While the renewable energy industry in the U.S. celebrates a rare victory -- winning an eight-year extension of its federal tax subsidies -- no one should forget what we've lost.

Forget for a moment the recurring costs of an inflated defense budget. Chalmers Johnson has tallied those. Let's look at the two biggest items, the ones that stand out so strikingly: the war in Iraq and the recent financial bailout.

Much has been written about the lost opportunities from the enormous expense of the Iraq war. But few yet have tallied what we're missing when combining the cost of both the war and the recent bailout. At last count, the direct costs of the war in Iraq passed $550 billion. The bank bailout is budgeted at $700 billion. We're on the hook for nearly $1.3 trillion!

How much is $1.3 trillion? It's more than enough to have launched one of the world's most aggressive renewable energy programs -- even greater than the shining city on the hill that is the German renewable energy program.

Germany today generates 14 percent of its electricity from renewable energy, nearly all of that from new renewables installed since 1991. Most of Germany's renewable energy is generated by wind turbines. Germans operate some 23,000 MW of wind generating capacity, more than any other country, including the United States.

If we had spent $1.3 trillion to install wind turbines across the continent -- putting wind turbines everywhere, not just in the windiest locations -- we could have installed 625,000 MW, or 25 times the amount of wind energy in Germany today. These turbines could produce as much as one-third of our current electricity consumption.

The Germans have become the world's leaders in renewable energy not through tax subsidies like those in the bailout package, but through a policy mechanism that pays homeowners, farmers, and businesses for their renewably-generated electricity. These feed-in tariffs, as they're called, have proven remarkably effective. Nearly every country that's moving rapidly ahead with renewable energy uses feed-in tariffs to spur its citizens to invest in renewable energy.

If the U.S. had used the $1.3 trillion to pay for feed-in tariffs, rather than simply buying and installing wind turbines directly, we could generate more than 40 percent of our current consumption with wind.

A full-fledged program of feed-in tariffs would include more than just wind turbines. The German program, for example, includes all renewable energy technologies, some of which are more expensive than wind energy, and some of which are less expensive.

And if we cut our electricity consumption 50 percent, which is not out of reach, we could generate a much higher percentage of our use with renewables, or reach specific targets more quickly. There's a lot of slack in the system that a massive conservation program can tighten up. For example, North American households consume, on average, two to three times more electricity than the typical Northern European home -- for the same standard of living. As a consequence, wind and solar energy go a lot farther in Europe than in North America.

With a 50 percent cut in our consumption and a $1.3 trillion investment in feed-in tariffs -- also known as renewable energy payments --we could be generating 80 percent of our supply with renewables. That's equivalent to Gore's target, offsetting our polluting fossil-fuel-fired electricity generating capacity with clean renewable energy. Gore's target doesn't sound quite as "preposterous" as some have charged.

What's the bottom line? If we'd spent these enormous sums on productive uses like building a renewable energy industry, we'd be well on the way to meeting Gore's challenge, with all the attendant jobs and industry that would have been created.

It can still be done, if we change our priorities from paying for the failures of a flawed economic ideology and a pointless war to investing in our country by paying Americans to generate renewable energy.

Congress' renewable energy subsidies are not the end we seek, they are only the beginning. They are a mere down payment on our future renewable energy economy.

The calculations behind this post can be found here.