Clean Energy and How We Look at Energy Spending

When confronting climate change, it all comes down to money. Most arguments for and against mitigating climate change contain the element of money. It will cost trillions of US dollars to change our energy infrastructure to become carbon free. It will also cost trillions of US dollars to continue with business as usual using a fossil fuel based infrastructure.  The IEA estimates that it will cost $44 trillion USD to change the energy infrastructure to keep global temperatures below 2 degrees Celsius. That is a great deal of money. The IEA also estimates that this huge clean energy investment will have a return of $115 trillion USD. The return comes from reduced operating expenses on fossil fuels.

 

Capital Expenses

For too long we have been paying for energy as an operating expense. We pay for energy as we need it; when we fill up at the pump, our monthly utility bills, when the oil tank or propane tank is filled, or when we get a chord of wood. In contrast, the clean energy economy forces us to change how we spend money on energy. Most clean energy technologies are capital expenditures. Solar collectors, wind turbines, batteries, insulation, air sealing, and efficient windows are items that are paid for upfront and they produce or save energy without any expenses for many years.

Typically, capital expenditures are paid for with a loan. Right now interest rates on those loans are low. The cost to borrow money for these projects is cheap. The energy saved or the energy created from the project can more than offset the monthly loan payment.

As with other technologies, clean energy technology gets better and less expensive over time. Solar and wind power continue to achieve new efficiency records while they decrease in price. There is a variety of ways to save and generate energy. In addition, more clean energy technologies are being created with commonly found and easily recycled materials.

Energy is one of our basic needs along with water, food, and housing. We can change how we spend money on energy. There is no need to fear this commitment because investing in clean energy will save money in the long run. We have been renting our energy for a long time. Now we have the opportunity to drastically reduce our rent or to own it.