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Unformatted text preview: 4/2009 7:00:00 PM Oil DDW 2012 1 US alternative energy investments spillover and quickly reduce oil dependence Sadorsky, Associate Professor of Economics at the Schulich School of Business, York University, 11 Perry Sadorsky, Associate Professor of Economics at the Schulich School of Business, York University, 12-11, [“Some future scenarios for renewableenergy,” Futures, Volume 43, Issue 10, December 2011, Pages 1091–1104 Special Issue: Energy Futures, http://www.sciencedirect.com/science/article/pii/S0016328711001741] E. Liu The changes in technology needed to bring about a renewable energy infrastructure would likely result in one of the biggest bursts of innovation, creativity, and investment the world has ever seen. This would result in an example of what Joseph Schumpeter called “creative destruction” [40]. New “green jobs” would be created as a transition to a low carbon world takes place. A future without oil might be closer than thought. Some, like Lovins et al. [27] have already laid out a viable road map for how, by 2050, the United States economy can be flourishing with no oil at all. Lovins et al. [27] advocate investing $180 billion over the next decade to eliminate U.S. oil dependence. The U.S. current imports approximately 66% of the oil consumed on a daily basis. Rather than spending money on importing oil, investments can be made to lessen and gradually eliminate the dependence on imported oil. In their calculations, this investment will result in a gross savings of $130 billion. They advocate using a four step approach that relies on creative destruction to revitalize the energy sector. First, oil efficiency must be doubled by using advanced but proven technologies to design and build ultralight vehicles. Second, business and public policies must be developed to accelerate the design and manufacturing of light weight materials, like carbon-fiber composites, that can be used in buildings, vehicles, heavy trucks and airplanes. Third, petroleum products must be replaced with biofuels. Fourth, increase efficiency in the natural gas sector to save half the projected 2025 use of natural gas. These savings will mean more natural gas can be used to make hydrogen and this will provide a convenient secure path to the hydrogen economy. While this four step plan is specifically designed for the United States, there is no reason why parts or all of this strategy could not be adopted in other countries.33 52 Oil DDW 2012 1 US purchases of oil control its market price – Reductions in consumption decrease its price Jaffe, Wallace S. Wilson Fellow for Energy Studies at the James A. Baker III Institute for Public Policy at Rice University , 08 Amy Myers Jaffe, Wallace S. Wilson Fellow for Energy Studies at the James A. Baker III Institute for Public Policy at Rice University, 4/5-08, [“The Impending Oil Shock: An Exchange,” Survival: Global Politics and Strategy, 50:4, 61-82, http://www.tandfonline.com/doi/abs/10.1080/0039633080232904...
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This note was uploaded on 01/30/2013 for the course ECON 101 taught by Professor Burke during the Spring '13 term at Southern Arkansas University.

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