Without a Price Signal...

While Washington was bailing out Detroit, President-elect Obama made two crucial appointments: he named Steve Chu as his secretary of Energy and Carol Browner as an energy coordinator or "czarina." It seems to me that the two posts neatly frame the two aspects of the effort to create a Clean Energy System—what we might call the clean energy predicament. Chu is a Nobel laureate in physics who has led a green-tech, clean-fuel effort that brings together scientists, the government, and BP; Browner's experience is with the Environmental Protection Agency, which she led during the Clinton Administration. Producing new energy, or protecting the environment—in the Energy-Climate era, which is more important? Is it possible to do both?

How we are going to do either without a price signal—i.e. gasoline or carbon tax—beats me. Consider this headline from CNNMoney.com on Dec. 22: "After nearly a year of flagging sales, low gas prices and fat incentives are reigniting America's taste for big vehicles. Trucks and SUVs will outsell cars in December, according to researchers at the automotive Website Edmunds.com, something that hasn't happened since February. Meanwhile the forecast finds that sales of hybrid vehicles are expected to be way down."

Have a nice day.


I am a big fan on The World is Flat. I Have read it atleast 8-10 times. When ever I read it, I gets new thing in it. It's Great book for my life.

It's impact is so significant that even after reading 8-10 times, still when I read it, I get new energy.

I am searching the url where can I download audio version of this file, I could not able to find yet. I have heard a lot of places online that it would be downloaded from this site and available for free download, but really could not find it.

If any body help me to get the right url link from where I can download it, it would be great for me.

Ayush Wave, Bangalore, India

Ayush Wave (not verified)
July 18th 2010, 4:11 pm

Protests, strikes and political upheaval across the world as oil prices respond to the reality of limited supply, threatening recession, or worse

Tommy Tang (not verified)
April 1st 2010, 2:27 pm

For Neil Ashton,

Diesels are great, I'm driving a 2.0 liter TDI A3 which does about 58 miles to the gallon and on long trips outperformes a Prius (generation 2) with ease. On short trips however a Prius outperformes it and in general a Prius wins. Now I only use it for long runs, short runs I do by bike.

Having said that, we need a 80 to 130 percent cut in emissions and no fuel saving technology currently available is going to deliver that. Not even the Audi A2 1.2 TDI with it's incredible 100 miles to the gallon can cut that or this car:


But a combination of fuel saving transport and change of lifestyle might do the trick (and carbon sequestering by foraminipheres should be investigated). Natural CO2 sinks are:

1) Limestone/Chalck deposites (like the white clifs of Dover)
2) Fossile fuel deposites (leaving fossil fuels in the ground or putting fuels in the ground)
3) Loss to deep ocean due to foraminipheres dying of

I wonder wether method 1 and 3 could be industrialised in a carbon efficient way?

Greetings, Ed Kuipers

Ed Kuipers (not verified)
July 1st 2009, 5:33 am

Hi Tom

Congratulations on your book which gave me lots of new perspectives on the state of the world. Thank you!

My opinion:

We need a well organized hub for future oriented people, where one can get informed about who is doing what, when and where – perhaps a web site (or even a new political party) that not only helps to connect people but also to coordinate efforts and act politically. I think the resulting focus would help reorient society in the ways you propose.
I live in Germany and know that the Green Party here has had a great deal of influence in German politics because it helped keep the issue of ecology in focus. Today, even conservative parties adopt green positions to the point that some coalitions between conservative parties and the Greens exist.
In a similar way, a “Future Party” might give focus to and help establish your vision in American society. I would like to see this vision evolve strongly, even after a political turn to the right, AFTER Obama.

Andreas Reimann (not verified)
June 30th 2009, 9:47 am

رياضيات حل مسائل تحميل برامج افلام كليبات ألعاب أون لاين أبحاث علمية أدبية اقتصاد تاريخ اسلاميات فن علوم كيمياء

ayman (not verified)
June 29th 2009, 1:15 pm

Hi Tom-

Firt time visitor to this page, and first time posting an opinion. I am not sure this is the right area on you website, but the following is in the form of a letter to President Obama.

Regards- Paul M.

Dear President Obama,

Thank you for the quick movement to re-ignite the economy. While the decisions ahead are complex and difficult, thought I would provide my input on the situation.

Regardless of how it’s done, we taxpayers are footing the bill to recapitalize our banks/credit markets. In addition to re-capitalizing banks from the back-end (Fed), we also should recapitalize banks by leveraging the households that are in good-standing credit wise, and pay their mortgages on time.

This plan, while outlined in a simplified, non-academic fashion, is designed to provide the following,

1. A quick confidence boost for consumer spending,

2. Assist with the re-capitalization of our financial institutions via a separate source other than the Federal Reserve.

Plan Summary


1. For home owners in good standing, Congress should give the banks the incentive to provide new and refinance fixed rates of 3.5% for 30years

2. Financing points TBD, but this has to be a win-win for banks and credit-worthy consumers.

3. For tax purposes, as with a bank or other commercial organizations, perhaps let homeowners in good standing, have a one time write-off of the drop in value of their home.

Targeted Result

A. Consumer and business short term benefits (not limited to the following),

1. A lower monthly payment, for majority of households, provides an additional sense of security, increasing consumer confidence.

2. The increase in monthly disposable income will increase the propensity to consume. The plan gives folks the confidence to spend. 401Ks are disappearing, the market is diving – and the job losses mounting. Those that have the ability to spend will need to soon, but will not, until short term fear of spending is minimized.

3. It will help small business and retail. Consumers will spend these dollars on non-essential items such as restaurants, entertainment, hard-goods, travel, etc.

4. State and Local Government - the spending will assist with the recovery of the dwindling tax revenue base for cities and governments. It will provide state and local officials new options to consider before cutting essential programs/services.

B. Banks/Financial Institutions Benefit (not limited to the following),

1. The 3.5% refinancing will help recapitalize banks from the end-consumer side from the resulting fees and deposits. Banks will then have an influx of capital for loan generation.

2. With the refinancing, banks will extend existing 30 year annuity streams.

3. Although the loans are at a lower rate, the alternatives, I believe, are much worse. If the economy continues to spiral, prime borrowers, will also need a rescue as well. At which time, banks will be re-active, extending similar programs just to preserve annuity streams, and asking for additional funding from the Federal Reserve.

4. The new mortgage annuity stream will be based off of credit-worthy consumers; these loans could be securitized, and re-sold, if/when the proper risk governance measure in place.

Why consider this option?

This crisis has showed us that there are those who borrowed and invested responsibly, and there are those who borrowed and invested in an irresponsible fashion. This list includes banks, financial houses, investors, insurance companies, rating agencies, our own government sponsored agencies, etc – the list goes wide and deep. The reverberations have been felt by all, very few are immune. We can look back and see many instances where our financial governance mechanisms failed, where checks and balances went, well, unchecked. The warning signs were there years prior, several folks did sound the alarms, but they were ignored because the money continued to be cheap, plentiful - with little to no covenants.

For the majority of Americans who invested and borrowed within their means, the result of this crisis has been to see hard-earned, invested dollars, evaporate. Moreover, they see their sense of financial security disappear while footing the bill to save institutions deemed too big to fail and/or individuals who borrowed way beyond their means.

The plan above should be considered within your stimulus options because we need to ensure that we help and recognize the majority of Americans that are silently assisting to resolve this crisis (whether they agree or not) by preserving their capability to continue to do so.

Let’s make sure we spur the economy from every angle.

All the best-

Paul Marrero

Paul Marrero (not verified)
March 12th 2009, 10:55 am

Here is one friendly suggestion: Offer version 1 of your book for free to download in full.

Anonymous (not verified)
March 6th 2009, 3:41 am

First, I must say that I am extremely upset with you Mr Friedman. You stole my theory. Of course only my two sons and a good friend listen to me so I guess I shall forgive you since you have a slightly larger audience. Great minds like ours do indeed think alike. No, I'm not nuts, just a warped sense of humor.

I just checked your hf&c book from the library. (YES, we do have libraries in Las Vegas) I being neither a new yorker nor a hot house liberal try to avoid the Times but I had encountered some of your columns in the past and tended to think well of you. (don't tell any of your new york friends that the likes of me likes the likes of you. They would be so embarrassed for you}

To stop being silly, one thing that you addressed minimumally in the book is the very real possibility that the world is way down the road to running out of oil. At the least the oil we are finding is difficult and increasingly expensive to extract. I would like to see your opinion and knowledge of this possibility treated in greater depth in chapter eighteen, even if you disagree with my assumptions.

Changing the subject, the public seems to have forgotten that not only the mortgage mess but also the run-up in oil prices over the first 6 months of 2008 contributed to the terrible state that the economies in the world including the USA find themselves now suffering. What will happen down the road when we begin recovering from our current malaise? All the petro producers will beginning bringing oil prices back up which will dampen and prolong the recovery. We absolutely must become energy independent unless the US is willing to settle for what England was in the 20th century, namely a country that is much less important than it thinks it is.

I believe you have written a very important book not just because it deals with a very serious subject but even more because it presents the subject in a common sense way that can be easily understood by a large audience.

Thanks for doing it.

Cherry Brock (not verified)
January 30th 2009, 11:42 pm

Louisiana Enacts the Most Comprehensive Advanced Biofuel Legislation in the Nation

Governor Bobby Jindal has signed into law the Advanced Biofuel Industry Development Initiative, the most comprehensive and far-reaching state legislation in the nation enacted to develop a statewide advanced biofuel industry. Louisiana is the first state to enact alternative transportation fuel legislation that includes a variable blending pump pilot program and a hydrous ethanol pilot program.

The legislature found that the proper development of an advanced biofuel industry in Louisiana requires implementation of the comprehensive “field-to-pump” strategy developed by Renergie, Inc.:

(1) Feedstock other than corn;
(2) Decentralized network of small advanced biofuel manufacturing facilities;
(3) Variable blending pumps in lieu of splash blending; and
(4) Hydrous ethanol.

Renergie looks forward to working closely with the Obama-Biden administration to:
(a) reduce U.S. dependency on imported oil;
(b) repeal the ethanol import tariff;
(c) maximize the environmental benefits of ethanol-blended transportation fuels; and
(d) create jobs in rural areas of the United States by growing ethanol demand, specifically hydrous ethanol demand, beyond the 10% blend market.

Please feel free to visit Renergie’s weblog (renergie.wordpress.com) for more information.

Brian J. Donovan (not verified)
January 30th 2009, 9:41 am

A story of the CFC/Carbon Cap and Trade ; Changing the engine at 90 MPH when no one really knows there is a problem...

I don't know if anyone will read this at this point, but twenty years ago, my then boyfriend, now ex husband, took a job I yanked off the job board at Georgetown for him. I was at the University of Vermont. While at PWC- Washington National Tax Service, he, and I believe three other economists worked on a project he thought "uncool", no pun intended, but which I, a Mr. Ely A.P. Bio former student(Go Cow Valley!), and a plane mate of the UVM Professor who first discovered the harm Acid Rain was causing (on Mt. Mansfied), 20 years before we met,...well, we thought it was VERY cool. I would tell my boyfriend everything I got from Mr. Ely, and from this professor, and I like to think he heard it, and included some of it (sort of like the annoying side-seat driver). Ten years, grad school (where he worked on the medicaire and medicaide issue with Havemen at UW Madison), and a divorce later, I learned, again in Vermont, that the CFC capping and trading that he had worked on (revelling in putting the skids on his father, a GE CFC manufacturing leader), had become something special, had cleared hurdles in the Senate and was proof "it could be done". I lump it in with the Carbon cap and trade , which I heard used the same idealogy.

At any rate, my point is this: it wasn't easy. While our friends were partying and going to Vegas, we were studying and going to extra math classes. We had fun, don't get me wrong. But life really did feel like we were changing a bus at ninety miles an hour, and then, with one, and then two kids in tow, that we were hurled to the next bus when the work was done (Medicare and Medicaid). As it turned out, we were exhaustible, mind, body and soul.

However, I find two things humbling about this. A high school biology teacher taught us that this matterred more than anything, and I was able to infect my now ex husband with that same passion. He worked 18 hour days, and, at the end, four straight days to get the project done before leaving for grad school. I look at our scars now, and they are many, and I wear them with pride. When my son got his insurance at 17, the agent, whose daughter had skied with him growing up, said "My company would be honored to insure the son of the author of the CFC ." I was out of town on business, and so, when I returned, my mother asked me what it meant. I told her the story, I told her it meant nothing more than my life, other than having been their mother, had purpose greater than I could ever have hoped for, or dreamed of. I didn't write it, he did, so he could say the same, and more. But I pulled the job off the job board, and said "this one." I took the math classes. I infected him with Mr. Elyisms and motivation for the green cause. I think there is an advertisement that says it best: "And I helped!"

I will not lie, the scars left at 90 MPH are not minor, and not all projects will succeed (and crashing the bus sucks). However, jump into the engine anyway. Heed the Mr. Ely's of the world, listen to the UVM professors. You may not see any results for twenty years, like we did, no one may ever know what it was at all, or that you did it (he described his work, FYI, as "for some lobbyist for a junior senator from somewhere.")

But... high school and biology teachers everywhere, rant and rave about how the bill is due and "your" generation, like it or not, is going to pay it, you've got to find the answers, etc., or you're just going to pass it on to your children, which no parent wants to do. We listened to Mr. Ely, and all the Mr. Ely's of the world, we still listen, and we will continue to listen. Educators matter.

And people in the engine, don't think it won't matter. It will. You may not realize it until far far after it's done and implemented, but it will matter. And, even without a Nobel, it feels really, really good to have at least tried. Succeeding, well, that just makes you want to try again.

Oh, and talk to the person next to you on the plane. You just never know!

Go Green! (the cause and UVM)

Anonymous (not verified)
January 27th 2009, 4:11 pm

The news about the "revitalization" of the SUV market came as a happy surprise to the workers at the Arlington Texas GM plant since they now will not have a forced several week-long unpaid vacation for a shut-down in production. They get to keep making the gas-guzzlers! Can American consumers TRULY be so short-sighted as to start buying those things again? I guess the answer is yes! Something must be done!!!
Why couldn't the car company bailout money require a retooling of plants that make such vehicles?

KJ Lowry (not verified)
January 27th 2009, 1:15 pm

Anyone who has read "Hot, Flat and Crowded" should also read the National Intelligence Council report "Global Trends 2025: A Transformed World". It is available online at http://www.dni.gov/nic/PDF_2025/2025_Global_T...
and complements much of what Tom discussed in the book with forecasts for that year, backed up with statistical analysis.

Anonymous (not verified)
January 25th 2009, 10:05 pm

Many comments on this topic reference Europe where fuel is highly taxed and efficient solutions abound. Oddly the European solution is already here - DIESELS. Right now there are diesel vehicles for sale in the US (from VW, BMW and Mercedes) that get 30% better fuel economy than comparable gasoline models with greater power and 50 state clean emmissions. If that sounds too good to be true go test drive one. Imagine if all SUV's and pickups (not to mention cars) had 30% better fuel mileage - that puts a big dent in the imported oil problem with lower emmissions to boot. Well over 50% of the vehicles sold in Europe are diesel so they must know something.

Unfortunately this is not likely to work in the US currently as diesel fuel is 50-70 cents a gallon more than gasoline and these new clean diesels cost more to purchase. Most buyers will not recover the money under the current price structure. Then again hybrids dont pencil either.

So how to address this? Create a "price signal" by indexing the gasoline tax to equal to diesel prices. Fifty to seventy cents a gallon will raise a lot of revenue so use it to:

1.Raise the alternative fuel tax credit already in place for diesel buyers to help negate the diesel premium and reinforce the "price signal."

2. Help finance the auto industry bailout and tie it to the car companies moving to diesel and alternative fuel vehicles - provide R&D incentives too. Companies that do not have clean diesels now could buy engines or license the technology from the Europeans - use tariffs if needed to make the Euros play fair.

3. Use the balance of the money collected to finance the transportation infrastructure projects currently being proposed.

Want another reason to do this? Putting these moves in place would encourage people trade their current vehicles for diesel's - a huge shot of demand for the the auto industry which we all know is in trouble. In addition, clean diesel is off the shelf technology and no new fuel infrastructure is needed. It is a far better solution than ethanol which turns food into low efficency, poor quality fuel.

Finally this would not be a permanent tax if set up as a floating adjustment. One reason diesel costs more is a lack of refining capacity in the US - if the auto industry moved to diesel the oil companies would soon adjust to meet demand and prices would drop via economies of scale. The same should hold true with the tax credit - as more vehicles use these engines the price surcharges will disappear as with other technology and the need for a tax credit would abate.

In the interests of full disclosure I should note that I am employed by BMW of North America but write as a private citizen. This plan would certainly benefit my company in the short term as a current importer of clean diesel vehicles. But that is not why I suggest this - it just makes sense as Europe has been proving for years now.

Neil Ashton (not verified)
January 25th 2009, 6:26 pm

Hi Tom,

I haven't read the book yet, but I've seen an interview with you today in CNN "talk asia". There, you mentioned that with a pessimistic attitude in the 60s, it would not have been possible to land a man on the moon before the end of that decade. It surely needed to charismatic president to formulate this goal.

Now, you again have a charismatic president. I don't know how good your links to the white house are, but maybe you could convince Barack Obama to stand up and make a statement similar to the following:

"I promise that by the end of the next decade, the United States will generate 50% of its electrical power from solar energy and 90% by 2030."

With solar-thermal power technology and efficient DC lines, this should be achievable. And at the same time, such an investment should stimulate the economy in an area with long-term future.

Greetings from a German living in South Africa...

Christoph Bollig (not verified)
January 24th 2009, 2:12 pm

C'mon Mr. President let's put this problem on a war footing. Use the military to organize projects to revitalize the economy. The Air Force and the Navy don't seem to be doing much. Put a 50 cents a gallon tax on gasoline so that much will stay in this country rather than going to the Middle East. People with low incomes can file for refunds. I expect some action before the end of the month.

Norm Harruff (not verified)
January 24th 2009, 10:30 am

Why can't we have a price signal??? Gas is down 50% in the State of California and the State gov't is broke. For some reason all I hear about is raising state income tax or sales tax to solved the problem. Haven't any California legislators read your book? Are these guys owned by big oil? They need to slap a 25 cent tax on right now while it's barely noticeable. It infuriates me that there isn't more discussion around this. Can't you call Arnold and talk some sense into him? Please!!!! My children's future is at stake!!!

Stephanie A (not verified)
January 23rd 2009, 4:45 pm

If the government would provide batterys for electric vehicles and service for batteries at every National Guard Post and if the safety standards for vehicles were relaxed to the 1940 levels; I would bet that we would have $8000 electric vehicles coming off the essembly lines by the end of the year. They would still be safer thatn motorcycles.

Norm Harruff (not verified)
January 23rd 2009, 11:31 am

No new gas or carbon tax need be levied -- we are already paying it. The revenue is just going to the wrong people. The "price signal" need only take the form of removal of the subsidies oil companies receive to produce gasoline, and expose the public to the real price of the resource. Some say the price of gas would go up to $7 - 9 per gallon, more like European countries. Removal of this public-funded market distortion would result in a quick restoration of urgency to migrate to efficient vehicles and well-placed pressure on our cultural obsession to frivolous consumption. The savings in public revenue could be used to clean up the mess from burning it and invest in long-term carbon compensation, or -- heaven forbid -- tax cuts. And speculator - induced run-ups in oil prices like experienced in 2007-2008, brought to us by the same criminals who squeezed California in the Enron electricity bubble in 2001, would be self - regulated by market forces. See RFK Jr's article, http://www.waterkeeper.org/mainarticledetails....

John Donnelly (not verified)
January 21st 2009, 11:22 pm


What does it say about America that enough people don't seem to care?

Why are Europeans able to have a culture of conservation, and political culture that enables/forces it?

Ignoring environmental or financial concerns, why is there such a culture of profligacy, inefficiency and simple inconsiderate waste when it comes to living in america?

If failing companies were able to get so much govt. funding to correct the things they've been campaigning for decades, how likely is it for american govt. to have a national fuel-escalator.

The cheapest way to change society is persuasion, but after seeing $150 oil and years of accepted environmentalism (minus bush-43 admin), when america doesn't see the consequences, and when it will be too late by the time real damage occurs, what can be done?

Yours kindly,

Shakir Razak

Shakir Razak (not verified)
January 20th 2009, 10:49 pm

Dear Mr. Friedman; great book! Very inspiring and thought provoking. Truly appreciate your profession and dedication to producing good work. Thank you. Here is an idea for Chapter 18. One way to make clean energy popular and consumable by “America” is to make it dumb.

James Marvin (not verified)
January 19th 2009, 3:42 am

Only about one-third of the way through Hot, Flat and Crowded; very provocative thus far.

Our current policies are so far off from incentivizing green purchasing decisions there would seem to be a lot of low hanging fruit. For instance, a few months ago we explored purchasing a hybrid vehicle. I was shocked to look more into the tax incentives for such purchases to find that the credits go away for a particular vehicle reaches a certain sales volume. Most of the types we looked into seem to have met that threshold and thus don't have any tax credits that we could discern.

This tax credit structure seems to discourage large scale production and purchase of these vehicles. Extending and increasing incentives for purchasing greener cars would seem to be a good carrot to include in policy along with the green mandates included in the Big Three bailout.

I haven't studied this issue in depth, have just found this one example from my own consumer experience, and suspect a lot more such examples abound.

By the way, we decided not to purchase the hybrid. As much as we'd like to, in our own current financial status we'd need stronger, bottom-line incentives to be able to afford this green choice. We're holding onto our current traditional vehicles (don't worry, not SUVs) and hoping that the economics supporting a green purchase will be there soon!

David C. (not verified)
January 18th 2009, 7:27 am

Lots of writing already so briefly: if you don't have taxes or cap and trade, you can also stimulate through government spending (subsidies), or government policies (power purchase agreements, dedicated infrastructure, 'Manhattan or Apollo' style project, pricing controls, etc.). You take part of a stimulus or recovery package and you say we are going to use these funds to bootstrap renewable energy. These may not be economically preferable alternatives, but the political reality may require this more executive style approach for the moment. On the plus side, a government policy or spending approach will cut through the delayed fits and starts of the market appproach which is what we are seeing now with a low ebb on gas prices.

A. Cherson (not verified)
January 17th 2009, 2:56 pm

You book is brilliant, insightful and pulls no punches.I live in rural southeast Alabama and unfortunately most people do not care or are completely ignorant about what is happening beyond their backyard. The average American has to be educated about what is happening on our planet. Who cares if the last wild tiger is killed in India?
Who cares if there are 8 billion people on our planet in 2025? What does it matter to me that the Amazon rainforest maybe cut down and planted in soybeans.
Education is the key. You have to be educated on the subject to make informed decisions about that subject.
I think "Hot, Flat and Crowded" should be required reading in high school and college social studies, biology, economics, physical science and political science classes. The next generation will have to deal with what our generation left them, a global mess.
It would not hurt for members of the US Senate and House to also read your book or at least listen to the audio if they are too busy, doing what I do not know.
I personally do not think the US will step up to the plate, we are too selfish, arrogant and self-centered. It will take a Pearl Harbor or 9/11 multiplied by 1000 before we will wake up. For my part I will keep trying on an individual and local level to try and make people see the light.

Eric Brock (not verified)
January 16th 2009, 6:04 pm

I propose a modest step toward lessening the hold that petrodictators have on us and to provide more funds for transportaion improvements as part of your ambitious green revolution:

Increase the federal gasoline tax to $0.20/gal now, during the recession, then when the price of crude oil begins to increase again, as it surely will, increase the gas tax by $0.10/gal when the price of a barrel of oil reaches $50, another $0.10/gal each time the price rises another $10/barrel, with no ceiling and no reduction if the price declines again as it did this past fall. The gradual increase would hardly be noticeable in the price at the pump and most likely wouldn't produce a hue and cry that a steep one-time gas tax increas would.

We need to take such a step and others to keep gasoline consumption lower and, I'd hope, lower it even more over time in combination with more fuel efficient vehicles.

Jerry Moore (not verified)
January 16th 2009, 12:57 pm

How about implementing a monthly per person residential kW/h structure? For example, 250 kW/h per person per month could be used to begin. If you used less then you could sell the excess in an auction format. If you use more then you pay a significantly higher cost or buy from the auction.

Someone with more utility knowledge than me should try to model this approach.

Thank you for your efforts!


Tim (not verified)
January 15th 2009, 3:32 pm

Mr. Friedman,

I was just listening this afternoon to an excerpt from your book, "Hot, Flat, and Crowded." You basically state that the electric grid, and electric cars and electric stoves, will all save us from global catastrophe.

Do you realize that the same amount of energy which is propelling gasoline-powered vehicles will need to be added to the power grid so it can be transferred to the electric cars' batteries by a plug to propel them? Do you realize how much energy that is? Regardless of government edicts and funding, it is simply impossible to do this without an equivalent carbon-producing power generation system added to the power grid. You will have no net carbon savings by converting to all-electric cars and stoves.

Best regards,

Fred (not verified)
January 14th 2009, 4:31 pm

I know economic theory treats people as self interested automaton/agents, but i didn't know it was true until i read this.

The economy is shot to hell ... i'm gonna buy an SUV!

Apart from being ridiculously short-termist, it just seems crass to me.

Ali Reid (not verified)
January 14th 2009, 2:03 am

Mr. Friedman,

I would like to bring to your attention a perspective on energy, the economy and the environment. It may be found at www.chrismartenson.com/crashcourse. Particularly I recommend looking at Chapter 17 for a model for thinking about various types of energy options. All the low hanging fruit is gone and ethanol is at the wrong end of the spectrum. I sure hope the new administration gets this. The discussion of coal was eye opening. The model presented can be a useful guide or way to think about future investments in alternative and traditional energy.

Some of the key benefits of the model presented are some of these ideas: We should consider the cost of acquiring the energy as part of the equation; and the surplus of the cost of acquisition over the cost of the energy has a huge impact on the economy and the social life styles that can be supported. The author even brings in consideration of the present economic conditions and fiscal and trade deficits. I commend the model to you.

Thank you. I always enjoy reading your work and your media appearances. I learn each time and am challenged to think more broadly.

Eva (not verified)
January 13th 2009, 3:33 pm


From the New York Times:

....even as President-elect Barack Obama talks about promoting green jobs as America’s route out of recession, gulf states, including the emirates, Qatar and Saudi Arabia, are making a concerted push to become the Silicon Valley of alternative energy.

They are aggressively pouring billions of dollars made in the oil fields into new green technologies. They are establishing billion-dollar clean-technology investment funds. And they are putting millions of dollars behind research projects at universities from California to Boston to London, and setting up green research parks at home.

“Abu Dhabi is an oil-exporting country, and we want to become an energy-exporting country, and to do that we need to excel at the newer forms of energy,” said Khaled Awad, a director of Masdar, a futuristic zero-carbon city and a research park that has an affiliation with the Massachusetts Institute of Technology, that is rising from the desert on the outskirts of Abu Dhabi.

These are long-term investments in an alternative energy future that neither falling oil prices nor the global downturn seems likely to reverse....

This new investment aims to maintain the gulf’s dominant position as a global energy supplier, gaining patents from the new technologies and promoting green manufacturing. But if the United States and the European Union have set energy independence from the gulf states as a goal of new renewable energy efforts, they may find they are arriving late at the party.

“The leadership in these breakthrough technologies is a title the U.S. can lose easily,” said Peter Barker-Homek, chief executive of Taqa, Abu Dhabi’s national energy company. “Here we have low taxes, a young population, accessibility to the world, abundant natural resources and willingness to invest in the seed capital.”...

To hedge their positions, then, an increasingly sophisticated generation of largely Western-educated leaders in the Middle East are seizing on green business opportunities, by seeding research in faraway nations.

The crown prince of Abu Dhabi, the wealthiest of the seven emirates that make up the United Arab Emirates, announced last January that he would invest $15 billion in renewable energy. That is the same amount that President-elect Obama has proposed investing — in the entire United States — “to catalyze private sector efforts to build a clean energy future.”

Masdar, the model city that will generate no carbon emissions, is tied to the crown prince’s ambitions. Designed by Norman Foster, the British architect, it will include a satellite campus of the Massachusetts Institute of Technology, as well as a research park with laboratories affiliated with Imperial College London and other institutions.

In Saudi Arabia, the new state-owned King Abdullah University of Science and Technology, or Kaust, gave a Stanford scientist $25 million last year to start a research center on how to make the cost of solar power competitive with that of coal. Kaust, now in its first grant cycle, also gave $8 million to a Berkeley researcher developing green concrete.

And it has other agreements as well, with Caltech, Cambridge, Cornell, Imperial, La Sapienza, Oxford and Utrecht, to name just a few.

In November, the Qatari government signed an agreement with Britain’s visiting prime minister, Gordon Brown, to invest £150 million, or more than $220 million, in a British low-carbon technology fund, dwarfing the fund’s investments from home...

“The impact has been enormous,” said Michael McGehee, the associate professor at Stanford who received the $25 million Saudi grant. “It has greatly accelerated the development process.”

Anonymous (not verified)
January 13th 2009, 2:25 pm

The $100 component: One simple and vitality important solution to this very large and complex issue is clearly enunciated in this video clip. To be sure it is not the entire solution, but it is one that is practical, and one that can make a major positive difference with the stoke of our governments pen.


Engage your elected representatives.


Jim Fillman (not verified)
January 13th 2009, 1:25 pm