International Cooperation and the Role of Technology

The more I’ve studied international cooperation as it pertains to climate change, the more I’ve come to believe that a mainstay of the solution will ultimately lie with technology. Put differently, I don’t think that we can stabilize CO2 levels just by getting everyone to give up their car in favor of riding their bike to work. Nor is it politically feasible, nor economically rational, to, say, put an outright ban the use of coal. Don’t get me wrong, I believe strongly in individual efforts to lead a less energy-intensive lifestyle. And I would be all for a coal-free economy. But coordinating policies that effectively induce individuals and companies to limit their carbon footprint is, as economists like to put it, an exercise in providing public goods.

In brief terms, such goods are difficult to provide because everyone has an individual incentive to maximize their own benefit without paying their fair share of the collective costs. This is hard enough on a national basis. On a global scale, where issues of equity are amplified across countries, and no single entity has the authority to deter free riders, it becomes a near impossibility. The UNFCCC’s Kyoto Protocol is a pretty decent start, and such mitigation efforts should continue. But in the end, I have more faith in humankind’s ability to innovate than I do in our ability to cooperate. In my view, which is admittedly a non-expert one, the long-term solution will require a wholesale transition away from a fossil-fuel based economy to one based on hydrogen or some other energy source that doesn’t emit carbon.

In this light, I find advances in solar technologies particularly promising. Two, in particular, have caught my eye in past weeks. First, SunPower announced it reached 23.4% PV cell efficiency, a world record. Currently, the biggest hurdle facing PV cell manufacturers is unit cost. Improving cell efficiency is one of the main ways to tackle this challenge, as SunPower CEO Tom Werner notes:

“This record efficiency solar cell, which is expected to be commercially available in approximately two years, extends SunPower’s leadership position and is a key component of our plan to reduce system cost by 50% by the year 2012.”

The second story comes, surprisingly enough, from IBM. Its scientist recently announced they’ve successfully used concentrator photovoltaic (CPV) technology to focus 230 watts of energy on a centimeter-square cell, another record. The technology makes use of a large lens to concentrate the sun’s rays onto a solar cell. To prevent the cell from overheating, which can hinder efficiency and even damage the cell itself, IBM applied an approach it had previously developed for cooling computer chips. In the end, the CPV prototype was able to convert the original 230 watts of sunlight into 70 watts of usable electricity—a rate of efficiency about five times that of standard CPV technologies currently in use at solar farms around the country.

So, who knows? Unlike the 1970s, another period when high oil prices spawned a hunt for alternatives, the current situation of R&D and innovation may prove to be more sustainable. We can only hope. The development of China, Brazil, India and others show no signs of relenting over the medium to long term. Such development is likely to continue to generate dear prices for oil, a trend that increases the relative value of substitutes. Technological advances, like those from SunPower and IBM, are perhaps our best hope that the substitute of choice doesn’t become coal—one of the cheapest and most carbon-intensive source of energy of them all.