The Tipping Point: How America Can Lead the Transition to a Prosperous Clean Energy Economy

The world is approaching a historic tipping point. Rapid advances in price and performance are bringing clean energy technologies ever closer to the point where they beat fossil fuel technologies on the merits; where they are quite simply cheaper and better. Solar and wind are already beating coal in a number of situations and locations. Once this tipping point is broadly reached, the full might of markets will come to bear and drive a wave of transformation that will replace the fossil fuel economy with a clean energy economy. Betting on coal at this point in history is about as smart as betting on typewriters in 1976—the year Apple released its first personal computer. This paper will argue that it is almost inevitable that the U.S. and the world will reach this tipping point, but that it is not happening fast enough. Progress needs to be accelerated in the U.S. for three reasons: First, the sooner the tipping point is reached, the lower the risks of damaging climate change. Second, in the race to build and deploy clean energy technologies there are significant first-mover advantages; the next ten years will likely determine which nations lead and which nations follow. Third and finally, for those who believe that government intervention in the economy should be limited, the faster America reaches this tipping point, the faster it can scale back intervention in its energy markets. A relatively brief but forceful policy push over the next ten years can drive the U.S. rapidly to the tipping point where clean energy technologies win on the merits and free market forces take over. Citizens will then enjoy the benefits of cleaner, cheaper, more secure energy, and the job creating economic growth that will come from this transformation, for decades to come. This paper will briefly discuss: (1) why clean energy technology has advanced so rapidly and why the tipping point is almost inevitable; (2) why the U.S. needs to actively accelerate its progress to this point; and (3) how smart policies can ensure U.S. leadership in the energy economy of the future.

Beinhocker, Eric, 2017. "The Tipping Point: How America Can Lead the Transition to a Prosperous Clean Energy Economy," INET Oxford Working Papers 2017-11, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.

Handle: RePEc:amz:wpaper:2017-11

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