Landscape

Economics

The Economics of Energy Options

Lester B. Lave^a1

^a1 Carnegie Mellon University, USA

Abstract

Increasing demand for energy, diminishing stocks of oil and natural gas, and the public's desire to enhance environmental quality, particularly by reducing greenhouse gas emissions, all point to the need for improved materials. For example, generating electricity from the most abundant fossil fuel, coal, efficiently and with no environmental damage, presents notable challenges to develop higher performance materials. Technologies exist to transform one fossil fuel to other uses, such as coal to a gas or liquid. New materials that increase the efficiency of the transformation and lower its cost would provide valuable flexibility. Materials should be evaluated in terms of their entire life-cycle in order to discern which will make the greatest contribution. Because society has many pressing needs, both commercial value and contribution to fundamental materials science should guide priorities in materials research.

Lester Lave can be reached at the Department of Engineering and Public Policy, Carnegie Mellon University, Baker Hall 129, Pittsburgh, PA 15213, USA; tel. 412–268–8837, fax 412–268–7357, and e-mail lave@cmu.edu.

Lave is a university professor and Higgins Professor of Economics at Carnegie Mellon University, with appointments in the business school, engineering school, and the public policy school. He has a BA degree from Reed College and a PhD degree from Harvard University. Lave has been on the faculty of Carnegie Mellon since 1963. He also spent a year as a visiting professor at Northwestern University and four years as a senior fellow at the Brookings Institution. Lave is the founder and director of Carnegie Mellon's Green Design Institute, which has conducted research on sustainability, life-cycle analysis, and related topics for 15 years. In addition, he and Granger Morgan direct the Carnegie Mellon Electricity Industry Center-the largest engineering-business center focused on the electricity industry. Lave was elected to the Institute of Medicine of the National Academy of Sciences and is a past president of the Society for Risk Analysis. He has acted as a consultant to many government agencies and companies. Lave also has received research support from a wide range of federal and state agencies, as well as foundations, nongovernmental organizations, and companies.