investment were held to a level just sufficient to eliminate the use of coal for electricity production in a constrained economy. In such a case the drag could almost certainly be kept below 0.1% per annum. It would also be less significant as the economy grows larger after the year 2000. Nevertheless, when the effect of compounding is considered, the economy of 2030 could be lower than the target level ($7 trillion) by anywhere from $400-1000 billion for scenario UH. Results for the other scenarios are: a $300-500 billion reduction for UI, $100-400 billion for CI. (Growth that would likely be created by "spin-offs" from SPS have not been included in these calculations.) These results also illustrate the sensitivity of 30-year projections in GNP growth to small changes in the growth rate. Inflationary Aspects. It must be acknowledged that calculations of this kind are predicated on so many uncertain factors that limited weight should be placed on them. It is probably enough to say that the capital demands of SPS could possibly hold back real economic growth to some degree, relative to the "cheapest" alternative sources of electric power. Assuming that the rate of capital accumulation through savings and allowable depreciation remains constant — or declines — and that capital becomes progressively less productive over time (SPS is itself an example), then economic "growth" for firms tends to be increasingly financed by borrowing, which is inflationary. Thus capital-intensive projects like SPS are also intrinsically inflationary. However, on this score, the counter-inflationary impact of reduced coal and gas prices would probably be more significant than the impact of financing. Macroeconomic Effects of Other Technologies. The earlier calculations of energy expenditures were accomplished by first determining total energy expenditures without SPS and then substituting a fixed amount of SPS-generated electricity for that from other technologies. This requires an assessment of the economic effects of reduced demand for a particular fuel, resulting generally in reduced electrical generation costs for the technologies that use the fuel. To go the other way, that is, to assess the effects of eliminating part or all of coal (or nuclear) generating capacity, would require extrapolation of the supply/demand relationships for those technologies left in the power generation portfolio. This is necessary to complete the "with vs. without" comparison but is beyond the scope of the present effort. Since the scenarios were developed considering equilibrium conditions, it is probably safe (and enough) to say that the cost of electricity would rise, perhaps even dramatically, if significant amounts of electricity produced by one fuelconsuming technology were unavailable and had to be produced by other fuelconsuming technologies. This would undoubtedly result in an increase in total energy expenditures. Merely eliminating one of several technologies that use the same type of fuel (e.g., the CG/CC system) would probably have little impact on total energy expenditures, assuming that other coal technologies covered the difference. One exception to the above reasoning is the case of TPV. TPV has been included in the scenarios in much the same fashion as SPS, but at about one-third the rate of deployment of SPS. Thus, while the nominal electricity
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