How Neoliberal Economics killed Google’s Clean Energy plans

Once upon a time, the company which promised to “do no evil” was trying to do good by climate change. Google had a program to reduce its own emissions by implementing today’s renewable energy technologies and to invest in the development of tomorrow’s energy technologies.

And then, in 2011, Google shut it down.

Two of the program’s managers explained why (at considerable length) in a new article posted to the the Institute of Electrical and Electronics Engineers’ Spectrum magazine website. Titled “What it Would Really Take to Reverse Climate Change,” it recounts their efforts and then a set of modeling studies that, in the end, convinced them that there was no feasible solution with today’s technologies. Nothing less than “disruptive” technological transformation could solve the problem, and they didn’t see one on the horizon. (But, they cast as nearly an aside, a fusion technology miracle could occur!)

Yet a closer reading undermines their argument. Here’s where they go wrong:

Across the board, we need solutions that don’t require subsidies or government regulations that penalize fossil fuel usage. Of course, anything that makes fossil fuels more expensive, whether it’s pollution limits or an outright tax on carbon emissions, helps competing energy technologies locally. But industry can simply move manufacturing (and emissions) somewhere else. So rather than depend on politicians’ high ideals to drive change, it’s a safer bet to rely on businesses’ self interest: in other words, the bottom line.

Here’s the thing. This might be a viable claim if there were a free market in energy. But there isn’t. US subsidies for fossil fuels exceed $15 billion per year routinely. Worldwide, they exceed $400 billion. Put in terms the glibertarians populating Silicon Valley might understand, that’s the heavy hand of government tilting the playing field strongly in favor of fossil fuels and the pollution they cause . And unsurprisingly, Google’s engineers couldn’t find a technofix that could clear that hurdle. No new technology can overcome that (intentionally) high barrier without help.

So is there a way to overcome both the non-level playing field AND the problem that “industry can simply move manufacturing somewhere else?” Sure!

We can:

1) Remove fossil fuel subsidies and apply them to renewables instead

2) Implement a carbon price (I favor a revenue neutral carbon tax, personally) to mitigate the social cost of carbon

3) Implement a carbon tariff  on goods imported from countries that don’t implement a carbon price

But these policy changes require us to admit that neoliberal economics, what @naomioreskes and I call market fundamentalism, is wrong. And we mean both historically wrong (free markets do not, and have never, existed) and ethically wrong.

These two Silicon Valley engineers failed in their ambitious quest for clean energy because they couldn’t see past their own ideological blinkers. And that’s why our Collapse of Western Civilization had to be written. There are not, in fact, solutions to many of the problems society faces within the framework of neoliberalism. It needs to be put on the same ash-heap of history that the West dumped communism on a generation ago.

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