Friday, October 07, 2011

How bad is the energy apocalypse?

A lot of post-apocalyptic fiction and non-fiction coming out recently premised on the world running out of energy/oil (e.g. the 80's dorky nostalgia fest Ready Player One) and even though I don't buy that premise--people have been predicting the end of oil for a hundred years, while new technology has led to reserves growing not shrinking in that time--even if it were true, it's worth soberly noting just how bad it could be. The US spends about 10% of GDP (about $1 trillion) on energy. If we ran out of fossil fuels there are literally dozens of sources of renewable energy that could be tapped to replace fossil fuels if we're willing to pay twice as much. A trillion dollars is a whole lot and so we shouldn't jump into it lightly. But at the very worst, it will cost a trillion dollars per year. That would set back GDP by about 10% (or about 5 years of GDP growth) but that's about it. We're talking 5 years, not mad max in thunderdome.

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