The United States and China are the world’s largest energy consumers with energy needs projected to double in China over the next two decades. This has sparked concerns over fossil fuels’ spiraling costs and increasing damage to the environment. Amory B. Lovins, co-founder of Rocky Mountain Institute and a U.S.-based consultant physicist and energy innovator, released a report entitled Reinventing Fire, which offered actionable solutions for the four energy intensive sectors of the economy: transportation, buildings, industry, and electricity. Lovins described a rigorous study that sketches how to run a U.S. economy in 2050 that is 2.6 times bigger with several environmentally friendly conditions: no coal, oil, or nuclear energy; one-third less natural gas (when valuing carbon emissions and all other external or hidden costs at zero); and no new inventions or national laws.

Carnegie’s Kevin Tu served as commentator for this joint Carnegie-Tsinghua University Climate Policy Initiative event. Qi Ye, a professor at Tsinghua University, moderated. 

A Fossil Fuel-Free Future

Four-fifths of the world’s energy needs, Lovins pointed out, come from fossil fuel combustion. While they were central to creating modern standards of living, they are no longer the only, best, or even cheapest way to sustain and expand the global economy.

  • Hidden Costs: Lovins said that the costs of continued fossil fuel use were “disturbingly large,” and that the world’s energy system was “disconnected, ageing, insecure, and dirty.” Tu pointed to the Chinese coal industry, responsible for 80 percent of the country’s electricity needs, as an example—more than 250,000 miners have died in the last six decades in China’s numerous coal mining accidents. The solution, Lovins said, was not to chop the problem “into little pieces, because then the boundary isn’t big enough to include the solutions.” Taking the United States as an example, he proposed using the most effective institutions—businesses, civil society, and military innovation—to bypass the least effective ones, like the U.S. Congress.
     
  • Vehicle Fitness: The automobile sector, Lovins said, was a good place to start, since it composes a big part of the world’s rapidly increasing demand for oil. Cars in the last twenty-five years, he said, have “become obese,” and two-thirds of the energy needed to move a car is due to its weight. Technologies perfected in the aerospace industry, such as carbon fiber composites, combined with smaller, lightweight electric engines, could make cars significantly lighter, pushing driving costs per kilometer downward, while advanced manufacturing techniques save close to 99 percent of the tooling costs and 80 percent of the capital currently used. Germany, Lovins said, was the current leader in this push, with BMW, Audi, and Volkswagen all working on carbon-fiber prototypes. 
     
  • Efficient Electricity: The increasing use of electric cars can lead to improvement of air quality in urban centers, which is especially relevant in countries such as China, Lovins added. With innovative pricing (such as congestion charges), IT-enhanced public transport (such as car sharing), new urbanism models, and smart algorithms guiding traffic, load regulation would be easier and smoother. Despite a predicted 90 percent rise in automobile use, 118 percent more trucking, and 61 percent more flying, Lovins predicted that nearly 4 trillion USD in savings could be achieved.

Key Drivers

  • Integrative Design: The approach driving these changes, Lovins said, was a disruptive innovation he called “integrative design.” Integrative design involves a radical focus on energy efficiency, a rethinking of how elements come together in a system. He pointed to the European “passive houses” movement, where personal residences achieve rigorous, staggeringly high standards of energy efficiency and reductions in their ecological footprint. Lovins also pointed to the work the Rocky Mountain Institute has done on making motors, fans, and pumps more efficient. An “integrative” approach to improving these components, he said, can help avoid compounding losses throughout the whole system.
     
  • Smart Grids: Lovins said that the often repeated assertion that “only coal and nuclear can keep the lights on” was a myth, and full reliability is possible with renewables. Both coal and nuclear, he pointed out, have 11 to 12 percent “downtime,” and grids are designed around these fluctuations in supply. In the same way, grids can deal with the intermittent nature of solar and wind, as long as they diversify, forecast, and integrate with flexible resources. Lovins used the example of Germany, which added a record amount of renewables capacity in 2011, while driving nuclear use down by 41 percent.
     
  • Barriers to Entry: The future of energy was dependent not on fate, but choice, Lovins said. Efficiency savings, combined with a distributed micro-grid and emphasis on renewables could make the energy sector more resilient and sustainable, with no increase in costs. Even if one disagreed with some of the methods outlined, Lovins argued that the outcomes—solutions to climate change, nuclear proliferation, energy poverty, and insecurity—were something everyone could get behind. In response to a question by a Chinese commentator on the maturity of the technology and processes driving this change, Lovins said that “reinventing fire” required a “fundamental change,” which is the aspect that has been most fiercely resisted.