The End of Global Warming: How to Save the Earth in 2 Easy Steps

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The optimist's case for rescuing the planet

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You may not believe me, but I have news about global warming: Good news, and better news.

Here is the good news. US carbon emissions are decreasing rapidly. We're down over 10% from our emissions peak in 2007. Furthermore, the drop isn't just a function of the Great Recession. Since 2010 our economy has been growing, but emissions have kept on falling. The reason? Natural gas. With the advent of "fracking" technology, the price of gas has plummeted far below that of coal, and as a result, essentially no new coal plants are being built. Although gas does release carbon, it only releases about half as much as coal for the same amount of electricity. This is why -- despite our failure to join the Kyoto Protocol or impose legal restrictions on CO2 -- the United States is now outpacing the rest of the developed world in reducing our contribution to global warming.

Now for the better news. A technology is in the pipeline that has the potential to eliminate CO2 emissions entirely. Solar power, long believed to be unworkably expensive, has actually been falling in cost at a steady exponential rate of 7 percent per year for the last three decades straight. Because of this "Moore's Law for solar", electricity from solar panels now costs less than twice as much as electricity from coal, and only about three times as much as electricity from gas. Furthermore, technologies now in the pipeline seem to ensure that the cost drop will continue.

Within the decade, solar could be cheaper than coal. Within two decades, cheaper than gas. When that happens, assuming we also have electric cars, it is game over for carbon emissions.

Am I being optimistic? Not especially. Global warming might still destroy the world. But technology has given us a fighting chance and this has big implications for at least four groups of people: Environmentalists, conservatives, economists, and policymakers.

Environmentalists have been the main force behind the fight against carbon emissions. But, as it became apparent that there would be no drastic voluntary worldwide curtailment of industrial society, many seem to have fallen into a funk of despair. Perhaps that despair will be justified in the end...but instead of cowering in the closet and holding their heads in their hands and saying "Oh God, we're all going to die," environmentalists should be doing what they can to seize the chances that we do have. And those chances are all related to technology. Natural gas may be the enemy in the long run, but in the short run it is our most powerful friend. Gas has succeeded in sending U.S. emissions tumbling; what else has managed that feat? Instead of panicking over the environmental dangers of fracking (toxic chemicals that can seep into groundwater), environmentalists should focus on finding ways to limit those risks.

This means working with gas companies, which often are also the same oil companies that have funded denial of global warming. Environmentalists will be understandably wary about partnering with such entities. But remember, the true enemy is not corporations; it's global warming. If Exxon can help fight warming by replacing coal with gas, then they are temporarily on the side of the good guys. (And take heart; the fall in solar costs, if it continues, will eventually render all of this fighting irrelevant.)

Conservatives, meanwhile, need to recognize that solar is for real. Modern American conservative ideas were mostly formed in the late 70s and early 80s, when solar really was prohibitively expensive. But things change. At one point, computers were so big that CEOs laughed out loud at the idea of a "personal computer"... but a few years later, Moore's Law had made those dreams into reality. Similarly, the conservative conventional wisdom - that solar will only ever survive by leaning on the crutch of government subsidies - is an anachronism whose expiration date has arrived. Solar is now so advanced that Germany, although it is cutting subsidies, is installing capacity at a breakneck pace; solar now provides over 4% of the electricity consumed by that cloudy, high-latitude country, and over 10% at peak times. Meanwhile, solar installations in the U.S., though helped by regulation and subsidies, are approximately doubling every year, without causing civilization to collapse. This trend will only make more sense as the exponential cost drop continues.

Economists are confronting an unpleasant truth with the rise of natural gas: Often, technology trumps our clever policy prescriptions. For many years, we have been vocal in our support for carbon taxes, which would act as a penalty on emissions and create incentives for the development of greener technology. This idea works great on paper, and would probably work great in real life ... if countries were willing to try it. But the fatal weakness of the carbon tax is that in order for it to work, it has to be global -- implemented by most or all industrial countries -- or else carbon-emitting activity will just migrate to whichever country has the weakest standards (in the process, hollowing out the economies of the countries with high carbon taxes). In other words, carbon taxes would be great, but they require the world to solve a coordination problem, a notorious bête noire of economic models. To make a long story short, China and India have absolutely no intent of curbing their carbon, and without them on board, a U.S. carbon tax might tax our own economy without making a difference to the planet.

The real, workable solution is one that doesn't easily lend itself to supply-and-demand graphs. Technology, as economists say, is nonrival. If you invent an idea, it's very easy to have everyone copy that idea for essentially no further cost. So if low-carbon energy technologies become cheaper than fossil fuels, they will spread like wildfire around the world, displacing dirty fuel overnight. That is what is now happening with gas displacing coal. And if solar gets cheap enough, it will happen again.

Policymakers don't need to push for an unpopular carbon tax. Policymakers need to be encouraging the rapid creation of low-carbon energy technologies. Government-funded research has worked miracles in the past (think internet, satellites, nuclear power), and has the potential to do so again. To keep solar on or below its exponentially falling cost curve, we need the federal government to step up spending on solar research. As of now, that spending totals somewhere around $500 million - not peanuts, but not nearly enough. Why not triple or quadruple that? Two billion dollars would still be cheap compared to the cost of subsidies.

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And here is the next step, the really radical policy idea: We need to give our low-carbon technologies away to other countries, starting with gas extraction technologies. China now burns much of the world's coal, but they have big deposits of frack-able gas. A deliberate technology transfer is thus the fastest way to lower China's emissions. This will mean lower profits for some U.S. companies, but in the long run it will be a boost to our economy too, even without considering the "world doesn't get destroyed" aspect. And importantly, green tech transfers will seem fair to developing countries. The West developed first, burning coal and oil the whole time. It's only fair that we shell out our own money to save the world from global warming now. Realize that if there is ever to be a global carbon tax, it will require (a) the existence of almost-as-cheap alternatives (like solar), and (b) the perception of fairness on the part of China and India. U.S. government research and free tech transfer kills both birds with one stone.

So to sum up: The way to save our planet is clear. Step 1 is to embrace natural gas as a "bridge" fuel, limiting the risks from fracking and helping China and other developing countries to switch from coal to gas. Step 2 is to fund research to ensure that the jaw-dropping three-decade plunge in solar power costs continues for two decades more. Natural gas is the temporary ally. Cheap solar is the cavalry that will ride in to finally save the day.

Preventing catastrophic global warming might still be a long shot. But if we do the right things now, we just might make it.

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Noah Smith is an assistant professor of finance at Stony Brook University. He writes regularly at Noahpinion.

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