Worldwatch Institute

Jumpstarting a Revolution
If a low-carbon energy economy is possible,
the next question is how we get there
from here. The road ahead will be long
and expensive, but it has become a bit
clearer thanks to the trailblazing initiatives of
pioneering governments and companies over
the past few years. A successful transition will
nonetheless require a powerful combination
of government policy changes, steady technological
progress, and the rechanneling of private
investment.
It is instructive to remember that when oil
was first discovered in western Pennsylvania in
the 1860s, it was virtually useless—far more
expensive than coal and, prior to the development
of the refinery or internal combustion
engine, useless for transportation. Even as
crude oil became widely used for lighting in the
late 19th century, the idea that it would become
a dominant energy source—let alone reshape
the global economy—was inconceivable.
In 1907, only 8 percent of U.S. homes had
electricity, Henry Ford had produced about
3,000 vehicles in his four-year-old factory, and
the mass-produced Model T wasn’t yet introduced.
1 Similarly, when Thomas Edison introduced
his improved lightbulb, skeptics
dismissed it: “Everyone acquainted with the
subject will recognize it as a conspicuous failure,”
said the president of the Stevens
Institute. 2 Few would have imagined that by
the mid-20th century, virtually every American
home—and billions of others around the
world—would have electricity and lighting,
and that the automobile would redefine
lifestyles and the economy.
Most economic transitions begin as almost
imperceptible ripples that build into transformative
waves. Dominant technologies and
businesses are protected by a network of institutional
and political support that effectively
resists change. As a result, developers of new
technologies and businesses must start by finding
a niche market to exploit, meeting specialized
needs at a higher cost. But over time, the
new competitor becomes more economical
and widens its share of the market, eventually
undercutting the cost of the dominant player
and gradually remolding the institutional
infrastructure to meet its own needs. The
transition from one generation of technology
to another speeds up as the economic advantage
flips.
According to conventional wisdom, the
energy sector is far from such a transformation.
New renewable energy sources, including
solar, wind, geothermal, and biomass, represent
less than 4 percent of the total energy
supply, and in 2008 total U.S. government support
of renewable energy research and development
(R&D) came to little more than $650
million—about the amount the government
spent in Iraq in a single day. 3 What these figures
fail to capture is the recent infusion of
private-sector capital and technology and the
fact that today’s renewable energy pioneers are
not limited to “energy technology” but rather
draw on fields as diverse as semiconductor
physics, biotechnology, aerodynamics, and
computer engineering.
Rapid growth has turned the new energy
industries into lucrative businesses, with
demand outrunning supply and profits soaring.
An estimated $71 billion was invested in
new renewable electric and heating capacity in
2007, up from just $20 billion in 2002. 4 (See
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