| Perspectives on Texas

In his final State of the Union address, President Obama stated that 200 nations agree that global warming is a problem and that they intend to solve it. This was presumably a reference to the agreement at the 2015 Paris Climate Conference to limit global temperature rise to 2 degrees Celsius above pre-industrial levels.

Unfortunately, the history of climate change agreements — Rio, Kyoto, Copenhagen — is a history of failure. Signatories are simply unwilling to burden current economies with costs that address a distant problem. But is the problem really distant?

The Texas economy depends heavily on the oil and gas industry, which represents 23 percent of our gross domestic product. As global economies shift away from fossil fuels, our state is under severe risk, unless we adapt and embrace clean energy.

Without significant changes to our energy infrastructure, the targeted temperature rise will occur in about 30 years, which is just around the corner. Unlike information technologies, changing energy technologies take decades — the capital costs are simply too large.

To replace the entire fossil fuel infrastructure with clean technology — and to accommodate growth — we must spend about $2 trillion annually for the next 30 years. Although daunting, this expenditure would only amount to about 2.5 percent of current global gross domestic product, and on a percentage basis is less than the U.S. government spends on defense.

Ultimately, though governments can mandate this expenditure, the technical community must develop and implement profitable clean energy technologies — only then will political opposition cease. As a member of this community, I am convinced that such technologies exist.

To speed displacement of well-entrenched fossil fuels, renewable technologies are generally introduced through various mandates, taxes, and subsidies; however, this approach depends upon political will, which is strongly affected by economic prosperity. For example, to become more economically competitive, Australia repealed its carbon tax in 2014.

Rather than rely on government regulations, the preferred approach is to develop practical clean energy technologies that compete strictly on economics without market-distorting legislation. A recent success is LED lighting. Compared to traditional incandescents, LEDs are 10 times more efficient and last 40 times longer. The case for LEDs can be made strictly on economics and requires no mandates.

In the future, with sufficient investment, we will have economical clean energy technologies, such as automobiles that are more efficient, buildings that consume less energy and economical electricity storage.

A particularly fascinating possibility is Hyperloop, a high-speed transportation concept that would send a "pod" through an evacuated tube at more than 500 mph while riding on a thin film of air. A trip from Houston to Dallas would require only 25 minutes, similar to a commercial airliner, and would require only $0.35 of electricity compared to $20 of jet fuel. Tesla Motors CEO Elon Musk envisions a Hyperloop network that connects all major cities in the United States. To realize this dream, Hyperloop Technologies is testing the concept in a 12-foot-diameter tube in Nevada and plans to be commercial by 2021.

The Texas economy depends heavily on the oil and gas industry, which represents 23 percent of our gross domestic product. As global economies shift away from fossil fuels, our state is under severe risk, unless we adapt and embrace clean energy.

We have already started making this change. Texas has the largest installed wind-energy capacity in the nation — three times larger than California, its nearest competitor. Georgetown has decided to provide 100% of its electricity from renewable wind and solar by 2017. The city's decision was motivated primarily by economics; renewable energy is less expensive than fossil-derived electricity and offers protection from potential future rate hikes.

Famed oil tycoon T. Boone Pickens is promoting the “Pickens Plan,” which aims to power long-haul trucks with natural gas rather than diesel fuel. Per mile, natural gas emits less carbon dioxide than diesel, while providing other benefits such as reduced vehicle maintenance and lower fuel costs.

To address global warming, British leaders have proposed the Global Apollo Program, a ten-year publically funded clean-energy initiative. As a private initiative, Bill Gates has pledged $2 billion and has joined over 20 other billionaires to form the Breakthrough Energy Coalition. Although this level of funding seems large, in fact it is small relative to the challenge; therefore, it is imperative that Texas investors follow their lead. We simply do not have time to waste.