First Mover Disadvantage

Guest post by Thomas Fuller

Over at Bart Verheggen’s weblog, Bart (who is a climate scientist who looks at aerosols) writes about innovation, implementation and efficiency, saying,

“Often, innovation (of new/improved energy technologies) and implementation (of existing energy technologies) are presented as if they are binary choices. Lomborg is a champion of that kind of rhetoric.

They are not: Both are needed, and both serve a different purpose (or at least, they are different, and complementary means towards the common goal of transforming our energy system towards a more sustainable one).

Innovation doesn’t actually reduce emissions. Rather, it is expected to allow for deep, fast and/or cheap emission reductions in the long term. Its pay-off though is inherently uncertain.

Implementation is needed to get started on emission reductions. It’s the cumulative emissions that are of concern, so earlier cuts in emissions are more useful to climate stabilization than similar cuts made later.

Counting on innovation as the only mitigation strategy risks postponing doing anything until a silver bullet comes along that may never will. Hence this strategy is sometimes referred to as fairy dust.

Counting on implementation only risks high costs to achieve needed emission cuts (or an effective inability to reach needed emission cuts, if we don’t want to pay for it).”

Bart is probably on the wrong side of the fence for many readers here, but he’s a good guy–more reasonable and reasoning than so many activist bloggers, and willing to at least discuss issues, rather than lecture and hector in the Rommulan or Tobitian mode. I urge those of you who haven’t visited his blog to give him a chance–you probably won’t agree with him, but his discussions are at least interesting.

But he’s missing one or two important points.

There is another way of dividing this problem up. Using renewable energy sources (possibly including nuclear, depending on the level of religious fervor you have) and improving the efficiency of our current means of generating, distributing and consuming energy.

The innovation strategies are not the same for each, obviously.

For renewable energy sources, the technology most likely to reach price parity with fossil fuels is solar power. The improvements needed to make it inexpensive enough to convince die-hard American Republicans that we should use it are well-understood. The complementary technology to make it scalable, grid level storage, is also understood, but farther off.

The appropriate innovation strategy would be to publicly finance research and development of storage, and offer tax incentives for accelerated deployment and development of solar. This is important as the last generation of fabs for solar cells still has mileage on it, and the owners want to milk the last penny out of it.

The dilemma nobody talks about (because nobody wants to advertise it) is the first mover’s disadvantage.

Anthony has kitted out his house with state of the art energy efficiency technologies, because he actually understands that it makes sense to try and make a difference. I gave up driving back in 1991 (with a clean driving record, I’ll have you know), because it seemed like the quantitatively most significant action I could take. I don’t regret my choice, and I doubt if Anthony regrets his.

But if I owned a business with a location in a warehouse with a flat roof facing southerly, I would still hold off on buying solar panels to cover it. There would be two reasons for my hesitation.

First, I am not certain that I won’t get a better deal from the government on tax incentives, depreciation and Girl Scout cookies later on. They do talk about such things quite frequently, both in Sackamenna and Washington. So even if it made sense in other ways, I might hold out for a better deal.

Secondly, and more importantly, I know that solar power gets 20% better with every generation. Two more generations and it will be so inexpensive and higher quality that it would be insane not to use it. Sound business principles suggest that I wait.

On a higher scale, the same decision-making process affects large industrial producers and consumers of energy. Take hydroelectric power. Uprating the turbines of a hydroelectric power plant can increase power output by 35% or more. That ain’t hay.

But turbines are increasing efficiency by at least 1% per year. If my current facility is operating profitably and I wait for 10 years before uprating it, I don’t have downtime for the plant, don’t incur the expenses of retrofitting, and have extra money in my pocket before uprating to an even more efficient turbine 10 years down the road. If I do it now, it’ll be second-hand news in 10 years, and who knows when some really dramatic innovation occurs that makes it impossible to resist.

In my personal life I am willing to put up with some inconvenience and risk a bit of unplanned obsolescence in my energy choices. But as a small business owner I do not have that luxury. There are people who depend on me making the right choices from a financial point of view.

And that’s the dilemma pretty much in a nutshell.

Thomas Fuller http://www.redbubble.com/people/hfuller

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Philip Thomas
September 15, 2010 1:40 pm

Thomas Fuller,
Sorry to repeat myself but I would love you to comment.
as commented in an earlier post:
I have previous criticised your posts for lack of skepticism regarding the core of AGW ‘science’; the theory that man is causing the earth to warm and he is doing this through the continued release of CO2. I find your absolvement of the scientists and the IPCC in you articles critical of AGW hype excessive and occasionally incorrect; I will draw the line at saying disingenuous because you have not replied to my previous post that I repeat here:
“Philip Thomas says:
September 13, 2010 at 6:09 am
‘[Major media campaigns] ignore IPCC scientists so they could insist that Himalayan glaciers would disappear by 2035.’
I was under the impression that this claim was made by the scientists in the IPCC report. These facts were reiterated on numerous occasions by Rajendra Pauchari.
Here is the IPCC’s statement on the matter.
http://www.ipcc.ch/pdf/presentations/himalaya-statement-20january2010.pdf
Unless I have greatly misunderstood what you have said, it seems completely incorrect to say that the media pushed these errors in the face of IPCC protest.”
The climate debate is littered with the comments of the nefarious whose sole purpose is to disseminate misinformation and cloud the truth. I would like to think that you are not included amongst those. I have, however, previously debated people with various ulterior motives and have learned to know as much about the authors of articles that I read because I simply do not have the time to fact check everything.
Is it possible you could tell us about the consultations you made to the UK Government regarding green technologies?
On Googling your name I was led to a testimonial you gave: http://www.pep-partnership.co.uk/testimonials.asp
‘Bill understands how business happens in the governmental sector, especially the European Commission. He’s a hard worker and next time I need a big proposal for an E.C. tender, there’s no doubt that he’s the guy to go to.
Tom Fuller, Managing Director, nQuire Services Ltd’
[Edit: PEP partnership specialise in EC grants]
Can you elaborate on your business interests with the EC? Do you worry that the tenders would be less forthcoming if you were critical of the accepted climate science consensus?
Sorry to put you on the spot but someone who gets so many posts on WUWT should have their cards on the table. These are hard times.

Dennis Wingo
September 15, 2010 1:41 pm

For renewable energy sources, the technology most likely to reach price parity with fossil fuels is solar power
Uh, no. Nuclear power is already only slightly more expensive than the cheapest fossil fuel, coal. If we truly want to deal with the CO2 issue then we need to immediately restart work on the 92 reactors that were halted after three mile island. That would reduce our entire greenhouse gas emissions in the U.S. by almost 8%, more than Kyoto. If they had been built in the first place, more than 30 billion tons less carbon dioxide would be in the air today.
I love solar power, I own a solar company, but our civilization needs tens of terawatts of power and there is no way that solar will ever be able to supply that.

September 15, 2010 1:44 pm

Many commenters seem to confuse Tom’s quoting of part of my blogpost with his opinions. In the first part of this post, Tom quotes me. And indeed, I hold to the old fashioned “belief” that CO2 can absorb and re-emit infrared radiation, thereby influencing earth’s radiative balance and ultimately the temperature.
My blog post quoted in part by Tom is http://ourchangingclimate.wordpress.com/2010/09/14/innovation-implementation-efficiency/
And then we have people such as wsbriggs saying that even if Greenland would melt, why would that scare you? There’s a lot of ice on Greenland. At the height of the previous interglacial, global avg temps were 1 or 2 degrees higher than now, but sea level was 6 metres higher (because of parts of Greenland and Antarctic ice sheets had melted).

Jimash
September 15, 2010 2:12 pm

“And then we have people such as wsbriggs saying that even if Greenland would melt, why would that scare you? There’s a lot of ice on Greenland. At the height of the previous interglacial, global avg temps were 1 or 2 degrees higher than now, but sea level was 6 metres higher (because of parts of Greenland and Antarctic ice sheets had melted).

6 meters, I think that is a new hyperbole record.

Jimash
September 15, 2010 2:31 pm

Giving up driving saves nothing.
It simply makes you unable to save energy.
Sure you can take a bus or train, but at some point you must be in a cab over which you do not have control, that might be a mighty polluter, and probably people come and pick you up and drop you off, which just transfers that use to them instead of you.
There are virtually none of these self-righteous acts of passivity that count for anything.
Maybe I like to sit in the dark and chant but I don’t fool myself that it is saving the planet.
I have a hybrid car because I can squeeze over 50 mpg out of it , saving money.
I have gas heat because it is cleaner in the house, and requires less maintenance.
Since scaring people seems to be the aim why not just go right to the Saber Tooth Tigers and Giant Sloths coming back ?
Because people just aren’t going to believe that the Antarctic is melting unless it actually does.
And IF the Antarctic IS melting, maybe you should ask how that happens when the temperature never rises above -20f instead of blaming it on soda pop bubbles.
Rantmode off/

Curiousgeorge
September 15, 2010 2:53 pm

Mr. Fuller, why do you feel it is necessary for there to be “a roadmap” to the future? There was no roadmap when my ancestors undertook to settle this country in 1632, yet they still made progress in spite of that. Furthermore, a roadmap implies some ability to predict the future, does it not? Good luck with that.

Dave Wendt
September 15, 2010 3:14 pm

“Jimash says:
September 15, 2010 at 2:12 pm
“And then we have people such as wsbriggs saying that even if Greenland would melt, why would that scare you? There’s a lot of ice on Greenland. At the height of the previous interglacial, global avg temps were 1 or 2 degrees higher than now, but sea level was 6 metres higher (because of parts of Greenland and Antarctic ice sheets had melted).”
6 meters, I think that is a new hyperbole record.””
You seem to be being overly harsh on old Bart. After all it would only require the present supposed rate to be doubled and straight lined out for a thousand years and bingo you’ve got 6 meters.

Curiousgeorge
September 15, 2010 3:19 pm

PS: to Mr. Fuller. I would also remind you of Robert Burns poem “To a Mouse”. Since you’re a journalist, I’m sure you are familiar with it, but it seems to have special meaning these days.

September 15, 2010 3:45 pm

I like to fantasise about being a Savvy Media Professional – to be called henceforth an SMP. How could I, for example, consistently intrude an AGW message on a website like WUWT?
Firstly, I’d boldly point the reader to an AGW website, but with enough disclaimers and personal reservations to keep my own position safe. What the hell, just get ’em reading the stuff – it’s worth a quick punt!
Next, I’d associate my name and personal practices with Anthony’s, since he is obviously a popular and admired figure among those who read this blog daily, and one who monitors his energy use and is generally smart on efficiency.
So I’d point out that I live in the Aussie bush, six miles or so from shops and weekend job, and that I no longer even use a mountain bike to commute. I walk. I’d point out that I’ve had energy-saver bulbs in my house for years, and that, unlike some Democrat politicians, I didn’t have to “work toward” using them – I just bought ’em and screwed ’em in. Also, I grow a species of commercial bamboo which is said to be some kind of world champion carbon muncher, so my all-up “footprint” is stupendously low.
I’d get all that said immediately after pointing people to that patronising alarmist site. A real SMP would be aware of the need promptly to defuse objections with the distracting reference to Anthony’s house…
…but then slip in a lightning killer-punch:
“…because he actually understands that it makes sense to try and make a difference.”
See how I did that? You might ask, on a website devoted to specifics, what on earth is meant by “make a difference”. But there’s a chance you won’t, and if I were to change the subject quickly enough, and not mention climate specifically, my message might slide through. Worth a try.
Of course, my article would need some kind of theme, and alternative energy, which is actually liked by hard-headed skeptics and conservatives, is a perfect choice. Pointing to obvious problems of cost and obsolescence couldn’t offend such hard-heads. Those guys have got efficiency on the brain.
But because, as an SMP, I’ve challenged myself to intrude a daffy green agenda…How’s this?:
“…solar power. The improvements needed to make it inexpensive enough to convince die-hard American Republicans that we should use it are well-understood. The complementary technology to make it scalable, grid level storage, is also understood, but farther off.”
How good is that! I’d separate solar power cost from the problems of scale and storage of solar power! At the same time I’d half-imply that teabagging rednecks are the main obstacle. Kind of. A skilled SMP has to alternate the highly specific with the hopelessly vague.
As a bush-dweller who’s actually depended on solar, I’d have trouble keeping a straight face with this last bit…but as an SMP, I could do it!

Gary Hladik
September 15, 2010 3:45 pm

Tom Fuller says (September 15, 2010 at 10:29 am): “As a liberal Democrat…”
After reading all his articles, I’m shocked to learn this about Tom. Shocked, I tell you. 🙂
Unfortunately for Tom’s touching faith in the ability of politicians to save the world from the taxpayers, the world’s second largest economy (and largest carbon dioxide emitter) isn’t run by liberal Democrats. The consequent irrelevance of the anti-CAGW crusade would be comical if it weren’t for all the collateral damage it causes.

September 15, 2010 4:18 pm

Hi, all:
First, Mr. Briggs: I’m a fan of markets, and I like free markets better than other sorts. Your description is good, but does not allay my concerns. If it’s all right with you, I’ll try and address them in a post all its own. Not trying to run away from your very cogent comments, just want to give them the space and attention they deserve.
Mr. Thomas: An IPCC scientist brought the news of the IPCC’s error to Mr. Pachauri’s attention in (I believe) 2004, but Mr. Pachauri paid no heed and in fact was rather dismissive of it all. But the scientist was from IPCC. I have consulted with various bodies of the UK government including at times on green technology. However, I am really surprised that you think you are entitled to the details, unless you have a comment somewhere asking Anthony Watts or Steve McIntyre similar questions. (I know I’m not in the same ballpark as these heavyweights, but still…) and if you found my recommendation for Bill Blakemore, how is it you could find so little about me? My tracks are much easier to trace. I have no current interests with the EC, btw.
Hiya Bart! Hope you don’t mind the wholesale listing of part of your post. I do not think your comment about 6 meters of sea level rise from previous periods is at all helpful unless you are willing to say ‘I, Bart Verheggen believe that sea level will rise 6 meters in x years due to y increase in temperatures.’
“And forward, tho I canna see, I guess an fear.”

September 15, 2010 4:20 pm

Hi Gary, your surprise is touching… It’s not faith in government, it’s faith in us to use it wisely that is the liberal fever that has touched (not torched… c’mon…) my brain.

RichieP
September 15, 2010 4:20 pm

@mosomoso
September 15, 2010 at 3:45 pm
By Jove I think you’ve got it! You’re not alone in this, you know, several of us have been raising questions that don’t get answers from sceptical/lukewarm (your choice – and further choices may be available for all we know) Mr Fuller. Unless he’s prepared to address the various questions he’s been asked adequately, why should we believe that he isn’t an agent provocateur?

Curiousgeorge
September 15, 2010 4:46 pm

Tom Fuller says:
September 15, 2010 at 4:18 pm
Hi, all:
…………………………………
“And forward, tho I canna see, I guess an fear.”

Congratulations. 🙂 So the next question is: Should the whole of humanity be tasked with paying the freight for the fears and guesses of a few?

lrshultis
September 15, 2010 4:56 pm

Fuller says: “First, I am not certain that I won’t get a better deal from the government on tax incentives, … .”
So you believe that you can get better deal by having government thugs point their guns at some tax payers and demand some cash to help poor Mr. Fuller with his solar project. Just what goes through your mind when you hear “tax incentives.” If it were economical, the market might do it if there were an actual need for it. If not it is best left to be done by individuals who believe that they must do it, pay their own ways. When you live by the law, i.e., by the threat of force, you will, in the long run, get nothing but loss and destruction, just your own if lucky or the whole country if you really work at hard at it.

September 15, 2010 5:07 pm

Hi Curious George,
Should the developed world be tasked with paying to remediate their past and current pollution? (Not talking about CO2…)

Gary Hladik
September 15, 2010 5:18 pm

Tom Fuller says (September 15, 2010 at 4:20 pm): “It’s not faith in government, it’s faith in us to use it wisely that is the liberal fever that has touched (not torched… c’mon…) my brain.”
And once again hope triumphs over experience. 🙂

Curiousgeorge
September 15, 2010 5:36 pm

Tom Fuller says:
September 15, 2010 at 5:07 pm
Hi Curious George,
Should the developed world be tasked with paying to remediate their past and current pollution? (Not talking about CO2…)

I asked you first, but I’ll answer your question anyway. No.
Now you answer my question.

Gail Combs
September 15, 2010 7:02 pm

“The appropriate innovation strategy would be to publicly finance research and development of storage, and offer tax incentives for accelerated deployment and development of solar.”
BULL PATTIES, that is a typical socialist/central planning fallacy.
Actually studies show that is the least productive method. One study I read showed small businesses get more bang for the research buck. (can not find link but I posted it here earlier)
FORTUNE Small Business Magazine says “Entrepreneurs tend to stay at least one step ahead of the pack, and lately they have been widening their lead. Small businesses are generating so much that’s new in our economy that more and more big corporations are buying them up to gain access to their research and development.” http://money.cnn.com/2006/02/08/magazines/fsb/nextlittle_xethanol/
Perhaps that is why major corporations and politicians collude to throw up the road blocks called regulations that cause small businesses to fail. After all Obama’s chief science adviser wants to “de-develop” the USA and you can not do that if you allow a bunch of innovative Entrepreneurs to stay in business. GASP they might actually allow Americans be more productive and wealthy than other countries and we can not have that.
If you want to curb CO2 emissions, pollution and increase everyone’s standard of living lobby your government for nuclear power. However that is not the real goal of government as far as I can detect. Making the wealth, wealther and the poor poorer seems to be the real goal based on the facts. And that is exactly what has been done. In 1976 a typical American CEO earned 36 times as much as the average worker. By 2008 average CEO pay increased to 369 times that of the average worker. http://timelines.ws/subjects/Labor.HTML
According to US census figures, the USA our population has about tripled since 1970, government employees had doubled by 1996 while education and manufacturing jobs fell. We have less than half the manufacturing jobs, a quarter of the education jobs per capita but 24% of the labor force is now eating at the government trough.
…..the more corrupt the state, the more numerous the laws… according to Tacitus(55-117 A.D.) And I would add the more useless bureaucrats eating the people’s wealth.

dr.bill
September 15, 2010 8:25 pm

Tom Fullers: September 15, 2010 at 5:07 pm
Hi Curious George,
Should the developed world be tasked with paying to remediate their past and current pollution? (Not talking about CO2…)

Another nuanced bit of propaganda, but of course you are talking about CO2. You’re just doing it “in code”. Pollution is a problem, but it always has been, and always will be, a local matter. Even the supposedly “far-reaching” kinds like the Acid Rain Panic have been vastly overstated. The down-wind dilution kicks in pretty fast, and as the (valid) mantra goes: “The solution to pollution is dilution.” Each micro-case is different, and we inhabit so little of the Earth’s surface that anything other than localized solutions are ridiculous even in concept.
Anthony, for how much longer will this troll be posting here?
/dr.bill

September 15, 2010 9:32 pm

Dr. Bill, I confess I don’t understand what you are saying. I’ve been open about my position from day one as a guest poster here. I have no secret agenda and I prefer English to speaking in code.
Had I meant CO2, I would have said it.
And troll has a bit of baggage attached to it in the blogosphere. What have I done to deserve that?

September 15, 2010 9:58 pm

Tom Fuller says:
September 15, 2010 at 4:20 pm
Hi Gary, your surprise is touching… It’s not faith in government, it’s faith in us to use it wisely that is the liberal fever that has touched (not torched… c’mon…) my brain.

Nah.

“If one rejects laissez faire on account of mans fallibility and moral weakness, one must for the same reason also reject every kind of government action.” Ludwig von Mises – Italian Economist 1881 – 1973

dr.bill
September 15, 2010 10:21 pm

Tom Fuller: September 15, 2010 at 9:32 pm
Dr. Bill, I confess I don’t understand what you are saying. I’ve been open about my position from day one as a guest poster here. I have no secret agenda and I prefer English to speaking in code.
Had I meant CO2, I would have said it.
And troll has a bit of baggage attached to it in the blogosphere. What have I done to deserve that?

Tom, I will be perfectly candid, although I think I’ve already made my thoughts clear in the comments that I have made on several of these articles that you have posted. What I object to is, in fact, a remarkable talent that you possess. You might think that this is a strange thing for a professor of Physics to complain about, but talent can be used in many ways and to many ends. Your writing is much like a Rorschach Test. The content is minimal, but it is framed in such a way that different groups of readers may easily project their own assumptions and preconceptions onto it. Having taken that step, usually facilitated by the first few seemingly sensible and innocuous bits of your presentations, they are then in a position to have the subliminals delivered.
This is one of the most effective ways of teaching complex topics while avoiding the “this is too hard to understand” impulse experienced by many students when faced with new and perhaps esoteric materials. In a classroom, however, the objective is to allow the students to get past their emotions and free their intellect to grasp the topic at hand, and to actually learn something valid. It imposes great responsibility on the part of the teacher, but is easy to abuse.
I would say that you are doing just that, but as you might judge from the number of other commenters who have effectively made the same judgement as I have, this isn’t a forum where such behaviour is likely to go unnoticed or unchallenged.
/dr.bill

Christopher Hanley
September 15, 2010 11:19 pm

Are we there yet?
I gave up reading Tom’s discursive essays a few episodes back.
Tom has perfected a writing style designed to convey as little meaning as possible.
I must congratulate him, from what I have read, they are masterpieces of circumlocution.

September 15, 2010 11:31 pm

Curious George,
Answering your question–no, not necessarily. But I think they should be given the option to buy insurance.