Photo Courtesy of Len Radin, Flickr Creative Commons
Conservatives and liberals collide when it comes to the legitimacy of global warming. Conservatives are not convinced that climate change is a reality, while liberals argue that climate change is a real threat to the environment and the civilized world. The majority of environmental scientists conclude that climate change is occurring from industrial pollution. But let’s just forget about the scientific evidence and look at oil dependency from an economic standpoint. The supply of oil is ever decreasing, while the demand is continually increasing. Thus, the price of oil will inevitably rise in the long run. Even in the short run, oil prices have a strangle hold on the global economy.
Recall the 1970s in the U.S. when OPEC raised oil prices, resulting in stagflation, which is when inflation and unemployment rise simultaneously. Is there anything that will stop economic and geopolitical outbreaks over oil such as this in the future? Whether you’re a liberal or a conservative, it is time to reach the consensus that our way of consuming energy needs to evolve. The question is, how?
Liberals try to tell everyone to change their lifestyles and reduce energy consumption per capita, which is completely impractical and often hypocritical. Why change our lifestyles if we can just change where we get our energy from? Liberals also advocate for government regulation. Conservatives will never accept government intervention when it concerns production levels. So please, drop the discussion of government regulation on fossil fuels. It’s too gradual of a process and it doesn’t solve the problem. At the end of the day, the world is still dependent on oil.
As I hinted at earlier, renewable energy is the answer. The privately driven green energy solution is one that could potentially satisfy the entire spectrum of ideology. Green energy is a market with a large sum of economic profit. The bottom line is that we can consume as much as we desire while conserving the Earth’s atmosphere and maintaining price stability.
The reason I advocate for a free market approach is because it usually results in higher levels of innovation. Government operations are usually inefficient, and lack recruitment of the best and the brightest. The challenge in project financing (privately funded) occurs when operational costs exceed $500 billion. In these cases, engineers often incur financial issues because project-financed transactions have nonrecourse debt. This means the loan repayments must come from project cash flows. So not only am I calling to the engineers, but to young finance experts as well.
The pace at which government policies are being implemented may leave an impact in the long run, but to quote John Maynard Keynes, “This long run is a misleading guide to current affairs. In the long run we are all dead.” Our generation has an obligation to save humanity from itself. A synergy of engineering and finance is called to the forefront to get it done. Why not start here at Ramapo College? The time to act is now.
panzano@ramapo.edu
