Some more thoughts inspired by Bill Nordhaus's richly deserved Nobel. As I mentioned, I was Bill's research assistant in 1973, when he wrote a classic paper on energy resources 1/ brookings.edu/bpea-articles/…
I spent most of a summer immured in Yale's geology library, hunting down data and cost estimates -- a harder job before the Internet! All this went into Bill's brilliantly innovative modeling effort. One thing, however: the model proved overoptimistic for many years 2/
The reason for this overoptimism was that estimates of the cost of alternatives to crude oil kept proving too low. For example, at the time engineers thought that shale oil would become available at not too high a premium over current prices 3/
But in the 70s and 80s that kept not happening despite huge price spikes. I remember people talking about "[Marty[ Weitzman's Law": the cost of alternatives to crude is 40% above the current price, whatever that price is 4/
But here's the thing: all that went into reverse about 10 years ago. Now alternatives to conventional fossil fuels keep coming in much cheaper than anyone imagined. Which is relevant to the subject Nordhaus did so much to advance: the economics of climate policy 5/
The simple and tragic thing is that the cost of sharply curtailing emissions now looks far lower than it did a decade ago. Energy solutions that seemed like hippie fantasies now make perfect sense, even as we barrel towards climate catastrophe 6/
But we're ruled by people who don't want to hear about it -- who even want to force clean energy to subsidize the continuing use of coal. It's a nightmare: the technology to save us is right here, and we may choose destruction all the same 7/
