Overwhelming scientific evidence concludes that a transition away from a fossil fuel based economy is necessary for a prosperous future. However, the United States' decision to heavily subsidize the fossil fuel industry - an outright refusal of the free market - has impeded the development of renewable energy, placing the nation's economic success in peril. In order to revive the global economy, policymakers must remind themselves of the economic problem: satisfying unlimited wants with limited resources. Though carbon intensive strategies initiated the Industrial Revolution, sustainability is becoming an archetype for the business community. As such, the integration of renewable energy into the nation's electrical grid will create more efficient and innovative processes for power production, catalyzing a new era of unprecedented economic and technological growth. This transition will not only free the United States from its unrelenting addiction to fossil fuels - which directly and indirectly costs the nation billions of dollars - but also re-invigorate the capital markets by accelerating innovation and investment in human capital.
During recessionary times, characterized by high rates of unemployment, policymakers must focus on providing opportunities for growth within the economy. Though progress has been made, the current market structure continues to discourage the incentive for innovation within the energy sector, which is demonstrated by the federal government's discriminatory subsidies for the fossil fuel industry, totaling over $72 billion annually. Because the government, too, is constrained by the reality of scarce resources, continuing to inefficiently allocate taxpayer revenue threatens to derail the nation's future economic superiority. Though fossil fuels were vital for the early development of the manufacturing industry, sustainability is paramount in a world characterized by escalating energy demands and environmental constraints; the earth is reaching a precipice, signaling its inability to absorb larger quantities of CO2. As such, maintaining status quo growth patterns requires a re-conceptualization of the current energy framework - one that holistically evaluates the various costs and benefits of competing energies.
In order to establish an accurate price structure for fossil fuels, one must consider the array of hidden externality costs. The United States' reliance on fossil fuels has held the nation captive to price spikes in a volatile oil market monopolized by the Organization of the Petroleum Exporting Countries. Resulting market uncertainties within the energy sector have transformed reasonable energy related investments into unprofitable strategies by distorting the relationship between risk and profit. For example, Exxon Mobil characterizes renewable energy as "unchartered water" because of the government's current incentive structure. In addition to discouraging capital investment, the importation of foreign oil supports various authoritarian regimes, impeding global efforts for stabalization: Iran is accelerating its nuclearization program; Venezuela is maintaining its reign of terror and human rights abuses; and, Saudi Arabia is continuing to harbor internationally notorious terrorists. This lethal externality has not only undermined national security objectives, but also exposed the economic reality latent in the nation's overdependence on fossil fuels: distortionary economic policies prevent the efficient allocation of capital. Although supporters of fossil fuels argue that there are secure oil reserves, the utility of domestic drilling is limited, namely because the marginal cost of extraction is rapidly increasing. The era of cheap and abundant oil is history; spare capacity is at an all time low, resulting in firms' unwillingness to invest scarce resources in costly extraction projects.
Proponents of fossil fuels claim that sustainability is not economically viable. Yet, the recent achievements of the renewable energy industry indicate the opposite: clean energy has the potential to revive the U.S. technological foundation, thus re-establishing the nation's competitiveness in the international arena. Because employment opportunities in the fossil fuel industry are subject to the constraints of a perfectly competitive market, the industry has set a low threshold for innovation by necessitating a weak demand for scientists and engineers, adversely impacting the U.S.'s ability to compete in the global marketplace. As such, maintaining the nation's economic superiority will prove futile without proper investment in the renewable energy sector. Estimated employment opportunities are illustrated in Figure 1, which compares the business as usual scenario to a potential Renewable Portfolio Standard:
Figure 1 is the estimated number of employment positions created under a Renewable Portfolio Standard
Although a federal RPS may not be implemented, the table illustrates that a renewable based economy offers greater opportunity for employment than does the business as usual scenario. Furthermore, a study conducted by the World Watch Institute, a renewable energy think-tank, illustrates that the decline in job opportunities in the fossil fuel industry resulted from a flawed business model - not environmental regulation as critics hypothesize, "A survey of 224 permanent plant closings in 1980-86 by the Oil, Chemical, and Atomic Workers' Union found that just 12 plants listed environmental reasons as a partial motive for closure. And surveys conducted by the U.S. Bureau of Labor ... show that environmental-related reasons for layoffs were minute significance". Therefore, creating an environment conducive to the accumulation of human capital is pivotal in maintaining U.S. economic superiority. Yet, this should not necessitate the government's intervention in the private market through the subsidization of specific energies. Empirical economic research suggests that picking "winners" and "losers" distorts private investment. Therefore, developing a diverse portfolio for investment in the renewable energy industry will allow the most efficient and effective technologies to emerge through the forces of the free market. Without cutting edge technology and efficient energy practices, the United States will permanently export its industrial foundation, therefore losing its market share in the global economy.
Because the world faces an era demanding sustainable economic practices, renewable energy should not be understood simply as a green solution to environmental distress, but rather as an extension of capitalism - "the true catalyst for change."13 Investment in renewable energy, guided by the free market's invisible hand, has the potential to re-establish the United State's industrial and technological foundation. As such, the integration of renewable energy into the nation's economy will not only catalyze an array of investment and growth opportunities, but also alleviate the overdependence on authoritarian regimes, creating a pathway towards economic prosperity.
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