Depending on who you talk to, Cleveland forward Lebron James may or
may not be the best basketball player alive. But nobody can deny his
greatness: he scored the last 25 points in a conference finals overtime
game against the Detroit pistons; he made a three point shot that tied
up last year's conference finals with less than two seconds left in the
game; he jumps out of the gym; shoots video game range threes; and
practically averages a triple-double

Needless to say every team in the NBA would be ecstatic to have him
on their team. The problem for the Cavs is he will be a free agent this
coming summer: he is up for grabs to the highest bidder.

This situation has created an uncertainty that is ultimately harmful
to his team. You see, no other free agents want to sign with the Cavs,
because they don't want to go to a a team that Lebron may leave.

The paradox creating this situation is this: Lebron will stay only
if he gets better players around him; but better players won't sign
unless they know Lebron will stick around.

What's Lebron Got To Do With Energy?

This paradox can be easily extrapolated to a variety of topics (can
you think of a few?). The one I want to shine a light on is renewable
energy.

Everyone likes renewable energy (its clean, creates jobs, and lasts
forever). We all want more of it, and we want it to replace energy
produced by oil, coal, and gas. But unfortunately renewable energy
only accounts for 7% of u.s energy production (EIA).

The question is how do we spur investment in renewable energy
projects that will increase that percentage? Or in terms of Lebron: how
do the Cavs get better players to sign?

The answers to these questions are simply: eliminate uncertainty.
Uncertainty leads to inaction ( I guess I should say leads to nothing).
We discussed the uncertainty surrounding Lebron. The uncertainty
around energy that makes investments in projects risky is the unset
price for renewable energy.

(Footnote: check out Thomas Friedman book hot flat crowded for an
excellent explanation)

Uncertainty's Effects on Energy Investments

Carbon, other greenhouse gases, or any other form of pollution for
that matter is called an externality.  An externality is something that
is produced by a third party.  For example a coal power plant produces
electricity by burning coal, which produces carbon as a by product.  The
coal plant does not explicitly pay to emit that carbon, a third party
does.  In this case the whole world with a changing climate.

This is a huge problem if you want more investments in clean energy. 
Because carbon-emitting plants do not have to pay for those
emissions their costs to produce or lower and they can charge a lower
price for the electricity they produce.  This makes it very
difficult for renewable energy to be adopted broadly.  The economics
does not allow renewables to compete with dirty plants that charge less
for their electricity.  Thus the price one can charge for renewable
production varies greatly and makes investments risky enough to stay
away from.

The solution is obvious: make plants that emit greenhouse gases,
mainly carbon, pay for that externality they impose on the world.  ELIMINATE
THE UNCERTAINTY.  This can be done two ways: tax each ton of
carbon, or impose a cap-and-trade program.  Both do the job, but the
difficulty is political and one I will not go into here.

The Consequences and Where I Get My Advocate On

Currently our energy that we pay for an use is far too cheap. 
Artificially cheap because of the externalities we do not account for or
pay for.

But we cannot ignore this problem for long.  The consequences of
climate change are real.  The problem is that climate change seems so
far away.  It's such a long term and slowly evolving problem, that it
sneaks up on us.  Problems like the earthquake in Haiti are examples of
short-term, in-your-face problems that are easy to recognize.  But you
know what?  The earthquake was the catalyst that shined a light on
Haiti's real problems.  Haiti had tons of problems before the
earthquake, but the earthquake made all those other problems real.

Climate change is a difficult issue to grasp.  But the sooner we ban
together with all your collective resources the more
effective we will be at confronting the problem.  It can't be ignored,
the economy of the future is going to be a carbon economy.  What are you
doing to get ready for it?

This is the first of my mini-series on environmental and
sustainability topics.  I want my generation and other generations to be
more aware about issues that will effect the world and our lives. 
There are no excuses to be ignorant or act like problems are getting
worse.  Most of all I want to show that there are solutions and that we
all need to work together.  Topics will include:

• History of the environmental movement (with help from "Death of
  Environmentalism") and the transition to sustainability
• Collaborating and innovation is the solution
• Why environmental support is broad but shallow
• A break down and summary of great Stanford Podcast
• Multiple Videos
• Why prices are everything
• How pretending "the environment" is separate from human beings
• Asking, "what's your excuse for ignoring ecological destruction?"
• Of course much, much more