ( Opportunity-and-How-to-Capture-It).  I really hope that some of you are committed and capable enough to follow up on this lead. There is a lot at stake.

IN FACT -- avoiding economic depression in the EU was a major part of my motive here. Back in 2009, when I worked in the office of Senator Specter, I was asked to evaluate the jobs benefits of various climate change proposals. I studied the best CBO report on that subject, and the economic analyses they cited; the head of CBO attended my briefing on what we really know about creating jobs, and what we can learn from multisectoral econometric models. At the end of the day, it's clear to me that all of the Big Three -- EU, US and China -- are facing very serious risks of falling into much deeper unemployment and recession. But lots of the bankers in the EU and even the classic greens seem to be in a kind of paralysis, arguing with each other, but not being creative about how to get out of the box. I do hope that the positive and creative energy of the space community can help in overcoming that paralysis, not only for the sake of space but also other goals.

Here is a brief explanation I wrote for a noneocnomist in NSS. Then I will add more details on why I think that this "small" measure could have huge benefits to the European economy.

To the noneconomist: ========================================

I haven't said a whole lot more about the economics aspect, because, so far as I know, Mark and I are the only ones in NSS leadership with graduate degrees in economics. But the economic aspect is serious, and the EU is in serious danger right now. The Germans know that if Greece goes under (and then Italy and Spain, and then France), their economy is not immune. But they also know lots of reasons why they don't want jobs in Greece to be preserved at the cost of sending money down the rathole of the Greek government. Stimulating PRIVATE SECTOR jobs, based on private investment, in the sunny nations of southern EU, could be a very big deal; the electricity industry involves trillions of dollars of capitalization, more than enough private stimulus, if it can be mobilized. High-cost solar farms aren't really worth the investment, but the feed-in tariff sets a cap on what people get paid, and encourages the lower cost versions more. (In fact, I hope it stimulates the lower cost dish-style solar thermal solar farms, which do not depend on buying PVs from China.) The immediate investment in earth solar farms would be greater than the immediate investment in deploying solar power satellites... but if we do a good enough job on the other fronts, it COULD start entering the real market as soon as a decade from now. Having a clearly defined market NOW is crucial to the investments NOW to prepare for what we can deploy a decade or two from now.


More details:

EU, US and China are all facing problems with aggregate demand versus government debt. In all three areas, true Depression was averted in 2009-2013, because of government spending at levels which now appear nonsustainable... yet other sources of demand have not risen enough to fill the gap. The resulting dilemmas actually work out in very different ways in the three areas. In the EU, the essential problem is that central banks are hitting limits on what they can do to support governments in the south of the EU, while rising unemployment already has rising politically nonsustainable aspects all the way form Greece to France.  Key questions: how can we fill the gap
with new private sector investment, on a large enough scale, while staying within the constraint that the investment must be real investment, with measurable payback?

This proposal would stimulate immediate investment in making solar farms in the sunny regions
of the EU, where jobs are most needed. Because it is based on making existing markets more competitive by allowing new entries (presumably in the 15-20 cents slot), it is a valid investment lowering costs to consumers (without compromising on environmental and security objectives which EU leaders have rightly already been committed to). I sit big enough? At about ten cents per kwh,
world electricity generation is t about $2 trillion, with a capitalization many times that; a major
new capitalization, with new solar farms (and grid investments), we already get numbers big enough to
dwarf the budget deficit of Greece, for example. This one small step would not be so small.

I tend to suspect that a feed-in-tariff of <=20 cents for solar farms would give much more incentive to
large solar thermal solar farms, where more of the jobs stay in the EU, than PV farms which rely so much on imported solar panels these days. 

Of course, all of the Big Three depend a lot on each other, and it's important to all three that no
one just "falls off the horse" (as all three are in danger of doing right now!).


Best of luck,


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