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Germany is looking to integrate wind, solar, and biofuel natural gas to supply 100% of its power generation needs by 2050 (40% by 2020). Germany plans to phase out both Nuclear and Coal-fired power generation.

This illiteracy has caused us to focus on the wrong problems, and the wrong solutions ... and it's stalled the realization of any politically tenable carbon reductions.Ironically, while the goal of reducing carbon emissions has political allies and adversaries, the economic illiteracy is found on both sides. It has become self-reinforcing. The only solace is that the economists are just as guilty.

We examine the potential economic implications of using vehicle batteries to store grid electricity generated at off-peak hours for off-vehicle use during peak hours. Hourly electricity prices in three U.S. cities were used to arrive at daily profit values, while the economic losses associated with battery degradation were calculated based on data collected from A123 Systems LiFePO4/Graphite cells tested under combined driving and off-vehicle electricity utilization. For a 16 kWh vehicle battery pack, the maximum annual profit with perfect market information and no battery degradation cost ranged from ~$140 to $250 in the three cities. If the measured battery degradation is applied, however, the maximum annual profit (if battery pack replacement costs fall to $5,000 for a 16 kWh battery) decreases to ~$10-$120. It appears unlikely that these profits alone will provide sufficient incentive to the vehicle owner to use the battery pack for electricity storage and later off-vehicle use. We also estimate grid net social welfare benefits from avoiding the construction and use of peaking generators that may accrue to the owner, finding that these are similar in magnitude to the energy arbitrage profit.

Most economic policy models now suggest a significantly negative impact on the economy if U.S. policymakers choose to reduce greenhouse gas emissions to any significant extent. There are a number of reasons for these inappropriate outcomes. Primarily, they are an artifact of the models and not the data. By turning to the historical record in the United States we can examine recent data to inform policymakers and business leaders what the economic policy models should be saying about energy and climate change policies. We can also use this historical record to perform a diagnostic review of recent modeling exercises to improve our understanding of their missed opportunities.

While capital cost is an important economic parameter, it should be realized that the total ownership cost (including the impact of equipment life and O&M costs) is a much more meaningful index for a complete economic analysis. For example, while the capital cost of lead-acid batteries is relatively low, they may not necessarily be the least expensive option for energy management (load leveling) due to their relatively short life for this type of application.

Cascading failures are an emergent phenomenon of a network, rather than the independent and coincidental failures of its individual components. Although it is true that many banks in the U.S. and Europe simultaneously overinvested in mortgage-backed securities (MBSs) to their peril, positive feedbacks in the global economic system amplified those errors. Bank regulators and macroeconomic policymakers have focused too much attention on the individual nodes of the network (that is, on each bank, and each national economy) without proper regard for the system-wide amplification.

The Paris-based Organization for Economic Cooperation and Development has released its 2008 Environmental Outlook. Without new policies, the world risks irreversibly damaging the environment and the natural resource base needed to support economic growth and well-being, according to the report. But the Outlook finds that tackling climate change, biodiversity loss, water scarcity and the health impacts of pollution is both achievable and affordable.