Page 250 - Sustainable Cities and Communities Design Handbook

224 Sustainable Cities and Communities Design Handbook

successful scientists, by any quantitative measure or scale, have placed
“emphasize even less the chances of any personal economic benefit. They
focus on personal satisfaction of realizing their own ideas and ensuring funds
for their own research.”
The most common supply-side economic mechanism is “integrated
resource management” in which the supply of energy into a system is based on
what is known as “base load” or firm supply of power. Base load is usually
dependable fossil fuel sources such as coal, oil, natural gas, and hydroelectric
or nuclear. However, in the past few decades, geothermal has been considered
base load. Renewable energy such as wind, solar, and even biomass are
considered nonbase load or intermittent. Hence the challenge to have renew-
able energy calculated and treated as base load power supply.
The issue of energy management is critical for understanding how the
economics of energy works. In short, the integrated resource management
approach places the burden on the power system for delivering energy. Hence
a “firm” or base load must be established that has reliable power from
traditional fossil energy such as coal, oil, or natural gas. Nuclear and hydro-
electric power are also considered firm load as the fuel can be constant and
uninterrupted. The problem is that each of these fuel sources (hydroelectric
usually has social and environmental side effects) pollute the atmosphere and
have waste disposal problems. Thus the use of current “technologies” for firm
load are unacceptable, given the increase in greenhouse gases and atmospheric
particulates.
The problem in the energy sector, therefore, is the definition and operation
of the market itself. When government does not regulate and directly oversee
the energy sector, the private sector can manipulate and game the system as it
is constructed. What is also not often stated or acknowledged is that the private
sector, unlike the public sector, need not invest or even explore renewable
technologies since they can not foresee immediate profits. As Schumpeter
noted many decades ago, innovation for companies will only occur when they
see it in their own best interests.

Stimulating Innovation for Sustainable Environment and Energy
Systems
The fourth change from the neoclassical model is the observation that in
marginally competitive situations (mature or established industries) innovation
is limited because it would render otherwise profitable investments obsolete.
Lovins, among others, has demonstrated the “factor of four” whereby new
technologies get twice the productivity from half the input of resources. These
technologies are sensible and environment-friendly innovations that not only
are cheaper to use but also are cheaper to install in the first place. One can ask