Google Report Shows Clean Energy’s Potential for Positive Impact on U.S. Economy

By Colin Houghton

In July, the search engine giant Google, acknowledged that the clean energy dilemma is one of the United States’ biggest challenges moving forward, by releasing a thought-provoking report. Their report unveiled the results of a huge number-crunching project to see how much change clean energy technology and innovation could have on the US economy and the environment. And the news is pretty uplifting!

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Lest we forget the context and pedigree, Google has been one of the biggest corporate investors into renewable and clean energy technologies.  They have invested over $780 million – $700 million this year alone- in clean energy technologies and innovations such as wind power, solar farms and rooftop solar installation. Google’s clean energy investments don’t come out of the company’s traditional investment arm, Google Ventures. Instead, the money comes from the company’s main treasury and is invested by the company’s “Green Business Operations” team. They typically make financial investments in clean energy projects that will generate some kind of return, but they have also made investments that have resulted in power purchase agreements — meaning Google uses the renewable energy to power its own data centres.

The company is also involved with three-wheeled electric car developer Aptera,

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biofuel venture Cool Planet Biofuels,coolplanetbiofuel logo 300x671 Google Report Shows Clean Energy’s Potential for Positive Impact on U.S. Economy

and power conversion pioneer Transphorm.

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The Google report suggested that aggressive spending and expansion in clean technology would generate 1.1 million new jobs by 2030 and reduce U.S. greenhouse gas emissions by 13%. If the U.S. were to employ more federal initiatives, they could generate an additional 0.8 million jobs and reduce U.S. greenhouse gas emissions by a further 8%. On this path, by 2050, U.S. greenhouse gas emissions would be cut by 55% without federal mandates and funding for clean technology projects and by 63% if the government introduced aggressive clean technology policies. According to Google, a delay in increasing investment and development in clean tech between 2010 and 2015 will result in $2.3 trillion to $3.2 trillion in unrealized GDP and cost 1.2 million to 1.4 million jobs by 2050.

So what would be these aggressive green policies?  The report suggests two ways to increase the funding for clean technology projects.

Government Intervention

The first is a model in which the U.S. government aggressively expands its clean technology policies and increases the amount of nuclear power deployed. That model also assumes that there are additional carbon-capture projects deployed in the U.S.  Clean technology spending would increase the United States’ GDP by around $244 billion per year and reduce household costs by $995 annually

Carbon Emission Taxation

The second model, which would have less of an impact than government intervention, involves taxing carbon emissions at $30 per ton. That would increase the cost of power produced by plants that use coal, natural gas and other types of fossil fuels. It would bring the cost of electricity and power from those plants to something matching renewable energy sources like wind power and solar power. The United States’ GDP would increase by $155 billion per year and U.S. consumers would save $942 annually.

How were all these numbers gathered, crunched and presented? The Google report uses a calculation tool provided by McKinsey and Co.; their Low Carbon Economics Tool (LCET), coupled with government data and assumptions based on industry trends. The report’s predictive models reveal that significant replacement of coal with clean energy sources isn’t likely to occur until after 2030.  But after then, clean technologies like wind power, solar and geothermal will be cheap enough to replace the dirty, but probably still widely available, coal.

Google also notes that cheap natural gas will likely slow down the drive for clean energy development over the next 20-20 years.  But that’s not necessarily all bad news- the report claims that natural gas is still cleaner than coal and its increasingly  widespread use should create cheaper electricity, thus making electric cars more viable.