Macroeconomics theory on alternative energy positively impacting the United States of America (Essay Sample)

Macroeconomics theory on alternative energy positively impacting the United States of America Name: Course: Instructor: Date: According to Walton (2014), the last three years have been characterized by immense economic challenges in virtually all the nations of the world, including the super powers. Financial analysts have continuously advised world leaders to not only look into ways of cutting down on national expenditure but also on exploring for alternative means of boosting their economies besides Agriculture. Although America has depicted a stable economy for the last couple of years, the effects of the economic recession did not spare the world’s second largest economy. There have been unending outcries from Americans on the shortage of employment opportunities, exorbitant energy prices as well as a slowly growing economy. America is a cosmopolitan society and as a result continuously receives immigrants from the rest of the world. Such immigrants, skilled and unskilled, need to earn so as to sustain their day to day life. Analysts own that America faces a high risk of joblessness that will run for almost fifteen years since the currently available skills cannot sufficiently replace the retiring population. Security experts often advise that the only way to guarantee security to residents of any given population is to ensure that all the members are regularly engaged in economically productive activities. An idle population breeds social vices such as insecurity, prostitution, drug and substance and even political unrest. The American government is thus charged with the responsibility to engage its population, whether skilled or unskilled productively. America is an industrial economy and any issue that touches on energy directly affects the country’s economy. In 2010 for example, American government spends approximately $1.205 trillion on energy against an economic gross domestic product of $14.498 trillion. In other words, the government spent about 8.31% of the country’s GDP on energy only. Although the expenditure might be reasonable given the revenue the country earns from exporting industrial outputs, the overall percentage of the economy of the country is significant enough. For instance, if half of the expenditure were locally supplied, then in 2010, the American GDP would have grown by 4.14%. As a remedy, therefore, American economists and other experts need to advise the government on how to reduce the cost of energy and hence encourage industrial production. The renewable energy sector, especially solar energy, can effectively be engaged as a supplement source of energy to reduce reliance on imported fuel, create jobs and hence decrease government spending on energy. According to the available data, in the year 2015, renewable energy in the United States of America accounted for close to 13.44% of all the electrical power domestically produced by the country. (National Bureau of Economic Research, n.d) Given the vast resources, available labor and sophisticated technology at the disposal of the American government, renewable energy sources have not been fully exploited. Some of the reasons to support this statement are that perhaps the dependency on exported energy has blindfolded the government to perceive such exploitation as an expensive venture as compared to the cost of importation. Alternatively, the middlemen between the government and the generating companies have exaggerated the overall cost to the extent that such a venture looks to add an insignificant value to the American economy. Nevertheless, America’s location is prime in such a way that the country can quickly engage in harnessing natural resources as an economic venture. Solar energy and hydro-electric powers are the two major and readily available yet under-exploited sources of renewable sources of energy in America. In 2014, when renewable energy accounted for close to 13% of the total electricity produced in the United States, there was a positive atmosphere and many people expected an incremental funding towards the sector. As a result therefore, residents of Oregon, Alabama, California and New York expected a major facelift since these are the areas with largest hydroelectric power generation potential in America. Whenever mega projects are established in a locality, people, especially the local population always anticipate great things from the same and hence the expectations of the residents of the above-listed areas were justified; they hoped to change their lives economically. However, what followed in the 205/2016 budget left many surprised as there were no evident signs that government had appreciated the contribution of renewable energy to the economy and hence intended to further invest in the sector. While the residents of the above-mentioned locations expected booming employment opportunities for both skilled and unskilled members of society, the government chose to import such labor leaving the residents to struggle for the limited opportunities. China is the leading producer of renewable energy in the entire world. As a result, therefore, China has redesigned its renewable energy academic curriculum in such a manner that it greatly emphasizes on specialization and thus churns out highly competent and effective renewable energy experts. Rather than training its experts, the opportunistic American chose to import such expertise labor from China to fill the existing labor gap in the renewable energy production sector. Initially, the idea to import labor was presented both as a cost effective approach and as a rapid initiative while awaiting long lasting solutions to the existing skills gap. However, in the long run, the move has not yielded significant economic value since the government spends almost a quarter of the total proceeds from the renewable energy sector on paying the cost of importing specialized labor from China. In fact, this is the perfect explanation for the insignificant contribution of the renewable energy sector on the economy of the country. At the moment, the renewable energy faces serious expertise labor related shortages which have greatly weighed down on the overall production and threatens to bring down the entire sector if remedial strategies are not sought. The Bull Run Hydroelectric Project, the Columbia Hydroelectric station, and the Marseilles Hydro Plant have all been closed down due to lack of skilled personnel alongside insufficient funding from the federal government. Hence, there is a need for the American government to train its experts and in the process not only cut down on the overall cost but also leave all the available job opportunities for its residents. The solar energy sector, another constituent of renewable energy sector, has for a long time been overlooked in the United States of America. Among all the renewable sources of energy, solar is the easiest to harness; the overall cost is cheap and doesn’t require sophisticated technology. On the same note, in a country like China which is the current leader in the production of renewable energy, the citizens have been urged to adopt and implement solar energy as their primary source of energy for domestic applications. The generation from the mega productions plants is then fed into the national grid for both export and industrial applications only. Hence, China with a population of about 1 billion people, has successfully managed to export energy while effectively meeting the consumption requirements of its local population. There has been insufficient public awareness in America about the need to embrace solar energy, not only as a renewable source of energy but also as the cheapest and most readily available source of energy. The South and Southwest regions of America have ample land tracts in the sunny deserts of California, Nevada, and Arizona which are magnificent sites for the building of large photovoltaic power plant. These are areas which receive the overhead sun for almost throughout the year, and yet they support no agriculture activity or vegetation due to desert conditions. At the end of 2013, solar energy was supplying the American national grid with 12, 100 megawatts of power, 70% which had been supplied by the Photovoltaic power plant in California. If there could have been sufficient public awareness, then perhaps all these electricity from the photovoltaic plants could have been exported and then people are encouraged to use small photovoltaic cells for their domestic applications. It is also worthwhile to note that California’s human population has continuously been on the increase due to available job opportunities within the region. Similarly, California has successfully supported all the races of the world with minimal cases of racial segregation, insecurity incidences associated with African –Americans and minimal conflicts. The hospitable conditions in California can be attributed to the fact that the photovoltaic plant has provided jobs to both skilled residents who work on contracts and permanent basis as well as the unskilled laborers who work as casuals. (Sovacool,2007) In the 19th century, most developing countries realized that the only sure way of growing their respective economies was through industrialization. As a result, therefore, many industries were set up in the 19th century and are now fully operational. Since all these industries require power to operate, there is an impending pressure on the current energy sources. Coal, which was used to run most of the industries, was declared bulky and environmentally dirty. Most energy exporting countries are now relying on geothermal power and hydroelectric power. The point here is that due to immense investment in the industrial sector, most countries will soon be producing energy for their local cons...