We need renewable energy, such as solar power. Because of that, companies are working hard on making it cheaper. They can do this either by developing new, cheaper to manufacture technologies, cheaper ways of installing or by simply getting economies of scale as demand and production increase. They haven't managed to follow Moore's law, though some new-technology developers predict they someday will.

Last weekend I attended a small gathering in the Grand Tetons where Boone Pickens came to promote his new energy plan. The billionaire oilman is spending $56M of his own money per year on ads for this plan, and you will see them if you watch ads. Otherwise they are at his Pickens Plan web site.

In light of my recent studies into transportation energy efficiency I've learned a lot more about the energy budget of the USA and the world.

As part of my research into robotic cars, I've been studying the energy efficiency of transit. What I found shocked me, because it turns out that in the USA, our transit systems aren't green at all. Several of the modes, such as buses, as well as the light rail and subway systems of most towns, consume more energy per passenger-mile than cars do, when averaged out. The better cities and the better modes do beat the cars, but only by a little bit. And new generation efficient cars beat the transit almost every time, and electric scooters beat everything hands down.

A subject of debate in environmental circles revolves around whether the successful 70s opposition to nuclear power was a wise idea. At the time, it was never thought of as a choice between nuclear and coal, it was thought of simply as fear of the dangers of nuclear. Unexpectedly, it ended up being a push for coal, which of course kills far more people and emits more radiation than U.S. nuclear plants ever have.

It was good to see a major newsmagazine like Time do its cover story on the corn ethanol scam this week. I've been worried about corn as a source of biofuel for some time. So far, it makes no sense, and is only used because of the power of the corn lobby and senators from agricultural states. I've read various arguments (all with political agendas) about just how much petrofuel is burned in order to make corn based ethanol.

Note to new readers: This article explores the consequences of using so much fuel to produce our food. If you come out of it thinking it's telling you to drive rather than get some exercise, you didn't read it! But if you like surprising numbers like this, check out the rest of my Going Green section and other sections.

Burning gasoline is ruining the world. It accounts for 40% of greenhouse emissions, and a large percentage of other nasty emissions including the particulate matter that kills millions each year. Getting it has driven the world to wars. When you burn it, you pollute my air, hurting me, and you owe me something for it, which is a reason that gasoline taxes make sense even in a libertarian context.

I've been writing a lot about self-driving cars which have automatic accident avoidance and how they will change our cities. I was recently talking again with Robin Chase, whose new company, goloco attempts to set people up for ad-hoc carpools and got into the issues again. She believes we should use more transit in cities and there's a lot of merit to that case.

However, in the wealthy USA, we don't, outside of New York City. We love our cars, and we can afford their much higher cost, so they still dominate, and even in New York many people of means rely strictly on taxis and car services.

Transit is, at first glance, more energy efficient. When it shares right of way with cars it reduces congestion. Private right of way transit also reduces congestion but only when you don't consider the cost of the private right-of-way, where the balance is harder to decide. (The land only has a many-person vehicle on it a small fraction of the time compared to 1-3 passenger vehicles almost all the time on ordinary roads.)

However, my new realization is that transit may not be as energy efficient as we hope. During rush hour, packed transit vehicles are very efficient, especially if they have regenerative braking. But outside those hours it can be quite wasteful to have a large bus or train with minimal ridership. However, in order to give transit users flexibility, good service outside of rush-hour is important.

This year's theme for Burning Man is "the Green Man." It represents a lot of things. For many it just is an inspiration for art centered on nature or the environment. Others are taking it as a signal to try to be better environmentally. That's going to be a very tough road for a festival centered on building a temporary city far from everything and pyrotechnic art.

In light of my recent threads on CitizenRe I built a spreadsheet to do solar energy economic calculations. If you click on that, you can download the spreadsheet to try for yourself. If you don't have a spreadsheet program (I recommend the free Gnumeric or Open Office) it's also up as a Google Solar Spreadsheet but you may need a Google account to plug in your own numbers.

Recently I opened up a surprising can of worms with a blog post about CitizenRe wondering if they had finally solved the problem of making solar power compete with the electrical grid. At that post you will see a substantial comment thread, including contributions by executives of the firm, which I welcome. At first, I had known little about CitizenRe and the reputation it was building. I thought i should summarize some of the issues I have been considering and other elements I have learned.

CitizenRe's offer is very appealing. They claim they will build a plant that can make vastly cheaper solar. Once they do, they will install it on your roof and "rent" it to you. You buy all the power it produces from them at a rate that beats your current grid power cost. Your risks are few -- you put down a deposit of $500 to $1500 depending on system size, you must cover any damage to the panels, and they offer removal and replacement for a very modest fee if you need to reroof or even move. You lock in your rate, which is good if grid rates go up and bad if grid rates go down or other solar becomes cheaper, but on the whole it's a balanced offer.

In fact, it seems too good to be true. It's way, way cheaper than any offering available today. Because it sounds so good, many people are saying "show me." I want to see just how they are going to pull that off. Many in the existing solar industry are saying that much louder. They are worried that if CitizenRe fails to deliver, all their customers will have been diverted to a pipedream while they suffer financial ruin. Of course, they are also worried that if CitizenRe does deliver, they will be competed out of business, so they do have a conflict of interest.

Here are some of the things to make me skeptical.

In the SF Bay Area, there are carpool lanes. Drivers of fuel efficient vehicles, which mostly means the Prius and the Honda Civic/Insight Hybrids can apply for a special permit allowing them to drive solo in the carpool lanes. This requires both a slightly ugly yellow sticker on the bumper, and a special transponder for bridges, because the cars are allowed to use the carpool lane on the bridge but don't get the toll exemption that real carpools get.

(Note: I have posted a followup article on CitizenRe as a result of this thread. Also a solar economics spreadsheet.)

I've been writing about the economics of green energy and solar PV, and have been pointed to a very interesting company named CitizenRe. Their offering suggests a major cost reduction to make solar workable.

While I've written before about the trouble in making solar competitive with grid power, this is not true when the grid is being blown up by geurilla fighters on a regular basis. Over the past couple of years, Bechtel has been paid over 2 billion dollars, mostly to try to rebuild the Iraq electrical infrastructure. Perhaps it's not their fault that power is only on in Bagdadh for 2 hours a day after these billions have been spent -- but their might have been a better way.

Just on the heels of my prior post on the bad math often found around alternative energy, I see a Google Blog post on Google's solar installation. It claims Google with save money with their 1.6 megawatt solar installation.

I think it's important that we stop burning petrofuels or indeed any fuels and get energy from better sources.

But there's a disturbing phenomenon I have seen from people who believe the same thing too much. They want to believe so much, they forget their math. (Or I may be being charitable. Some of them, trying too hard to sell an idea or a product, may be deliberately forgetting their math.)

I see this over and over again in articles about photovoltaic solar, wind and other forms of power. They suggest you could put in a PV panel array for $20,000, have it provide you with $1,000 worth of electicity per year and thus "pay for itself" in 20 years. Again and again I see people take a series of payments that happen over a long time and just divide the total by the monthly or annual amount.

I've been thinking more about environmental economics since I blogged about retail carbon credits. I was surprised about how cheap (some would say unrealisticly cheap) wholesale credits are -- about $2.20 per tonne of CO2. (Update: This price keeps changing. The U.S. price is clearly out of whack down to just 25 cents per tonne in 2009. The European price has declined too, from $20/tonne when I wrote this to $14/tonne in fall 2009.)

Today, many of my friends have bought a car like the Toyota Prius, feeling they are doing their bit to help the environment by burning less gas. The Prius costs around $3,000-$6,000 more than a comparable old-style engine car (in part because high demand keeps the price high), and the savings on gasoline don't justify it on a financial basis unless you do nothing but drive all day. So the main reason to buy it is to help the environment and to make a statement before your peer group. The Camry Hybrid, which gets 32mpg instead of 23mpg costs about $5,000 more than the regular Camry.)

Problem is, there's an argument that you're hurting the environment, counterintuitive as that sounds. And no, it's not just the unanswered questions about recycling the fancy batteries in the Prius when they fade, where fairly positive results have been returned so far. Read on...

You may have heard of the idea of pollution credit trading. I've been pointed to two firms that are selling CO2 credits on the retail level for individuals, to offset the output from driving a car, heating a house etc.

I'll get into the details on how it works a bit below, but if you have a car like mine that is putting out 5 metric tons of CO2 each year, you can for a low price (about $50, which includes a whopping markup) pay a factory somewhere to cut their own output by 5 tons, meaning that net, you are causing zero emissions. Which means you are reducing total emissions by a lot more than you would by switching to a Prius, and you are doing it at a vastly lower cost. (This doesn't mean you shouldn't drive a Prius, it just means this is a lot more effective.)

Normally pollution credits are traded only by the big boys, trading contracts with hundreds or thousands of tonnes of emissions. The retail firms are letting small players get in the game.

This is a fabulous idea, in theory at least, and also a great, if sneaky gift idea. After all, if you buy the gift of not polluting for your loved one all they get is a bumper sticker and a good feeling. At least it's better than giving to The Human Fund in their name.

Here's the catch. I went and priced the credits, and while www.certifiedcleancar.com wanted $50 to credit my car, the actual price of credits on the Chicago Climate Exchange is about $2.16 per tonne of CO2, or about $8 for my actual output as they calculated it. One expects some markup, of course, and even some profit for the company selling the retail credits, but this is nuts. I called the other company, Terrapass and got reasonably frank answers. First of all, they claim they invest more in wind power and other truly non-polluting forms of energy more than they just buy carbon credits. Secondly, this is still a small volume thing, and most of the costs are not the credits, but the $20,000 or so to become a member of the exchange, or so I was told. And of course, in small volumes, administrative costs can swamp the real costs.

Another outfit I found is carbonfund.org which is non-profit and cheaper. In some sense since people buy these out of guilt rather than compulsion (they were meant to be forced on polluters to give money to non polluters and make a market) non-profit might make sense, but they are also supposed to be a real market.

Still, if I pay $50, I would love for my $50 to mostly go to reducing pollution, not mostly to administration. Usually when exchanges are expensive there are members who will trade for you at much more modest markups. The folks at Terrapass said they were not yet profitable at the current prices.

And it is such a good idea. Read below for more on pollution credits.